Administration details Bulletin 5 updates, indirect-cost guidance and payment practices for state grants

Secretary Sarah Clark, head of Vermont’s Agency of Administration, told the House Government Operations & Military Affairs Committee on April 2 that the administration updated Bulletin 5 — the state’s guidance on grant issuance and monitoring — on July 1, 2024, to align state practice with new federal guidance and to reflect issues raised in last year’s committee testimony.

Clark said Bulletin 5 now includes clarified language on indirect cost-rate calculations, companion procedures and templates, and that the administration also issued Finance and Management Policy No. 11 to govern indirect-cost proposals. “For the record, I’m Sarah Clark. I’m the Secretary of Administration,” she said in opening remarks to the committee.

The update responded to two drivers, Clark said: federal changes to the Uniform Guidance for federal financial assistance that took effect in October 2024, and stakeholder testimony the administration received during the prior year. Jordan Black Deegan, the statewide grants administrator, told the committee the bulletin and the new policy give departments defined options for indirect-cost treatment, including the federally approved indirect rate, the federal de minimis rate (now 15%), or a negotiated rate with the state passthrough entity. “The de minimis rate is a federal rate. There’s no Vermont-specific de minimis rate,” Black Deegan said.

Why it matters: the indirect-rate rules affect nonprofit grantees’ budgets and negotiations with multiple state departments. Clark and Black Deegan described a new oversight step for negotiated rates: proposals are now reviewed by Finance and Management so departments see a shared approval and to reduce inconsistent treatment across agencies.

On payments, Clark said the state’s policy is that payments should be made within 30 days of receipt of an acceptable invoice and cited an internal figure showing that from fiscal 2022 to 2024, 97.8% of grant payments were made within 30 days. Black Deegan told the committee the underlying calculation uses the final, acceptable invoice as recorded in the state accounting system. “It’s the final invoice. So it’s looking at the payments themselves from the system,” he said.

Both witnesses emphasized that while net-30 is the expectation, practical exceptions exist. Clark said advanced (pre‑award) payments are permitted under Bulletin 5 and federal guidance but are “narrow and prescriptive,” require a risk assessment and generally require more state resources than reimbursement-only approaches. She cautioned that requiring extra written explanations for every late payment or adding heavy new reporting could create administrative burdens that slow grant work further.

The administration also described efforts to improve consistent use of Bulletin 5 across departments. Clark and Black Deegan said the administration rolled out statewide trainings on the updated bulletin, provided Q&A materials and a recorded two-hour briefing on the Uniform Guidance update; Clark highlighted a “continuous improvement network” and communities of practice hosted on Teams where grant administrators across state government ask questions and share answers.

Black Deegan said Finance and Management has logged 32 negotiated indirect-rate approvals (or proposals) through its new review process since Policy No. 11 took effect and that larger nonprofits often already have federally approved rates that the state accepts when grantees supply the federal letter.

Points of committee interest and administration concerns: Clark asked lawmakers to consider how a proposed working group in the bill would be structured and warned that the Secretary’s Office is small and that adding reporting or oversight requirements would create resource implications. She said some elements requested in the draft bill already exist in Bulletin 5 and Finance & Management policies and urged careful drafting to avoid duplicative administrative burdens. Representative Nugent asked whether the 97.8% figure counts invoices that were returned for corrections; Black Deegan confirmed the statistic is tied to final invoices recorded in Vision, the state accounting system.

The administration made written copies of Bulletin 5 and the companion procedures available to the committee and requested that members consider whether competitive grants — which require applications and reviews — are practical to execute within a rigid 30-day timeline.

Ending: Committee members said they would continue consideration of the bill and hear additional departmental witnesses. Clark and Black Deegan offered to provide follow-up information to organizations that testified previously about payment delays.