Filed under: Federal Grant & Contract Consulting

On January 22, 2020, the Office of Management and Budget (OMB) released proposed changes to Title 2 of the Code of Federal Regulations (CFR) for public comment. The Proposed Rule (Federal Register document: 2019-OMB-0005) would affect 2 CFR Parts 25, 170, 183, and 200 with the Uniform Guidance (UG) at 2 CFR Part 200 seeing the largest number of proposed changes. The UG (2 CFR Part 200) was created in 2014 to reduce the administrative burden on grantees and grant administrators. These proposed revisions are intended to further reduce recipient burden, provide guidance on implementing new statutory requirements, and improve federal financial assistance management, transparency, and oversight.

Key Reasons for Proposed Changes

Although the OMB has issued periodic changes to the UG, the OMB is required to conduct a complete review every five years. As part of this review period the OMB has incorporated:

  • Strategies from the Results-Oriented Accountability for Grants Cross Agency Priority Goal (Grants CAP Goal). Proposed changes align terminology between the Grants CAP Goal and 2 CFR. The proposed revisions also implement the government-wide approach to performance and risk.
  • Revisions to 2 CFR to implement relevant statutory requirements, including several from National Defense Authorization Acts (NDAA) and the Federal Funding Accountability and Transparency Act (FFATA).
  • Clarifying requirements regarding areas of existing misinterpretation in the UG and adding some of the existing Frequently Asked Questions (FAQs) from the Council on Financial Assistance Reform (COFAR) to make them more official.

Federal Register Rule Making Process – When Would These Changes Become Effective?

When issued on January 22, 2020, the Proposed Rule entered a 60-day comment period. The OMB has asked that the public review and comment on the proposed guidance on or before March 23, 2020. The easiest way to view the proposed changes is to review the tracked changes version of the guidance on the Federal Register’s website. The preamble to the Proposed Rule provides an overview and background on the proposed changes, as well as detailed instructions on how to comment on the proposed changes, which must be submitted through www.regulations.gov.

Once the comment period has ended, the OMB will analyze the feedback they received and issue a Final Rule. It is unclear how long this process will take. The OMB has made no known commitments on timing.

UG Revision Highlights

We have outlined key observations impacting Not-For Profit entities (NFPs) made from the proposed changes to the UG – commonly referred to as proposed UG in this article. The attached table represents our view of the proposed changes. We encourage NFPs to perform their own detailed read and evaluation of the proposed UG.

Click here for a table of the updates and our evaluation of the impact.

Take Action

The proposed changes to the Uniform Guidance will impact most grantees in some form or another. With the public comment period open, now is your chance to provide comments to the OMB on the changes they are proposing and, just as important, the changes you would like to see made that are not present in the proposed UG.

When the Final Rule is issued, recipients should be prepared to update their understanding of the revised changes being made, including revisions from the proposed UG. They will have to assess what actions will be necessary to adjust organizational policies, procedures, and documentation to meet the Uniform Guidance revisions and ensure ongoing compliance. If you have any questions regarding the Uniform Guidance, contact a Clark Nuber professional.

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This article or blog contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.