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Navigating the Proposed Revisions to Uniform Guidance 2 CFR Part 200

Jan 4, 2024

The Office of Management and Budget (“OMB”) recently issued proposed revisions and updates to streamline processes and improve clarity in the Uniform Guidance (“UG”) outlined in 2 Code of Federal Regulations Part 200. Published in the Federal Register in October 2023, this guidance covers five main areas in which to incorporate statutory requirements, increase thresholds (e.g., monetary), clarify areas of misinterpretation, add specific measures to reduce burden, and use plain-language principles to improve accessibility. As the landscape of grants management evolves, staying abreast of the changes is paramount for organizations involved in federal programs.  

Overview of Uniform Guidance 

The UG has undergone significant evolution, beginning in 2013 with the consolidation of eight circulars into one comprehensive document. UG is a set of authorized rules and regulations governing federal grants found in Title 2 of the Code of Federal Regulations, crafted with the goal of ensuring alignment and consistency among all participants in the grant community. The UG’s most recent regs occurred in August 2020. Subject to a five-year review cycle for compliance with new laws and regulations, the OMB has issued these new proposed revisions.  

There has been substantial growth in federal grant funding being allocated to recipients. This growth shifted significantly in 2020, which is largely attributed to pandemic-related funding. Noteworthy is the Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) program, a $350 billion federal program supporting pandemic response and recovery efforts. The UG has become instrumental in effective grant administration, governing nearly $1.1 trillion dollars in federal grant funding and impacting more than 80,000 recipients and 1,800 distinct programs across 28 major grant-making agencies that have formally adopted OMB grant guidance. 

Understanding OMB's objectives 

In its proposal, the OMB seeks to: 

  • Incorporate statutory requirements that align with administration priorities. 
  • Reduce the burden on both agencies and recipients through streamlined processes. 
  • Clarify sections that have been subject to varied interpretations. 
  • Rewrite applicable sections in plain language, improve flow and address inconsistent terms. 

Some of the more significant proposed changes that will impact grantees and auditors based on the OMB’s objectives: 

  • Incorporate statutory requirements. The revisions to UG are proposed across multiple Parts for alignment, including Part 25, Universal Identifier and System Award Management; Part 170, Reporting Subaward and Executive Compensation Information; and Part 180, Governmentwide Debarment and Suspension (Non-Procurement) to ensure guidance will align with underlying statutes as amended.  
  • Increase thresholds. The OMB proposes to increase the de minimis, indirect cost-rate threshold from 10% to 15%; the per-unit threshold value of a capital expenditure (e.g., real property or equipment) increased from $5,000 to $10,000; the single audit threshold is increasing from $750,000 to $1,000,000; and the Modified Total Direct Costs exclusion base for subawards would rise to $50,000.  
  • Clarify areas of misinterpretation by recipients and/or agencies. The OMB clarifies prior approval expanded authorities for research grants irrespective of the granting agency. It also provides guidance to allow for administrative closeout costs incurred within the 120-day closeout period to be paid by the grant. 
  • Add specific measures to reduce administrative burdens. The OMB has proposed to remove prior approval requirements for ten Cost Principles. It is proposing to eliminate the current Simplified Acquisition Threshold limit for fixed-amount subawards and has also removed the prior approval requirement to switch subrecipients on a project/program.  
  • Use plain language principles. The OMB’s proposed revisions use plain language principles to improve flow, accessibility and consistency. It proposes terminology to replace “non-federal entity” with “recipient” or “subrecipient.” It references appropriate systems of record such as, and to replace the ambiguous “OMB designated government-wide systems.”  

Key actions for grantees, auditors, and subrecipients  

Organizations involved in grants and audits should proactively address these revisions by: 

  • Remaining informed about the proposed revisions and their potential impact on the organization. 
  • Conducting a comprehensive review of the proposed revisions to identify specific changes that may impact grant management, auditing processes, and compliance requirements.  
  • Updating policies and procedures to align with the proposed changes. 
  • Enhancing training and awareness for staff, auditors, and relevant stakeholders to ensure they understand the implications of the proposed revisions. 
  • Communicating between grantees, auditors, subrecipients, and any relevant stakeholders to address any questions concerning the proposed revisions.  

In this ever-changing landscape, keeping pace with the evolution of UG is not just a regulatory requirement but a strategic necessity. As the grants management terrain expands, it's crucial to comprehend and integrate these revisions to ensure effective compliance and program execution. Stay informed, proactively adapt, and chart a path to success in this dynamic realm of government grants. 

The EisnerAmper grants management team has decades of experience navigating complex federal guidance and assisting clients with compliance in executing their critical programs. Contact us below if you have questions about how this guidance may impact your organization.  

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Angie Brown is a Senior Manager in the firm with more than 20 years of experience.

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