Accelerating Spending of Remaining Recovery Act Funds for Grant Programs

October 4, 2011 § Leave a comment

When the American Recovery and Reinvestment Act (Recovery Act) was enacted in February 2009, Congress directed federal agencies to “manage and expend the funds made available in this Act so as to achieve the purposes [of the Act] including commencing expenditures and activities as quickly as possible consistent with prudent management.” To emphasize the importance of expending Recovery Act funds, the President set a goal of spending 70% of Recovery Act funds by September 20, 2010. This goal was met and, as of mid-September, nearly 85% of Recovery Act funds have been spent.

With the introduction of the American Jobs Act to Congress on September 12th, the Office of Management and Budget (OMB) issued Memorandum M-11-34: Accelerating Spending of Remaining Funds from the American Recovery and Reinvestment Act for Discretionary Grant Programs to accelerate the spending of remaining Recovery Act funds in discretionary grant programs in an effort to ensure existing government programs are doing everything to ensure that funds are spent as quickly and efficiently as possible to drive job creation right now.

More specifically, the Memorandum directs federal agencies to take necessary steps to complete Recovery Act projects by September 30, 2013. This new guidance compresses the period of availability for most of the remaining Recovery Act funds in discretionary grant programs into the next two years. In order to implement this new policy, federal agencies are asked to work with recipients of affected grant funds to accelerate the spending rate for all awarded funds while still achieving core programmatic objectives. In addition, federal agencies are encouraged to do the following:

  • Reduce administrative hurdles that delay expenditure of funds
  • Decrease delays between receipt of invoices and outlaying corresponding funds
  • Implement programmatic safeguards to protect against unnecessary delays
  • Establish appropriate safeguards for ensuring the integrity of current spending timelines for all types of federal assistance and contracts and accelerate spending of funds, where possible

Waivers from the September 30, 2013 deadline for discretionary grant funds are available to federal agencies where contractual commitments by the grantee with vendors or sub-recipients prevent adjusting the timeline for spending or where programs are long-term by design. Agency waivers will only be granted when compelling legal, policy, or operational challenges exist. The deadline for submitting a waiver is September 30, 2012.

In addition, the Memorandum directs agencies to revise the terms of Recovery Act discretionary grant agreements, to the extent permitted by law, to provide for the reclamation of funds that remain unspent after September 30, 2013, absent a waiver from OMB.

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