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  • Writer's pictureJillian Helding

7 Upcoming Revisions to the Uniform Guidance

On April 22nd, the Office of Management and Budget (OMB) published a new rule significantly revising its Guidance for Grants and Agreements, now called the OMB Guidance for Federal Financial Assistance. The revisions do not include drastic regulatory changes, but instead aim to incorporate new statutory requirements and administrative priorities, clarify provisions frequently misinterpreted by recipients, and improve transparency and oversight.


The rule, which goes into effect on October 1, 2024, impacts multiple parts of Title 2 of the Code of Federal Regulations, including the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, or the Uniform Guidance. In this article, we've highlighted some notable changes that may impact your grant program's operations. For complete details regarding the upcoming rule change, please review 89 FR 30046.


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1. Fraud Detection and Prevention


Under current regulations, the Uniform Guidance requires any entity acting as a pass-through entity to "evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring" (currently 2 CFR 200.332(b); beginning October 1, 2024, this will become 2 CFR 200.322(c)).


Beginning October 1st, pass-through entities will be obligated to evaluate subrecipients' fraud risk in addition to their risk of noncompliance.


2. Community Benefit-Focused Procurement

Currently, the Uniform Guidance does not explicitly address whether recipients may incorporate considerations for community benefits into their procurement processes. Under the new rule, the OMB clarified that recipients and subrecipients are not prohibited from:


  • 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, or areas with high-unemployment;

  • requiring commitments or goals to individuals with barriers to employment (including women and members of underserved communities);

  • using agreements intended to ensure uninterrupted delivery of services or community benefits; or

  • offering employees of a predecessor contractor rights of first refusal under a new contract.

The OMB further clarified that this list is intended to be illustrative rather than exhaustive, and the fact that an alternative practice is not expressly included does not necessarily mean that it is prohibited.


Additionally, section 200.319(f) in the final guidance states that recipients and subrecipients may incorporate a scoring mechanism in their procurement procedures rewarding bidders “that commit to specific numbers and types of U.S. jobs, minimum compensation, benefits, on-the-job-training for employees making work products or providing services on a contract, and other worker protections.”


Any procurement provisions designed to promote community benefit are still required to be consistent with the U.S. Constitution, applicable Federal statutes and regulations, the objectives and purposes of the Federal financial assistance program, and other requirements of 2 CFR Part 200.


3. Geographic Preferences in Procurement


Currently, the Uniform Guidance prohibits including geographic preferences in procurement solicitations, in order to ensure free and open competition.


Because this could restrict the ability of recipients and subrecipients to include community benefit requirements or enter into certain labor agreements, the OMB has removed section 200.319(c). However, it clarified that procurement processes cannot restrict or prohibit interstate hiring.


4. Access to Research Results


The OMB added a new paragraph (f) to section 200.315 addressing intangible property. The paragraph states that Federal agencies should:


  1. collaborate with recipients to maximize public access to Federally-funded research results and data (in a manner that protects data providers’ confidentiality, privacy, and security); and

  2. provide guidance to recipients to make restricted-access data available through a variety of mechanisms.


Possibly due to administrative burden; confidentiality, security, and privacy concerns; or the potentially sensitive nature of some restricted-access data, the OMB acknowledged that FOIA may not be the most appropriate vehicle for providing access to intangible property, including Federally-funded research results and data.


5. Increases to Monetary Thresholds


The new OMB rule raised several key financial thresholds related to oversight and procurement, including Single Audits, program income from the sale or disposal of equipment and supplies, and the indirect cost rate. As of October 1, 2024:


Single Audit: The threshold for a mandatory Single Audit will increase from $750,000 to $1 million (2 CFR 200.501(c)). The OMB also clarified that Single Audit requirements apply to any non-Federal entity as defined in the Single Audit Act and section 200.1 of OMB's guidance that expends $1 million or more in Federal awards during the non-Federal entity’s fiscal year. At this time, those definitions do not include for-profit entities.


Indirect Costs: The de minimis rate will increase from 10 percent to 15 percent. Recipients and subrecipients may apply a rate lower than 15 percent at their own discretion, but cannot be compelled by Federal agencies to do so unless required by statute. OMB also clarified that the de minimis rate may not be applied to cost reimbursement contracts.

 

Equipment and Supplies: The threshold value for equipment will increase from $5000 to $10,000; equipment valued at $10,000 or less may be disposed of with no further responsibility to the Federal awarding or pass-through agencies (2 CFR 200.313). The same revision and terms apply in the final guidance to excess supplies valued at $10,000 or less (2 CFR 200.314).


6. Procurement Authority for Indian Tribes


In recognition of Tribal sovereignty, and consistent with the existing requirements for States, the OMB updated section 200.317 to allow Indian Tribes to follow their own policies and procedures for procurement.


All other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow the procurement standards in 2 CFR 200.318 - 200.327.


7. Contracting with Veteran-Owned Businesses


Section 200.321 of the Uniform Guidance requires non-Federal entities to "take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible" (2 CFR 200.321(a)).


Beginning October 1st, veteran-owned businesses will be added to the types of firms included in this section.


 

Overwhelmed? The Vander Weele Group can help!


The Vander Weele Group provides turn-key oversight solutions for federal and state grant programs. We specialize in monitoring large-scale programs nationwide, combining grants monitoring expertise with industry-specific program experience. The firm offers traditional fiscal and compliance reviews, programmatic monitoring, risk assessments, internal control reviews, data analytics to detect fraud, best practice recommendations, and technical assistance for grantees.


To consult a grants oversight expert, call 773-929-3030 or email us at info@vanderweelegroup.com.


For more grants monitoring, oversight, and technical assistance resources, visit our Resource Library.


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