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OMB Announces New Recovery Act Administrative Costs Guidance for States

Office of the Vice President
FOR IMMEDIATE RELEASE                          May 13, 2009
OMB Announces New Recovery Act Administrative Costs Guidance for States
Updated Guidance Helps States Better Meet Accountability and Transparency Requirements in Recovery Act
The Office of Management and Budget has issued updated administrative costs guidance for states, improving the process by which they may obtain funds needed to meet the accountability and transparency requirements in the Recovery Act.
Memorandum M-09-18 (May 11, 2009) allows states to submit to the Federal Department of Health and Human Services either:
  •          estimated or budgeted costs for ARRA administrative costs to be included in its indirect cost rates for ARRA programs or
  •          a methodology to develop a billing rate for ARRA administrative costs used to charge the ARRA programs directly. 
The memo addresses concerns raised by state recipients of American Recovery and Reinvestment Act (ARRA) grants regarding being able to secure funds for administrative costs like maintenance of their websites or development of their reporting databases in a timely manner.  When the concern was raised, Vice President Biden asked OMB and Recovery Act staff to improve the funding process and the updated guidance was generated with the input of state and local officials.  States will now be able to obtain funds for administrative costs related to Recovery Act activities more quickly than would be permitted under the current traditional process, allowing them to make up-front investments in staff and technology.
To view the memo, click HERE.