In late December 2013, the Office of Management and Budget ("OMB") issued long-awaited grant reforms in a document titled Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Audit.
This reform of OMB guidance is an attempt to reduce the administrative burden for non-federal entities receiving a portion of the $600 billion in federal grants that are awarded annually, while reducing the risk of waste, fraud, and abuse. It applies to institutions of higher education, nonprofits, state/local governments, Indian tribes, and certain for-profit and foreign entities. These revisions are clearly the most significant change to occur in relation to federal grants management in recent history. Entities receiving federal funding will need to carefully digest these changes.
The new rules combine eight previously separate sets of OMB regulations into one streamlined, comprehensive policy. This consolidated document is aimed at eliminating duplicative or almost duplicative language in order to clarify where policy is substantively different across types of entities, and where it is not. As a result, the guidance includes sections and parts of sections which are clearly delineated by the type of non-federal entity to which they apply. This final guidance is located in Title 2 of the Code of Federal Regulations.
This guidance supersedes requirements from various prior OMB Circulars and provides reforms in three main areas:
|Reform Area||Guidance Previously Located in|
|Administrative Requirements||Circulars A-102 (the Common Rule), Circular A-110 and Circular A-89|
|Cost Principles||Circulars A-21, A-87 and A-122|
|Audit Requirements||Circulars A-133 and A-50|
These regulations became effective for new awards and/or new funding increments made on or after Dec. 26, 2014, exactly one year after the publication date of these reforms. However, standards set forth related to the audit requirements will be effective for audits of fiscal years beginning ON or AFTER Jan. 1, 2015; i.e., the first single audits affected by this rule will be for the year ending Dec. 31, 2015.