When it comes to grant management, governments have many customers – citizens (grant recipients as well as the wider public), providers (for-profit and not-for-profit), ministers and parliaments. In the age of the consumer, there is a high expectation that government should be easy to do business with.
Research conducted by KPMG International and Forrester Consulting has revealed that governments believe the customer experience they offer to be lagging within the private sector, but that forward-looking governments will be putting customer needs ‘at the heart’ of future government policy and ambitions. A summary of this research can be found in KPMG's Modernising Government report.
Grants are an integral instrument governments use to provide good outcomes for citizens and grant management an important jumping off point from which to begin to improve the customer experience. There is a distinct opportunity – both to improve customers' government grant experience – and to enhance standards of integrity.
Transforming ambition into a seamless customer journey
The process of putting together a grant scheme is an ever-changing landscape. A fast turnaround time is key: policy makers must be able to quickly comprehend the the public policy challenge at hand that must be addressed and proceed to action an immediate response. This process envelops every stage of the grant management process, from the design of a grant program to advertising, assessing and gaining traction on getting funding out to target recipients. What once may have taken 12-18 months to complete is now often expected to take mere weeks or in some cases, days. Post-pandemic government debt levels and the prospect of stagflation in major economies will likely put even more pressure on budgets and can create a stronger drive to do more with less.
With a newly heightened focus on trust in government, there are intensified expectations surrounding efficiency and integrity; policy makers must not compromise on one to enhance the other.
Poor customer experience equals high cost and frustration
The existing grant experience can be complicated and challenging. Applicants report feeling frustrated and defeated after a poor experience as the system in place comprises complex form filling, inflexible processes and a perceived lack of progress.
Governments are facing the challenge of meeting customer expectations: different types of customers have varying needs – while an individual may need a simple online interface or app, a multi-dimensional provider could present more sophisticated requirements that are more akin to a B2B portal where a range of tasks can be accessed and completed in the same place. Not-for-profits and other providers often act as the buffer between government and citizens. They may be delivering multiple programs with different eligibility criteria, definitions, expectations and reporting cycles through various systems with distinct templates. For organisations dealing with multiple grant programs, this creates complexity and increases cost; it also detracts from the delivery of the program and can impact the outcome for which they are being funded.
While different grant programs are likely to have a diversity of criteria and requirements, too often the discrepancies in various grant designs are purely accidental. The administration costs alone of grant management can be significant. They are often cumbersome and require a hefty amount of people-power to run. Most grant management ‘solutions’ have been built with layer upon layer of manual intervention, largely designed to provide checks and balances to overcome the fear of fraud in the system.
Governments can spend anywhere from two percent to as much as 20 percent of the grant on administration, depending on the complexity of the grant management system and process. This spending accumulates throughout the year and can produce an enormous sum; the Australian government spend on grants across federal and states, for example, roughly results in a combined AU$70bn (c.$47bn USD) [source: www.budget.gov.au]. If efficiency was improved by as little as one percent, the government would enjoy some A$700million more that could be spent on improving the lives of its citizens.
This does not account for the costs that grant recipients incur. The overhead that grant recipients experience through a poor grant management process is a significant burden to them and can notably slow down the distribution of grants or delivery of services through that grant to its end users. A poor customer experience and lack of customer centricity serves to deflect them from the added value they could be – and should be – providing to the communities they serve.
Streamlining and standardising certain requirements and definitions could serve to help improve the grant experience for applicants, lower costs and improve integrity.
The case for investment
Delivering modern, seamless, usable, multi-channel services is an area in which many governments across the globe need to focus on making progress.
Unnecessary differences in grant processes and requirements, even when accidental, must be minimised. This can be achieved by designing grant programs that align people, processes, and technology (the operating model) around a core set of more standardised and repeatable grant models.
Grounding these approaches in modern, agile, adaptable technology platforms can foster automation and agile decision making, freeing up time on both the government and grant recipient side. This can improve integrity and public trust by focusing on a customer centric grant management process and help to ensure that a greater portion of government funding gets to the intended end users.
For an Australian State Government, the KPMG Australia Data Risk team developed a Quality Assurance Model, which independently assessed every single grant for eligibility, fraud and compliance prior to the grant being paid. This modular solution significantly sped up the application-to-payment timeframe by replacing a heavily manual and sample-based approach. It lowered the error rate of grant payments (both false positives and negatives), and produced interactive reporting. This gave all stakeholders a sense of trust and confidence in these significant grant payments.
Automation could hold significant benefits for high volume grants applications. In both Australia and the UK, there was high profile media coverage of fraud relating to COVID-19 grants where large volumes of wage assistance and business loans were used to prevent large scale unemployment. A rigorous, automated process that can check trading solvency, company registers, board memberships, conflicts of interest, etc., could drastically reduce levels of fraud while expediting fund distribution at the same time.
Something for everyone
The ideal future state would be to adopt leading practice supported by case management, workflow, automation, data analytics and reporting, and customer management. This would provide stakeholders in the grant management chain with significant expected benefits in helping them to navigate managing complex grants.
Providers could benefit from a single view of everything they have in their portfolio:
- Analysis on what they have received/are due to receive
- Automated prompts for reports due to be submitted
- A central repository of contracts they have in place
- A clear view of which grant managers are dealing with their applications
- Reduced admin, allowing them to focus more on their target communities
Grant managers could benefit from a lifting of significant administrative burden:
- Free up time that would otherwise be spent on low value tasks
- Access to tools to provide a better service
- The ability to follow the money and identify potential misuse
- Headroom to build better relationships with providers
- Help with launching new grants faster through a more in-depth understanding of provider network
- Data insights that connect output to outcomes
- Understand and measure the impact that grants are making
- Receive insights that can directly feed back into public policy
- Begin to answer the question: Did we make things better?
Need help with becoming more customer centric?
Get the teams at KPMG Australia to assist you with honing in on customer centricity. With years of experience in enabling many government departments and NFPs implement the right strategies and tools that ensure an effective, customer centric grant management system, we will help you focus on the right areas that will allow citizens achieve discernible, measurable, improved, outcomes from their grants.
In the pursuit of streamlining grants and improving the outcomes of citizens, becoming customer centric has a big role to play. On top of providing a better process, it can potentially reduce the high costs suffered by both government departments and providers. Taking measures that are out of the box in order to be faster, cheaper or both is commendable. But the opportunity in grants is, in fact, even greater than that.
This blog article was authored by Ben Wallace, KPMG Australia, and originally appeared on the KPMG International website.
Grant management article series
In this short series of grant management blogs, senior leaders from KPMG firms' global Government Advisory team provide insights into how governments can drive change, get more from their investment in grants, and deliver better outcomes for citizens.
Throughout this series, ‘grants’ refer to the various mechanisms that transfer funds from governments to third parties for the delivery of public support, relief, or services either as a one off or ongoing.
To learn more about how governments can achieve better outcomes from their investments in grant management programs, explore the related articles below:
How modernising government can provide trustworthy, agile grant management solutions that deliver better value for taxpayers.
How modernising government can provide trustworthy, agile grant management solutions.
How embracing technology transformation and data can advance the grants process and improve outcomes for citizens.
Embracing technology transformation can advance the grants process and improve outcomes.
Modernising risk management framework for grants to measure and improve outcomes.
Modernising risk management framework for grants to measure and improve outcomes.
Grant management – How KPMG Australia can help