Untangling (and Making ready for) the New Uniform Grant Steerage

Prime 10 Updates that will likely be applied on October 1, 2024

It’s the information that each one our grant fanatics and compliance champions have been ready for—the brand new Uniform Grant Steerage has been issued! Whereas the updates received’t go into impact till October 1st, you will need to find out about these modifications and the way they affect your group.

We’ll begin by discussing why the Workplace of Administration and Finances (OMB) determined to make them now, and the way they align with bigger modifications occurring within the federal authorities. To make sense of the updates, I wished to share the highest 10 modifications associated to the Uniform Grant Steerage that can affect organizations probably the most.

What’s OMB’s Meant Final result?

For the reason that authentic Uniform Grant Steerage was issued in 2014, federal grant recipients, subrecipients, and contractors have grumbled in regards to the complicated jargon, lack of readability, and normal “squishiness” about a few of the steering’s language and the way it applies to all recipients of federal funding.

This can be a pure consequence when a number of totally different administrative necessities, paperwork, and value circulars are consolidated into one doc and meant to be universally utilized. This newest iteration is OMB’s try and simplify and scale back administrative burdens. OMB requested public feedback and suggestions and acquired hundreds of responses, which is why integrating suggestions and making updates took over a yr.

As such, OMB is searching for to perform 4 core targets, that are detailed additional within the steering itself:

Goal 1: Incorporating Statutory Necessities and Administrative Priorities

There have been some inconsistencies between statutory authorities that had been complicated and unclear. As said within the steering, OMB revised Elements 25 (Distinctive Entity Identifier & System for Award Administration), 170 (Reporting Subaward & Govt Compensation Info), and 175 (Award Time period for Trafficking in Individuals) to make sure its steering correctly aligns with underlying statutes, as amended. These revisions additional align OMB’s steering with the authorizing statutes to make sure correct implementation. OMB additionally made a number of structural modifications to particular person elements inside Chapter I to offer additional structural consistency all through OMB’s steering.

Goal 2: Lowering Company and Administrative Burden 

As any federal grant recipient, subrecipient, or contractor is aware of, the recordkeeping, reporting, and administration course of for federal grants is usually a enormous enterprise. This has been a continuing problem, which is why OMB is searching for to cut back a few of these burdens via elevated capitalization threshold ranges for tools and provides (thus decreasing paperwork and recordkeeping). OMB additionally elevated the one audit threshold and required federal businesses to organize the Notices of Funding Alternative (NOFO) persistently via a template.

Goal 3: Clarifying Sections that Recipients or Businesses have Interpreted in Completely different Methods

Whereas this goal doesn’t represent particular coverage or course of modifications, it does assist to decrease confusion. This has led to a extra sturdy definitions part and offers readability.

Goal 4: Rewriting Relevant Sections in Plan Language 

For individuals who have learn NOFOs, this could typically result in further questions and confusion, and one other workforce member should evaluation it to take care of a shared understanding of the steering. That is the half that may excite folks probably the most as there’s a concerted effort to keep away from using jargon and incorporate language in plain English that each one (together with those that are non-native English audio system) can clearly perceive. This helps with the movement of data and transparency in regards to the administrative necessities to which federal grant recipients, subrecipients, and contractors should adhere.

The Prime 10 Uniform Grant Steerage Updates 

Drum roll, please…. The second you’ve gotten been ready for! What are the Prime 10 Uniform Grant Steerage Updates and the way do they affect your group?

