OMB UNIFORM GUIDANCE UPDATES - 2024
MI WORKS! MARCH 25, 2024 Tom DiLisio – Retired (USDOL-ETA) [email protected]
BRIEF HISTORY OF THE CIRCULARS STATE, LOCAL & TRIBAL GOVERNMENTS: A-87; Cost Principles A-102; Uniform Administrative Requirements A-133; Single Audit Requirements INSTITUTIONS OF HIGHER EDUCAITON A-21; Cost Principles A-110; Uniform Administrative Requirements A-133; Single Audit Requirements
BRIEF HISTORY OF THE CIRCULARS NON-PROFIT ORGANIZATIONS: A-122; Cost Principles A-110; Uniform Administrative Requirements A-133; Single Audit Requirements FOR-PROFIT COMMERCIAL ORGANIZATIONS 48 CFR 31; Contract Cost Principles
BRIEF HISTORY OF THE CIRCULARS A-102; Administrative Requirements for State, Local & Tribal Governments 2 CFR 215; Uniform Administrative Requirements for Educational Institutions & Non-Profit Organizations (8/31/2005) 2 CFR 220; Cost Principles for Educational Institutions (8/31/2005) 2 CFR 225; Cost Principles for State, Local & Tribal Governments (8/31/2005) 2 CFR 230; Cost Principles for Non-Profit Organizations (8/31/2005)
DEPT. OF LABOR CODIFICATION OF THE CIRCULARS 29 CFR Part 95; GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS, AND WITH COMMERCIAL ORGANIZATIONS, FOREIGN GOVERNMENTS, ORGANIZATIONS UNDER THE JURISDICTION OF FOREIGN GOVERNMENTS, AND INTERNATIONAL ORGANIZATIONS 29 CFR Part 97; UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS
SUPER CIRCULAR / UNIFORM GUIDANCE 2 CFR 200 – UNIFORM GUIDANCE Introduced & effective on 12/26/2013; 8/13, 2020 – 2 new requirements 11/12/2020 – additional changes / revisions 2/22/2021 – additional changes / revisions 10/5/2023 – Comment Period Open Review & update every 5 years (2 CFR 200.109)
CHAPTER XXIX – DEPARTMENT OF LABOR 2 CFR Part 2900; Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR Part 2998; Non-procurement, debarment, & suspension. DOL issued a technical amendment to 2 CFR Part 2900 in April 2021 to update cross-references and terminology to align with the Uniform Guidance Revisions of 2020 and 2021.
Procurement is grouped into three areas (200.320): Informal - Micro Purchase & Small Purchase; Formal - Sealed Bids & Proposals; Non-Competitive - Sole Source; November 12, 2020 - Revisions
November 12, 2020 - Revisions Procurement thresholds were increased: Micro Purchase threshold increased to $10,000 or up to $50,000 (Over $50k requires prior approval from the NICRA Negotiator – OCD Victor Lopez); Small Purchase threshold increased to $250,000 (Simplified Acquisition Threshold); Closeout is extended from 90 to 120 days for submitting final reports, etc.;
Allows the use of 10% de minimis rate of modified total direct costs (MTDC) to all non-Federal entities. With certain exceptions; Currently, the de minimis rate can only be used for non-Federal entities that have never received a negotiated indirect cost rate. Clarifies that when a non-Federal entity is using the de minimis rate for its Federal grants, it is NOT required to provide proof of costs that are covered under that rate. Another revision requires that all grantees negotiated agreements for indirect cost rates are collected and displayed on a public website (2024 update removes this requirement) Agency and website TBD
Assistance listings, assistance listing number, & program title; Budget period Discretionary Awards Financial Obligations Highest Level Owner Micro-Purchase Threshold Non-Discretionary Award Notice of Funding Opportunity Renewal Award Subsidiary Telecommunication Costs 2020 Updated Definitions:
Program Planning Design Reporting a Determination that a NFE is not qualified for a Federal Award Never Contract w the Enemy Prohibition on Certain Telecommunications and Video Surveillance Services & Equipment “Federal” payment “Modifications to” Period of Performance Domestic Preferences for Procurement Telecommunication Costs & Video Surveillance Costs 2020 Updated Definitions:
Improper Payment / Questioned Costs The definition of improper payment was revised to accurately reflect how questioned costs, including questioned costs identified in audits, are not improper payments until reviewed and confirmed as such.
Clarifies that the term period of performance reflects the total estimated time interval between the start of an initial Federal award and the planned end date, and that the period of performance may include one or more budget periods. The identification of the period of performance does not commit funding beyond the currently approved budget period. PERIOD OF PERFORMANCE
Budget Period (200.1) The definition of budget period was edited to clarify that recipients are authorized to expend the current funds awarded, including any funds carried forward or other revisions pursuant to 2 CFR 200.308.
