GOVERNMENTAL UPDATE: Implementing Guidance on Uniform Guidance Revisions

Background

The Council on Federal Financial Assistance (COFFA) was established in August 2023 by the U.S. Office of Management and Budget (OMB) under Memorandum M-23-19. The OMB’s intent was to create an interagency forum to improve coordination, transparency, and accountability in the oversight and management of federal funding. Aligning with that purpose, the COFFA maintains several resources related to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including resources related to the recent Uniform Guidance revisions that were issued in April 2024. These resources include:

The official Federal Register notice, Guidance for Federal Financial Assistance, published April 22, 2024.
An unofficial redline comparison version of the April 2024 revisions.
2 CFR Crosswalk, which is a spreadsheet that shows individual changes from the previous version of the Uniform Guidance.
OMB Memorandum M-24-11, Memorandum for Heads of Executive Departments and Agencies.
Implementation guidance for federal agencies released by the COFFA (which is the focus of this article).
Other reference material issued by the OMB.

Implementing Guidance

On August 15, 2024, the COFFA published FY2024 Revisions to 2 CFR: Federal Agency Implementation. This document provides guidance for federal agencies on implementing the new revisions, including guidance pertaining to new awards, existing awards, subawards, and notices of funding opportunities. It also emphasizes that federal agencies should adopt the revisions timely and in full.

Transition Issues for Agencies, Recipients, and Auditors—Federal Awards and Compliance Requirements.

For recipients, the COFFA publication reemphasizes guidance that was included in the 2024 OMB Compliance Supplement related to the transition, which notes that there will likely be some variation on when federal agencies begin to make the 2024 revisions applicable to federal awards. The COFFA guidance reminds recipients that not all flexibilities provided by the April 2024 revisions to the Uniform Guidance are available to existing federal awards issued prior to the effective date. It encourages federal agencies to work with recipients to address questions on whether changes made by recipients to address the revisions (such as internal controls and procedural changes) could affect compliance with the terms of conditions of their existing federal awards.

From an audit perspective, Appendix VII of the 2024 Compliance Supplement states that auditors should perform reasonable procedures to ensure that compliance requirements identified as subject to the audit are current and determine whether there are any additional or modified provisions of federal awards based on these revisions. In addition, the COFFA publication includes transition guidance for both federal agencies and recipients on the changes to indirect cost rates, including the de minimis rate.

Transition Issues—Revised Single Audit Requirements.

Of particular interest to auditors performing Single Audits is the clarification the document provides regarding the increases in the thresholds ineffectively communicated in the Uniform Guidance revision and partially communicated in Appendix VII of the 2024 Compliance Supplement. It clarifies that both the increases in the Single Audit threshold and the major program determination threshold (i.e., the Type A program threshold) from $750,000 to $1,000,000 are effective for auditee fiscal years beginning on or after October 1, 2024 (generally for fiscal years ending September 30, 2025 and later). It states that the threshold changes will be effective regardless of whether the awarding agencies take action to amend existing awards, based on OMB’s statutory authority to adjust the thresholds.

Practical Consideration: Auditors should note that this effective date does not coincide with the effective date of the annual Compliance Supplement update (i.e., Single Audits for entities with fiscal years ending June 30, 2025 through September 29, 2025 will be subject to the 2025 Compliance Supplement, but not the increased Single Audit or Type A program thresholds).

All other Uniform Guidance Subpart F—Audit Requirements revisions were effective on October 1, 2024. This clarifying guidance on the effective date of the Single Audit threshold, Type A threshold, and the other Subpart F audit requirements resolves significant uncertainties about when the various Single Audit requirement changes become effective. Auditors should be certain to refer to this updated guidance rather than earlier comments about OMB’s intentions about effective dates.

Practical Consideration: The Uniform Guidance (April 2024 revision) resources maintained by COFFA that are described in this article can be accessed at www.cfo.gov/coffa/uniform-guidance-coffa/2024/. www.cfo.gov/assets/files/FY-2024-Revisions-to-2-CFR-Supplementary-Information-for-Federal-Agency-Implementation.pdf is a direct link to the FY2024 Revisions to 2 CFR: Federal Agency Implementation document. The 2024 edition of PPC’s Guide to Single Audits and the 2025 edition of PPC’s Guide to Audits of Local Governments, available in fall 2024 and spring 2025, respectively, will be updated for the Uniform Guidance revisions.