The COVID-19 pandemic triggered office closures and other measures that could make it hard for organizations to meet the requirements for getting and using federal grant funding.
In response, the Office of Management and Budget (OMB) issued 15 temporary exceptions to its requirements for how federal agencies administer grants. For example, agencies could allow grantees to delay reporting financial information by three months.
The COVID-19 pandemic was the third time in recent years that OMB identified flexibilities when crises disrupted grantees’ ability to continue managing their grants as they normally do.
OMB’s memorandums stated that the flexibilities were intended to help grantees respond to and address organizational challenges stemming from COVID-19 by reducing administrative burden without compromising accountability. OMB rescinded most flexibilities in June 2020. All flexibilities expired by the end of December 2020.
The flexibilities were broadly available at the three selected agencies—the Departments of Education, Health and Human Services, and Transportation. Officials from grantee organizations told the Government Accountability Office (GAO) that grantees reported using the flexibilities to address unprecedented operational disruptions related to COVID-19, such as having to close offices or laboratories in response to stay-at-home orders early in the pandemic. For example, research grantees reported using a flexibility to continue using federal grant funding to pay the salaries of employees unable to work during shutdowns. They reported that this flexibility allowed them to retain employees and be prepared to restart grant-funded work when it was safe to do so.
GAO reported on March 31 that OMB and selected agencies leveraged existing grants management processes to develop and implement the flexibilities in line with relevant internal control standards, such as risk assessment and communication. For example, OMB consulted with agencies involved in a government-wide effort to modernize grants management policy to identify flexibilities that would strike a balance between helping grantees respond to the pandemic and maintaining controls against waste, fraud, and abuse of federal grant funds. Offices responsible for grants management policy at each selected agency then issued agency-wide guidance communicating the available flexibilities and policies and procedures for implementing them.
In prior work, GAO has found that collecting and sharing lessons learned from programs or projects helps organizations share information for improving work processes and factor beneficial information into future planning. The watchdog notes that while OMB is relying on agencies to individually document lessons they learned using the flexibilities, it has not established a process to collect and share lessons learned widely across the federal government. GAO believes that such an effort could help OMB and agencies understand the extent to which the flexibilities assisted grantees while maintaining accountability.