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, like other parts of the economy, should be easy to do business with.
Research from KPMG International and Forrester Consulting has shown that governments believe the customer experience they offer to be lagging the private sector, but that forward-looking governments will be putting people ‘at the heart’ of future government policy and ambitions. A neat summary of this research can be found through this recent article from KPMG's Modernizing Government report.
Because of the importance of grants as a mechanism for governments to deliver better outcomes for its citizens, grant management would be a great place to aim to improve the customer experience. There is an opportunity to both improve consumer experience of government grant delivery, and to enhance standards of integrity.
This blog will explore why this would be desirable, and how it could be achieved.
Turning ambition into capability
In the previous grant management blog in this series, my colleague Matthew Glanville, Director, KPMG in the UK, explored how transformation can help turn ambition (of driving better outcomes from grants programs), into capability (by putting in place the tools, methods and processes to make the ambition happen).
The landscape for putting together a grant scheme has changed in recent years. Policy makers need to be able to quickly understand the public policy challenge to be addressed and be able to rapidly respond - from the design of a grant program to advertise, assess and start getting traction on getting funding out to the target recipients. What used to take 12-18 months can sometimes be expected to take just weeks or sometimes 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 heightened focus on trust in government, there are ever increasing expectations that there is no trade-off between increased efficiency and integrity.
Grant management article series
In this short series of grant management blogs, senior leaders from the KPMG firm’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 their citizens.
This blog post, the second in a series of four, focuses on how taking a customer centered approach can lead to better outcomes, as well as delivering a more cost-effective model for managing grants.
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.
High cost, and much frustration
Currently, the grants experience is often very difficult. Complex form filling, inflexible processes and systems, and little visibility of progress can leave applicants frustrated with the entire process.
The challenge for governments is that different types of customers have very different needs – from an individual needing a simple on-line interface or app, to a multi-dimensional provider that has more sophisticated requirements, (more akin to a B2B portal where everything can be found, and done, in the same place). Not-for-profits and other providers are often the layer between government and citizens. They may be delivering multiple programs with different eligibility criteria, different definitions, different expectations, different reporting cycles through different systems with different templates. For organizations dealing with multiple grant programs this creates complexity and cost, and it detracts from the delivery of the program or outcome for which they are being funded.
While different grant programs will likely have different criteria and requirements, too often the differences in grant design are accidental, rather than purposeful. The administration cost of grant management can be huge. They can be cumbersome and people-intensive 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.
It is not untypical for governments to spend two or three percent, or as much as 20 percent of the grant on administration (depending on complexity). These can be enormous sums annually. For example, the Australian government spend on grants across federal and states combined is roughly AU$70bn (c.$47bn USD) [source: www.budget.gov.au]. Improving efficiency by as little as one percent equates to some A$700million more to spend on improving citizens’ lives. Even before COVID-19, the UK Government spending on grants was £118bn a year (c.$150bn USD) [source: www.gov.uk].
This does not include any measurement of 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 significantly slow down grants distribution or delivery of services through that grant to its end users. It also deflects them from the added value they could be providing to the communities they serve.
Streamlining, and where possible, standardizing some requirements and definitions could serve to help improve the experience of grant applicants, reduce compliance costs, and improve integrity.
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The case for investment
Delivering modern, seamless, usable, multi-channel services is a journey that many governments around the world are yet to make much progress on.
Unnecessary variations in grant processes and requirements can be minimized by designing grant programs that align people, processes, and technology (the operating model) around a core set of more standardized and repeatable grant models.
Embedding these approaches in modern, agile, adaptable technology platforms can drive automation and decision making, to free up time on both the government and grant recipient side. Doing so can improve integrity (and public trust) and help ensure that a greater proportion of government funding gets to the 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 before it was paid. This modular solution significantly sped up the application-to-payment timeframe by replacing a heavily manual and sample-based approach. It reduced the error rate of grant payments (both false positives and negatives), and produced interactive reporting, giving trust and confidence to all stakeholders for these significant grant payments.
Consider the potential benefits of automation on 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 is able to check trading solvency, company registers, board memberships, conflicts of interest, etc., could significantly reduce levels of fraud, while simultaneously speeding up fund distribution.
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 to provide stakeholders in the grant management chain with significant expected benefits in helping them to navigate managing complex grants.
Providers could potentially 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 potentially benefit from a lifting of significant administrative burden:
- Free up time otherwise spent on low value tasks
- Access to tools to provide a better service
- Allow them to follow the money and identify potential misuse
- Give them headroom to build better relationships with providers
- Help launch new grants more quickly through a deeper understanding of provider network
Policy makers/Executives could potentially benefit from evidence of outcomes achieved:
- Use 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?
Continued focus on higher value
In the pursuit of streamlining grants and improving the outcomes of citizens, becoming customer centric has a big role to play. Not only does it run the process better, it has the potential to reduce the administrative overhead suffered by both government departments and providers.
Doing things differently to be faster, cheaper or both is laudable. But the opportunity in grants is much greater than that.
Taking a customer-centric approach and focusing on high value tasks can help all parties, in turn, to help citizens achieve discernible, measurable, improved, outcomes from a grant they have received.
What next?
If you missed the first blog in this series on grant management, Driving better outcomes for citizens through modern grant management, you can find it here.
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 complex grant programs will explore how adaptive, intelligent automation can overhaul risk and fraud mitigation and deliver startling results.
