Witness tells House committee Vermont must simplify and speed state grant payments under H.233

Jonathan Williams, senior grants and contracts manager and a former state representative, told the House Government Operations & Military Affairs Committee on Wednesday that H.233, a bill on state-funded grants, should do more to make grants usable for nonprofits, towns and schools.

"Grants are the delivery truck for legislative will," Williams said. He testified that delays and complex, varying agency procedures are forcing nonprofits to close and slow disaster recovery, and he urged clearer, simpler processes to allow organizations to access indirect cost allowances and quicker payments.

Williams told the committee that Section 1 of the bill, which addresses indirect (administrative) rates, is important because federal rules now allow a higher de minimis rate and agencies can negotiate a higher negotiated indirect cost rate agreement (NICRA) if organizations "can show your math." He said Vermont currently limits many grantees to a lower indirect rate even though some organizations (he cited his employer's food bank) have real indirect costs around 30 percent. "If the money is freed up over here for rent and utilities, they can spend their unrestricted funding on medicine or teachers," Williams said.

Williams said the federal floor for de minimis indirect rates used to be 10 percent and has recently moved to 15 percent, and that some research institutions have rates of 40–50 percent. He warned that recent federal instructions to the National Institutes of Health to restrict funding to the de minimis could harm research institutions nationally.

On prompt payments, Williams acknowledged the administration's statistic that 97.8 percent of state grant payments are made within 30 days, but he said that figure can be misleading for reimbursement grants. "You have to view that as part of a larger puzzle," he told the committee, noting that reimbursement grants require recipients to spend money first and then seek payment. He described cases in which a grant award and executed agreement took months—citing one ANR example that took 117 days—and said that timeline plus 30 days for payment can be catastrophic for small nonprofits.

Williams described local experience after severe flooding: his volunteer-run Berry Community Relief Fund distributed more than $600,000 to individuals and businesses in roughly two years and was able to turn around emergency grants in about two weeks. He contrasted that speed with some state legislative appropriations that, he said from experience, have taken eight months to a year to reach grantees. "It can be better. It should be better," he said.

Committee members asked questions about differences across agencies and data collection. Williams said agencies use different portals and processes—he praised the Agency of Agriculture's portal as an example of speed—and urged the bill's working group to examine whether Vermont could adopt a single portal and standard forms similar to the federal SF-424 and grants.gov system. He said several other states, including Florida, New Jersey and New York, have implemented grant-portal or process reforms.

Williams recommended specific steps to the committee: (1) allow a clear, accessible process for nonprofits to request higher indirect rates by documenting costs (an easier state-level alternative to a federal NICRA); (2) require clearer notice in grant agreements that higher indirect rates are available when supported by documentation; (3) collect data on the time between application and executed grant agreement and reasons for delay; and (4) explore a single, standardized grants portal for the state.

Committee members thanked Williams and requested the list of states he referenced and additional details on the standardized federal forms he cited. There was no formal vote at the hearing; Williams's testimony and the committee's questions concluded the item's public testimony.

Less critical details: Williams identified the Emergency Food Assistance Program (TEFAP) and other federal agencies (USDA, HUD, EPA, ACF) as sources of federal grant funding that are sometimes routed through the state. He also noted the Business Emergency Gap Assistance Program (BGAP) as an example of small-business disaster support that relies on timely state disbursements.

Next steps: The committee will consider H.233 and the working-group provisions within it; witnesses asked the committee to add clearer guidance on indirect-rate processes and to collect more complete timing data so the state can reduce bottlenecks and speed funds to communities in crisis.