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Understanding OMB Memorandum 20-26

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

This memorandum revisits and adjusts previous memorandums issued by the OMB. Previously, there was a six month extension provided to recipients in filing their Data Collection Form with the Federal Audit Clearinghouse. This six-month extension was applicable to year ends through June 30, 2020. Under Memorandum 20-26, the six-month extension is only effective for June 30, 2019 through September 30, 2019 year-ends. There is now only a three-month extension for October 31, 2019 through December 31, 2019 year-ends. Lastly, an extension no longer exists for recipients with year-ends after December 31, 2019 through June 30, 2020. In order for a recipient of federal funds to take advantage of the extension, no additional documentation is required in filing the Data Collection Form; however, the OMB is requesting that documentation is otherwise maintained to support the reason for electing to file by the extended due date.

Memorandum 20-26 extends relief to recipients of federal funds who have been impacted by the COVID-19 crisis. Previous guidance allowed for salaries and benefits to be charged to federal awards during this unusual situation. The most recent memorandum extends this relief to September 30, 2020 but also offers further clarification on when these costs should be charged to federal awards. Specifically, recipients of federal funds should use other available funds before using federal funds. And, double dipping is not allowed. For example, any payroll and related costs paid for using CARES Act funding cannot also be paid for using other sources of federal funding. The OMB has provided this clarification to ensure that federal funding is available as restrictions are raised and entities return to some level of normalcy. As always, documentation is key and a recipient of federal funding needs to sufficiently document that it has exhausted all other funding sources before using federal funds and that it has not used two or more sources of funding to pay for the same costs.

Lastly, the latest memorandum requests that all COVID-19 funding is specifically identified on an entity’s Schedule of Expenditures of Federal Awards.

If you receive federal awards and have questions in relation to the most recent guidance published by the OMB, please feel free to reach out to YHB.

About the Author

Since joining YHB in 2012, Katrina’s career focus has been on nonprofit organizations such as private schools, colleges, foundations, religious organizations, museums, and other nonprofit entities. Her service to those organizations include audit and attest as well as tax services.


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