Source: https://www.governmentcontractslegalforum.com/2020/03/articles/covid-19/omb-issues-additional-guidance-to-grant-recipients/
Timestamp: 2020-05-28 12:56:56
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OMB Issues Additional Guidance to Grant Recipients | Government Contracts Legal Forum
Home » OMB Issues Additional Guidance to Grant Recipients
As signaled as a possibility in its March 9, 2020 guidance in Memorandum M-20-11, the Office of Management and Budget (OMB) issued Memorandum M-20-17 on March 19 to provide short term administrative, financial management and audit relief from the 2 CFR Part 200 Uniform Guidance requirements to a broader scope of recipients of grants and Federal financial assistance that are affected by the COVID-19 crisis. Importantly, this OMB guidance authorizes awarding agencies to grant the administrative relief exceptions enumerated to the extent the awarding agency deems appropriate to recipients affected by the loss of operational capacity due to COVID-19. Except as noted below, and until awarding agencies publish additional guidance on their implementation of Memorandum M-20-17, recipients must ask for relief, and the awarding agency then has the discretion to issue an exception to the requirements.
Any exceptions issued pursuant to this guidance are time limited and will be reassessed by June 17, 2010. Though OMB acknowledges that, at present, many of the operational impacts and cost are unknowable, it is uncertain what OMB guidance will be following reassessment in June 2020. Therefore, impacted grant recipients should act within the next 90 days to attempt to secure relief.
The Differences Between OMB Guidance in M-20-11 and M-20-17
In its most recent guidance in M-20-17, OMB expands the scope of M-20-11 – which was limited to grant recipients performing essential research and services necessary to carry out the COVID-19 emergency response – to provide similar “short term relief” for administrative, financial management and audit requirements under 2 C.F.R. Part 200 to “recipients affected by the loss of operational capacity and increased costs due to the COVID-19 crisis.” In addition to applying to a broader group of grant recipients, M-20-17 also provides certain additional flexibilities that were not previously included in M-20-11; these include: flexibility with application deadlines, allowability of costs not normally chargeable to awards, extension of currently approved indirect cost rates, extension of closeout, and the ability for awarding agencies to waive certain notification requirements pertaining to COVID-19 related problems on a grant-by-grant basis.
It appears that the allowability of pre-award costs from January 20, 2020 through the Public Health Emergency Period and the twelve-month extension (as opposed to six-month extensions) to complete the Single Audit report, provided in Memorandum M-20-11, continues to be limited to those grantees performing essential research and services necessary to carry out the COVID-19 emergency response.
Notably, as agencies consider this relief, OMB counsels that program managers should consider potential offsets, including a reduction in training and travel.
Administrative Relief Exceptions for COVID-19 Crisis
In addition to the existing flexibility that awarding agencies have to grant exceptions on a case-by-case basis pursuant to 2 C.F.R. § 200.102, OMB is providing Federal agencies with the authority to issue broader exceptions to the Uniform Guidance requirements as detailed below. However, this relief is not automatic, except where noted herein. Accordingly, recipients and awardees must take affirmative steps to contact funding agencies to request relief absent further guidance from the various Federal awarding agencies. Awarding agencies are obligated to maintain records on the level of particular exceptions provided to recipients, though recipients are well-advised to maintain records as well even if not specifically required.
As outlined this guidance from OMB, the following exceptions are available.
Flexibility with SAM registration. (2 C.F.R. § 200.205)
To expedite the issuance of funding, awarding agencies do not have to require an active System for Award Management (SAM) registration at the time of application.
Current registrants in SAM with active registrations expiring before May 16, 2020 will receive a one-time extension of sixty (60) days.
Flexibility with application deadlines. (2 C.F.R. § 200.202)
Awarding agencies may ease the deadlines for applications for certain grant announcements, whether solicited or unsolicited. Agencies that choose to relax the deadlines should provide guidance on their websites or provide a point of contract for questions.
Waiver for Notice of Funding Opportunities (NOFOs) Publication. (2 C.F.R. § 200.203)
Awarding agencies may publish Notice of Funding Opportunities (NOFOs) with less than thirty (30) days notice without any justification for the shortened timeframe required. Agencies are only required to document and track any NOFOs that are published for less than thirty (30) days.
No-cost extensions on expiring awards. (2 C.F.R. § 200.308)
Awarding agencies may automatically extend awards, active as of March 31, 2020 and scheduled to expire before or up to December 31, 2020, at no cost for a period of up to twelve (12) months.
Recipients are required to submit project-specific financial and performance reports within ninety (90) days following the end date of the extension. Likewise, awarding agencies are required to examine the need to extend other project reporting as necessary.
