The Public Health Emergency is Ending: Now What?
OMB Grants Administration Flexibilities
Federal agencies have used the PHE and national emergency declarations to waive or modify certain requirements, including in grants administration and health-related services. The Office of Management and Budget (OMB) issued guidance to federal awarding agencies at multiple stages of the pandemic, authorizing them to implement administrative flexibilities with respect to compliance with certain requirements under the Uniform Guidance, 2 C.F.R. Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. While the Uniform Guidance allows federal agencies to grant exceptions to individual non-federal entities on a case-by-case basis (see Flexibilities Going Forward, below), it also authorizes OMB to allow exceptions for entire classes of federal awards or non-federal entities subject to the Uniform Guidance, when such exceptions are not prohibited by statute. 2 C.F.R. § 200.102(a).
Many of OMB’s administrative flexibilities (e.g., those issued under OMB Memoranda M-20-11, M-20-17, M-20-20, and M-20-26) have expired. At this point, the only active administrative flexibilities, issued in OMB Memo M-21-20, Appendix 3, give federal agencies the authority to grant exceptions to recipients affected by the pandemic, as the agencies deem appropriate and to the extent permitted by law. Federal agencies may also apply the flexibilities to grant awards not related to COVID-19. All of the flexibilities in OMB Memo M-21-20 expire no later than the end of the PHE declaration, unless a federal awarding agency specifies otherwise. OMB FAQs on Memo M-21-20, Appendix 3, Question Q-8.
Different federal agencies took different approaches to adopting the flexibilities recommended in OMB Memo M-21-20. Some explicitly adopted a subset of the flexibilities, while others chose not to adopt any of them. Some examples of these administrative flexibilities include permitting grantees to:
- Request no-cost extensions on expiring awards;
- Charge costs not normally allowable under the Uniform Guidance;
- Take advantage of blanket waivers of prior approval requirements;
- Be exempt from certain procurement requirements;
- Delay submission of financial, performance, and other reports after their normal due dates;
- Extend award closeout periods;
- Extend single audit submission deadlines; and
- Delay biennial physical inventory requirements.
In the expandable sections below, we briefly discuss how some of the federal funding CAAs administer applied the OMB flexibilities, and how the expiration of the PHE and national emergency declarations may affect each of these funding awards.
Community Service Block Grant (CSBG)
Currently, there are no administrative flexibilities applicable to CSBG funding tied to the PHE or national emergency declarations. The Office of Community Services (OCS) initially adopted flexibilities issued under an earlier OMB Memo M-20-17, but subsequently noted in IM 159 that all but two of the flexibilities had expired (and these two remaining flexibilities have now expired as well).
The Office of Head Start (OHS) adopted many of the flexibilities in OMB Memo M-21-20 pursuant to Information Memorandum IM-HS-21-01, which are specifically tied to the duration of the PHE declaration. As a result, when the PHE expires, the flexibilities currently in place for Head Start (listed below) will also end, and Head Start grantees are expected to resume pre-COVID-19 program operations without these flexibilities.
If a Head Start grantee has submitted an application in the Head Start Enterprise System (HSES) on or before May 11, 2023, the grantee may still apply the administrative and fiscal flexibilities described in IM-HS-21-01. However, if a grantee has begun an application but has not yet submitted it as of May 11, 2023, the grantee must revert back to pre-pandemic requirements and procedures.
- Purchases of equipment up to $25,000 without prior approval. After May 11, 2023, grantees must seek prior approval from OHS to purchase equipment with Head Start funds. 45 C.F.R. § 75.439. Expenses for equipment not obligated by May 11, 2023, will require prior approval, which grantees may seek by submitting a formal budget revision through HSES.
- Budget transfers between cost categories up to $1 million without prior approval. After May 11, 2023, budget transfers between object class categories that exceed, or are expected to exceed, 10 percent of the total budget (as last approved by OHS) will require prior approval. 45 C.F.R. § 75.308(e).
- Procurement by sole-source purchasing without prior approval. After May 11, 2023, grantees may engage in sole source, or noncompetitive, procurement, only if (1) the item is only available from a single source; (2) an emergency will not permit a delay resulting from a competitive solicitation; (3) OHS expressly grants prior approval in response to a written request from the grantee to use noncompetitive proposals; or (4) after soliciting a number of sources, the grantee determines that competition is inadequate. 45 CFR § 75.329(f).
