On June 18, 2020, the U.S. Office of Management and Budget (OMB) issued M-20-26 , which outlines an extension of select flexibilities for federal financial assistance recipients directly impacted by continued COVID-19 related effects. The memoranda clarifies that not-for-profits receiving the funding may now use federal grants toward salaries and staff benefits; however, they must first exhaust use of other funding, such as Paycheck Protection Program loans. The memoranda also allows extensions on single audits previously between March 30, 2020 and June 30, 2020 for up to six months (through September 30, 2020) when all M-20-26 allowances are set to expire. Despite no necessary approval for these latitudes, it is highly recommended that organizations maintain support for any use of the above allowances in case of future scrutiny, which is expected to continuously increase as COVID-19 cases subside.
Previous memoranda issued during the pandemic have been extinguished by M-20-26, such as M-20-20 and M-20-17. This action prevents federal awards from being utilized for charge-incurred costs related to the cancellation of events and no longer encourages no-cost extensions. M-20-11, which allows necessary pre-award costs to be paid by grants, will expire on July 26, 2020, as expected.
As we navigate through the beginning stages of the reopening process, there is still a great deal of uncertainty. We will continue to update this article as new information becomes available. Feel free to visit our COVID-19 Resources page for more information and clarification on important topics.