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The Office of Management and Budget (OMB) has updated its Uniform Guidance for federal grants and agreements, now known as OMB Guidance for Federal Financial Assistance. These changes will take effect on October 1, 2024, with the aim of streamlining the requirements for nonprofits and other organizations receiving federal funds.   

Here is a breakdown of the latest changes and how this could impact your organization.  

What Changed?  

The revised Uniform Guidance is set to improve the oversight of Federal funds. It also intends to lessen the workload for agencies, applicants, and recipients, making it easier to allocate federal funding toward mission objectives rather than administrative overhead.  

Key Components of the Updated Guidance 

• Increased De Minimis Rate: The maximum rate at which recipients of federal funds may use for indirect costs without extra paperwork will increase from 10% to 15%. 

• Increased Cap on Fixed Amount Awards and Subawards: The cap on fixed-amount awards and sub-awards that can be given without prior written approval from the Federal Agency will increase from $250,000 to $500,000.  

• Higher Single Audit Threshold: The threshold at which a recipient of Federal funds is required to conduct a single audit will increase from $750,000 to $1 million.  

• Increased Cybersecurity Requirements: Recipients of Federal funds, including grants, will be allowed to spend a portion of award funding for cybersecurity enhancements. 

• Increased Asset Retention: Nonprofits can keep or sell equipment valued up to $10,000 (previously $5,000) without returning it to the government. Similarly, the threshold for selling unused supplies has increased to $10,000. 

• Enhanced Transparency Requirements: Recipients, sub-recipients, and applicants under a federal award will be required to disclose any suspected illegal activity related to their federal grants, such as fraud, conflict of interest, bribery, or gratuity violations. This updated disclosure closely mirrors the Federal Acquisition Regulation (FAR) requirements as it does not require a firm, legal determination as to whether a criminal law was violated.  

How This Impacts Your Organization  

While these modifications may offer potential benefits for your nonprofit, it’s important to review these new changes with a financial advisor in order to understand their full implications. 

Have questions about this update or how it may impact your organization? Contact us; our team of advisory experts is here to help.