The US Office of Management and Budget (OMB) recently issued comprehensive grant reform rules titled “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” The new requirements consolidate what was previously in eight separate OMB Circulars into a new document being referred to as the “super circular” or “omni-circular”.
The grant reform rules are intended to streamline the federal government’s guidance on administrative requirements, cost principles, and audit requirements for federal awards. The final guidance supersedes OMB Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122, and A-133.
Some of the most significant changes to the administrative requirements include a heightened focus on program performance results, use of technology, standardization of grant documents, and coordinated oversight. The cost principles consolidation includes changes to the definitions of direct and indirect costs, a provision for a de minimis indirect rate of 10 percent, changes to payroll time and effort reporting requirements, and some changes to the allowability of selected items of cost. The reform raises the threshold for a single audit to $750,000 and also includes some changes to program risk assessments, audit coverage, and reporting of findings.
The new rules are expected to be implemented by federal agencies and pushed out to grant recipients over the upcoming year. The changes in audit requirements will take effect beginning with years ending December 31, 2015.
The Council on Financial Assistance Reform (COFAR) will also be issuing documents with frequently asked questions related to the grant reform. The first of these documents, Frequently Asked Questions for New Uniform Guidance at 2 CFR 200, was issued on February 12, 2014.
For an in-depth look at this topic, view a replay of our webinar, “OMB Grant Reform: an overview of the recent changes and tips to help ensure your compliance.”
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.