The latest overhaul of the federal grant guidelines went into effect on October 1, 2024. The guidance from the Office of Management and Budget is meant to enhance clarity and reduce burden for organizations managing federal funds. This guidance includes the 2024 Revised Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

WHAT THIS MEANS FOR YOUR ORGANIZATION

RAISED AUDIT THRESHOLD

The single audit threshold has increased from $750,000 to $1,000,000, providing more flexibility in programmatic and budgetary decisions and potentially reducing the audit burden for entities with federal funding below the threshold.

IMPROVED INDIRECT COST RATES

The increase in the de minimis indirect cost rate from 10% to 15% could enable a more realistic recovery of indirect costs. Nonprofits remain free to negotiate a higher indirect cost rate agreement (NICRA).

INCREASED ACCESSIBILITY

The new requirements aim to make federal funding more accessible, particularly to smaller organizations historically sidelined by high administrative costs and complex application processes.

SIMPLIFIED COMPLIANCE

The removal of numerous prior written approval requirements for various costs is expected to decrease administrative overhead, allowing for a more direct allocation of resources to project and service delivery. Further, the new rules instruct federal agencies to eliminate reports that are not necessary for the effective monitoring of the grant.

LOOKING FORWARD

CFOs, finance officers, and grant managers need to remain vigilant and proactive in adapting to these changes. It is imperative to stay informed on the changes and conduct a thorough review of the new requirements to identify how these changes impact their grant management and compliance. This may also require organizations to update their policies and procedures and provide training to the staff and stakeholders.

OUR TEAM IS HERE TO HELP

Navigating the latest OMB Uniform Guidance updates can be a complex and daunting task for any nonprofit organization. Mercadien’s Nonprofit and Human Services Group specializes in helping nonprofits like yours adapt to these significant changes with ease. Our team of experts are dedicated to providing comprehensive support, from understanding the raised audit thresholds and improved indirect cost rates to simplifying compliance requirements. By partnering with us, you can ensure that your organization remains compliant, maximizes federal funding opportunities, and has the ability to focus more on delivering your mission-driven programs.

Don’t let regulatory changes overwhelm you; let Mercadien guide you through the process. Contact us today to learn more about how we can help your nonprofit thrive under the new guidelines.

Resources for additional information:

• Uniform Grants Guidance 2024 Revision
• Guidance for Federal Financial Assistance (OMB Uniform Guidance Final Rule)
• Redline Edits to prior Uniform Guidance.
• Memorandum: Reducing Burden in the Administration of Federal Financial Assistance
• COFFA Landing Page for Updates on the Uniform Guidance

 

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.