The Uniform Guidance (2 CFR 200), or Title 2 Part 200 of the Code of Federal Regulations, lays out the Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. In April 2024, the Office of Management and Budget (OMB) revised 2 CFR 200 to streamline and clarify requirements for federal funding and make grant announcements as clear as possible. These changes went into effect Oct. 1, 2024. All federal agencies were required to submit a plan for implementing the 2024 revisions to OMB by May 15.

Recommendations to adapt to 2 CFR 200 changes

Organizations participating in federal award programs need to remain vigilant with regard to adapting to these changes. It is important that all organizations confirm that their staff is implementing the changes. To make sure this happens, we recommend you consider the following steps. 

1. Continuously stay informed. Regularly remind employees of the changes and provide frequent updates and links to make sure everyone has access to the most current information. 
2. Enhance training and update training materials. In addition to providing independent reading materials, conduct live trainings to allow employees to ask questions and have an open dialogue regarding the 2 CFR 200 revisions. This will further ensure that employees are well informed and aware of the implications the changes may have for your organization.
3. Update SOPs and policies. Organizations should work expeditiously to confirm that their policies and procedures align with the revised guidance. 
4. Maintain communication. Stay in contact with federal agencies, pass-through entities, auditors, subrecipients, and other stakeholders; know who to contact in the case of questions or concerns, as well as establish who within your organization should address any questions you receive.

General 2 CFR 200 changes that will impact all organizations

While organizations operate differently depending on their entity types, demographics served, and varying guidelines set for them, the below changes will apply to recipients of federal funding. Below are our key takeaways from the 2024 Uniform Guidance changes.

• Remove prior written approval requirements. The purpose of this change is to simplify and reduce the number of approvals needed before recipients can spend award funds on, or perform, certain activities. These include costs associated with acquisition of real property or equipment, entertainment, memberships, subscriptions, marketing, and participant support costs. 
• Remove barriers to entry. These changes aim to remedy high administrative costs that prevent smaller organizations from seeking funding. Guidance changes now require Notices of Funding Opportunities (NOFOs) to use plain language, making it easier for non-experts and less-experienced organizations to apply for federal funding. Awarding agencies are further instructed to reduce word counts in NOFOs and to incorporate visuals, colors, and other sensory tools to enhance readability and bring attention to important provisions.
• Make sure assistance serves intended communities. These changes give awarding agencies the flexibility to use languages other than English for notices, applications, and reporting to increase applicant pools and promote more equitable access across communities.
• Strengthen the Federal Program Inventory (FPI). The FPI is a new searchable tool (launched on February 15) with critical information about federal programs that provide grants, loans, or direct payments. Agencies are required to improve the official descriptions of their programs (or “Assistance Listings”) to feed the search tool. OMB is requiring agencies to describe programs separately for clarity; existing program descriptions or Assistance Listings that appear in the same location(s) should be separated. The deadline is Nov. 15, 2024, to complete an initial assessment of their current Assistance Listings and to provide their preliminary plan to work toward establishing a single Assistance Listing, where appropriate, for each program. 
• Single Audit Threshold changes.
  • An increase in the threshold for the disposition of equipment and supplies from $5,000 to $10,000
  • An increase in the de minimis rate from 10% to 15%
  • An increase in the modified total direct costs exclusion threshold for subawards from $25,000 to $50,000
  • An increase in the Single Audit threshold from $750,000 to $1 million

• Relax procurement regulation. Recognizing the administrative burdens and enforcement challenges associated with the mandatory “affirmative steps” for contracting with small businesses, minority businesses, women’s business enterprises, and labor surplus area firms, these changes instead require that “when possible,” recipients and subrecipients “should” consider contracting with such firms. Veteran-owned businesses are also added to this group of entities for procurement preference.

These changes were designed to support federal agencies in implementing award programs through enhanced clarity, flexibility, and transparency. Most importantly, they are poised to help federal funding become more accessible to recipients and subrecipients. Staying informed and proactively adapting policies will help ensure your organization stays in compliance.

Additional information on the changes can be found here: Guidance for Federal Financial Assistance