The Office of Management and Budget (OMB) has issued substantial revisions to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly referred to as the Uniform Guidance. These changes, effective October 1, 2024, aim to streamline processes, clarify requirements, and enhance the management of federal funds. As this date approaches, organizations must prepare to implement these changes effectively.
Key Revisions in the 2024 Uniform Guidance
1. Increased Audit Thresholds: The threshold for requiring a single audit has been raised from $750,000 to $1 million in federal expenditures, reducing the administrative burden for smaller entities.
2. Equipment and Cost Rates Adjustments:
- The capitalization threshold for equipment has increased from $5,000 to $10,000.
- The de minimis indirect cost rate has increased from 10% to 15% over modified total direct costs, providing more flexibility in financial planning.
3. Enhanced Cybersecurity Measures: New requirements for cybersecurity internal controls have been introduced, allowing organizations to tailor their security strategies without mandating a specific framework.
4. Simplified Notices of Funding Opportunities (NOFOs): Federal agencies are directed to make NOFOs more concise and accessible, using plain language to ensure broader reach and understanding, particularly for underserved communities.
5. Community Engagement and Evaluation: The revisions encourage recipients to allocate funds for community engagement and evaluation activities, emphasizing the importance of understanding and achieving program goals.
6. Mandatory Disclosures: Recipients must promptly disclose any credible evidence of violations related to federal criminal law or the False Claims Act, aligning with existing federal acquisition standards.
7. Increased Flexibility for Tribes: Tribal governments can now use their internal procurement standards, providing more autonomy in managing federal funds.
Preparing for the Effective Date
To ensure a smooth transition to the new requirements, organizations should consider the following steps:
- Review and Revise Policies: Update internal policies and procedures to align with the new thresholds for audits, equipment, and indirect costs. Ensure that procurement policies reflect the updated standards.
- Train Staff: Conduct training sessions for staff involved in grant management to familiarize them with the new requirements and ensure compliance.
- Update Financial Systems: Adjust financial and accounting systems to accommodate changes in cost categories and thresholds, ensuring accurate tracking and reporting.
- Engage with Stakeholders: Communicate with federal agencies and other stakeholders to understand implementation plans and any additional requirements specific to your organization’s funding sources.
- Monitor Developments: As the effective date approaches, stay informed about any further guidance or clarifications issued by OMB or relevant federal agencies.
By taking these proactive steps, organizations can effectively navigate the revised Uniform Guidance, ensuring compliance and maximizing the impact of federal funds. The changes represent an opportunity to streamline operations and enhance the focus on delivering results for the communities served.
Contact your Yeo & Yeo advisor to discuss how these changes may impact your organization and to ensure you are fully prepared for the upcoming revisions.