Sneak Preview: OMB Guidance Adds New Records Retention Exception

April 2, 2014 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from an article in the Federal Grants Management Handbook). The Office of Management and Budget’s new grant reform guidance, as previously established in Circular A-110, still requires that recipients of federal awards retain financial and statistical records and supporting documents related to the award for three years after submitting the final expenditure report, or for an award that is renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report. However, OMB’s new guidance adds a new exception provision.

OMB has added that recipients must retain documentation “when the nonfederal entity is notified in writing by the federal awarding agency, cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity to extend the retention period.” This is significant because it could extend the amount of time that federal agencies and auditors have the right to review and/or take enforcement actions after a project has closed out.

Despite this new exception, in §200.333, retention requirements for records, OMB provides language on the three-year retention requirement that federal agencies and pass-through entities generally must not impose other record retention requirements on grantees and subrecipients. The guidance, like A-110, includes an exception in the case that any litigation, claim or audit is started before the three-year period expires, which would necessitate that the records be retained until all litigation, claims or audit findings involving the records are resolved.

 The guidance shares language with A-110 by stating that recipients must retain records for real property and equipment acquired with federal funds for three years after final disposition. When records are transferred to or maintained by the federal awarding agency or pass-through entity, the three-year retention requirement does not apply to the nonfederal entity.

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