Grants are important tools the government uses to fund programs that benefit the public and support national priorities. Examples include providing incubator advisory programs for small businesses, local producer-to-consumer marketing of farmers markets, and programs to reduce gun crime and community violence.
In FY 2022, U.S. federal government aid to state, tribal, local, and territorial governments was approximately $1.2 trillion. The details of how that money is made available, coordinated, distributed, and reported are just as substantial as the amount itself. Transparency of grants management can inform decision-making, helping the public understand how and where grant funds are spent, and help grant managers ensure intended outcomes.
Government agencies often reference commercial best practices when procuring software to improve the effectiveness, efficiency, and security of their operations. Leveraging the best practices that commercial banks and insurance companies have developed from decades of experience with technology – especially around risk and fraud – can accelerate intended outcomes for grant management. Banks and insurance companies serve large constituencies, manage trillions of dollars annually, and are at the forefront of fighting fraud as they pursue modernization. These are examples directly relevant to the challenges and opportunities facing government today.
Pega has been working in the financial services industry for more than 40 years – it’s where we started. Our experience with data analytics and intelligent automation to prevent fraud before it happens, integrating AI to help identify the most sensitive and risky behavior for special care, as well as our ability to scale at the rate necessary to handle as much as trillions of dollars of throughput, set us apart in this industry. Applying this expertise to government missions, such as grants and financial management, is what agencies like the USDA recognized when they partnered with us to modernize their grants management lifecycle.
How the USDA streamlined grants management
By standardizing and streamlining processes, the USDA has been able to operationalize control while managing compliance with grant administration. Grants are reconciled to the financials throughout the program lifecycle, with automated alerts to communicate discrepancies while allowing for reconciliation to their GL. The automation of complex workflows allows the USDA to follow the many federal, department, agency, and program regulatory requirements, while providing internal and external stakeholders full visibility into the status of their transactions. Easily configured dashboards give the USDA management team a 360-degree view of its programs in real time, allowing for greater operational efficiencies, as well as the ability to decrease potential fraud through improved visibility, tracking, and transparency. The partnership of technology and people has helped the USDA reduce grant payment processing from an average of 6-8 months down to an average of three days, providing complete transparency to the applicant throughout the process, all while lowering the USDA’s cost to manage a grant.
System flexibility for government agencies is critical, as their mission requires on-demand response when issues arise or regulations change. With the newest capabilities around process mining and AI, agencies like the USDA will be able to maintain a continuous improvement loop so they can easily identify and apply changes to their grant processes to maintain responsiveness without compromising transparency or fraud prevention.
Building on the intelligent automation foundation, these government agencies can embrace the latest in technology advancements, like AI, to increase effectiveness and efficiency without compromising mission success. And the more successful they are at improving transparency and accountability, the more trust and confidence they receive from their constituents.