OMB Issues Limited Extension of Flexibility for Federal Granting Agencies

The White House Office of Management and Budget (OMB) issued a memo on June 18 allowing federal funding agencies to continue to provide certain administrative flexibility to their grantees as a result of the global pandemic.

The memo, M-20-26, replaces M-20-17, a March 19 memo and two others issued in March, which allowed funding agencies to waive or modify a number of administrative requirements for grantees whose research was impacted by the COVID-19 pandemic. While the original memo described 13 allowable actions that the agencies could take to reduce administrative burden on grantees and assist grantee institutions in maintaining researcher salaries and activities while research labs were closed, the new memo extends only two of those allowable actions and adds additional requirements to each.

As of the June 18 memo, funding agencies may still allow recipients to continue to charge salaries and benefits to active federal awards and may allow grantees to delay their single audit reporting submission dates for three or six months, depending on the existing due dates for those reports. All other previous flexibilities are no longer available.

M-20-26 has added new restrictions to the original memo, which allowed broad use of grants to cover salaries and benefits while research was halted. OMB now directs agencies to require grantees to “exhaust other available funding sources to sustain its workforce and implement necessary steps to save overall operational costs (such as rent renegotiations).” The memo also directs that grant recipients should “retain documentation of their efforts to exhaust other funding sources and reduce overall operational costs.”

Each funding agency will need to issue guidance to grantee organizations on how it will be implementing this new direction. The flexibilities allowed by OMB will expire on Sept. 30, 2020.

As memo M-20-17 neared its expiration date, the AAMC joined the Council on Governmental Relations, Association of American Universities, and Association of Public and Land-grant Universities in a May 27 letter to OMB requesting that the memo’s content be extended in its entirety through Sept. 30, 2020.