On March 19, 2020, the federal Office of Management and Budget (“OMB”) issued Memorandum M-20-17 allowing flexibility related to grant fund award recipients impacted by COVID-19.   Importantly, the OMB will allow grant recipients to continue to charge salaries and benefits to currently active Federal awards even when those employees are not performing their normal services during the COVID-19 emergency.  The caveat is that the payments need to be pursuant to a “policy of paying salaries (under unexpected or extraordinary circumstances) from all funding sources, Federal and non-Federal.”  In other words, grant recipients must have some form of “policy” addressing how employees are paid from various funding sources in emergency circumstances.

The OMB Memorandum states that Federal awarding agencies may allow the flexibility outlined in the Memorandum to the extent they deem appropriate.  On April 8, the U.S. Department of Education (“DOE”) issued a Fact Sheet relating to the use of grant funds pursuant to the OMB Memorandum, stating that a DOE grantee may continue to pay employees with DOE grant funds during an extended closure if, consistent with its policies and procedures, the grantee continues to pay similarly situated employees whose compensation is paid with non-Federal funds. The DOE Fact Sheet notes that grantees should consider ways that employees paid with grant funds can support continuing activities, including distance learning opportunities for students served by the grant.

The DOE Fact Sheet states that, if a grantee does not currently have a policy in place for payment of employees that addresses extraordinary circumstances such as COVID-19, the grantee may amend or create a policy in order to put emergency contingencies in place for Federal and non-Federal similarly situated employees.  IASB’s PRESS team is currently working with ISBE to develop a policy statement or procedure to meet the policy requirement in the OMB Memorandum and DOE Fact Sheet.

The flexibility outlined in the OMB Memorandum is currently in effect only for 90 days from its March 19, 2020, date of issue, which is June 17, 2020.