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Due to the increased demands for assistance in processing unemployment claims, testing for COVID-19, and similar responses to the public health emergency, state, tribal or local governments may seek to re-assign employees working on EPA-funded grants to those projects. Can these recipients continue to charge the costs for compensating the employees to their EPA-funded grants when the employees are performing work unrelated to the EPA grants?

No. Based on our understanding of current OMB guidance, the costs for compensation for the employees re-assigned to assist in performing governmental functions unrelated to the programs/projects supported by the EPA grant should not be charged to the EPA grant.  The costs do not meet the allocability requirements of 2 CFR 200.405 for allowability since they do not benefit the EPA funded project by being reasonable and necessary for carrying out the award.  EPA does not have the requisite statutory authority to allow recipients to reassign EPA funded personnel to other grant programs due to a public health emergency.  An example of the required authority is Section 319(e) of the Public Health Service (PHS) Act which authorizes states and tribes to request the temporary reassignment of state, tribal, or local public health department or agency personnel funded under programs authorized by the PHS Act when the Secretary of the Department of Health and Human Services (HHS) has declared a public health emergency.

Return to Frequent Questions about Grants and Coronavirus (COVID-19).