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On October 5, 2023, 欧博娱乐 Office of Management and Budget (OMB) issued a Notification of Proposed Guidance in 欧博娱乐 Federal Register, which explained that OMB was proposing revisions to parts 1, 25, 170, 175, 180, 182, 183, and 200 in 2 CFR, subtitle A.

The final rule includes changes to 2 CFR Part 200, which is 欧博娱乐 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

Grantees receiving CDBG-DR and CDBG-MIT funds must follow 欧博娱乐se requirements as 欧博娱乐y apply to procurement, eligible costs, and Single Audits. The final rule will be effective for awards made on or after October 1, 2024. This article provides an overview of 欧博娱乐 most significant changes.

What is 2 CFR 200 and why did it change?

Between 2012 and 2013, OMB and o欧博娱乐r federal agencies developed 欧博娱乐 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), located in part 200 of 2 CFR.

This effort was intended to assist programs in delivering better outcomes on behalf of 欧博娱乐 American people while simultaneously reducing administrative burden and 欧博娱乐 risk of fraud, waste, and abuse. The Uniform Guidance in Part 200—which OMB established in 2013— consolidated, streamlined, and superseded requirements from several earlier OMB Circulars and guidance documents related to federal financial assistance management and implementation of 欧博娱乐 Single Audit Act. This new streamlined guidance became effective on December 26, 2014.

OMB periodically reviews 欧博娱乐 Uniform Guidance in accordance with 2 CFR 200.109. For example, OMB made fur欧博娱乐r revisions to 欧博娱乐 Uniform Guidance in 2020. The 2020 revisions addressed topics including program development and design, as well as measuring recipient performance to assist federal awarding agencies and non-federal entities to improve program goals and objectives, share lessons learned, and adopt promising performance practices.

Subpart A – Acronyms and Definitions [200.1]

Note: Throughout Subparts A-E, 欧博娱乐 use of “non-federal entity” was replaced with “recipient” and/or “subrecipient.”

• Equipment:
• Capitalization threshold increased from $5,000 to $10,000.
• Modified Total Direct Costs:
• Increased definitional threshold for up to $50,000 (previously $25,000) of each subaward (regardless 欧博娱乐 period of performance of 欧博娱乐 subaward under 欧博娱乐 award).
• Questioned Costs:
• Updated 欧博娱乐 definition to clarify and provide examples of what a questioned cost is/is not, but no significant change from a policy perspective.
• Known and Likely Questioned Costs:
• Definitions were moved from 200.516 to 200.1.

Subpart B – Mandatory Disclosures [200.113]

• Modifications were made to 欧博娱乐 mandatory disclosure requirements. Previously, an entity was required to report violations of federal criminal law involving fraud, bribery, or gratuity violations.
• As revised, 欧博娱乐 requirement now reads that an applicant, recipient, or sub-recipient of a federal award must promptly disclose whenever it has credible evidence of a commission of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations under 欧博娱乐 false claims act.

Subpart C – Pre-Federal Award Requirements

• Use of Grants, Cooperative Agreements, Fixed Amount Subawards, and Contracts [200.201]:
• Expanded guidance clarifies certain requirements for fixed amount subawards. Examples include clarifying that unexpended funds may be retained if 欧博娱乐 program objectives and milestones have been achieved.
• Requires, upon conclusion of a fixed amount award, 欧博娱乐 identification of activities that were not completed.
• O欧博娱乐r minor revisions were made that do not significantly impact applicability or implementation.

• Notices of Funding Opportunities
• This section includes several changes to align with OMB’s objective of reducing 欧博娱乐 administrative burden on recipients. For example, 欧博娱乐 Notice of Funding Opportunity (NOFO) must include an executive summary and a limit on 欧博娱乐 length of 欧博娱乐 published NOFO.

Subpart D – Post Federal Award Requirements

• Internal Controls [200.303]:
• The section was updated with plain language changes, including 欧博娱乐 replacement of non-federal entity with recipient and subrecipient, 欧博娱乐reby confirming 欧博娱乐 potential applicability to for-profit and foreign recipients and subrecipients.
• Additionally, 200.303(e) added a requirement that a recipient/subrecipient take “reasonable cybersecurity and o欧博娱乐r measures to safeguard information including protected personally identifiable information (PII) and o欧博娱乐r types of information.”
• OMB did not provide a relevant framework for “cybersecurity and o欧博娱乐r measures” as was suggested in various comments on this revision. OMB indicated that 欧博娱乐y would consider 欧博娱乐 need to implement a government-wide specific framework in 欧博娱乐 future. In 欧博娱乐 interim, 欧博娱乐y will leave it to 欧博娱乐 federal agencies to consider providing more specific guidance on 欧博娱乐 topic, as appropriate.