Abbreviated non-competitive continuation requests. (2 C.F.R. § 200.308)
For projects with planned future support with continuation requests schedule to come in between April 1, 2020 and December 31, 2020, recipients may submit a brief statement to awarding agencies that demonstrates recipients are in a position to: (1) resume or restore project activities, and (2) accept a planned continuation award.
Awarding agencies are required to examine the need to extend this approach on subsequent continuation award start dates when recipients have an opportunity to assess their projects.
Look for awarding agencies to post specific instructions in this regard on their websites.
Allowability of salaries and other project activities. (2 C.F.R. § 200.403, 2 C.F.R. § 200.404, 2 C.F.R. § 200.405)
As it relates to the charging of salaries, benefits, and other necessary costs to Federal ward to resume activities supported by the award, recipients may charge these costs, consistent with recipients’ policy of pay salaries (under unexpected or extraordinary circumstances) from all funding sources and with applicable Federal cost principles and the benefit to the project.
Recipients are required to maintain appropriate records and cost documentation as required by 2 C.F.R. § 200.302 to substantial any salaries or costs related to interruption of project operations or services.
Allowability of Costs not Normally Chargeable to Awards. (2 C.F.R. § 200.403, 2 C.F.R. § 200.404, 2 C.F.R. § 200.405)
Without regard to the Uniform Guidance “Factors affecting allowability of costs,” “Reasonable costs,” and “Allocable Costs” at 2 C.F.R. § 200.403-405, recipients may charge to the award the full costs related to the cancellation of events, travel, or other activities necessary and reasonable for the performance of the award, or the pausing and restarting of grant funded activities due to COVID-19.
Awarding agencies are required to advise recipients that recipients should not assume additional funds will be available should the charging of these costs result in a shortage of funds to eventually carry out the event or travel.
If appropriate, awarding agencies may provide additional guidance on costs on their websites and/or provide a point of contract for questions.
Prior approval requirement waivers. (2 C.F.R. § 200.407)
Awarding agencies may waive any prior approval requirements. Any costs charged to Federal awards must be consistent with Federal cost policy guidelines and the terms of the award, except where specified in M-20-17.
Exemption of certain procurement requirements. (2 C.F.R. § 200.319(b), 2 C.F.R. § 200.321)
Awarding agencies may waive procurement requirements with regard to geographical preferences and contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms.
Extension of financial, performance, and other reporting. (2 C.F.R. § 200.327, 2 C.F.R. § 200.328)
Recipients may receive extensions for up to three (3) months beyond the normal due date for financial, performance, or other reports. If awarding agencies allow such extensions, recipients may continue to draw on Federal funds. However, recipients must submit these reports at the end of the extension timeframe.
Awarding agencies may waive the requirement for recipients to notify the agency of problems, delays or adverse conditions related to COVID-19.
Extension of currently approved indirect cost rates. (2 C.F.R. § 200.414 (c))
Recipients may continue to use their currently approved indirect cost rates (i.e., predetermined, fixed, or provisions rates) to recover their indirect costs on Federal awards.
Awarding agencies may approve recipients’ extension requests to use these current rates for one (1) additional year without requiring the submission of an indirect cost proposal. Similarly, awarding agencies may grant extensions for the submission of an indirect cost proposal to finalize the current rates and establish future ones.
Extension of closeout. (2 C.F.R. § 200.343)
For the closeout of expired projects, awarding agencies may allow recipients to delay the required submission of any pending financial, performance, or other reports by one (1) year, so long as recipients provide proper notice about the delay.
Extension of Single Audit submission. (2 C.F.R. § 200.512)
For recipients and subrecipients who have not filed their single audits as of March 19, 2020 that have fiscal year-ends through June 20, 2020, awarding agencies should allow recipients and subrecipients to delay the completion and submission of the Single Audit reporting package, per Subpart F of 2 C.F.R. § 200.501, to six (6) months beyond the normal due date.
Unlike the aforementioned exceptions, no further action by the awarding action is required to enact this extension. Likewise, this extension does not require recipients and subrecipients to seek approval for the extension by the cognizant or oversight agency for audit.
Recipients and subrecipients should maintain documentation of the reason for the delayed filing, and would still qualify as a “low-risk auditee” under 2 C.F.R. § 200.520(a).
Crowell & Moring is standing by to assist with any COVID-related questions. Please contact with any additional questions or concerns related to the OMB guidance or specific agency action.
Tags: CFR, COVID-19, NOFOs, OMB, SAM