The Office of Management and Budget (OMB) issued its final guidance based on previously proposed revisions for the uniform guidance on April 4, 2024. As part of the announcement, the OMB published memorandum M-24-11, titled Reducing Burden in the Administration of the Federal Financial Assistance and reference guides.
The revisions are, among other things, intended to simplify the process for applying for and managing federal grants.
These updates, to be adopted by federal agencies by October 1, 2024, will alleviate burden on recipients and subrecipients of federal financial assistance, making it easier for organizations to navigate and benefit from the opportunities mentioned below.
Uniform Guidance Changes Overview
The revisions include clarification to the applicability of requirements and terminology for uniform guidance and some relaxation and clarification to certain requirements that required prior approval from federal regulators.
The changes also replace areas of the guidance with more plain English to simplify the process of applying for and managing federal grants and contracts, as well as making federal financial assistance more accessible.
In turn, the federal government aimed to decrease burden on recipients and subrecipients of federal financial assistance.
Some key changes include the following:
- Reduction of complexity and technical language throughout, including improved language for notices of funding opportunity (NOFO)
- Increased the audit threshold from $750,000 to $1 million
- For entities with total federal expenditures under $34 million, increased the Type A threshold used to determine major programs to $1 million and increased the threshold for Type B programs requiring risk assessment to $250,000
- Increased the de minimis indirect cost rate from 10% to 15% and the exclusion of subaward costs in the modified total direct costs calculation used for the de minimis indirect cost rate and certain other rates was increased from $25,000 to $50,000
- Increased the equipment and unused supplies threshold from $5,000 to $10,000
- Increased the emphasis on monitoring of Federal Funding Accountability and Transparency Act (FFATA) reporting
- Increase in the accessibility, equity, and flexibility of federal award funds to support programs for Tribal nations, which includes updating procurement guidance applicable to Tribes to follow procurement standards previously allowed for States
- Allows federal cognizant agencies and federal oversight agencies to award extensions for the Single Audit deadline when there’s undue burden on the recipient
- Added veteran-owned businesses to the types of businesses recipients and subrecipients are encouraged to consider under federal awards
The effective date of these changes is all new awards issued on or after October 1, 2024. Federal agencies may elect to apply the final guidance to awards issued before October 1, 2024, but aren’t required to do so.
Changes have not yet been published to the federal register as of the date of this alert.
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If you have questions on how your organization could be affected by the proposed guidance, please contact your Moss Adams professional.
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