- Evaluating procurement proposals with geographic preferences. After May 11, 2023, grantees may not include geographic preferences when evaluating bids or proposals in procurement transactions, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference. 45 CFR § 75.328(b).
- Extension of financial and other reporting deadlines. After May 11, 2023, the normal due dates for financial, performance, and other reports will apply. 45 C.F.R. § 75.341; 45 C.F.R. § 75.342.
- Waiver of non-federal match requirements. After May 11, 2023, grantees must resume the process of applying for a waiver of Head Start’s non-federal match requirement by submitting the request as a budget revision application in HSES. When applying for a waiver, grantees must be able to show one or more of the following: (1) a lack of resources available in the community, preventing the grantee from obtaining all or a portion of the match; (2) the impact of startup costs for grantees in their initial years of running a Head Start program; (3) the impact of an unanticipated increase in the cost of running a Head Start program; (4) the adverse impacts of a major disaster in the grantee’s community; or (5) how its community would be affected if the grantee was no longer able to carry out its Head Start program. As a reminder, grantees may meet their non-federal match through cash or in-kind donations, which may include facilities, equipment, or services. Section 640(b) of the Head Start Act and Head Start Program Performance Standard, 45 C.F.R §1303.4.
- Waiver of governing body and Policy Council approvals. After May 11, 2023, grantees must, when submitting continuing applications and post-award amendments, revert back to the requirement of providing signed statements of the governing body and Policy Council chairs, along with meeting minutes documenting each group’s participation in the development and approval of the application.
- No-cost extensions. After May 11, 2023, grantees may continue requesting extensions to expiring awards at no cost, as this request is not tied to the fiscal and administrative flexibilities established due to the PHE declaration. Requests should be submitted to Regional Grants Management officers.
Low Income Home Energy Assistance Program (LIHEAP)
Currently, there are no administrative flexibilities applicable to LIHEAP funding tied to the PHE or national emergency declarations. The Office of Community Services (OCS) initially adopted flexibilities issued under an earlier OMB Memo M-20-17, but these flexibilities have now expired.
Weatherization Assistance Program (WAP)
Currently, there are no administrative flexibilities applicable to WAP funding tied to the PHE or national emergency declarations. The Department of Energy had adopted one of the flexibilities in OMB Memo M-21-20 related to the extension of Single Audit deadlines, but this flexibility has already expired.
Other HHS and CMS Programs
HHS and the Centers for Medicare and Medicaid Services (CMS) each also issued guidance about how the end of the PHE declaration will impact certain health-related services. While these impacts may not directly affect CAAs’ administration of their own programs, some, such as access to free COVID-19 testing and treatment, as well as waivers for health care providers designed to increase access to health care capacity, are likely to affect clients served by CAAs.
Other impacts on clients that were originally tied to the PHE declaration, such as the continuous enrollment condition for individuals enrolled in Medicaid, are no longer linked to the end of the PHE. Under the Families First Coronavirus Response Act, states claiming a temporary 6.2 percentage point increase in their federal Medicaid matching funds (i.e., Federal Medical Assistance Percentage (FMAP)) have been unable to terminate enrollment for most individuals enrolled in Medicaid as of March 18, 2020, as a condition of receiving the temporary FMAP increase. However, under the 2023 Consolidated Appropriations Act, the FMAP continuous enrollment condition will end on March 31, 2023. As a result, the temporary FMAP increase will be gradually reduced and phased down beginning April 1, 2023 (and will end on December 31, 2023). See Medicaid’s guidance for states on this unwinding process.
Flexibilities Going Forward
While certain blanket waivers and administrative flexibilities will sunset upon the end of the federal emergency declarations, federal awarding agencies may still consider exceptions from the Uniform Guidance requirements, as well as program-specific conditions. There are two classes of exceptions to Uniform Guidance requirements: (1) those made on a case-by-case basis for individual non-federal entities; and (2) class-wide exceptions, which may apply to an entire category of awards or non-federal entities.
The Uniform Guidance authorizes federal awarding agencies to allow exceptions for individual non-federal entities, unless otherwise required by law or where OMB or other approval is expressly required. 2 C.F.R. § 200.102(b). By contrast, to waive or adjust requirements for an entire class of awards or non-federal entities, federal agencies must generally obtain OMB approval. 2 C.F.R. § 200.102(c).
The authorizing statute or appropriations act for federal grant programs may also give the awarding agency discretion to modify, waive, or grant flexibilities for programmatic requirements.
This resource is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Award Number 90ET0482-03. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.