June 9, 2003 Gareth Hatch, Office of Federal Financial Management Office of Management and Budget Room 6025 New Executive Office Building Washington, D.C. 20503 Via E Mail to ghatch@omb.eop.gov Re: Consolidated Federal Financial Report, Volume 68 Fed. Reg. No. 67, Pages 17097-17105 Dear Mr. Hatch, OMB Watch is submitting these comments on the proposed consolidated financial reporting form for federal grantees based on input from nonprofits at the state and local level that wrestle with the complexity of the current system on a daily basis, and look to this process for relief. The issue of grant streamlining has been a priority of OMB Watch for some time. We worked with former Sen. John Glenn of Ohio to develop the Federal Financial Assistance Management Improvement Act of 1999 (FFAMIA) after co-sponsoring a series of physical and online conferences with the Ohio Association of Nonprofit Organizations, a NCNA member, that included recommendations leading to the legislation. Since that time we have joined with The Urban Institute and GuideStar to give nonprofits information on implementation of FFAMIA and a vehicle for input into how the federal government implements FFAMIA’s mandates. General Comments and OMB Questions Consolidation is a Positive Step Forward, But Simplification Must Be the Priority OMB Watch supports the comments and recommendations on this matter being filed by The Urban Institute’s National Center for Charitable Statistics. Currently more than 50,000 nonprofit 501(c)(3) organizations receive federal grants, and they spend an enormous amount of time and money seeking them. In addition, thousands of small community and faith-based organizations are in the process of forming and are interested in competing for these funds. Identical items of financial information must be reported multiple times or inconsistent definitions require “slicing and dicing” the same information in different ways. The inconsistencies are multiplied at the state and local level. It is critical that consolidated forms eliminate unnecessary information and clearly explain uniform definitions of terms. Focus Groups Recommendations The recommendation set out below was derived from two sources: responses from individual nonprofits to information we provided on this Request for Comments, and two focus groups of state and local nonprofits that reviewed the questions in detail. The focus groups were sponsored by OMB Watch and the National Council of Nonprofit Associations (NCNA), and included 15 nonprofits and one state highway patrol. All participants are federal grantees and also get funds from state or local government. They represent social service providers, educational institutions, museums, literacy efforts, safety and research programs and technical assistance providers for faith-based and community organizations. Participants also were geographically diverse, hailing from Arizona, California, Florida, Georgia, Illinois, Massachusetts, Nebraska, New York, North Carolina, North Dakota, Puerto Rico, Texas, Utah and Virginia. � Automatic Calculations for Online Financial Reports During discussion of financial reporting, focus group participants noted that a great deal of duplication will remain in the system if the same information must be re-entered and submitted to each agency funding a program. To avoid this, and reduce errors, they suggested that online financial reporting forms contain calculation macros that would automatically adjust figures in all relevant fields when one item is changed. The system would work in a manner similar to Turbo Tax and other electronic tax preparation software. � Financial Information Clearinghouse Basic information about a grantee, including financial information, should be stored in a password protected site that grantees can access to update their information annually or when major changes occur, such as identity of a contact person. This should be possible, since standard information is required with every application, but rarely changes from application to application. Once the standard application is submitted to the clearinghouse, a nonprofit could access it and direct a new grant application be submitted without having to fill out another form with the same information. The inefficiencies of filling in the same information on the same form remain in an online system if such a clearinghouse is not established. Conclusion Implementation of the Federal Financial Assistance Management Improvement Act is an enormous undertaking, and we commend OMB and the agencies for their work toward the goal of simplification. It can only benefit everyone- nonprofits and government alike. Charities are seeking easier ways of obtaining federal resources without massive burdens. While we are pleased with the ambitious timetable the EGrants process has established, we caution the agencies not to be so driven by the timetable that the inefficiencies of the current system are not corrected. If these inefficiencies are transferred into an online system we will simply have shifted paperwork burdens to online burdens, and not have gained much. We would appreciate the opportunity to meet with project staff to discuss these comments and any and all questions relating to the simplification and streamlining process. Yours truly, S/ Kay Guinane, Counsel and Manager Community Education Center kguinane@ombwatch.org