Please note this article has been updated with the latest developments. See more here.
Today, the Firm learned that there is a new banner on the U.S. Department of Health and Human Services ("HHS") Payment Management Services ("PMS") website announcing, among other things, "PAYMENT DELAYS: Due to Executive Orders regarding potentially unallowable grant payments, PMS is taking additional measures to process payments. Reviews of applicable programs and payments will result in delays and/or rejections of payments." The Firm was informed over the weekend there would not be delays in advance payments from PMS for HHS grantees. The PMS banner suggests otherwise.
As many of our clients and federal funding recipients know, PMS also serves as the electronic payment service for a number of other federal agencies. How this banner would affect those agencies, if at all, is not clear. We say "if at all" because some federal agencies have required greater support than HHS for many years so this may not be a change at all for those grantees.
In the meantime, here are critical considerations:
- Be prepared to fully justify any requests for cash drawdowns; all grantees should have such documentation already but, at least with respect to HHS, have not had to provide extensive support for any drawdowns to date; and
- The standard under the Uniform Guidance is "payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient..." 2 C.F.R. 200.305(b)/45 CFR 75.305(b). If it takes longer for PMS to process payment requests, grantees should act accordingly and submit such requests well in advance of actual cash needs.
Feldesman attorneys will, of course, monitor the situation. Please let us know if you are receiving cash timely or are experiencing delays.
Additionally, be sure to join Feldesman's upcoming webinar, "What Grantees Need to Know About the New Administration's Executive Orders" on Tuesday, February 4, 2025, from 3:00 – 4:00 p.m. ET as Managing Partner Ted Waters and Partner Scott S. Sheffler go over all the recently enacted Executive Orders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
