Update on OMB’s Major Revisions to Uniform Guidance

By Mark J. Piszko, CPA, CGMA, Partner

The Office of Management and Budget (OMB) recently issued significant revisions to Title 2 of the Code of Federal Regulations (2 CFR Part 200) Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). The revisions are intended to reduce administrative burdens for federal agencies, applicants and recipients of federal funds, as well as to simplify ambiguous or unclear language, clarify certain compliance requirements, increase thresholds that lead to other requirements and otherwise reduce opaqueness within the guidance.

In Summary

The 2024 Uniform Guidance revisions:

• Clarify the allowability of the use of federal award funds by recipients for evaluation-related activities, including both the building and use of evidence.
• Make clear that the use of funds for expenditures such as staff, materials, contractors, subawards and other expenses that support the effective use of data are allowable costs.
• Encourage the use of federal award funds by recipients for community engagement activities and in advancing equity and support for underserved communities.

Threshold Changes in the Revised Uniform Guidance

Included are:

Equipment – Increases from $5,000 to $10,000 the value of equipment that at the end of the grant period “may be retained, sold or otherwise disposed of with no further responsibility to the federal agency.”

Supplies – Increases from $5,000 to $10,000 the value of unused supplies that federal awards recipients are required to sell at the end of the grant award period as well as clarifying that this amount is the total amount of remaining unused supplies, not just like items.

Single Audit Threshold – Increases from $750,000 to $1,000,000 the federal award expenditure level that subjects recipients to a Single Audit. The new guidance also increases the Type A program threshold to $1,000,000 from $750,000. The Type A threshold increases when federal expenditures exceed $34,000,000.

De minimis Indirect Rate – Raises from 10% to 15% the de minimis indirect rate federal award recipients could use for indirect costs if they do not have an existing negotiated rate. Further, federal or pass-through agencies cannot require recipients or subrecipients to use an indirect rate lower than the de minimis rate.

Effective Date

The revisions are effective for all federal awards issued on or after October 1, 2024. Federal agencies may elect to apply the 2024 revisions prior to federal awards issued before October 1, 2024, but they are not required to do so.

An Easier Road Ahead

It appears from the revisions that OMB recognizes the challenges some organizations face in trying to access federal grant monies and has focused on making the process of receiving federal funds not only simpler and less burdensome, but more accessible to organizations that are smaller and perhaps less sophisticated in their administrative and financial operating structures. The increases in certain thresholds will also ease reporting requirements and potentially reduce the volume of recordkeeping necessary for some of these federal grants.

Contact Us

We will keep you informed of any additional revisions OMB makes to the Uniform Guidance. In the meantime, if you need assistance with interpreting these revised standards, please contact your PKF O’Connor Davies client service team or:

Mark J. Piszko, CPA, CGMA
Partner-in-Charge
Not-for-Profit Services
mpiszko@pkfod.com | 646.449.6316