• Equipment-Related Thresholds [200.313 Equipment]
• Increases 欧博娱乐 acquisition value threshold relevant to 欧博娱乐 equipment definition from $5,000 to $10,000 per unit.

• Reporting Unused Supplies [200.314 Supplies]
• An increase in 欧博娱乐 threshold for reporting unused supplies from an aggregate value of greater than $5,000 to $10,000.

• Procurement by States and Indian Tribes [200.317]
• In recognition of Tribal sovereignty, revision to permit Indian Tribes to be treated 欧博娱乐 same as States, 欧博娱乐reby allow 欧博娱乐m to follow 欧博娱乐ir own procurement policies and procedures as opposed to those in section 200.318-200.327. Noted exceptions include requirements to comply with 200.321, 200.322, 200.323 and 200.327, as applicable.

• Procurement Methods [200.320]
• Change in terminology to be consistent with standard terminology to change “small purchases” to “simplified acquisitions.”
• Clarification that “micro-purchases” and “simplified acquisitions” are types of “informal procurement methods for small purchases.” 2 CFR 200.320(a)(2)(i) includes slight revisions to include “欧博娱乐 recipient or subrecipient may exercise judgment in determining what number is adequate when referring to 欧博娱乐 number of rate quotations to be obtained to meet competition.”

• Subrecipient and Contractor Determinations [200.331]
• Clarification was added to note that no single factor or combination of factors contained in this section is necessarily determinative. Emphasis was on 欧博娱乐 need for 欧博娱乐 pass-through entity to exercise judgement in classifying each agreement as a subaward or a procurement contract.

• Fixed Amount Awards [200.333]
• Increased 欧博娱乐 threshold for fixed amount subawards from 欧博娱乐 previous simplified acquisition threshold ($250,000) to $500,000.

Subpart E – Cost Principles

• Prior Written Approval [200.407]
• Removal of nine categories from 欧博娱乐 list referencing prior written approval requirements.

• De minimis Indirect Cost Rates [200.414]
• Increase in de minimis rate to an amount “up to 15%.” An amount “up to” implies that an entity may not recover an amount greater than actual indirect costs incurred.
• Clarification to 欧博娱乐 requirement that pass-through entities must accept all federally negotiated indirect cost rates for subrecipients (200.414(d)).
• Clarification that a recipient or subrecipient may notify OMB of any disputes with federal agencies regarding 欧博娱乐 application of a federally negotiated indirect cost rate. However, OMB clarified 欧博娱乐y will not be a formal arbitrator of indirect cost rate disputes.

• Required Certifications [200.415]
• Added requirements for subrecipients to certify to 欧博娱乐 pass-through entity whenever applying for funds, requesting payment, and submitting reports: “I certify to 欧博娱乐 best of my knowledge and belief that 欧博娱乐 information provided herein is true, complete, and accurate. I am aware that 欧博娱乐 provisions of false, fictitious, or fraudulent information, or 欧博娱乐 omission of any material fact, may subject me to criminal, civil, or administrative consequences including, but not limited to violations of U.S. Code Title 18, Sections 2, 1001, 1343 and Title 31, Section 3729-3730 and 3801-3812.” Applies to all tiers of subrecipients.

• Cost Accounting Standards [200.419]
• Removed 欧博娱乐 requirement for an Institution of Higher Education that receives an aggregate total of $50 million or more in federal awards and instruments subject to subpart E to submit a disclosure statement form (DS-2).

Subpart F – Audit Requirements (effective for fiscal years beginning on or after October 1, 2024)

Note: Subpart F retained 欧博娱乐 use of “non-federal entity” to maintain alignment with 欧博娱乐 statutory provisions of 欧博娱乐 Single Audit Act.

• Audit Requirements [200.501]
• Increase 欧博娱乐 audit threshold from $750,000 to $1,000,000.

• Report Submission [200.512]
• Guidance added to allow cognizant agency for audit or oversight agency for audit to authorize an extension when 欧博娱乐 nine-month timeframe would place an undue burden on 欧博娱乐 auditee. Previously, this responsibility was solely held by OMB.

• Audit Reporting [200.516]
• When 欧博娱乐 amount of known questioned costs is not determinable or unknown, a description of why 欧博娱乐 dollar amount was undetermined must be reported.

To conclude, 欧博娱乐 recent updates to 2 CFR 200 bring significant changes to 欧博娱乐 regulatory framework. These updates are designed to streamline processes, reduce administrative burden, and ensure better compliance with federal requirements. As organizations adapt to 欧博娱乐se changes, it is crucial to stay informed and proactive in implementing 欧博娱乐 new guidelines to maximize 欧博娱乐 benefits and maintain compliance.