Guidance for Federal Award Recipients

The Federal Office of Management and Budget (OMB) released Memorandum M-20-26, Extension of Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to the Loss of Operations dated June 18, 2020.

The Memorandum contains updated guidance impacting nonprofits who receive Federal grants and awards. Among other topics, the Memorandum clarifies the long-awaited question of how the Paycheck Protection Program (PPP) interacts with other federal awards, in particular, the question of “double-dipping.”

Appendix A of the Memorandum states that “payroll costs paid with the Paycheck Protection Program loans or any other Federal CARES Act programs must not be also charged to current Federal awards as it would result in the Federal government paying for the same expenditures twice.”

The Memorandum also directs recipients to exhaust other available funding sources to sustain its workforce and implement necessary steps to save overall operational costs (such as rent renegotiations) during this pandemic period to preserve Federal funds. 

During this time of the pandemic, OMB emphasizes that federal award recipients are still expected to abide by 2 CFR § 200.302 - Financial management and 2 CFR § 200.333 - Retention requirement of records to substantiate how costs, including salaries, are charged to programs. OMB states that recipients should also retain documentation of efforts to exhaust other funding sources and reduce overall operational costs during the pandemic.

Awarding agencies are directed to allow that other costs be charged to Federal awards necessary to resume activities supported by the award. Accordingly, you may reach out to your awarding agency to explore what additional flexibility is available to you to reallocate budgeted program costs.

The Memorandum also addresses the Federal Single Audit submission extension that was enacted in March 2020. Single audits for nonprofits with fiscal year ends of June 30, 2019, through September 30, 2019, continue to have a 6-month blanket extension for submitting their single audit with the Federal Audit Clearinghouse. Nonprofits with fiscal year ends of October 31, 2019, through December 31, 2019, will only be allowed a 3-month extension.

Finally, single audits for fiscal years ending in 2020 will be required to submit single audits within the normal due date provisions of the Uniform Guidance, which is the earlier of 30 days after the completion of the audit, or 9 months after the fiscal year-end. If you take advantage of the extensions offered, you must retain documentation of the reason for the delayed filing to continue to be considered a low-risk auditee.

Contact your Whittlesey advisor with questions.