An award made subsequent to an expiring Federal award for which the start date is contiguous with, or closely follows, the end of the expiring Federal award. A renewal award’s start date will begin a distinct period of performance. Renewal (200.1)
Pass Through Entities (200.332) Pass-through entities (PTE) are responsible for addressing only a subrecipient's audit findings that are specifically related to their subaward. In addition, the PTE may rely on the subrecipient's auditors and cognizant agency's oversight for routine audit follow-up and management decisions. Reduce the burden for PTEs by allowing a PTE to rely on the cognizant agency to address a subrecipient's entity-wide issues.
Concerning a subrecipient's indirect cost rate, pass-through entities are to use a subrecipient's NICRA but, if none exists. Parties can either negotiate a rate, use the de minimis rate, or a cost allocation plan method to account for indirect costs. Indirect Costs
Pre-Award Costs (200.458) Costs incurred prior to the effective date of the Federal award directly pursuant to the negotiation and in anticipation of the Federal award where such costs are necessary for efficient and timely performance of the scope of work. Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency. If charged to the award, these costs must be charged to the initial budget period of the award, unless otherwise specified by the Federal awarding agency.
This new section is applicable to grants and cooperative agreements which exceed $50,000, that are performed outside the United States and its territories, in support of a contingency operation in which members of the Armed Forces are actively engaged in hostilities. These provisions prohibit recipients from providing funds, subawards, or contracts to persons actively opposing the United States or coalition forces involved in said contingency operations. Never Contract w the Enemy (200.215)
Prohibition on Certain Telecommunications & Video Services or Equipment (200.216) This new section implements Section 889 of the National Defense Authorization Act (NDAA) of FFY 2019 by establishing a broad prohibition against purchasing any equipment, services, or systems that uses covered telecommunications equipment or services as a substantial component of any system. “Covered telecommunications equipment or services” include such items provided by Huawei Technology Company, ZTE Corporation, or any of their many subsidiaries or affiliates. When it is to be used for certain public security purposes, such equipment also includes products provided by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, and their subsidiaries and affiliates.
The Federal award may be terminated in who or in part as follows (The bases available for termination of an award have been expanded to include authorization for awarding agencies to terminate an award). “to the greatest extent authorized by law, if an award no longer effectuates the program goals or agency priorities” (this language replaces “for cause”). Termination (200.339)
Closeout (200.344) The closeout period for all reports due under federal awards has been extended to 120 calendar days. Subawards must complete their closeout within 90 days, unless an earlier timeframe has been provided in the subaward agreement terms. Federal agencies must report failure to adhere to the submission criteria as a material failure to adhere to terms (currently FAPIIS). They may also pursue other enforcement actions, including withholding payments, disallowing costs, and withholding further federal awards.
Catalog of Federal Domestic Assistance (CFDA) CFDA Program Title Internal Control over Compliance Requirements for Federal Awards Obligations 2020 Definitions Removed:
2024 Updates & Changes In September 2023, the Office of Management and Budget (OMB) announced tentative changes to loosen the constraints and ease the administrative burden on federal agencies and award recipients for grants and agreements subject to Title 2, Part 200 of the Code of Federal Regulations (Uniform Guidance). Proposed changes largely affect the administrative requirements, cost principles, and audit requirements sections.
Incorporate statutory requirements that align with administration priorities. Reduce the burden on both agencies and recipients through streamlined processes. Clarify sections that have been subject to varied interpretations. Rewrite applicable sections in plain language, improve flow and address inconsistent terms. OMB’s Objectives:
New & Updated Definitions “nonfederal entity” is replaced by “recipient or subrecipient,” unless specific provisions apply to an entity that is not a federal entity; continuation funding; for-profit organization; key personnel; Participant; prior approval;
Mandatory Disclosure: Under current guidance, recipients and subrecipients (i.e. “non-federal entities”) or Federal award applicants must disclose all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. 2 C.F.R. § 200.113. OMB proposes to incorporate the Federal Acquisition Regulation (FAR) “credible evidence” standard to the mandatory disclosure requirement for grants and cooperative agreements. Recipients or subrecipients would be required to disclose any credible evidence of a violation of federal criminal law potentially affecting the Federal award, or a violation of the civil False Claims Act. Required written disclosure to the Federal awarding agency and passthrough entity (if applicable) as well as that agency’s Office of Inspector General.
OMB proposes to remove the requirement that all indirect rates be publicly available on a government-wide website. There is no plan to publish indirect cost rates of entities. Indirect Cost Website
Indirect Costs (200.414): ➢Pass-through entities must accept all federally negotiated indirect cost rates for subrecipients.
