November 10, 2011

Acceleration of Unspent ARRA Grant Funds

Pam Miller, the Director of the Sponsored Projects Office, sent an advanced notification to the campus of the need to spend ARRA funds promptly or risk having these funds reclaimed by the federal government.

On September 15, 2011, the federal Office of Management and Budget (OMB) distributed Memorandum 11-34 to the heads of executive departments and agencies of the federal government regarding the need to accelerate the expenditure of ARRA funds.

The memo stated that nearly 85 percent of ARRA funds have now been paid out and the vast majority of remaining funds have already been obligated for projects that communities are counting on for job creation. However, despite the rapid pace of spending of ARRA funds over the past 30 months, OMB noted that there remain billions in ARRA funds that, although they have been obligated, have not yet been outlayed.

In light of the current economic situation and the need for further economic stimulus, OMB is now asking federal agencies to spend these remaining ARRA funds as quickly and efficiently as possible.

In order to ensure that remaining ARRA balances are spent in an expeditious fashion, federal agencies are being asked by OMB to establish aggressive targets, consistent with programmatic objectives, for outlaying remaining funds by September 30, 2013. This new policy would compress the period of availability for the bulk of remaining funds in discretionary grant programs into the next two years.

Agencies may request waivers, but they will be granted sparingly.

SPO anticipates that the federal agencies will soon be communicating the requirements of Memorandum 11-34 the UC Berkeley campus by adding these requirements to new grant agreements, modifying terms and conditions of existing grant agreements, or other appropriate written means. Agencies also are being directed to revise the terms of ARRA discretionary grant agreements, to the extent permitted by law, to provide for reclamation of funds that remain unspent after September 30, 2013, absent a waiver issued by OMB.

Principal Investigators should contact their Research Administrators with questions about the status of their ARRA expenditures.

Update (December 14, 2011): NSF and NIH Issue Guidance to Accelerate Spending of ARRA Funds