Round Three: OMB’s Proposed Revisions to Uniform Guidance
The Office of Management and Budget (OMB) has drafted proposed changes to the Uniform Guidance governing compliance with federal grants, contracts, and cooperative agreements (Title 2 CFR, Part 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 in Subpart D, Post Federal Award Requirements to improve the clarity of sections where recipients or agencies have had divergent interpretations, including:
Clarifying section 200.307 regarding program income, OMB is proposing to provide additional paragraphs regarding the use and expenditure of program income, including allowing program income for certain closeout costs. This change could streamline project closure for grant recipients. OMB also proposes to revise and provide further clarifying guidance for each of the three methods for the use of income: deduction, addition, and cost-sharing.
Clarifying section 200.308 regarding budget and program plans, OMB is proposing that recipients only need approval for subrecipients when making subawards for programmatic activities not initially proposed in their award application. Additionally, OMB wants to clarify that federal agencies should not be required to approve changes to subrecipients unless the initial choice of a subrecipient played a crucial role in the awarding decision. The proposed changes are intended to emphasize that the recipient is responsible for the effective and efficient management of the federal award.
Clarifying section 200.319 regarding competition, OMB is proposing to remove the ban on using geographic preferences in awarding government contracts. This change could benefit local contractors, boost the local economy, and enhance regional expertise in government contracts. OMB also proposes to allow rewards for bidders who promise specific U.S. jobs and worker benefits.
Clarifying section 200.332 proposes the requirement for pass-through entities to confirm that potential subrecipients are not suspended, debarred, or otherwise excluded from receiving Federal funds. Pass-through entities will need to verify that the proposed subrecipients are not excluded entities in SAM.gov. OMB seeks to clarify this section to ensure that federal funds are distributed in a compliant, accountable, and transparent manner.
Clarifying section 200.344 regarding close-out procedures for federal awards, OMB proposes that recipients will be required to submit a final financial report within the close-out period, regardless of whether or not an indirect cost rate has been finalized. Once the rate is finalized, recipients will then be required to submit an amended final financial report to claim the finalized indirect cost rate. This change aims to improve the cadence of closing out federal awards.
Our last two blogs reviewed significant proposals that would reduce agency and recipient burden by raising dollar thresholds tied to specific compliance requirements and clarify sections where recipients or agencies have had divergent interpretations. Click Part I and Part II 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.