Grant recipients (both pass-through entities and subrecipients) may want to take note of an interesting item in OMB’s recent guidance on implementation of the Improper Payments Elimination and Recovery Act (PL 111-204).
OMB says that for grant programs, agencies must consider payment recapture audits at the grant recipient level. “Federal agencies should work with state and local governments to ensure that they have enough resources to conduct payment recapture audits (for example, through direct funding, allowable administrative expenses, or contingency contracts),” OMB writes. It continues, “[G]enerally, federal agencies should not look to pass-through entities for repayment of improper payments identified by payment recapture audits for funds they pass-through until repayment has been made by the sub-recipient or the final payee.”
On this last point, I think it’s important to note that OMB is only referring to monies that were identified in recapture audits.
How agencies will implement this memo remains to be seen, but I thought some might find OMB’s take on the matter interesting.
You can view the complete OMB memo guidance here.