Lessons GGRF Recipients Can Learn from Federal Grant Programs

By Carly Mitchell, Thomas Holland, Ted Kowalsky, Britt Harter

The Greenhouse Gas Reduction Fund (GGRF) is a new, uniquely structured $27 billion dollar federal program. However, it shares many characteristics with previous large-scale, high profile federal loan and grant programs. As applicants plan for their first year, lessons learned from previous programs like the Emergency Rental Assistance Program, state and local fiscal recovery funds, and the RESTORE Act can position these potential recipients for success.

As with pandemic-era programs established in 2020 to 2022, federal financial managers, watchdogs, and Congress are already signaling interest in reporting, compliance, oversight, conflict mitigation and financial control on GGRF. GGRF’s National Clean Investment Fund and Clean Communities Investment Accelerator programs are drawing particular attention due to their less-typical eligible recipient criteria. As indicated in a recent House Committee on Energy and Commerce Hearing,  oversight is already focusing in on topics such as oversight of the GGRF program, fraud prevention, and measuring impact/success.

As past program experience shows, GGRF awardees should think of the first 6–12 months as the beginning of a marathon where pacing, planning, and preparation are the foundation for success. And the work during that first year to get the right operations, controls and foundation in place, the better chance new programs have to succeed. Below we share insights and perspectives in the form of 6 lessons learned from past pandemic and financial crisis stabilization programs for GGRF applicants to consider as they prepare for GGRF awards.

Build Flexibility and Agility into the Plan Assume you don’t know where challenges will present themselves during the first few “miles” post-award. The U.S. Environmental Protection Agency (EPA) is building a plane while flying it too. They are designing and launching three programs at once, while under intense scrutiny themselves and balancing government stakeholders, including Congress and the White House, and industry stakeholders. It will take them time to align all of the often competing objectives to finalize things like reporting and compliance requirements. You may not know all the “rules” when you sign your grant agreement. Technology, processes, and reporting will need to be agile as EPA continues to mature its design and its own GGRF operations.

Design with the Finish Line (and Success) in Mind —In the early miles, you will be myopically focused on moving money to qualified investments and projects. However, it won’t be too long after that when you will be expected to report impact of those investments and show compliance with the many requirements governing this program. Bear this in mind: accepting just $1 of federal funds will invite federal oversight and impose federal reporting responsibilities. Therefore, you don’t want to wait until the first investments are made to consider how to structure reporting and compliance efforts. The information you collect and review as part of the application and funding processes should be building toward a longer-term plan for monitoring and reporting compliance and impact, and eventually closing out the investments.

Celebrate Small Wins Every Mile You will be running a marathon at a sprint pace, and your team will feel that pressure. Don’t burn everyone out in the first year. Celebrate small wins, milestones, and impacts. You will all need that positive energy to carry you through and to help keep energy up. You will also want to use these milestones to show progress to stakeholders and build and keep momentum both internally and in the eyes of external stakeholders.

Plan Your Race: Balance Speed and Control While Avoiding the Rabbit Hole — You will need to balance the pressure to moving initial investments quickly, with having the necessary controlled processes and operations ready to go. Not every process and role must be defined, but any decisions and actions you take should be directionally correct to future state processes, decisions documented, recipients verified, and math checked (and checked again). When designing processes, for example, it is very easy to get caught in a “what if” scenario where you end up with a convoluted process that takes any and all potentialities into account. And worrying after or fine-tuning processes for the 10% of exceptions could slow down the efficient processing of the other 90% of “business as usual” transactions. Instead, solve for the base case and define exceptions processes to handle deviations from the norm. If and when exceptions occur, you’ll have the organizational experience and agility to standardize them then.

Use Your Team To get this far, you’ve had to assemble a strong team with various skills and experience. They were not there just for the sake of a winning application.  EPA expects they should be around for the winning program. Aside from pacesetting and drafting, as you move forward, understanding who does what, and who has decision-making authority on what decisions, will be critical clarifications for your organizations. Even going so far as practicing or walking through hand-offs, for example the process for investment committees through grant draw down, will make operations smoother as pace picks up.

Align Around and Remember Your “Why” —Keep focused on the horizon throughout the race. While policy, operational risk, and financial objectives and perspectives can sometimes conflict, there is one thing we can generally all agree on: the mission and purpose of GGRF. Keep mission as your North Star and continuously emphasize focus on it across employees, contractors, and other stakeholders.

Guidehouse is a global consulting firm with experienced subject matter knowledge and expertise in advisory, digital, and managed services. Guidehouse has designed and administered many grant and loan programs, including under the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Consolidated Appropriations Act (CAA) of 2021, and the America Rescue Plan Act (ARPA) funding for dozens of federal and state agencies, the Section 1603 renewable energy program, utility and Inflation Reduction Act (IRA) energy efficiency programs including the Homeowner Managing Energy Savings program (HOMES) and the High-Efficiency Electric Home Rebate Act (HEEHR), and clean technology due diligence. Guidehouse is actively supporting entities across many IRA programs and all three GGRF programs.

Guidehouse brings an unparalleled mix of sustainability consulting, financial services, grants management, and digital expertise, all on one integrated platform to help you implement and operate your GGRF-related programs. From strategy, design, and build through to running the technology and operations, Guidehouse is uniquely qualified to help you on your GGRF journey.

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