A RAPid alert on behalf of Finance and Research

Important Notice: Charging Idle Employee Salaries to Federal Awards

July 16, 2020


COVID-19In response to the OMB Memo M-20-26 the University has determined that effective June 17, 2020, the salaries, wages and benefits of individuals who have been idled due to a lack of available work cannot be charged to federal awards or to awards from non-federal sponsors who are subcontracting federal funds to U-M. Please note that employees may still use any hours remaining in their COVID-19 PTO time bank for other allowable purposes.

Sponsored Programs will be reaching out directly to units who have payroll charges that need to be corrected. If you have questions, please contact Bryan Van Sickle at bvsickle@umich.edu.


Background

On March 19, 2020, the federal Office of Management and Budget issued Memo M-20-17 to federal grant-making agencies giving them authority through June 16 to allow the use of federal funds to support personnel who could not work due to the impact of COVID-19.  OMB issued Memo M-20-26 on June 18, rescinding M-20-17 and extending the salary continuation authority to September 30, but with an unexpected and significant restriction. Under these revised rules universities are required “to exhaust other available funding sources to sustain its workforce and implement necessary steps to save overall operational costs (such as rent renegotiations) during this pandemic period in order to preserve Federal funds for the ramp-up effort.”

After much discussion internally and with peer institutions from across the country, the University has determined that it has not met OMB's requirement that other available resources (i.e., discretionary funds) are exhausted before charging idled employees to federal awards, and therefore U-M may not take advantage of the flexibilities authorized under OMB Memo M-20-26.


Additional Resources

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