Easy to grant, hard to defend: M-24-10 put every federal AI exception on the record

The week

On March 28, 2024, the Office of Management and Budget issued memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence, finalizing the draft it had released in November 2023. Each agency had to designate a Chief AI Officer within 60 days, and the CFO Act agencies had to convene AI governance boards. The memo listed purposes presumed to be rights-impacting or safety-impacting, from benefits eligibility to biometric identification and credit decisions. For those uses, agencies had to apply minimum risk management practices by December 1, 2024, or stop using the AI. The final text set out three formal exceptions. They were a Chief AI Officer determination that a presumed use did not meet the definition, a Chief AI Officer waiver of specific practices, and a one-year extension granted by OMB. Agencies also had to publish compliance plans within 180 days.

An earlier article in this series covered the November 2023 draft and its comply-or-stop deadline: the work of finding systems in scope, retrofitting the minimum practices and planning for a shutdown. The final memo kept all of that, and it spelled out the exits in detail. It defined three distinct exceptions and attached the same discipline to each: a named official, evidence written down before the decision, and a record that OMB or the public would see. That turned every exception into something an agency would later have to defend. The three exceptions are a determination that a use is out of scope, a waiver of a specific practice, and an extension of time.

Determinations: saying a presumed use is out of scope

Appendix I presumed many uses to be rights- or safety-impacting. The Chief AI Officer could decide that a particular application did not in fact meet the definition. The memo made that power non-delegable. It required a documented, system-specific risk assessment, central tracking, a report to OMB within 30 days, annual recertification, and a public summary of each determination and its justification.

Those conditions change the calculation. A determination is the cheapest exit in effort, because no minimum practices follow. It is also the most exposed. The public summary describes how the system is used, and that description can be tested by an inspector general, a court in a benefits dispute, or a journalist who obtains case files. If staff rely on the model more than the summary says, the agency has published an inaccurate statement over its Chief AI Officer’s name.

A defensible determination therefore rests on operational evidence: a process map showing where people decide, records showing they do, and a trigger for reassessment when the workflow changes. The memo required reassessment after significant changes. Agencies needed a way to notice those changes, such as a review step in the change-management process for the systems concerned.

Waivers: setting aside a specific practice

A waiver covered a use that stayed in scope but could not or should not meet one practice. The test was narrow. The Chief AI Officer had to base it on a system-specific risk assessment. The written finding had to show that meeting the requirement would increase overall risks to safety or rights, or create an unacceptable impediment to critical operations. Waivers were also non-delegable, tracked, reported to OMB within 30 days, recertified annually and summarized publicly.

The first ground is the more principled. Offering an opt-out from a fraud model, for example, could make the model easy to evade. The second ground is the one programs reach for under deadline pressure, and it is harder to defend publicly. “Critical operations” needs a concrete description of what would stop and who would be affected. A waiver justified only by cost or schedule reads badly once it is published.

Compensating controls make the difference. If a practice is waived, something should partly stand in for it: more frequent monitoring, a narrower deployment, a second human check on adverse outcomes, or a shorter review cycle. A waiver that names its compensating controls tells a reader the agency weighed the risk. One that does not suggests the agency simply ran out of time.

Waivers also outlive the people who sign them. Each one is a standing statement that a known gap is acceptable, and annual recertification puts it back on the Chief AI Officer’s desk. An agency should keep a waiver register showing the practice waived, the compensating controls, the next review date and the evidence that conditions have not changed.

Extensions: asking OMB for more time

The third exception was granted outside the agency. Requests had to reach OMB before October 15, 2024. Each needed a detailed justification, a description of the mitigations in place, and a plan to reach full compliance. OMB could grant up to one year and said it would not renew.

An extension looks like relief, and it is a commitment. The plan submitted to OMB sets a date by which the use must comply or stop, with no second extension available. It also shows OMB which agencies understood their systems and which did not. A credible request needed the same retrofit analysis the draft had demanded: what the vendor would supply, what testing was feasible, what notice and appeal changes were needed.

The extension deadline also set the year’s calendar. With requests due in mid-October, agencies had roughly six months from the memo to decide which exit each presumed use would take. Choosing late meant defaulting to an extension, and an extension that failed would end in shutdown.

For agency program directors, the final memo’s message was that exceptions are documents with readers. Each needed an owner, evidence and a review date. Agencies that treated determinations, waivers and extensions as a single portfolio could see where the exposure sat. Those that handled them case by case found out when the summaries were published.

With hindsight

The exits were not used evenly. When the December 2024 inventory was published, the federal CIO site reported 227 uses flagged as rights- or safety-impacting, and 206 of them had received extensions of up to a year. Extension was the dominant exit by a wide margin, which suggests few programs had compliance evidence ready in time. OMB’s consolidated inventory, updated in January 2025, listed 2,133 use cases from 41 agency submissions, with 351 flagged.

In April 2025, OMB rescinded M-24-10 and issued M-25-21 and M-25-22. Later articles in this series cover that transition. M-25-21 merged the two categories into high-impact AI and gave agencies 365 days to document minimum practices. It kept the essentials of the exception structure: Chief AI Officer waivers in writing, tracking and reporting to OMB, and the duty to stop using non-compliant systems. Many of the one-year extensions granted in late 2024 ran into that transition, so the plans behind them carried over.