The Office of Management and Budget (OMB) has disbanded the Council on Financial Assistance Reform (COFAR), the interagency group created in 2011 to coordinate federal financial assistance and oversee the integration of uniform grant guidance, under a recent OMB memorandum to federal agencies aimed at reducing governmental burden.

OMB Memorandum M-17-26, issued June 15, aims to support the President’s Management Agenda by relieving agencies of requirements under numerous prior OMB memoranda by either rescinding or modifying those memoranda. “Too often, burdensome tasks have piled up without consideration of whether the requirements collectively make sense,” stated OMB Director Mick Mulvaney in the new memorandum. “In many cases, agencies are asked to spend more time and resources complying with low-value activities versus allocating taxpayer dollars to meet their core agency mission. Through this memorandum, OMB begins providing relief to agencies by rolling back these requirements and allowing those who know their agencies best — agency managers — to manage operations, adopt best practices and find the best way possible to reduce costs and minimize staff hours responding to duplicative and burdensome reporting requirements.”

Mulvaney adds that “this is just the first phase of an extensive review process” as the federal government looks for ways to reduce low-value, duplicative and obsolete requirements and to review and rescind previous OMB guidance. Along with eliminating and modifying numerous OMB memoranda setting guidance for information technology, federal contractor procurement and federal performance management, the new memorandum eliminates three previous documents related to grants management.

COFAR

The first is OMB Memorandum M-12-01, which established COFAR. The council was chartered as part of the Chief Financial Officers (CFO) Council to provide recommendations to OMB on policies and actions necessary to report on grants and cooperative agreements, and share with executive departments and agencies best practices and innovative ideas for transforming the delivery of this assistance (see ¶101 in the Federal Grants Management Handbook). COFAR’s membership included the OMB controller and senior policy officials from eight federal agencies that provide the largest amounts of financial grants assistance (i.e., the departments of Agriculture, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Labor and Transportation) and one additional agency.

The new memorandum disbands COFAR and states that financial assistance priorities going forward will be considered by the CFO Council “consistent with the goal of involving a broader community of grantmaking agencies to participate in developing priorities for reforming federal grants management.” OMB provided no further details as to why it disbanded COFAR, or what implications this could have for future grants oversight.

In September 2015, COFAR had released its most recent “Frequently Asked Questions” pertaining to the uniform guidance, and was developing an updated version before the effort was put on hold when the Trump administration took office. In its most recent action, COFAR and the CFO Council in June released a “Financial Assistance Management Career Roadmap” to identify and document the competencies needed for successful job performance by financial assistance management professionals across the federal government. The roadmap is available at https://cfo.gov/wp-content/uploads/2017/06/CFOC_COFAR-FA-Mgmt-Career-Roadmap-Report_20170619_Final.pdf.

M-14-17

The new memorandum also states that federal agencies no longer must meet the requirements under OMB Memorandum M-14-17, which was issued in September 2014 and established metrics to help determine whether the uniform guidance is meeting its intended goals of reducing the risk of fraud, waste and abuse, and unnecessary administrative burden (see “Metrics Set To Gauge Uniform Guidance Success,” November 2014). According to §200.109 of the uniform grant guidance, OMB is required to review the guidance every five years, so OMB planned to use metrics to ensure that it meets its goals.

Agencies were required to provide information on administrative metrics such as the number of OMB-approved exceptions focused on program performance over compliance, the number of fixed amount awards issued and the number of indirect cost rate extensions approved by cognizant agencies. In addition, the Federal Audit Clearinghouse was required to provide information on single audit metrics such as the number of modified opinions for higher-risk major programs, the number of audit findings of material weaknesses in internal controls for higher-risk major programs, the number of major programs selected for audit and the number of audit objectives in the OMB Compliance Supplement.

When it issued M-14-17, OMB noted that it had hoped to reduce any administrative burden related to gathering information under these metrics by essentially requiring information the federal government already collected. At the time, OMB said that “metric collection is only to inform COFAR about the current impact of implementation,” and that “once COFAR has reviewed the metrics for the first year, it will consider whether it is appropriate to establish goals or target outcomes for any given metric.”

CFDA Numbering

Lastly, the new OMB memorandum states that agencies are no longer required to prepare for an expanded Catalog of Federal Domestic Assistance (CFDA) numbering schematic, as informed by a December 2016 CFO Council controller alert in December 2016. The controller alert advised federal agencies that effective Oct. 1, 2018, the numbering construct associated with CFDA titles would be changed from XX.XXX to XXX.XXXX in an effort to align with the three-digit Common Governmentwide Accounting Classification (CGAC) agency code used in the Treasury Account Symbol (TAS) listed in OMB Circular A-11 Appendix C.

Promise Zones

The new memorandum also halted a prior memorandum pertaining to federal funding for Promise Zone designations. It paused the requirements under OMB Memorandum M-16-23, which called for federal agencies to identify financial assistance and other resources where preference can be appropriately offered on the basis of a Promise Zone designation and to make such preference available. M-16-23 specifically required agencies to report to OMB at the beginning of each fiscal year (FY) (or within 60 days of annual appropriations) on programs that will offer preference for Promise Zones in that fiscal year, including both competitive and noncompetitive opportunities. It also required agencies to report to OMB annually on resources awarded to Promise Zone and Promise Zone-certified entities in the prior fiscal year.

Under the new memorandum, OMB suspended the requirement to report on programs offering preference through FY 2018, and awards to Promise Zones and Promise Zone-certified applicants for FY 2017. However, OMB will resume the requirement for reporting on awards in FY 2018 and will continue to consider whether to resume reporting requirements in full for FY 2019 and beyond. All other provisions of M-16-23 remain in effect.

No further details were provided on any of these changes. Any further updates will be included in future articles.

For More Information

The memorandum is available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/M-17-26.pdf.