1. De Minimis Oblique Price Price Enhance (§200.414): For these recipients (and subrecipients) that wouldn’t have a negotiated oblique price price settlement in place, that is welcome information. As overhead and administrative prices develop, organizations usually scramble to search out methods to recoup this funding. The speed will improve from 10% to fifteen% 🥰, which is a 50% improve. 
   Plus, there’s extra! The brand new steering states that cognizant federal businesses will uphold these oblique charges and pass-through entities (PTEs) should do the identical. This may imply much less pushback from PTEs and extra funding for impactful applications. The Nationwide Council of Nonprofits wrote a terrific memo on this and the significance of this replace for nonprofit organizations.
2. Single Audit Threshold Enhance (§200.501): The dreaded single audit could cause a lot upheaval and stress inside organizations. Now that the edge has elevated to $1 Million versus $750,000 in federal funding obligated inside a corporation’s fiscal yr, which serves because the set off for a single audit, some organizations is probably not required to have a single audit. This improve additionally coincides with the Client Worth Index, because the final improve was in 2014.
   Whereas the one audit preparation necessities are nonetheless the identical (together with evaluation of the Compliance Complement to make sure you’re ready), not less than the edge degree improve would possibly ease the burden for some organizations.
3. NOFO Template Language/Plain English (§200.204): With OMB’s deal with readability and transparency, it’s no surprise that the NOFO template is a welcome change. The objective is to cut back confusion so candidates can perceive the pre-award and post-award necessities, and the template will likely be related throughout businesses. OMB has tasked federal businesses with a plan to include this replace by Might 15. 
4. Tribal Authorities Inclusion (OMB Memo M-24-11): Many Tribal authorities entities are faraway from the Federal grant utility course of. To extend the accessibility, fairness, flexibility, and utility of Federal funding and help applications for Tribal Nations, Federal businesses are directed to help these entities additional. This requires that Federal businesses promote “compacting, contracting, co-management, co-stewardship, and different agreements with Tribal Nations” and determine funding applications that permit for Tribal set-asides or different profit or useful resource applications. Tribal Authorities entities may also have the ability to use their very own procurement insurance policies, which permits for larger determination making and funding flexibility, as long as their procurement insurance policies adhere to the federal necessities.
5. Distinctive Entity Identifier (UEI) and SAM.Gov registration (§25.105 (b)): There may be confusion in regards to the kinds of recipient entities (subrecipient, contractor) who should register in SAM.Gov to acquire a UEI. The lengthy story brief is that those that obtain a subaward straight from a recipient, or PTE, should receive a UEI. Nevertheless, those that are second-tier subrecipients or contractors will not be required to take action. 
6. Prior Approval for Eligible Prices (§200.407): Simply once you thought you had a deal with in your expenditures, there are funds modifications, and also you would possibly must receive prior approval earlier than buying sure tools, items, or companies. To ease the burdens a bit extra for recipients, the prior approval necessities have been eliminated for such objects as leisure prices, memberships, subscriptions, skilled exercise prices, and participant help prices
7. Procurement and Modified Whole Direct Price (MTDC) Thresholds Enhance (§200.313(e)(1), §200.314): Upon closeout of a federal grant award, recipients can retain, promote, or eliminate provides and/or tools at a threshold degree of $10,000 as an alternative of $5,000. This permits for extra flexibility on the finish of a grant award interval. 
   As well as, whereas many are confused about price allocation plans and the way they relate to your oblique price price, this merchandise will profit those that depend on MTDC for the oblique price price calculations (particularly for the Dde Mminimis price). The brink has doubled to $50,000 as an alternative of $25,000. Which means that contractual charges, which account for a bulk of federal grant awards, allow the inclusion of the primary $50,000 of anyone subaward within the base calculation, permitting the nonprofit to recoup extra funds for oblique prices.
8. Geographic Preferences (§200.319): If you happen to work with contractors or subrecipients regularly, this procurement replace will affect your group probably the most. The up to date steering states that recipients/PTEs can incorporate a scoring mechanism that rewards bidders that decide to particular numbers and kinds of U.S. jobs, minimal compensation, advantages, on-the-job coaching for workers making work merchandise or offering companies on a contract, and different employee protections. This permits for extra home labor and promotes inclusivity within the procurement course of.
9. Construct America Purchase America Impacts (OMB Memo M-24-11): Since extra building tasks require assets not readily present in the US, there may be up to date steering that Federal businesses ought to specify within the NOFO that some merchandise could be costlier and fewer accessible in the US and require to be bought from abroad contractors. As a part of this, Federal businesses can require recipients to determine the merchandise for procurement unavailable in the US and develop a plan to adjust to home content material necessities.
10. Micropurchases Documentation (§200.320 (a)(1)(ii)): The recipient or subrecipient ought to distribute micro-purchases (purchases as much as $50,000 if self-certified) equitably amongst certified suppliers. A bonus is that micropurchases don’t require an in depth procurement course of because the solicitation of aggressive value or price quotations will not be required, as long as the recipient or subrecipient considers the value affordable primarily based on analysis, expertise, buy historical past, or different info and maintains paperwork to reveal this method.

As you start to consider operationalizing a few of these modifications (and there are extra included within the up to date steering), do not forget that these will take impact on October 1, 2024, so you’ve gotten a while. The excellent news is that these modifications will supply extra readability, and leniency, and scale back administrative burdens and confusion.

Extra Flexibility for Organizations that Depend on Grant Funding

It’s uncommon that we will use “thrilling” and “authorities grants and contracts” in the identical sentence, however these modifications are welcome updates to any group that receives—or is considering making use of for—authorities grants or contracts. These grants will nonetheless require robust inside controls and a system to obviously observe your restricted funding. However that is an thrilling time for nonprofit organizations that use grant funding, offering extra flexibility to raised serve their communities.

Are you anticipating to come across a single audit this yr, or wish to get forward of a possible single audit sooner or later? Try our information, Step by Step Single Audit Prep: Your Information to Common Steerage