Modern grant management: Better outcomes for citizens

Grants have been unusually newsworthy in recent years. Economic tumult and personal hardship resulting from the COVID-19 pandemic have driven governments around the world to provide an unprecedented level of public access to grants.

Through wage support and business loans, millions of people have been exposed to schemes over the last two years that they had never previously had a need for. While grants have always been a significant public policy lever, recent global events have certainly made them more visible to the general population.

This increased visibility may have also shed light on the potential disconnect between setting policies and enacting them – that is, a disconnect between ambition and capability – that is caused by old methods of grant management.

This should come as no surprise to those who deal in grant management. Efficient grant management has arguably been under invested in and as such, is reliant on inconsistent, outdated processes on legacy technology platforms. This makes it difficult for grants teams to adopt new ways of working and deliver a service that meets citizens’ expectations.

Further, audit office reports across the globe often point to a lack of evidence of the positive impact that grant spending has; this is proving to be a problem for governments as it undermines public trust.

There is a distinct opportunity through grant management modernisation for grants to deliver better outcomes, create greater transparency and operate at a much-improved cost.

In KPMG firms’ dealings with governments around the world (both federal and state/provincial), there is commonality in their desire to help restore the trust that may have been lost, and to become more responsive both to challenges and to opportunities. (A good summary of these topics can be read in the report Modern government: Global trends)

The future of grant management solutions lies in turning ambition into capability, beginning with being fit for purpose in a society with high consumer expectations – a result of often receiving stellar retail experiences. At a basic level, modernity should make grants easier to apply for and track. Trust must be earned as the result of visible financial and outcomes stewardship. Agility should support the need to be rapid-responsive.

These three themes are interdependent. Modern government is trusted and agile. These themes consistently drive the conversation between KPMG firms and governments, and continue to drive the grant management approaches that KPMG professionals help them achieve.

Some grants teams are not where they would like to be, and managing major change is complex. Whilst there are areas that have already adopted very good practice, trying to scale good practice across the whole of government is a challenge. How can a government begin to bridge the gap between its ambition and its capability? Because grants can be so diverse in their design and have traditionally been developed in departmental silos, one major problem to overcome is the lack of standardisation that exists across them.

This lack of standardisation accrues significant cost in the form of administrative overheads (both for government and for external providers of all types), greater technology cost of ownership (multiple platforms, multiple skillsets), increased cost of change management (additional scope and complexity), a potential lack of access for citizens (too confusing or complex) and decreased discernability of the complete picture for all involved, thereby decreasing trust. Beginning to overcome each of these means establishing capability.

There are many existing technological solutions that may help to modernise grant management. However, to realise a step-change in both efficiency and effectiveness, it is more than just a technology problem; it is a transformation problem – one that should involve a realignment of people (roles and skills), and an adoption of best practice across process, operating models, analytics, governance, and technology.

The diversity of grants means that a more successful modernisation is likely if governments were able to build grants solutions that created standardisation across them. Tackling and eradicating inconsistency makes it easier for applicants to comply with requirements and helps to reduce the amount of funding that otherwise would be lost to compliance costs.

Modernising grants should follow a transformation approach that starts with a model answer of ‘what good looks like’, based on current leading practice (such as KPMG’s Target Operating Model for grant management). However, it is of critical importance that this model answer is able to adapt to changing circumstances and intercept emerging technologies.

For governments, the concept of trust is at the heart of public service. Allocating taxpayers’ money to grants should produce results. It also needs to be seen to help produce results through greater transparency.

Transforming grant management can begin to strengthen trust in the system. There are three areas to focus on:

• Delivering the outcome – Everything is designed with the outcome for the citizen in mind, and so that the results are measurable and demonstrable.
• Integrity of the process – That the process is seen to be run fairly and consistently and is accessible to the intended recipients and their representatives, with a demonstrably appropriate use of resources, rather than a perception that too much grant spending is lost to fraud or allocated to the wrong things.
• Efficiency – That a scheme is set up in the right way, in the right timescale, at the right cost and using the right partners to help ensure successful delivery.

By their nature, some grants schemes are urgent. Agility (the ability to be responsive, with ease) is a key component of rapid grant program design. But one size rarely fits all; therefore, building tested, reusable, modular-based solutions is an effective way of getting grants out there quickly and having the scalable, full lifecycle solution in due course.

Taking a modular approach (i.e., solutions made up of reusable, preconfigured component parts) can also help where more agility is needed on existing schemes. Surrounding legacy systems with modern capability can help overcome their limitations.

Agility is not just about making changes quickly. Embedding agility into business processes through automation or artificial intelligence can help revolutionise how that process works. Consider risk management: KPMG professionals have been working with grants teams to embed intelligent automation into the risk management process. Not only does it make the process more dynamic and adaptive, but it also frees up people resources to focus elsewhere. Currently, a disproportionate amount of people resources in grants is focused on distribution and financial stewardship instead of on outcomes stewardship. Intelligent automation can dramatically reset that balance.

Grant management transformation should be about creating better outcomes, increasing transparency and aiming to reduce costs. By modernising grants, governments can begin to deliver significant improvements, including aiming to:

• reduce money lost to administrative overheads
• enable not-for-profit organisations to better support their target citizens and communities
• increase the level of trust throughout the grant management process.

Governments must think differently about what service delivery models they deploy to allow their employees, and the grants ecosystem, to better serve the communities they are trying to reach. Changes can be made step-by-step; becoming modern, trusted, and agile is a good place to begin a journey towards efficient grant management.

There is a lot to do. To foster an environment that helps bridge the gap between capability and ambition requires governments to make the right investments into people, process, analytics, governance, technology, risk management and the right collaborations. KPMG Australia has years of experience helping government organisations and NFPs build the right capabilities and systems that allow for a trusted, modern and agile grant management.

This blog article was authored by Matthew Glanville, KPMG in the UK, and originally appeared on the KPMG International website.