Title: Federal Grant Flexibility Act: Maximizing Unspent Funds to Support Priority Social Programs
Purpose:
To end the “use-it-or-lose-it” provision within federal grant guidelines, allowing unspent funds to be reallocated toward addressing urgent social priorities, including homelessness, education, food security, and other critical community needs. By enabling the rollover or repurposing of unspent grant funds, this policy aims to increase flexibility, efficiency, and impact within federal funding programs.
Background:
Under current guidelines, many federal grants operate under a “use-it-or-lose-it” provision, requiring that all allocated funds be spent by the end of the fiscal period or forfeited. This approach often pressures agencies and organizations to spend remaining funds quickly, sometimes inefficiently, to avoid forfeiture. By eliminating this provision, unspent funds can be effectively redirected to address pressing needs, maximizing taxpayer dollars and enhancing the impact of federal spending.
Policy Objectives:
- Increase Flexibility in Federal Grant Spending:
• Enable recipients of federal grants to roll over unspent funds from one fiscal year to the next, allowing for strategic and thoughtful spending aligned with program needs and goals.
• Allow reallocation of unspent funds for related social priorities within the community, such as homelessness prevention, public education, and food security programs.
- Maximize Impact and Accountability of Federal Funds:
• Ensure that every dollar spent supports critical initiatives and provides measurable social benefits.
• Require accountability measures to monitor and report on the use and impact of reallocated funds.
- Support Collaboration Across Federal and Local Agencies:
• Encourage interagency cooperation to identify where unspent funds can be most effectively reallocated.
• Allow federal agencies to coordinate with local governments and community organizations to channel resources toward high-impact areas, creating a stronger social safety net.
Implementation Guidelines:
- Rollover Provisions:
• Allow grant recipients the option to roll over up to 20% of unspent funds for continued use in subsequent years for the same program.
• For grants in critical sectors such as housing, education, and food security, allow for up to 50% of unspent funds to be repurposed for similar local priorities.
- Reallocation Mechanism:
• Establish a review and approval process for reallocation of funds, with a focus on areas facing acute challenges, such as homelessness, underfunded schools, and food insecurity.
• Require grant recipients to submit proposals detailing the intended use of reallocated funds and anticipated outcomes.
- Reporting and Accountability:
• Mandate detailed annual reports on the usage and impact of both rolled-over and reallocated funds.
• Establish metrics and performance indicators to track the effectiveness of reallocated funds in addressing key social issues.
- Transparency and Oversight:
• Implement oversight through the Office of Management and Budget (OMB) to ensure funds are directed responsibly and align with federal priorities.
• Make information on fund reallocation publicly available to promote transparency and community trust in the process.
Expected Outcomes:
- Enhanced Efficiency in Federal Spending:
• Reduce wasteful spending at the end of fiscal periods, ensuring all funds support meaningful objectives.
• Increase long-term efficiency in federal programs by promoting more strategic use of resources.
- Stronger Social Infrastructure:
• Address unmet needs in homelessness, education, and food programs by providing flexible funding solutions that adapt to evolving social challenges.
- Greater Public Trust and Engagement:
• Foster transparency in the federal funding process, allowing taxpayers to see the positive impact of reallocated resources in their communities.
Conclusion:
By ending the “use-it-or-lose-it” provision and allowing unspent funds to be repurposed for critical social priorities, the Federal Grant Flexibility Act will strengthen federal support for underfunded community programs, reduce inefficiency in government spending, and foster a more effective response to emerging social needs. This policy supports a sustainable, adaptable approach to federal funding, maximizing the positive impact of every dollar spent.