The federal Office of Management and Budget (OMB) Controller, Danny Werfel, issued a memorandum to federal agency heads last week on April 4. The memo provides further guidance on issues related to implementing the March 1, 2013 sequestration, also referred to as the “Joint Committee Sequestration.” One section of the memo specifically directs agencies that provide grants and other financial assistance to state, local and tribal governments to consider how they can help these entities mitigate the effects of funding reductions under sequestration. The memo says agencies should work closely with states, localities and tribal governments to determine whether there are ways to reduce administrative requirements, consistent with applicable laws, to enable funds to be used in a more cost-effective manner. The memo also explains that while agencies have little discretion in deciding where and how to reduce spending under sequestration, some agencies, depending on their account structure and any existing flexibilities provided by law, may have limited ability to realign funds using existing reprogramming and transfer authority. To the extent possible, agencies are directed to use these authorities to minimize the negative impact of sequestration on core mission priorities. The memo also provides instructions on implementing funding reductions for agency Inspectors General (IGs) and restates previous guidance that discretionary monetary awards should not be issued while sequester is in effect unless legally required.

Link(s): Guidance Memo