Key Updates to Uniform Grants Guidance

On April 4, 2024, the Office of Management and Budget (OMB) shared a significant update to Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), the most extensive update since it was initially implemented in 2014. OMB officials have declared that the revisions will streamline the process and clarify requirements for obtaining federal funding, ultimately making it easier and more equitable for eligible recipients to apply for funding.

The Uniform Grants Guidance Final Rule will be effective for awards made on or after Oct. 1, 2024. The OMB recommends that federal agencies enact the updates before that date if it is at least 60 days after the Final Rule.

Significant updates contained in the Final Rule

The Final Rule contained nearly 650 pages of information, but there are a few notable data points that government agencies should be aware of.

• The threshold for tracking federally funded equipment has been increased from $5,000 to $10,000. So, you only need to ask the federal agency for permission to retain, sell, or otherwise dispose of federally funded property if its value (sales/disposition price) exceeds $10,000.
• The single audit threshold has increased from $750,000 to $1,000,000.
• The de minimis indirect cost rate has increased from 10 percent to 15 percent.
• A pre-procurement contract cost and price analysis must be performed for every procurement transaction, including contract modifications above $250,000, the simplified acquisition threshold. The method and degree/depth of analysis can vary depending on facts and circumstances, but an independent estimate must be completed before receiving bids and proposals.

Insight from our National Government Practice leaders

In addition to the previously mentioned updates to various figures and thresholds, our National Government Practice members identified other significant “procedural” changes.

• More allowable costs associated with data gathering, analysis/evaluation, and storage due to increased emphasis on non-financial data.Data costs include (but are not limited to) the expenditures needed to gather, store, track, manage, analyze, disaggregate, secure, share, publish, or otherwise use data to administer or improve the program, such as data systems, personnel, data dashboards, cybersecurity, and related items. Data costs may also include direct or indirect costs associated with building integrated data systems—data systems that link individual-level data from multiple State and local government agencies for management, research, and evaluation purposes. Evaluation costs include (but are not limited to) evidence reviews, evaluation planning and feasibility assessment, conducting evaluations, sharing evaluation results, and other personnel or materials costs related to the effective building and use of evidence and evaluation for program design, administration, or improvement.
• When establishing grant programs with federal funds, grantees should engage with the public.This seems to be a direct carryover from ARPA community engagement. A program must be designed to encourage applicants to engage with community members who will benefit from or be impacted by a program when practicable during the design phase. Federal agencies should develop programs in coordination with communities benefiting from or affected by the program.
• Notices of funding opportunities should be clear and concise by limiting the length and complexity of the grant announcement. Whenever possible, an agency should communicate opportunities to the public in plain language to ensure the announcement is accessible to diverse communities of eligible applicants, including underserved communities. The agency should also make efforts to limit the length and complexity of the announcement and only include the information necessary to communicate the program objectives effectively. Such notices should also be focused on underserved communities or those who might be inexperienced applicants.

The Biden administration and the Office of Management and Budget are concerted in improving access to federal funds for all eligible recipients. The updated Final Rule requires federal agencies to revise their current notice of funding opportunities processes to comply with new requirements. Please fill out the form on this page to connect with a professional from our National Government Practice to discuss the Final Rule's impact on your organization.