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����51 Excess Fund Balance Waiver Blanket Approval – FYE 12/31/2020 and FYE 1/31/2021

Lora M. Rath, Director, Office of Compliance and Enforcement
March 11, 2021

• (PDF)

Policy

����51 recognizes that many Recipients have received additional Covid-19 related funding from other sources – many that have time limits for expending those funds. Therefore, given the unprecedented circumstances of the last year, we anticipate receiving a significant number of requests to retain excess ����51 fund balances. On March 20, 2020, via a Frequently Asked Question, ����51 reminded Recipients that 45 C.F.R. Part 1628 allows grantees to request approval to carry over funds in excess of 25% of ����51 support when there are “extraordinary and compelling circumstances, such as a natural disaster or other catastrophic event, that prevent the timely expenditure of ����51 funds” and advised that the COVID-19 crisis is such an event.

Therefore, ����51 has determined that all Recipients with a December 31, 2020 or January 31, 2021 fiscal year end (FYE) will be allowed to carry over any excess ����51 fund balance for that fiscal year, regardless of the amount. We have also developed a simplified form, below.  I hope that you find this year’s fund balance process to be less burdensome. Please send any questions on completing the Form to me at rathl@lsc.gov.  Thank you and stay safe.

Required Waiver Request—Simplified Reporting Form

Despite this blanket approval, Recipients are still required to submit a waiver request within 30 days after the submission of annual audited financial statements. However, rather than submit a formal request letter, Recipients will only need to complete a simple Fund Balance Waiver Request for Fiscal Year 2020 Smartsheet Form (Form). 

Please note that the Smartsheet Form is to be used only for FYE December 31, 2020 and January 31, 2021 excess fund balances. ����51 is currently working to incorporate excess fund balance waiver requests into GrantEase and will provide guidance and training when that module is complete.

This Form will capture the information required to satisfy the criteria outlined at . When completing the Form, please remember that ����51’s COVID-19 supplemental grant funding and any specialty grant funds (Technology Initiative, Pro Bono Innovation, or Disaster grants) are NOT included in the fund balance calculation. This email provides official notice of the approval of all December 31, 2020 and January 31, 2021 FYE excess fund balance waiver requests; therefore, Recipients will not receive separate approval notices from ����51 after completing the Form. However, ����51 will contact Recipients if there are questions related to the amount of an excess fund balance or the proposed use of those funds.

Other Fund Balance Requirements

There are no changes to the requirements for reporting an excess fund balance in the Recipients’ Audited Financial Statements (AFS). Please ensure that excess fund balances and related expenditures are separately reported by natural line item in the FYE 2021 (or in the case of January 31 FYE in the FYE 2022) AFS in either a separate fund column within a financial schedule or a supplemental schedule. . Recipients should instruct their Independent Public Accountants to follow the guidance in  for reporting excess fund balances.

����51 emphasizes that Recipients are required to expend excess funds in accordance with . Further, excess funds must be used according to the timeline and purposes outlined on the Form, unless otherwise contacted by ����51. ����51 will be flexible on the timeline to spend down excess funds; however, the timeline must be reasonable and not excessive. Please notify and seek guidance from ����51 regarding any changes to spending plans provided on the Form. 45 C.F.R. § 1628.4(g).

Finally, ����51 recommends that Recipients maintain all ����51 funds, including any carry-over or derivative income, in accounts or investments that earn reasonable interest or returns while also providing sufficient security as required by . If Recipients do not create a separate bank account to maintain ����51 funds, they must develop a methodology for attributing interest or earnings proportionately to each funding source.