Seven tips to manage risks for COVID-19 ongoing costs

Part 6 of 6 in a series focusing on lessons learned and leading practices in COVID-19 disaster cost recovery.

As discussed in Part 1, Part 2, Part 3, Part 4 and Part 5, there are many issues to consider in the long-term COVID-19 disaster recovery. Applicants may be incurring ongoing COVID-19-related costs that are potentially eligible for reimbursement from federal awards. To facilitate compliance, reduce the risk of funding de-obligation and minimize unexpected financial burdens on the applicant, there are seven suggested tips for applicants when monitoring for ongoing costs:

1. Isolate eligible costs:

Continue to be mindful of what types of costs are eligible per the applicable funding regulations and confirm if these eligible COVID-19-related costs can be isolated. Isolating eligible costs will assist with tracking, ease the reimbursement claim preparations and ultimately reduce risk of de-obligation.

2. Track deadlines:

Stay up to date on critical deadlines such as the funding period of performance for cost eligibility, cost share deadlines and requirements. Understanding the cost-share deadlines will help manage expectations of the amount and the time period for the cost share to be covered by the applicant — minimizing unexpected financial burdens on the applicant.

3. Confirm cost reasonableness:

Confirm ongoing eligible costs are reasonable to adequately respond to the current level of the COVID-19 pandemic. Where applicable, conducting independent cost estimates and drafting memos to provide additional clarification to justify costs may be beneficial to prepare for future audits.

4. Reevaluate current procurement methods:

Applicants that may have experienced state of emergency declarations for COVID-19 where procurement requirements were temporarily relaxed to expedite the response to the COVID-19 pandemic may need to reevaluate their current procurement approaches. It is critical that such procedures are in compliance with local procurement guidelines to avoid future findings.

5. Identify active contracts that may result in ongoing costs beyond the award eligibility end date:

Costs incurred outside of the eligibility end date may cause a financial burden to the applicant since the incurred costs may not be reimbursed. If the cost eligibility end date has yet to be determined by the funding agency, this is a critical area to continue monitoring.

6. Document everything:

Keep a record of all supporting documentation that demonstrates costs are eligible. It is recommended that documentation be stored in a centralized location for future reference and audits.

7. When in doubt, refer to the funding specific guidelines and 2 CFR Part 200 Uniform Administrative Requirements for federal awards for clarification:

It is imperative for applicants to monitor federal award guidelines, policies and requirements for clarification and updates to confirm compliance and avoid costs being ineligible.

Lemuel Peterson also contributed to this article.