Modern government is trusted and agile

In this short series of grant management blogs, senior leaders from KPMG’s 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.

This blog post, the first in a series of four, focuses on how modernizing government can make the management of grants more trusted and agile and deliver better value for taxpayers.

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.

Driving better outcomes for citizens through modern grant management

Unusually, grants have been newsworthy in recent years. The response of governments around the world to potential economic disaster and personal hardship resulting from the pandemic has brought grants to the masses. Through wage support and business loans, millions of people were exposed to schemes that (thankfully) they had never previously had a need for. While grants have always been a significant public policy lever, recent times have certainly made them more visible to the general population.

This spotlight may have also showed that the old ways of managing grants (often slow and lacking precision) could create a disconnect between setting policy, and enacting them. Or, put differently, a disconnect between ambition and capability.

This shouldn’t necessarily have come as a surprise. Grant management has arguably been under invested in and as such is reliant on inconsistent 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.

Furthermore, around the world, audit office reports often point to a lack of evidence of the positive impact that grant spending has. This can be a problem for governments when it undermines public trust.

The opportunity is for grants to deliver better outcomes, create greater transparency and to do this at a much-improved cost. This blog will explore how these could be achieved.

Modern. Trusted. Agile.

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 to challenges and to opportunities. (A good summary of these topics can be read here.)

In the future world of grant management, the first step in turning ambition into capability is to be 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. Becoming trusted should be earned through 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 consistently drive the grant management approaches that KPMG professionals help them achieve.

Unlocking capability through transformation

Some grants teams are, however, some distance from where they would like to be, and managing major change is complex. Whilst there are areas of very good practice trying to scale good practice across the whole of government is a challenge. How can government begin to get a handle on 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 standardization that exists across them.

This lack of standardization brings 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 visibility of the complete picture for all involved, thereby decreasing trust. Begin to overcome each of these, and capability can begin to be unlocked.

There are, of course, lots of potential technology solutions out there that might help modernize grant management. However, to realize 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 modernization is likely if governments were able to build grants solutions that created standardization across them. Tackling inconsistency makes it easier for applicants to comply with requirements and help to reduce the amount of funding that otherwise would be chewed up in compliance costs.

Modernizing 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.

The cornerstone to trust is assurance

For governments, the concept of trusted goes to 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 that the outcomes are measurable and demonstrable.
  • Integrity of the process – That the process is seen to be run fairly, consistently and is accessible to the intended recipients and their representatives, with a demonstrable appropriateness of use of resources, rather than a perception that too much 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, using the right partners to help ensure successful delivery.

There’s more to agility than speed

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 revolutionize 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, it 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.

Plenty of opportunity for improvement

Transforming grant management should be about creating better outcomes, greater transparency and aiming to reduce costs. By modernizing grants, governments can begin to deliver significant improvements, including aiming to –

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

There is a lot to do. To create grants capability that matches ambition requires governments to make the right investments into people, process, analytics, governance, technology, risk management and the right collaborations. Governments should 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. But change can be done in bite-sized chunks.

Becoming modern, trusted, and agile is a good place to start.

What next?

Later blogs will explore grant management transformation in more detail:

The role that age of the consumer has on transforming grant management will be explored in the second blog – Becoming customer-centric can transform grant management.

The third blog – Embracing the power of technology and data for grant management, will explore what it takes to transform grants through the application of technology.

Finally, the fourth grant management blog – Modernizing risk management in grants will explore how adaptive, intelligent automation can help overhaul risk and fraud mitigation and deliver startling results.