Untangling (and Getting ready for) the New Uniform Grant Steering

High 10 Updates that might 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 Steering has been issued! Whereas the updates gained’t go into impact till October 1st, it is very important find out about these adjustments and the way they affect your group.

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

What’s OMB’s Meant End result?

For the reason that authentic Uniform Grant Steering 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 among 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 completely 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 cut 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 12 months.

As such, OMB is looking for to perform 4 core aims, 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 acknowledged within the steering, OMB revised Components 25 (Distinctive Entity Identifier & System for Award Administration), 170 (Reporting Subaward & Govt Compensation Data), 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 adjustments to particular person elements inside Chapter I to supply 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 generally is a large endeavor. This has been a continuing problem, which is why OMB is looking for to cut back a few of these burdens by way of 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 arrange the Notices of Funding Alternative (NOFO) persistently by way of a template.

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

Whereas this goal doesn’t represent particular coverage or course of adjustments, 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 many who have learn NOFOs, this may generally result in further questions and confusion, and one other workforce member should evaluation it to keep up 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 the usage of 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 circulation of knowledge and transparency in regards to the administrative necessities to which federal grant recipients, subrecipients, and contractors should adhere.

The High 10 Uniform Grant Steering Updates 

Drum roll, please…. The second you will have been ready for! What are the High 10 Uniform Grant Steering Updates and the way do they affect your group?

1. De Minimis Oblique Value Fee Improve (§200.414): For these recipients (and subrecipients) that wouldn’t have a negotiated oblique value charge settlement in place, that is welcome information. As overhead and administrative prices develop, organizations usually scramble to seek 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. It will imply much less pushback from PTEs and extra funding for impactful applications. The Nationwide Council of Nonprofits wrote an amazing memo on this and the significance of this replace for nonprofit organizations.
2. Single Audit Threshold Improve (§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 company’s fiscal 12 months, 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 Shopper Value 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 are ready), a minimum of the edge degree improve may ease the burden for some organizations.
3. NOFO Template Language/Plain English (§200.204): With OMB’s give attention to readability and transparency, it’s no surprise that the NOFO template is a welcome change. The aim is to cut back confusion so candidates can perceive the pre-award and post-award necessities, and the template might be related throughout businesses. OMB has tasked federal businesses with a plan to include this replace by Could 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 assist applications for Tribal Nations, Federal businesses are directed to assist 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 even have the ability to use their very own procurement insurance policies, which permits for higher resolution 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 sorts 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 immediately from a recipient, or PTE, should get hold of a UEI. Nonetheless, those that are second-tier subrecipients or contractors will not be required to take action. 
6. Prior Approval for Eligible Prices (§200.407): Simply whenever you thought you had a deal with in your expenditures, there are funds modifications, and also you may have to get hold of prior approval earlier than buying sure tools, items, or providers. 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 assist prices
7. Procurement and Modified Whole Direct Value (MTDC) Thresholds Improve (§200.313(e)(1), §200.314): Upon closeout of a federal grant award, recipients can retain, promote, or get rid of 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 value allocation plans and the way they relate to your oblique value charge, this merchandise will profit those that depend on MTDC for the oblique value charge calculations (particularly for the Dde Mminimis charge). The edge has doubled to $50,000 as an alternative of $25,000. Because of this 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): In case you work with contractors or subrecipients frequently, 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 sorts of U.S. jobs, minimal compensation, advantages, on-the-job coaching for workers making work merchandise or offering providers 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 sources 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 element 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 intensive procurement course of because the solicitation of aggressive worth or charge quotations will not be required, as long as the recipient or subrecipient considers the value cheap based mostly on analysis, expertise, buy historical past, or different data and maintains paperwork to show this method.

As you start to consider operationalizing a few of these adjustments (and there are extra included within the up to date steering), keep in mind that these will take impact on October 1, 2024, so you will have a while. The excellent news is that these adjustments will provide extra readability, and leniency, and cut back administrative burdens and confusion.

Extra Flexibility for Organizations that Depend on Grant Funding

It’s uncommon that we are able to use “thrilling” and “authorities grants and contracts” in the identical sentence, however these adjustments are welcome updates to any group that receives—or is considering making use of for—authorities grants or contracts. These grants will nonetheless require sturdy inner 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 12 months, or need to get forward of a possible single audit sooner or later? Take a look at our information, Step by Step Single Audit Prep: Your Information to Common Steering