On March 19, the U.S. Office of Management and Budget (OMB) released memorandum M-20-17, Administrative Relief for Recipients and Applicants of Federal Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to Loss of Operations.
In brief, the memorandum addresses three key areas.
1. Extension of Single Audit submission
Issues a six-month Single Audit submission extension through June 30, 2020. This extension does not require recipients and subrecipients to seek approval for the extension by the cognizant or oversite agency for audit; however, recipients and subrecipients should maintain documentation of the reason for the delayed filing. Recipients and subrecipients taking advantage of this extension would still qualify as a “low-risk auditee” under the criteria of 2 CFR 200.520 (a) – Criteria for a low-risk auditee.
2. Allowability of payroll costs when recipients’ operations have been affected by COVID-19
The new memo instructs federal agencies that they may allow recipients to continue to charge salaries and benefits to currently active federal awards consistent with the recipients’ policy of paying salaries (under unexpected or extraordinary circumstances) from all funding sources, federal and non-federal. Recipients and subrecipients are required to maintain appropriate records and cost documentation to substantiate the charging of any salaries and other project activities costs related to interruption of operations or services.
3. Other guidance provided
Other guidance including allowability of costs not normally chargeable to awards, exemptions of certain procurement requirements, extension of currently approved indirect cost rates, and other various application and reporting waivers and extensions.
The new memo acknowledges that many of the operational impacts and costs relating to COVID-19 are unknowable at this point, as they will depend on the spread of the virus and response dictated by public health needs.
For more information
We encourage our clients to read the newly released memorandum in its entirety and to contact Mike Lowry with questions using the contact information below.
Information in this document has been obtained by Allen, Gibbs & Houlik, L.C. from sources believed to be reliable. However, AGH does not guarantee the accuracy nor completeness of any information. This communication does not and is not intended to provide legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly, AGH assumes no liability whatsoever in connection with its use. Nothing in this communication can be used to avoid penalties that may be imposed by a governmental taxing authority or agency.
Senior Vice President
Mike Lowry specializes in governmental and not-for-profit clients. Prior to joining AGH, Mike’s experience included nearly 20 years of financial and technology leadership positions in hospitality management and software companies.
Mike is a certified public accountant who has earned the designation of Certified Government Financial Manager from the Association of Government Accountants, and he is also a member of the American Institute of Certified Public Accountants, the Kansas Society of Certified Public Accountants, and the Association of Government Accountants. He is a frequent presenter and member of the Kansas, Missouri and Great Plains Financial Officers Association, and serves as a CAFR reviewer for the GFOA.