Auditors Seek OMB Guidance on Auditing COVID-19 Response Funding

As we continue to experience life under the COVID-19 crisis, the Office of Management and Budget (OMB) has attempted to address the concerns it has received from the grants community by releasing numerous guidance memoranda.

First came OMB Memorandum M-20-11, which allowed federal awarding agencies to provide regulatory flexibilities for grantees conducting COVID-19 research. That was soon followed by OMB Memorandum M-20-17, which enables agencies to implement regulatory flexibilities to a wider scope of grant recipients that experienced a loss in operations due to the COVID-19 crisis. OMB Memorandum M-20-18 provided a similar relaxation on regulations for contractors.

OMB Memorandum M-20-20 allowed federal agencies to enable recipients to donate supplies and equipment to address COVID-19 response needs, and OMB Memorandum M-20-21 set forth provisions for awarding agencies for reporting and overseeing the huge amount of federal funding provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act and two other previous supplemental packages. On Friday, OMB released yet another memorandum, M-20-22, which addressed oversight of the congressional COVID-19 funds for federal contracts.

However, other than a small provision in M-20-11 and M-20-17 allowing federal agencies to extend the audit submission deadline date for grantees affected by the COVID-19 response, there has been little direction to assist auditor charged with reviewing grantee financial reports that may include funds received under the CARES Act and other supplemental spending packages. OMB officials have stated that they are aware of the concerns raised by the audit community, particularly how the funding under the CARES Act and supplemental packages will be identified on the Schedule of Expenditures of Federal Award. Other questions focus on the payroll relief portion of the CARES Act and determining what should be charged to awards, and when time should not be charged to awards.

OMB was scheduled to meet this week with federal agency single audit coordinators to consider guidance in this area. These discussions could lead to yet another OMB memorandum to federal agencies that could assist auditors and hopefully answer their questions and concerns. We’ll provide information and analysis on that guidance, if and when it is released, as well as other OMB memoranda that may affect all grantees.

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