OMB Releases Uniform Guidance Revisions

• Equipment: 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” increases from $5,000 to $10,000 (see section 200.313(e)(1)).

• Unused Supplies: The value of unused supplies that recipients of Federal funds are required to sell at the end of the grant award period increases from $5,000 to $10,000. Guidance also clarifies that this is the total amount of remaining unused supplies, not just like items (see section 200.314).

• Fixed Amount Subawards: The amount of fixed amount subawards that a recipient may provide with prior written approval from the Federal agency increases from $250,000 to $500,000 (see section 200.333).

Recognizing Recipient Costs of Doing Business

• De Minimis Indirect Rate: The maximum rate that recipients of Federal funds may use for indirect costs without negotiating an alternative rate with the relevant Federal agency increases from 10 percent to 15 percent.

• Calculating Indirect Costs: The amount of subawards that recipients can apply to their indirect rate increases from $25,000 to $50,000 (see section 200.333).

Report Submission

OMB revised section 200.512 to more accurately reflect the provisions of the Single Audit Act with respect to the report submission deadline. This paragraph now recognizes that a cognizant agency for audit or oversight agency for audit (in the absence of a cognizant agency for audit) may authorize extensions for Single Audit submissions when the nine-month timeframe would place an undue burden on the auditee.

Additional Updates

To reduce paperwork and obstacles, Federal agencies must now devise a plan to improve the readability, clarity, accessibility, and design of Notices of Funding Opportunities (NOFOs). To improve the applicant experience, Federal agencies must announce specific openly competed NOFOs. NOFOs must be limited in length to include only the information required to effectively communicate program goals.

The update further emphasizes the use of plain language to reduce complexity and ensure accessibility. To this end, agencies are asked to write Notices of Funding Opportunities at a reading level accessible to potential grant applicants. Agencies are also asked to reduce word count by 25 percent, eliminate unnecessary provisions, address any inconsistent use of terms, consider translating into other languages for broader accessibility, and follow plain language principles. Finally, the update promotes enhanced readability through the adherence of visual and user experience design principles, such as typographic hierarchy, checklists, and supporting imagery.

In addition to thresholds, the Uniform Grants Guidance 2024 Revision contains various updates that address labor standards for Federal grant awards. The update includes provisions emphasizing the importance of using responsible contractors and engaging in organized labor have been revised, with examples of permitted employment and labor practices included.

The Uniform Grants Guidance 2024 Revision also updates:

• Evaluation: Federal fund recipients are allowed to spend a portion of their award on evaluation activities. Evaluation questions may address grant implementation, outcomes across groups served, and the effectiveness or the impact of activities or strategies.

• Data: Federal fund recipients are allowed to spend a portion of their award gathering data and analytics. Data helps recipients use funding in ways that improve program management and better understand the extent to which their programs reach affected populations and achieve intended goals.

• Community Engagement and Public Participation: Federal agencies and fund recipients are encouraged to conduct community engagement activities and to let those receiving assistance spend funds on public participation and community engagement activities. This includes activities that make the public aware of and help the public understand and gain access to Federal grant opportunities and other services and support available. The goal of these activities is to advance equity for underserved communities while improving public trust in government and democratic accountability.

How We Help

AAFCPAs provides assurance solutions and audit guidance in accordance with Uniform Guidance/Single Audit and Government Auditing Standards. In addition, our experienced consultants assist our clients with the day-to-day questions that arise on the allowability of Federal expenditures and the proper way to efficiently track these costs with the use of technology. We are available to help you review these changes to determine if any of your policies and procedures should be revised to enable you to maximize the funding. We also help nonprofit organizations navigate the complexities involved in internal controls and compliance, advising on weaknesses and recommending improvements and corrective actions. Finally, we help clients maintain Federal compliance and meet their strategic vision by automating data collection processes from multiple sources and using the data to uncover operational deficiencies through data analytics.

If you have questions, please contact Hui-Ting Grady, CPA, Director, Assurance at 774.512.4106 or hgrady@aafcpa.com—or your AAFCPAs Partner.