On April 4, 2024, the Office of Management and Budget (“OMB”) released a substantial update to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), as codified at 2 C.F.R. Part 200. The Final Rule release has been eagerly anticipated by recipients of federal funding and the government agencies tasked with crafting specific regulatory requirements. These changes represent the most extensive revision to the Uniform Grants Guidance since it went into effect 10 years ago. The Final Rule states that the revised guidance will be effective for awards made on or after October 1, 2024, and instructs permissively that federal agencies may elect to implement the updates sooner so long as at least 60 days after publication of the Final Rule in the Federal Register.

During a press conference announcing the changes, OMB officials touted that the Uniform Guidance revisions aim to streamline and clarify requirements for federal funding. The overarching goal, as stated by government officials, is to ensure that grant announcements (notices of funding opportunities, or NOFOs) are as clear and concise as possible, making it easier and more equitable for eligible recipients to submit applications. Anticipated changes include reducing agency and recipient burdens, clarifying sections that had led to inconsistent interpretations in the past, and revising certain sections to be rewritten in “plain” language.

Feldesman attorneys are conducting a thorough examination of the changes and will be providing a more substantive update during a webinar on April 16. The webinar will share our observations on the key revisions, highlight particularly impactful changes, and discuss potential implications for grantees.

Below is an overview of the most significant changes:

• Equipment-Related Thresholds [200.313]
  • Increases the acquisition value threshold relevant to the equipment definition from $5,000 to $10,000.
  • Indian Tribes may use their own internal disposition procedures for use, management, and disposal of equipment, but must follow the regular guidance if they do not have set procedures.

• De minimis Indirect Cost Rates [200.414]
  • Increases the de minimis rate from 10 percent to fifteen percent over modified total direct costs (MTDC).
  • Recipients and subrecipients can elect a lower de minimis rate at their discretion, and modify the definition of MTDC to permit inclusion of the first $50,000 of any one subaward in the base.
  • Neither federal agencies nor pass-through entities may require recipients and subrecipients to use a de minimis rate lower than the standard, unless mandated by federal statute or regulation.

• Mandatory Disclosures Adding False Claims Act Violations [200.113]
  • Requires an applicant, recipient or subrecipient of a federal award to “promptly” disclose whenever, in connection with a federal award, it has credible evidence of the commission of a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code or a violation of the civil False Claims Act.
  • Generally aligns the meaning of “credible evidence” in the context of mandatory disclosures relating False Claims Act violations under 2 C.F.R. Part 200 with the existing standard for similar disclosures under the Federal Acquisition Regulation (FAR).

• Fixed Amount Awards and Subawards [200.201]
  • Requires, upon conclusion of a fixed amount award, the identification of activities that were not completed.
  • Increases from $250,000 to $500,000 the amount of fixed amount subawards that a recipient may provide with prior written approval from the federal agency (see Section 200.333).

• Cybersecurity Internal Controls [202.303]
  • Adds cybersecurity internal control requirements at 202.303(e), but does not mandate a specific framework. OMB will consider providing more specific guidance on this topic in the future.

• Single Audit [200.501]
  • Increases from $750,000 to $1 million the “expenditures” of federal funds threshold at which a recipient is required to conduct a single audit or a program specific audit.

• Procurement by States and Indian Tribes [200.317]
  • Allows Tribal Government recipients to use their own internal procurement standards rather than complying with federal procurement standards requirements prescribed by the Uniform Guidance in sections 200.318 through 200.327.

To register for the firm’s “Changes to the Uniform Guidance” webinar on April 16, please click here.

For additional information, please contact the attorneys in Feldesman’s Federal Grants practice group:

• Ted Waters, Managing Partner
• Scott S. Sheffler, Partner
• Nicole M. Bacon, Partner
• Rosie Dawn Griffin, Partner
• Mindy B. Pava, Partner
• Phillip A. Escoriaza, Senior Counsel