De Minimis Rate: Increasing the de minimis indirect cost rate from 10% to 15% over MTDC (section 200.414), which allows for the more “reasonable and realistic” recovery of indirect rates, particularly for new or inexperienced organizations that may not have the capacity to undergo formal rate negotiations. Recipients and subrecipients still have discretion to apply a rate lower than 15%, agencies cannot compel them to do so unless required by statute. The new guidance also clarifies that the de minimis rate cannot be applied to cost-reimbursement contracts (i.e., only to federal assistance).
Updated Thresholds: Increasing the amount of subaward costs counted within the Modified Total Direct Costs (MTDC) base from $25,000 to $50,000 (Appendix IV of Part 200). This will allow for more and recovery of subrecipient costs, which can potentially drive down the indirect rate.
IMPACT Modification to subrecipient awards for revisions to the indirect cost budget category (MTDC?); Modification to grants issued by ETA to reflect additional indirect cost recovery; Requires ETA Grant Officer written approval (30 day notice).
Updated Thresholds: Increases the threshold for determining items that are considered supplies or equipment from $5,000 to $10,000 (sections 200.501 and 200.314, respectively).
Removes the “simplified acquisition threshold (SAT)” cap for fixed-amount sub-awards, which is currently in place to provide agencies and recipients with increased flexibility to make programmatic and budgetary decisions (section 200.333). (SAT = $150,000) Update allows recipients to establish their own award-specific thresholds with the prior written approval of the federal agency. Updated Thresholds:
The OMB proposed increasing the single audit threshold from $750,000 to $1 million. Updated Thresholds:
Financial Statements (200.510): Auditees are required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements; 2 C.F.R. § 200.510 and dictates what the schedule must include. The Guidance adds a new requirement: for audits covering multiple recipients, the schedule must identify the recipient of the federal award.
Audit / Auditor : OMB adds a requirement that compliance testing include a test of transactions and other auditing procedures necessary to provide auditor with sufficient evidence to support an opinion on compliance.
Subrecipient & Contractor Determination (200.330) OMB adds additional characteristics of a subrecipient or contractor determination by expanding beyond current examples provided in the guidance.
Socioeconomic Policies Using Project Labor Agreements or similar forms of pre-hire collective bargaining agreements; Requiring commitments or goals to hire people residing in high-poverty areas, disadvantaged communities as defined by the Justice40 Initiative OMB Memorandum M21-28, or high-unemployment census tracts within a region no smaller than the county where a federally funded construction project is located, provided that a recipient or subrecipient may not prohibit interstate hiring; Allowing tribes to use their own procurement policies at §200.317 (now only allowed for states); Including “veteran-owned business” in the list of the types of businesses that recipients or sub-recipients are encouraged to consider procurement contracts under federal award (section 200.321).
Clarifying Language: Use specific appropriate names for systems….SAM.gov, Grants.gov, etc. Deleting the term “OMB designated governmentwide systems.”
Reporting (200.328) OMB proposes clearer guidance to better align financial reporting with progress reporting requirements (section 200.328).
Adding specific measures to reduce burden: Additional flexibilities for Federal agencies to waive System for Award Management (SAM) and/or Unique Entity Identifier (UEI) requirements for foreign recipients and sub-recipients up to $250,000 (previously $25,000), UEI requirement to not apply to second tier subrecipients, eliminating the current Simplified Acquisition Threshold limit for fixed amount subawards OMB proposes to remove the prohibition on using geographic preference requirements.
Costs requiring prior approval are considered “approved” if included in the recipient’s proposal and therefore do not require subsequent approval prior to expenditure. Prior Approvals:
Prior Approvals: OMB seeks to clarify and add certain requirements for prior approval when revising budget and program plans. OMB proposes that recipients do not need prior approval of individual subrecipients under all circumstances, but only when making subawards of programmatic activities not proposed by the recipient in the application for an award. OMB proposes to further clarify that agencies should not require approval of a change in a proposed subrecipient unless the initial inclusion of a subrecipient was a determining factor in the agency’s merit review process. OMB proposes to add requirements for prior approval where a recipient or subrecipient requests additional federal funds to complete a project, or transfer funds between construction and non construction work. Under the proposed rules recipients and subrecipients must also seek prior approval for a no-cost extension to the period of performance, but not for one-time extensions authorized by the agency.
Prior Approvals: Prior written approval will no longer be required for: real property; (See WIOA 20 CFR 683.235) equipment, direct costs, entertainment costs, exchange rates, memberships, participant support costs, selling and marketing costs, taxes.
Prior Approval: Recipient or Subrecipient is responsible for treating these costs consistently across all federal awards. Prior approval requirements are removed for “selling and marketing costs”, however, such costs are unallowable unless they meet certain requirements.
Future Proposed Changes Establishing specific audit requirements for for-profit entities, which are not subject to the requirements of Subpart F; Incorporating the requirements of National Security Presidential Management 33 (NSPM-33) on research security requirements; Providing additional guidance in 2 C.F.R. concerning the relationship of specific aspects of the guidance to loans and loan guarantees;