Non- Profit Grants Oversight Policy Report No. 2009- 02
Page 19 of 28
• measurable performance standards and quality assurance plans;
and
• performance incentives and payment tied to outcomes.
Thirteen states have moved toward adopting performance- based
contracting, and two of these did so through legislative changes. Legislation
passed in Florida in 1994 required performance- based contracting for all
state- funded programs; legislators in Maine voted to require the
Department of Human Services to adopt performance contracts as of
1997. In the other 11 states, single agencies or state- funded programs
have adopted performance contracts.
In North Carolina, the Department of Health and Human Services began
agency- wide implementation of performance- based contracting in 2003.
First, the agency trained program staff in performance contracting and
contract management; once performance contracting was in place, the
department implemented systematic peer reviews of programs to assess
the quality of services and the consistency of grants within programs.
Department staff has found performance- based contracting brings a new
dimension to grants by focusing attention beyond reimbursement to
outcomes achieved with the money. In addition, in lean economic times,
data that result from performance- based contracting can provide an
empirical basis for future funding decisions.
Grant contracts in North Carolina do not consistently establish how
agencies should assess performance. Once a grant is awarded, the
agency draws up a contract to ensure that all requirements in N. C. Gen.
Stat. § 143C- 6- 23 are met. The administrative rules spell out required
components of contracts, which are reflected in a contract template
developed by the Attorney General’s Office and provided on the internet.
The template specifies required elements such as terms and conditions, the
scope of work to be completed, budget documents, and various required
certifications. The contract states the effective period, describes the
grantee’s and agency’s duties, outlines payment procedures, and describes
reporting requirements.
The Program Evaluation Division’s review of contract templates and terms
submitted by 15 state agencies suggests most agencies adopt the Attorney
General’s template or terms. One grant program administered by the
State Treasurer, the Health and Wellness Trust Fund, has a detailed
template that defines focus areas and strategies for each area and
requires applicants to describe activities, outcomes, and performance
measures within each area. This level of detail is possible because the
grant program is narrowly defined, and the focus areas and strategies are
set by the program. Most agencies, however, oversee varied programs
that would not be accommodated by such a detailed, uniform template.
The Department of Health and Human Services stands alone in its adoption
of a flexible framework that applies across widely varied contracts and
requires performance measurement.
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