On Friday, September 22, 2023, the Office of Management and Budget (“OMB”) announced substantial pending changes to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), codified at 2 C.F.R. Part 200.  An announcement and the pre-publication draft of the proposed rule are available on OMB’s website here.

Comments on the proposed rule will be due to OMB within 60 days after the notice is published in the Federal Register, which can be expected to occur sometime this week.

Proposed Updates to Uniform Guidance

Although the announcement describes the changes as a “fundamental rewrite,” the proposed changes are more in the form of:

• Clarifications to applicability and terminology;
• Relaxation or clarification of prior approval requirements; and
• Increases to thresholds that trigger compliance requirements, limit cost recovery, and limit flexibilities such as fixed amount subawards.

With respect to the last item, examples of impactful proposed changes include:

• Increasing the Single Audit Act audit threshold from threshold $750,000 to $1 million;
• Increasing the amount of subaward costs that can be counted within the MTDC base from $25,000 to $50,000;
• Increasing the de minimis indirect cost rate to 15 percent over MTDC; and
• Removing the “simplified acquisition threshold” cap for fixed amount subawards that is currently in place.

Under the proposed rule, the basic legal framework and organization of the Uniform Guidance, to include section numbering, will largely remain intact.

Our federal grants attorneys are evaluating the details of the proposed rule and will provide additional information in the coming week.

If you have any questions on matters of federal grants, please contact Scott S. Sheffler (ssheffler@feldesman.com) or Ted Waters (ewaters@feldesman.com) or call 202.466.8960.