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Tuesday, May 12, 2009

OMB tells states how to recoup costs of administering stimulus

The Office of Management and Budget on Monday outlined the process by which states can get reimbursed for managing federal Recovery Act grants, addressing concerns raised by some state officials in recent weeks.

OMB Circular A-87, "Cost Principles for State, Local and Indian Tribal Governments," allows state grantees to recoup administrative expenses through the State-wide Cost Allocation Plan, the administration said in a memorandum. SWCAP requests for reimbursements are sent to the Health and Human Services Department annually for review and approval.

Unlike other grant recipients such as colleges or universities, which generally recover administrative costs up-front, states often are reimbursed for such expenses after the fact, Orszag said.

The memo explained that SWCAP costs can be submitted as either "centralized services," which refer to budgeted or estimated costs, or direct "billed services."

In both cases, the costs should not exceed 0.5 percent of the total Recovery Act funds received by the state, the guidance stated.

-Robert Brodsky, GovExec.com
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