More Proposed Changes to Uniform Guidance (Title 2 of the Code of Federal Regulations Part 200)
The Office of Management and Budget (OMB) has drafted proposed changes to the Uniform Guidance governing compliance with federal grants, contracts, and cooperative agreements (2 CFR 200). The proposed revisions aim to achieve the following objectives:
Incorporating statutory requirements and administration priorities
Reducing agency and recipient burden
Clarifying sections where recipients or agencies have had divergent interpretations
Rewriting applicable sections in plain language. Improving flow, and addressing inconsistent use of terms
Several significant revisions have been proposed by OMB to clarify sections where recipients or agencies have had divergent interpretations, including:
Clarifying section 25.105 regarding requirements for a Unique Entity Identifier (UEI) and SAM.gov registration, OMB proposes to exempt second-tier subrecipients or contractors from obtaining a UEI. This change will reduce the administrative burden on these entities while creating new flexibility for recipients when selecting sub-recipients. Conversely, OMB’s clarification also would clearly state that recipients of loan guarantees must obtain a UEI and register on SAM.gov to improve accountability and compliance.
Clarifying section 200.113 in Subpart B, recipients and subrecipients are required to promptly report any credible evidence of a Federal criminal law violation that may impact the Federal award in writing to the agency's Office of Inspector General. OMB believes this is beneficial because it would not require recipients, subrecipients, and applicants to make a legal determination that a criminal law has been violated before they are required to make a disclosure of “credible evidence.”
Clarifying section 200.201 in Subpart C regarding fixed amount awards, OMB’s change would permit recipients to retain any unexpended funds under a fixed amount award if the required activities were completed in accordance with the terms and conditions of the award. Fixed amount awards are based on negotiated budgets with measurable project goals and objectives. By clarifying this, OMB intends to streamline administrative processes, promote efficiency among recipients, and improve accountability and compliance.
Clarifying section 200.202 in Subpart C, OMB is encouraging both awarding agencies and recipients to engage members of the communities benefiting from federal financial assistance programs when developing programs. This involvement should be informed by data and evaluation results from previous programs, aiming to enhance program effectiveness, efficiency, and responsiveness through community-oriented planning and design.
Clarifying Appendix VII to part 200, Federal agencies must accept indirect cost proposals from State or local departments or agencies receiving less than $35 million in their fiscal year. This emphasizes that these agencies have the freedom to reject rates set by the Federal agency if the proposals meet part 200 requirements and are well-documented for audits. This clarification grants smaller entities more flexibility in determining their indirect cost rates.
Our last blog reviewed four significant proposals that would reduce agency and recipient burden by raising dollar thresholds tied to specific compliance requirements. Click here to learn more.
OMB is seeking comments on these and other proposed changes, which must be submitted electronically via www.regulations.gov before December 4th, 2023. Our Grants Management and Compliance experts are closely monitoring these proposed changes and are ready to guide your team through a dynamic regulatory environment. Learn more about Bronner’s Grant Management and Compliance work here.