Major Changes in the Uniform Guidance or Single Audit

The Office of Management and Budget (OMB) has issued significant updates to the Uniform Guidance that will impact nonprofit organizations receiving federal funding. Here are the key changes you need to know:

1. Increased Single Audit Threshold

The threshold for requiring a Single Audit has been raised from $750,000 to $1,000,000 in federal expenditures. This change will exempt many smaller nonprofit organizations from the Single Audit requirement, reducing their administrative burden.

2. New Cybersecurity Requirements

Recipients and subrecipients must now take "reasonable" cybersecurity measures to safeguard information. However, the guidance does not establish a specific framework for these cybersecurity requirements, giving organizations some flexibility in implementation.

3. Simplified Procurement Requirements

The updated guidance removes the requirement to negotiate profit as a separate element of price for contracts where there is no price competition, streamlining the procurement process.

4. Indirect Costs (Section 200.414)

• Increases the de minimis indirect cost rate from 10% to 15% of modified total direct costs.
• Revises the definition of modified total direct costs in section 200.1 to increase the value of each subaward that can be included in modified total direct costs from $25,000 to $50,000.

5. Termination Provisions (Section 200.340)

The guidance clarifies that agencies may include an award term and condition that permits termination if an award no longer effectuates program goals or agency priorities.

6. Mandatory Disclosures (Section 200.113)

• Applicants, recipients, and subrecipients must "promptly disclose credible evidence" of the commission of a violation of the civil False Claims Act or Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations under Title 18 of the United States Code.
• The revised guidance changes certain provisions in 2 C.F.R. Part 25 related to obtaining unique entity identifiers (UEIs) and registering in the System for Award Management (SAM.gov), including:
  • Clarifying that second-tier subrecipients and contractors under grants do not need to obtain a UEI
  • Permitting agencies to exempt foreign organizations and foreign public entities from completing a full SAM.gov registration for Federal awards

What These Changes Mean for Your Organization

These updates to the Uniform Guidance represent significant changes that could impact your organization's federal grant management procedures. The increased Single Audit threshold will provide relief to smaller nonprofits, while the higher indirect cost rate could result in additional funding for administrative costs.

However, the new cybersecurity requirements may necessitate a review of your current data security practices, and the mandatory disclosure provisions emphasize the importance of strong internal controls and compliance monitoring.

How KVR Can Help

Our team at KVR specializes in federal grant compliance and Single Audits. We can help your organization understand and implement these changes effectively. Contact us for assistance with:

• Determining if your organization still requires a Single Audit under the new threshold
• Assessing your cybersecurity measures against the new requirements
• Implementing the increased indirect cost rate in your budget
• Updating your policies and procedures to comply with the revised Uniform Guidance

Don't navigate these changes alone. Reach out to our team for expert guidance tailored to your organization's specific needs.