The National Academy of Public Administration has published what it calls a “field guide” for using federal grants. Not just any grants though, it’s about government-to-government grants allowing state, local and tribal governments to build better data systems. The idea is better data management and analysis can lead to better programs. The field guide’s principal authors, Pari Sabety, an economic stability program advisor at U.S. Digital Response, and Kathy Stack, a senior policy fellow at Yale University, joined the Federal Drive with Tom Temin to discuss the guide further.
Interview transcript:
Tom Temin All right, that’s a good answer. And what are we talking about here? Why this field guide for such a highly specific topic at this time?
Kathy Stack So let me give you a little background. In 2024, the Office of Management and Budget updated its uniform guidance that provides grant procedures and rules covering all federal grants. So that’s over $1 trillion going out in hundreds of programs. And they made a very important clarification. And we know it’s important because we’ve been talking to folks in the state and local government who have been confused about how permissible it is to use federal grant dollars for data and evaluation activities or shared data infrastructure. So the provision basically explicitly says federal grant funds may be used by grantees for data evaluation and integrated data systems as either direct or indirect costs. And that for some programs has been the policy that they’ve always assumed. But there’s other federal programs where the field has perceived a barrier to that because the program office from the federal agency wasn’t explicitly saying you can use our dollars in this way, it was assumed on the outside that you couldn’t. So what this enables is a much more robust investment strategy where state and local governments that are trying to connect data across a lot of different programs and really harness the insights that you can get by bringing that data together now have permission to tap into these different funding sources and combine them and and sustain them on an ongoing basis.
Tom Temin And there have been several federal statutes for federal agencies to use data and evaluation more explicitly in policymaking and program planning, the Data Act and so on. Is this a way of ensuring that money that flows for various purposes from the government to state-administered or even tribally-administered programs has the same basis for program evaluation as in theory is available to the federal agencies?
Kathy Stack Absolutely. A lot of the work on implementing the Evidence Act has been at the federal level trying to get different chief data officers and agencies to get their data to flow. But what’s interesting contrast is at the federal level, that those agencies have to go to Congress and get appropriations for that. What OMB is doing with this guidance is saying, hey, the dollars that are flowing to state and local governments, you may use these. Those dollars are already in the system, and there, OMB has given permission with coordinated with the federal agencies to say the dollars that are already there, you can tap into them to build the new sort of modern infrastructure that’s needed.
Tom Temin And Pari, give us an example of how that might work at the state level. You were a budget director for Ohio, correct? And so you understand what’s going on at the state level?
Pari Sabety Absolutely. So we do have some great examples in states. I’m going to tell you a story about North Dakota. They realized during the pandemic to satisfy the reporting requirements for the emergency rental assistance program, they would need to have outcomes data from a variety of human service programs that existed under their very broad reach. And they began to build that system to give them automated outcome data from early care and education all the way back to family stability to allow them to collect that data. But they were doing it by taking the cost of that program and allocating them to a large variety of programs, 4 or 5 different programs, one step at a time. This is a really expensive way to do this, and it’s incredibly complicated. And with technology changes, we really ought to be thinking about how to do this in a new way. So the clarifications that OMB has made, Kathy has pointed out, really helped how they might build such a system. Any state or local government might build such a system to allow them to use outcomes data from many different domains to prove their programs are actually working. So that’s why this is a very exciting time to make these changes something that everyone can understand and give people in labeling language.
Tom Temin We’re speaking with Pari Sabety. She’s a grants advisor at U.S. Digital Response. And with Kathy Stack, senior fellow at the Yale Tobin Center for Economic Policy. They are both fellows of the National Academy of Public Administration. And is there a formula that is to say if a grant is, say, $100 million, just to make up a number, how much of that under the guidance is available for building a data system? And if data systems in the follow on is integrated, can multiple state agencies, for example, put their grant money together so they build one instead of replicating, you know, multiple data systems?
Kathy Stack So the answer is the OMB guidance does not specify an amount. There isn’t a cap, and it is going to depend upon their ability to show a benefit to the program. I’m going to throw this to Pari to talk about how, and this is really the guts of our our guide on the mechanics, of how you can tap into programs and justify the blending of money or the braiding of funding.
Pari Sabety So there are many different ways to allocate these costs across multiple programs. The easiest way to do this is to have a system that will benefit all agencies in a government. And if it benefits the enterprise, then the federal government allows you to incorporate it as part of your government-wide cost allocation plan. It’s like just a couple of cents on top of that entire allocation amount, which covers lots of other things that are important for a functioning government that can run these programs. Well, it joins H.R. and telephone services and all sorts of other rental utilities, lights, Zoom, all sorts of things. So it’s just like that. So data becomes part of the lifeblood of running and administering federal grants responsibly. That’s if you show that your data system benefits all elements of a local government administering that program. If it has benefits to a specific group of programs, then you would do exactly what you described, which is that you charge a certain amount to each program based on the benefits received. And that would pay for a program that would benefit just a few programs.
Tom Temin Because at the state level, you know, you might have economic development grants, you might have unemployment grants, housing, homelessness. A lot of programs seem to interlock, say, in the economic area, and it would sound like it makes sense for somehow the data thrown off by those programs to be used in some integrated way, especially with all the A.I. tools coming in.
Pari Sabety Absolutely. In fact, if your mission is to improve a goal like economic mobility or getting people put into into better education systems that gives them better outcomes, of course you’re going to need to use multiple sources of data to understand whether those programs are actually proving to work the way you want them to work.
Tom Temin And Kathy, is this money available from grants that are so-called block grants, or the less discretionary grants such as might come through unemployment programs?
Kathy Stack Absolutely. This applies to this provision that OMB has put out there, applies to competitive discretionary grants, large formula grants, entitlement grants. So it really covers the gamut. And now some of those programs, particularly the entitlements, have prescribed statutory provisions on use of funds for data. But data is a core part of those activities. They recognize that you can’t run these entitlement programs without that. But now what we also have is a recognition that these large formula grants that are flowing, that sort of block grant kinds of programs as well as competitive grants, would all benefit from having shared data infrastructure and analytics. So it evens the playing field.
Tom Temin And what about the oversight responsibility now that seems to accrue to the federal agencies, because they have to make sure grants are being used properly and so forth. And what do you evaluate, what do you anticipate should be the oversight mechanism to make sure that if money is being used for other than the direct purpose, say, to build a data system, that that’s being done correctly, that the resulting system does what it’s supposed to, and all those other good things.
Kathy Stack So I think that’s that’s definitely an important point. One thing that we have to go on here is we have exemplars in a host of states like Arkansas, Indiana, Ohio, Rhode Island counties like Allegheny County and cities like Denver, where you see how they have built these systems. And there is a real recognition on the importance of efficiency and return on investment. They do not have any interest in wasting federal funds. They do have an interest in creating a very high ROI by putting these dollars together to build a service that can support a whole host of programs. So there’s a built in incentive, I think, at the state and local level to try to be efficient about this. But there clearly is a risk that, you know, you could waste the money. And I think the federal government will be they have mechanisms in place now for reviewing statewide cost allocation plans, local cost allocation plans to try to mitigate that.
Tom Temin And the guide now, the one I’m looking at is in draft form, the field guide. Is it finalized yet and how will you get it out there?
Kathy Stack So it’s posted on the National Academy of Public Administration website. We want people to look at it, review it, digest it, if they have any comments, either positive, or things that they think are missing or need to be clarified or might be wrong, we want to hear from them. And so there’s a submit button that allows for that on the NAPA site. We do plan to have it issued probably by the end of February.
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