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The Office of Management and Budget (OMB) Makes Updates to Federal Grantmaking Rules

Posted Jun 26, 2024 01:35 PM
The federal Office of Management and Budget (OMB) recently published revisions to rules governing federal grantmaking to charitable nonprofits (as well as state, local, and Tribal governments) that will go into effect on October 1, 2024.
The goal is to make the process of nonprofits receiving federal funding easier and more straightforward to manage.

See these slides from a presentation delivered by the National Council of Nonprofits for more details.

OMB published revisions to the Uniform Guidance (Title 2 of the Code of Federal Regulations, also known as 2 CFR 200) on April 4.
Read the White House’s announcement for further information. The objectives of this current round of revisions include:
  • Incorporating statutory requirements and administration priorities.
  • Reducing agency and recipient burden.
  • Clarifying sections that recipients or agencies have interpreted in different ways.
  • Rewriting some sections using plain language (such as in grant announcements--Notices of Funding Opportunities).
  • Improving flow.
  • Addressing inconsistent use of terms (some terminology changes include replacing “grants and agreements” with “Federal financial assistance”, using “recipient” in place of “non-Federal entity”, replacing general terms with more specific terms, and eliminating infrequently-used acronyms).
  • Added requirement for cybersecurity internal controls.
These changes should make it easier for smaller organizations and projects to receive federal funding, ensure the funds reach communities most in need, and reduce burdens on requirements and reporting for organizations seeking federal funding, as well as those already receiving federal grants. Under the current rules, organizations of all sizes have the same or similar requirements. Other changes include:
  • The Single Audit and Major Program threshold increased from $750,000 to $1,000,000.
  • The fixed amounts of subawards increased from $250,000 to $500,000.
  • The equipment and supplies thresholds increased from $5,000 to $10,000.
  • The de minimis indirect rate increased from 10% to 15%.
These changes are much welcomed, considering nearly one-third of the nonprofit sector’s revenue comes from federal grants and contracts. Read more about the code regulating federal grantmaking.