The document provides an updated supplement to previous Costing and Financial Compliance FAQs, focusing on recent Office of Management and Budget (OMB) memoranda related to COVID-19 administrative flexibilities, with particular attention to OMB Memorandum M-20-26. It outlines the timeline and rescission status of various OMB memos that temporarily allowed federal grant recipients increased flexibility during the pandemic, specifically concerning administrative relief, management of federal contract issues, and the repurposing of funding to address COVID-19 emergencies. M-20-26, in particular, extends salary charging flexibilities originally granted under now-expired memos (notably M-20-17) but introduces more stringent requirements for institutions seeking to use these flexibilities, notably the need to document efforts to reduce operational costs and exhaust other funding sources.
The Council on Governmental Relations (COGR) provides an analysis emphasizing that while M-20-26 continues to offer institutions the ability to charge salaries consistently across all funding sources through September 30, 2020, this is now contingent on robust, well-maintained documentation. Institutions must record their cost-reduction initiatives and demonstrate attempts to maximize available funding—both federal and non-federal—to justify continued use of these flexibilities. Given the complexity and subjective nature of interpreting “exhaust other funding sources,” institutions are urged to develop disciplined protocols for documentation and risk assessment, anticipating potential future audits or inquiries. The guidance encourages organizations to regularly review internal policies, consult previous COGR Costing FAQs, and adopt intentional, transparent documentation practices to safeguard institutional compliance and support decisions made under pandemic conditions.
