On October 5, 2023, the Office of Management and Budget released proposed changes to revise several sections of OMB Guidance for Grants and Agreements to integrate statutory requirements and administration priorities, reduce agency and recipient burden, clarify and update financial assistance guidance to federal agencies, and rewrite applicable sections in plain language.
The proposed changes impact the following sections of 2 Code of Federal Regulations (CFR):
- Part 1 – About Title 2 of the Code of Federal Regulations
- Part 25 – Universal Identifier and System for Award Management
- Part 170 – Reporting Subaward and Executive Compensation Information
- Part 175 – Award Term for Trafficking in Persons
- Part 180 – OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Non-procurement)
- Part 182 – Governmentwide Requirement for Drug-Free Workplace (Financial Assistance)
- Part 183 – Never Contract with the Enemy, and
- Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards known informally as “Uniform Guidance” is the culmination of extensive collaboration between the Office of Management and Budget and federal awarding agencies to improve the transparency, oversight, and performance of federal awards to non-federal entities.
The Grants Works team has written about the history of the original release of Uniform Guidance and the revision released in August 2020. To read an easy-to-understand overview of Uniform Guidance, visit this Grants Works blog.
According to the October 5th announcement in the Federal Register, OMB is proposing these changes after receiving feedback from and through ongoing engagement with federal agencies and the broader federal financial assistance community (recipients of federal grants and cooperative agreements).
The feedback and engagement led OMB staff to believe that additional revisions are needed to further streamline, clarify, and update the guidance and to raise certain thresholds, where permissible under law, and in recognition of inflation.
What Are Some of the Changes?
Some of the proposed changes include increasing the single audit threshold to $1,000,000 from $750,000, increasing items defined as “equipment” as an item with a single unit cost of $5,000 to one with a single unit cost of $10,000, increasing the de minimis rate from 10 percent to 15 percent, and increasing the subaward threshold for Modified Total Direct Cost calculations.
Proposed changes also include:
- Removal of ten items from the prior written approval requirements
- Clarifying cost share vs. cost match
- Several revisions to procurement standards and procurement methods.
- Scope of audit recommendations
- Combining the revision of budget and program plan requirements for construction and non-construction awards
- Clarifying the difference between a no-cost extension and a one-time extension and when prior approval applies
- A complete revision to the template text for a Notice of Funding Opportunity including following plain language principles, grouping similar items, and including basic information at the top of a funding opportunity
- Clarifying when a Unique Entity Identifier and SAM.gov registration is applicable, including making this clear for foreign entities
There are numerous proposed changes that we did not list here, however, our team created an extensive list of the changes and shared it with our clients.
Future Updates Under Consideration
OMB also outlined revisions that are being considered for future updates such as establishing specific audit requirements for for-profit entities, removal of even more prior approval requirements, addressing indirect cost rate proposal challenges, and further clarification of the scope of an audit.
Accessing the Proposed Rule and Submitting A Formal Comment
To submit a formal comment by the December 4, 2023 deadline, you can access the proposed rule here. You can also visit www.regulations.gov and search for docket OMB-2023-0017. OMB requests that commenters make it clear what section of the guidance they are commenting on by beginning each comment with the section number in brackets (e.g., [200.332]). Note that public comments will be posted on regulations.gov and are a matter of public record.
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