Melissa P. Prusock and Christopher O’Brien co-authored an article in The Government Contractor titled “OMB Releases Final Guidance For Federal Financial Assistance.” The article discusses the Office of Management and Budget’s (OMB) Final Rule revising the Guidance for Grants and Agreements, now known as Guidance for Federal Financial Assistance (which applies to grants, cooperative agreements, loans and loan guarantees, and other types of assistance awards). The revisions include significant changes to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 CFR Part 200, and is the most extensive update to the Uniform Guidance since it took effect over a decade ago. The Uniform Guidance revisions, like the rest of the Final Rule, aim to incorporate statutory requirements and administration priorities, reduce agency and recipient burden, clarify ambiguous sections, and rewrite sections in plain language to improve clarity and consistency.
The 2024 OMB Final Rule shortens and simplifies the Notice of Funding Opportunity (NOFO) template and directs agencies to write NOFOs in plain language. It also increases certain monetary thresholds to reduce agency and recipient burden, including raising the single audit threshold from $750,000 to $1 million, the equipment threshold from $5,000 to $10,000, and the de minimis indirect cost rate from 10% to 15%. Additionally, the Final Rule clarifies that contractors under assistance awards and second tier or lower subrecipients do not need to obtain unique entity identifiers (UEI) and permits agencies to exempt foreign public entities and foreign organizations from completing full System for Award Management (SAM.gov) registrations for awards under $500,000.
The article analyzes key provisions in the 2024 OMB Uniform Guidance revisions, including the alignment of the mandatory disclosure rule with the Federal Acquisition Regulation (FAR), changes to the section implementing the FY 2019 National Defense Authorization Act section 889 ban on certain telecommunications and video surveillance services and equipment, and revisions to the requirements for fixed amount awards. It also addresses changes to the procurement standards, a new requirement for recipients and subrecipients to adopt cybersecurity internal controls, and a new requirement for agencies to adopt written procedures for disputes.
The revised guidance will take effect October 1, 2024, but Federal agencies can apply it to awards issued prior to that date if they wait at least 60 days after the Final Rule’s April 22 publication in the Federal Register. Each agency must implement the guidance through codified regulations for it to apply to that agency’s recipients and subrecipients. To encourage uniformity and consistency, agencies are required to adopt the revised Uniform Guidance in full unless different provisions are required by Federal statute or are approved by OMB. But, because of the flexibility to implement the revised guidance prior to October 1, there may be different effective dates for different agencies. Recipients and subrecipients, especially those receiving awards from multiple agencies, will need to ensure they are aware of each agency’s implementation date and any agency-specific regulations that differ from the Final Rule.