April 1, 2020

On March 19, 2020, OMB issued M-20-17 authorizing agencies to provide short-term relief for certain administrative, financial management and audit requirements under Uniform Guidance (2 CFR 200) to recipients (including sub-recipients) affected by a loss of operational capacity due to the COVID-19 crisis. M-20-17 expands the reach of a memo issued earlier this month (M-20-11) which authorized agencies to allow similar flexibilities only for Federal awards intended to support continued research and services necessary to carry out the emergency response related to COVID-19.

The memo encourages agencies to offer relief by allowing exceptions in several areas.

Extensions of Upcoming Deadlines

  • Extensions are currently allowed up to six months beyond the normal due date to complete and submit the Single Audit package for recipients with fiscal-year ends through June 30, 2020. Recipients are not required to seek approval for the extension, but should maintain documentation for the reason delaying filing (for example what the loss of operations are and how the award is affected)


  • Extensions are allowed for submission of financial, performance and other reporting up to three months beyond the normal due date (grantee may continue to draw down Federal funds). Pending closeout reports may also be delayed for a period not to exceed one year after the end of the award (proper notice must be provided to the agency).


  • Recipients may request an extension on the use of currently approved indirect cost rates for an additional year, and agencies may approve requests for an extension of the indirect cost rate proposal submission to finalize the current rates and establish future rates.


  • Awards scheduled to expire by December 31, 2020 may be extended automatically at no cost for a period up to twelve months.


Cost Allowability

  • Awardees may be permitted to continue to charge salaries and benefits to currently active Federal awards despite inability to conduct the work of the award due to the crisis, consistent with the awardees policy of paying salaries under extraordinary circumstances. This must be consistently applied for all federal and non-federal funders. Agencies must require appropriate records and cost documentation to substantiate any salaries/project activities costs related to interruption of operations or services. OMB has indicated that the intention is to provide flexibility, so recipients that currently do not have a policy covering extraordinary circumstances should consider implementing a policy retroactively.


  • Costs related to cancelation of events, travel or other activities for the award due to the public health emergency may be charged. It should not be assumed that additional funds will be available should the charges result in a shortage to eventually carry out the event or travel. Agencies must require appropriate records and cost documentation.


  • Certain exemptions are also authorized for prior approval requirements and procurement requirements regarding geographical preference, small and minority businesses, women’s enterprises and labor surplus area firm.


Relaxed Application Requirements

  • The requirement for active System for Award Management (SAM) registration at time of funding application can be relaxed and current SAM registrations expiring before May 15, 2020 will be allowed a 60-day extension.


  • The timeframe required for publishing emergency Notice of Funding Opportunities may be shortened to less than 30 days. Abbreviated non-competitive continuation requests and flexibility with regard to deadlines for submission of applications are permitted.


Next Steps

Recipients should read the full memo (M-20-17), and note that the exceptions noted are time limited and will be reassessed by OMB within 90 days. Although the OMB is encouraging agencies to allow these exceptions, keep in mind that this is not a government wide directive. Recipients should contact agencies to request approval and specific instructions for relief provisions they would like to implement, and watch for agencies to issue guidance regarding the relief authorized. Some agencies have already published websites regarding guidance (for example, USAID and HRSA).

The CPAs and advisors at GRF are available to assist clients and we will provide updates on the firm’s COVID-19 Response page as they develop. For questions about the OMB memo and federal awards, contact Lindsay Dean, CPA, Audit Manager, at ldean@grfcpa.com or 301-951-9090.