Earlier this month, the Office of Management and Budget (OMB) issued two memos, M-20-11 and M-20-17, to assist organizations with complying with terms and conditions of federal awards during the COVID-19 outbreak. M-20-11 is narrow in scope related to essential research and the response to COVID-19.
M-20-17 expands the scope of M-20-11 and is designed to provide “short term relief for administrative, financial management, and audit requirements under 2 CFR Part 200, Uniform Administrative Requirements, Cost principles and Audit Requirements for Federal Awards, without compromising Federal financial assistance accountability requirements.”
The following is a summary of key points in M-20-17 for organizations to consider:
Federal agencies were directed to grant flexibility with respect to the System for Award Management (SAM) registration system, application deadlines, and no-cost extensions on expiring awards. No-cost extensions on awards expiring through December 31, 2020 have been automatically extended for a period of up to 12 months.
Certain costs related to salaries and benefits, cancellation of events, pausing and restarting of grant funded activities due to the public health emergency, or other activities necessary and reasonable for the performance of the award may now be allowed by federal agencies awarding grants. The memo was clear in its indication that recipients should not assume additional funds will be available should the charging of cancellation or other fees result in a shortage of funds to eventually carry out events.
In addition, awarding agencies have been authorized to waive prior approval requirements, as deemed necessary, as long as those costs are consistent with Uniform Guidance cost principles. Lastly, traditional procurement requirements, geographical preferences and contracting with disadvantaged businesses, may be waived by federal agencies.
Reports related to performance, indirect cost rate plans, award closeouts, and other financial or special reports may be granted three-month extensions by federal agencies. In the interim, organizations are advised to use previously negotiated indirect cost rates. Certain award closeouts may be delayed by up to one year with proper approval.
Single Audit Submissions
Federal Audit Clearinghouse submissions through fiscal years ending through June 30, 2020 have now been extended for up to six months. No approval for the extension is required by the cognizant or oversight agencies, but award recipients should maintain documentation for delayed filings. An extension will not impact low-risk auditee criteria.
M-17-20 states that the exceptions noted above are time limited and will be reassessed by OMB within 90 days of the memo, dated March 19, 2020.
If you have any questions about these two memos, please reach out to us today!
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.