Office of Management and Budget Relaxes Some Federal Requirements for Grantees in Response to COVID-19

In an attempt to ease the burden on recipients of federal grants that has resulted from the coronavirus, the Office of Management and Budget issued a memorandum on March 19 that gave federal agencies and grant recipients certain flexibility in dealing with federal grant rules. Grantees may find it difficult to comply with existing federal rules during the COVID-19 crisis. In addition, some of the requirements may handcuff the government in awarding crucial grants during this time. There were 13 different areas where OMB relaxed rules. Below is a description of some of the flexibility for federal grants recipients during this time.

Single Audit Act

Grant recipients that expend more than $750,000 in federal grants in a given year must undergo a single organization-wide audit after the conclusion of their fiscal year. Generally, the results of this audit must be submitted within nine months after the conclusion of the entity's fiscal year. Now, grantees who have fiscal years ending before June 30, 2020 now have an extension of up to six months from the normally required due date to submit the results of their Single Audit to the Federal Audit Clearinghouse. This relaxation of requirements should give some additional flexibility to grantees who are struggling with administrative requirements right now.

Submission of Financial Reports

Oftentimes, federal grants have reporting requirements. The terms of the grant agreement sometimes dictate that the recipient must submit financial and other performance reports to the federal government in accordance with the schedule contained in the agreement. These reports take some time and effort for the grantee to compile. In recognition of that and the burden that many grantees are facing, OMB has now stated that recipients are able to delay submitting these reports until three months after the due date. They may still draw down grant funds in the interim while the due date for the reports is delayed.

Allowance of Cancellation Costs

Sometimes, grantees arrange events as part of their federal grants. Other times, they make travel arrangements to go to conferences or other events. With coronavirus, travel and events must be canceled, and there are almost always charges that go along with the cancellation of these events. The OMB memo allows grantees to charge the costs of the cancelation against their federal grants. In other words, they are not forced to bear the costs on their own. The government generally has tight requirements for what is considered an allowable cost and this otherwise may not have been allowed. Nonetheless, if a grantee does charge this against the grant, it does count in drawing down the available funding. There is not additional funding available for these expenses. Grantees will still be required to retain the relevant documents in order to substantiate these costs for a government audit.

Application Deadlines

Any grant announcement will have a deadline by which the applicant must apply. When it comes to federal grants, the usual rule is that late is late. Any application that fails to meet the deadline is not considered. In light of the COVID-19 crisis, agencies are directed to allow applicants to have some flexibility in meeting application dates. This is for both solicited and unsolicited applications. In general, agencies must be proactive in listing a point of contact for grantees and in informing them of any specific guidance related to coronavirus that they must heed.

No-Cost Continuations

If a federal grant is set to expire at any point before the end of 2020, the federal agency may give a no-cost extension for a period of up to twelve months. This will allow for the continuation of many different activities that the recipient was performing. It will also give continuity for grant activities. During this time, the grantee would be able to file the relevant required reports with agency staff.

Federal grantees perform much of the difficult work necessary in research projects and other scientific endeavors. Their work is needed more than ever right now as the country mobilizes in order to fight a global pandemic. They must be able to be freed up to do their essential work, and OMB'e relaxation of requirements will help ease their regulatory burden while they do the vital work to help the U.S. cope with this crisis. OMB is trying to help recipients continue essential services during this challenging time.

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