Uniform Guidance alters how agencies manage $600B in annual grants

The Council on Financial Assistance Reform (COFAR) released a rule Thursday that will have a huge impact on how the federal government manages approximately $600 billion grants and other assistance it hands out annually.

The rule implements guidance — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards — from the Office of Management and Budget on grant-making across the federal government. The guidance cuts financial management regulations governing federal grants and other assistance by 75 percent, reducing the risk of waste, fraud and abuse and promoting greater transparency.

OMB originally published the guidance on Dec. 26, 2013. The guidance rewrote eight separate OMB Circulars into a single guide — 2 CFR 200.

OMB gave the Uniform Guidance one year to go into effect. This allowed grant-making agencies and award recipients time to incorporate the Uniform Guidance into their policies.

According to a Dec. 18 blog post written by OMB Controller Dave Mader, the new interim final rule will apply to awards made on or after Dec. 26, 2014.

Key policy reforms within the Uniform Guidance, Mader wrote, include:

• Allowing state, local and tribal governments to partner with nonprofits and universities on local community projects with enhanced coordination from the federal government;
• Letting universities hire staff dedicated to administrative work that benefits grants;
• Allowing nonprofits and other groups to use a standard minimum rate to be reimbursed for indirect costs that support the fundamental operations of the organization;
• Publishing single audit reports online;
• Ensuring that organizations maintain strong internal controls.

“Taken as a whole, this historic reform will transform the landscape for financial assistance for generations to come,” Mader wrote. “To realize today’s actions, the COFAR in coordination with OMB, engaged the larger public for direct input and worked directly with stakeholders to navigate between competing priorities, facilitate implementation, evaluate effectiveness, and push this important reform effort forward.”

The interim final rule has a 60-day public comment period. The public can make comments here.

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