Posted October 1, 2024.

As we step into a new federal fiscal year, let’s celebrate fresh beginnings and look ahead to changes that are shaping federal funding and grants management.  Updates to the Uniform Guidance (also referred to as 2 CFR 200 regulations), including the introduction of a new format for Notices of Funding Opportunity (NOFOs), take effect today.

The Uniform Guidance can best be described as a set of clear rules and standards that help organizations—both federal and non-federal—manage and use federal funds in a fair and efficient way.  It ensures that everyone is following the same regulations to keep things transparent and accountable.

One of my goals as the Rio Reimagined Ambassador is to build an awareness of how the federal funding lifecycle works, so that you can make informed decisions on how to compete well. If you’ve been fortunate enough to have been awarded a federal grant and claimed victory only to find out the real work has just begun—you’re not alone!  If you’re not sure about how you’re going to comply with all the regulations, or what the next steps are in post-award grant management, keep reading.  Please also reach out to me directly for advice or assistance—this is part of my role and is at no cost to you.

What is 2 CFR 200 and why do you need to know?

There are a lot of moving parts to take into consideration when designing a new federal program—it can take a year, and sometimes longer to get one up and running.   A federal agency doesn’t do this in a vacuum.  Published by the Office of Management and Budget (OMB), the Code of Federal Regulations (CFR), and in this case, the Uniform Guidance, codified as 2 CFR 200, is the framework governing federal awards and grants.

This year marks the full implementation of updates designed to streamline and clarify regulations for both federal agencies and grant recipients.  The good news is that the regulations are accessible to everyone, and they’re written in plain language. They’re also empowering.

I’m not going to dig into the entire regulations universe today, but it’s important to know they’re out there and that they govern every part of the federal funding project lifecycle—whether you are the federal agency managing the funds, or a non-federal entity applying for those funds.

You’ll never have to read the regulations from cover to cover.  The idea is to familiarize yourself with the regulations that govern your work, know where they live, and how they’re used. You will be better positioned to proactively decide what programs “best fit” your project pipeline, and what program compliance looks like.

Understanding 2 CFR 200 Updates

Some Key Changes

1. Simplified Cost Principles: The revised guidance aims to simplify the cost allocation process. This will help organizations better understand allowable costs and avoid compliance pitfalls.
2. Recognition of Tribal/State Sovereignty (§200.317): Indian tribes are now afforded the same flexibility given to states.
3. Indirect Costs (§200.414): De Minimis rate increases from 10% to 15%. Use this when you don’t have a negotiated indirect cost agreement without having to prove actual indirect costs. That said, calculating indirect costs is complicated. You need more than this post to decide how to apply this (give me a call!), but in general, this is good news!
4. Audit (§200.501): Audit threshold increases from $750,000 to $1,000,000 for federal funds expended. This threshold increase means that if you spend less than $1,000,000 in a year, you are exempt from federal audit requirements for that year. However, you do still have to have records available for review if asked by the federal program office, a pass-through entity if you’re a sub-recipient, or the General Accounting Office (GAO).
   Translation: Even though you may be exempt from the Single Audit Act, you are not exempt from keeping meticulous records, but the increased threshold is more reflective of how much things cost now.
5. Risk Management: There’s a stronger emphasis on risk assessments, requiring recipients to adopt a more proactive approach to identifying and managing risks associated with federal awards.
6. Increased Transparency: The updates stress the need for transparency in reporting and monitoring. This will enhance accountability and allow for more efficient oversight by federal agencies.
   Translation: More reporting requirements—no surprises here, but it’s important to remember that these are taxpayer dollars and it’s important to know they’re going toward their intended use.
7. Performance Measurement: A renewed focus on performance metrics will require organizations to demonstrate the effectiveness of their programs, ensuring that federal program funds are used efficiently and yield tangible results.

For a high-level overview of the 2024 Uniform Guidance Updates, check out the National Grant Management Association’s (NGMA) Uniform Guidance Crosswalk Supplement.

New NOFO Format

The updates to 2 CFR 200 also bring a revamped approach to NOFOs. The new format aims to make them clearer and more accessible. Here’s how:

1. Streamlined information: The updated NOFO format will provide clearer instructions and expectations, making it easier for potential applicants to navigate the funding process.
2. Standardized Sections: The new format will standardize sections across NOFOs, helping applicants quickly find relevant information, such as eligibility criteria, funding priorities, and application submission requirements.
3. Focus on Outcomes: NOFOs will increasingly emphasize expected outcomes and impact. Applicants will be encouraged to outline how their proposed projects align with federal goals and contribute to measurable improvements in their communities.

Check out Appendix I to Part 200—it has been updated to more clearly define all NOFO requirements.

Other Important Updates

Funding Opportunities and Timelines

As federal agencies roll out new funding opportunities, it’s crucial to stay informed about application deadlines and requirements.  Keep an eye on grants.gov for announcements and updates throughout the year.

Capacity Building Initiatives

The federal government continues to prioritize capacity-building initiatives to help organizations, especially those in underserved communities, better navigate the funding landscape.  These programs may include technical assistance, training, and resources to enhance organizational capabilities.

For example, the Environmental Protection Agency, has a dedicated web page for technical assistance that includes webinars, FAQs and other tips and tools.  Try searching the web for “how do I apply for grants” and include a federal program office and you’ll be directed to a site that will help you navigate their programs and provide assistance.

Check out these examples of funding-focused resource pages with various federal agencies. This list is not exhaustive — try your own search if you don’t see what you’re looking for!

• US Department of Transportation
• United States Forest Service Grants and Agreements Resource Center
• US Fish and Wildlife Service
• US Department of the Interior Indian Affairs
• Bureau of Reclamation

Emphasis on Equity

This fiscal year, there’s a significant push towards equity in funding distribution.  Agencies are encouraged to consider the unique challenges faced by marginalized communities and ensure that federal funds are accessible to all.

Conclusion
While I have a great deal of expertise in the world of federal funding, things are changing constantly, and there’s just so much to learn.  I’m keenly aware that in many cases, grants management falls to one individual and it’s a big responsibility.

I rely greatly on my membership with the National Grants Management Association, where I recently completed an intensive Grants Management Body of Knowledge (GMBoK) two-day training on these updates and I’m happy to share this knowledge with you at no cost, as part of my role as Ambassador.  If your involvement in federal grants is more than serendipity—please also consider joining a network of your peers, whether it’s NGMA or another professional grants organization, to stay abreast of this evolving landscape.

As we embark on this new federal fiscal year, organizations should prepare to adapt to the changes brought about by the revised 2 CFR 200 regulations and the new NOFO formats.  Staying informed and engaged will be key to successfully navigating the evolving nature of federal funding.  Here’s to a year filled with opportunities, growth, and impactful projects—happy new year!