Committee Meeting Memos

19099

Prepared by the North Dakota Legislative Council staff for the Budget Section
October 1999

STATE GRANT PREAPPROVAL PROCESSES

Senate Concurrent Resolution No. 4050 (1999) directs the Legislative Council to study the feasibility and desirability of implementing a grant preapproval process for every state agency except institutions of higher education. The Legislative Council has assigned this study to the Budget Section, which at its June 9, 1999, meeting adopted a study plan that included a review of grant preapproval processes used in other states. Pursuant to the committee's action, a survey was sent to all 50 states and the District of Columbia to gather information on preapproval processes used. Of the 46 responses to the survey, seven states (California, Connecticut, Delaware, Illinois, Oregon, Wisconsin, and Wyoming) utilize a preapproval process for grants.

CALIFORNIA

The preapproval process used in California applies to all federal grants except those dealing with highways. The preapproval process was implemented in 1949. The preapproval is granted by the executive branch agency, the Department of Finance. The criteria used to evaluate grant applications are not set in statute.

In California, the Department of Finance has issued a policy that "delegates" to state agencies the responsibility to preapprove grant applications from departments within each agency except in the following situations where the Department of Finance retains preapproval authority:

New activities not included in the budget.
Activities that have been previously denied by the administration or the legislature.
Sensitive policy issues.

CONNECTICUT

The preapproval process used in Connecticut applies to all federal and private grants except fundraising from private sources by higher education institutions. All state agencies are subject to the preapproval requirements. The preapproval process was implemented in 1997. The preapproval is granted by the executive branch agency, the Office of Policy and Management. The criteria used to evaluate grant applications are not set in statute but include:

Consistency with the Governor's policies.
Fiscal implications for the state.

State agencies must submit a "notification of intent to apply for federal assistance or private grant funding" at least 30 days prior to the application deadline. The Office of Policy and Management is not statutorily provided with the authority to disapprove an application but is given the authority to prohibit the agency from spending the funds if they are applied for and received against the wishes of the Office of Policy and Management.

DELAWARE

The preapproval process used in Delaware applies to all federal and private grants and all state agencies are subject to the preapproval requirements. The preapproval process was implemented in the early 1980s. The preapproval is granted by the Clearinghouse Committee, which consists of 10 members, six legislators and four executive branch members. The criteria used to evaluate grant applications are not set in statute but include:

The number of new positions required.
The impact on general fund expenditures.
Space requirements.
Purpose of program.

ILLINOIS

The preapproval process used in Illinois applies to all federal grants received by executive branch agencies under the control of the Governor. Higher education, judicial agencies, legislative agencies, and other elected officials are excluded. The preapproval process was implemented in 1981. The preapproval is granted by the executive branch agency, the Bureau of the Budget. Federal grant applications must be forwarded to the Bureau of the Budget at least 45 days prior to the application deadline.

The criteria used to evaluate grant applications are set in statute and include:

Direct and indirect costs.
Duration of program.
Possible costs to the state after termination of the federal assistance.
Purpose of the program.

OREGON

The preapproval process used in Oregon applies to all federal grants except those received by institutions of higher education. The preapproval process was implemented in 1973. The preapproval is granted by the Joint Committee on Ways and Means or the Emergency Board, both of which are composed of legislative members. If the Legislative Assembly is in session, the grant application must be submitted to the Joint Committee on Ways and Means. If the Legislative Assembly is not in session, the grant application must be submitted to the Emergency Board. Grant applications must be submitted four weeks prior to the committee or board meeting date.

The criteria used to evaluate grant applications are not set in statute but include:

State match requirements.
Maintenance of effort requirements.
Relationship to other state programs.
Desirability of program.

WISCONSIN

The preapproval process used in Wisconsin applies to all federal grants that require the submission of a budget, plan, application, or project proposal to the granting federal agency. All state agencies are subject to the preapproval requirements. The preapproval is granted by the Governor's office. The criteria used to evaluate grant applications are not set in statute but include:

State match requirements.
Appropriateness of the grant.
Possible costs to the state after termination of the federal assistance.

WYOMING

The preapproval process used in Wyoming applies to all federal and private grants. All state agencies whose administrators are appointed by the Governor are subject to the preapproval requirements. The preapproval process was implemented in 1983. The preapproval is granted by the executive branch agency, the Department of Administration and Information. The criteria used to evaluate grant applications are not set in statute but are specified in a policy issued by the department and include:

An assessment of the benefit of the program to the people of the state.
New positions required.
Long-range impact on state tax revenues.

SUMMARY

Of the seven states that utilize a grant preapproval process:

Five states utilize an executive branch agency or office to grant the preapproval (California, Connecticut, Illinois, Wisconsin, and Wyoming), and two states utilize a legislative committee or a committee including legislative and executive branch members to grant the preapproval (Delaware and Oregon).
Three states subject all state agencies and institutions to the preapproval requirement (Connecticut, Delaware, and Wisconsin), one state excludes only higher education institutions (Oregon), one state excludes only agencies dealing with highways (California), and two states exclude all agencies and institutions not under the direct control of the Governor (Illinois and Wyoming).
Three states require preapproval for federal and private grants (Connecticut, Delaware, and Wyoming), and four states require preapproval for only federal grants (California, Illinois, Oregon, and Wisconsin).

Specific information on the preapproval process used in each state is included in Appendix A. The related statutes from each of the seven states are attached as follows:

State	Appendix
California	B
Connecticut	C
Delaware	D
Illinois	E
Oregon	F
Wisconsin	G
Wyoming	H

ATTACH:8