A Midsummer Summary of Changing Grants Policy, Part 2

Part one of this two-part blog post covered changes to the grants application process on Grants.gov, and also the elimination of COFAR.

Now, part two takes us through even more changes to grant policy made by the Office of Management and Budget (OMB) during their busy summer.

So, whether you’re about to go on vacation, or you just got back (point being: don’t miss these updates), here’s the news and what it means:

OMB Issues Guidance on Buy American Laws

In June, the Secretary of Commerce and OMB Director jointly issued OMB Memorandum M-17-27, Assessment and Enforcement of Domestic Preferences in Accordance with Buy American Laws. The memorandum addressed the requirements in Executive Order 13788, “Buy American and Hire American.”

The purpose of the executive order was to help ensure that Federal procurement and financial assistance awards maximize the use of goods, products, and materials produced in the United States.

The memorandum stated that for Federal grants, “[T]here is no primary law that imposes the Buy American Laws as defined in E.O. 13788, and applicability varies by the authorizing and appropriation statutes imposed on the specific Federal financial assistance program.”

E.O. 13788 requires agencies to evaluate and report on their oversight of Buy American laws. The OMB memorandum identified three items that Federal agencies will need to report regarding Federal grant awards:

1. Agency actions to review and update relevant agency guidance to grant recipients.

2. Intended agency actions to review and update internal agency procedures to implement relevant Buy American laws.

3. Agency recommendations to strengthen and apply Buy American laws through statutory, executive, regulatory, or administrative action.

Grant recipients should review the terms and conditions of their awards and awarding agency guidance to determine what requirements, if any, to comply with Buy American laws.

Procurement Grace Period Extended to Three Years

The OMB announced an extension to the procurement grace period. OMB published a rule in the Federal Register on May 17 providing non-Federal entities an additional fiscal year to comply with the procurement standards under 2 CFR 200.

OMB explained that the grace period extends through December 25, 2017 and non-Federal entities will need to comply with the procurement standards for the fiscal year beginning on or after December 26, 2017.

Non-Federal entities that opt for the grace period must indicate their decision in internal policy manuals. Failure to note this decision may result in an audit finding.

Still Waiting on 2017 Compliance Supplement, 2 CFR 200 Updates, and Revisions to the FAQS

While the Federal government has taken many actions affecting grants in the last few months, there are still some outstanding items that we are waiting for:

• 2017 Compliance Supplement. The Compliance Supplement is the annual single audit guidance. OMB generally has a target release for the Compliance Supplement in the spring. However, for the last few years, the release date has generally been delayed until the summer. The previous delayed release dates have resulted in an extension for grant recipients to submit single audit reports to the Federal Audit Clearinghouse (FAC). The FAC has not yet posted an announcement providing guidance.
• 2 CFR 200 Updates. OMB has discussed plans to update 2 CFR 200 to incorporate recent legislative changes. Yet, there has been no specific date given when the updates may be released. Recent legislative actions affecting grant awards include:
  • The Digital Accountability and Transparence Act (DATA Act)
  • The 2017 National Defense Authority Act, which increased the micro-purchase threshold for research institutions
• Revisions to 2 CFR 200 Frequently Asked Questions. The now-defunct COFAR had promised updates to the Frequently Asked Questions (FAQs) guidance to 2 CFR 200, which were last updated in September 2015. Since the elimination of the COFAR, it is unknown when, or if, the FAQs will be updated.

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This concludes our midsummer update on OMB’s latest changes to grants policy. For more, be sure to subscribe to this blog (using the form at the top-right of this page), and stay up to date on all things Federal Grants & Assistance by signing up for our training courses in Grants Management Processes & Techniques; Laws, Regulations, and Policies Affecting Grants; and Grants Financial Practices, Assessments, and Audits.