Federal News: OMB’s Uniform Guidance Update

The federal Office of Management and Budget (OMB) has finalized reforms to the Uniform Guidance, the regulations that govern most federal grantmaking. Effective October 1, 2024, the new rules will improve cost reimbursements, reduce red tape and streamline reporting for nonprofits.

• Improved Indirect Cost Rates. The new Guidance raises the guaranteed de minimis rate for indirect costs from 10% to 15% of modified total direct costs and clarifies that governments may not compel recipients to use an indirect rate lower than the 15% de minimis rate, unless required by statute. Organizations can, however, voluntarily choose not to utilize the 15% minimum.
• Support from OMB. The new Guidance clarifies that recipients and subrecipients may notify OMB of any disputes with regards to a federal agency’s application or acceptance of a federally negotiated indirect cost rate.
• Pass-Through Compliance.  The new Guidance also mandates that pass-through entities – typically state and local governments – must accept all federally negotiated indirect cost rates (NICRAs) for subrecipients. This means that nonprofits with negotiated rates with one federal agency must be paid that same rate by all other federal, state, and local government agencies.

For more information on the new OMB Guidance, see the analysis from the National Council on Nonprofits and register for their May 30 webinar.