With the widespread impact of the COVID-19 virus, the Office of Management and Budget (OMB) has released various memorandums offering advice, direction and relief through the relaxation or easing of the administrative requirements related to the expenditure of federal funds. Initially the OMB’s memo’s focused on providing relief or flexibility only to recipients performing essential research and services necessary to carry out the emergency response to COVID-19 with memo M-20-11. The OMB then expanded the scope of administrative relief listed in memo M-20-11 to all recipients affected by the loss of operational capacity and increased costs due to the crisis with memo M-20-17.
With this memo, the OMB provided thirteen administrative relief exceptions related to the administrative requirements over the expenditure of federal funds as seen at Title 2 – Part 200. While all thirteen exceptions are important, we will focus on and briefly discuss four of the more immediate administrative relief exceptions, primarily the extensions on expiring awards, reporting deadlines, indirect cost rate usage, the closeout of awards and also extensions on the submission of single audits to the Federal Audit Clearinghouse.
- No-cost extension on expiring awards (2 CFR § 200.308) (Exception #4)
“To the extent permitted by law, awarding agencies may extend awards which were active as of March 31, 2020 and scheduled to expire prior or up to December 31, 2020, automatically at nocost for a period of up to twelve (12) months. This will allow time for recipient assessments, the resumption of many individual projects, and a report on program progress and financial status to agency staff. Project-specific financial and performance reports will be due 90 days following the end date of the extension. Awarding agencies will examine the need to extend other project reporting as the need arises.”
With this exception being on an agency by agency basis, recipients of federal awards that were active as of March 31, 2020 can apply to extend the period of performance or the end date of an award period for up to 12 months. Additionally, this exception allows recipients to automatically extend their reporting requirements 90 days after the extended deadline. Recipients will want to consult with their respective agency for guidance on that agency’s adoption of that exception. For example, the Department of Health and Human Services – Center for Disease Control published a memo in regards to M-20-17, in which they state “No-cost extensions will be considered on a case-by-case basis,” and thus would require recipients to apply for extensions with the grantor.
- Extension of financial, performance and other reporting. (2 CPR§ 200.327, 2 CPR§ 200.328) (Exception #10)
“Awarding agencies may allow grantees to delay submission of financial, performance and other reports up to three (3) months beyond the normal due date. If an agency allows such a delay, grantees will continue to draw down Federal funds without the timely submission of these reports. However, these reports must be submitted at the end of the postponed period. In addition, awarding agencies may waive the requirement for recipients to notify the agency of problems, delays or adverse conditions related to COVID-19 on a grant by grant basis (200 CPR 200.328(d)(l).“
This exception, is also on an agency by agency basis, and allows recipients of federal awards to apply for extensions on reporting deadlines for up to 3 months after the original deadline, while this exception is active. Recipients will want to consult with their respective agency for guidance on that agency’s adoption of that particular exception.
- Extension of currently approved indirect cost rates. (2 CPR§ 200.414 (c)) (Exception #11)
“Awarding agencies may allow grantees to continue to use the currently approved indirect cost rates (i.e., predetermined, fixed, or provisional rates) to recover their indirect costs on Federal awards. Agencies may approve grantee requests for an extension on the use of the current rates for one additional year without submission of an indirect cost proposal. Agencies may also approve grantee requests for an extension of the indirect cost rate proposal submission to finalize the current rates and establish future rates.”
For recipients that currently elect to apply for and use an indirect cost rate other than de minimis, they may apply for approval to continue to use their current indirect cost for an additional year, without having to apply for approval of their current or updated rate with their cognizant oversight agency. As this exception varies by granting agency, recipient will want to consult with their cognizant oversight agency. For example, the Department of Health and Human Service’s Center for Disease Control published guidelines stating that the “CDC may approve recipient requests for an extension on the use of the current rates for one additional year…” and “…may also approve recipient requests for an extension of the indirect cost rate proposal submission to finalize the current rates and establish future rates.”
- Extension of closeout. (2 CPR§ 200.343) (Exception #12)
“A warding agencies may allow the grantee to delay submission of any pending financial, performance and other reports required by the terms of the award for the closeout of expired projects, provided that proper notice about the reporting delay is given by the grantee to the agency. This delay in submitting closeout reports may not exceed one year after the award expires.”
Like exception 10 above, this exception potentially allows recipients to delay reporting requirement for the closeout of an expired federal award, but for up to one year as allowed by the granting agency. As this exception varies by granting agency, recipients will want to consult with their granting agency via published implementation guidelines or with their grant contact. For example, for the Department of Health and Human Service’s Center for Disease Control’s implementation guidelines state “one a case-by-case basis, CDC may allow the… delay of submission of… reports,” but that “these extensions only apply to projects that expire during the 90-day time period of Memorandum M-20-7.”
For additional information on these resources, we recommend grant recipients visit the respective website for the federal agency from which their grants originated from as many agencies have issued their responses to these memo’s with FAQs, interpretation guides, etc. Additionally, the AICPA has published various alerts from their Government Audit Quality center (GAQC), notably GAQC Alert 398 & 401, which are in response to OMB memos M-20-11 and M-20-17, respectively.
Steven May, Senior Associate