OMB Circular – Proposed Guidance

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Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements (including Single Audit Act)

By: Mary Karen Wills

The complete text of this proposal and a crosswalk of policy changes from the existing guidance are available on the OMB website under Proposed Policies.

This guidance is applicable to grants and cooperative agreements that involve state, local, and tribal governments, as well as institutions of higher education and nonprofit organizations. The proposal rule seeks to consolidate and streamline the requirements from OMB Circulars A-21, -89, -110 and -122. In addition, Circulars -50, -89, -102, and -133 on audits would be consolidated and streamlined. This guidance seeks to minimize the burden associated with compliance and audits for the grants and cooperative agreements with the aforementioned organizations. The goal would be to replace these eight circulars with one document, resulting in a single set of rules across these entities that currently have varying degrees of requirements.

Key provisions in the proposal include:

  • With respect to funding opportunities, require agencies to provide 90-day notice
  • Provide a standard format for announcements of funding opportunities
  • Centralize guidance on the oversight of sub-awards
  • Update simplified acquisition thresholds to conform to 41 U.S.C. 403 ($150,000)
  • Require close-out actions no later than 180 days after a final report is received
  • Consolidate cost principles and conform them across entity types, except certain unique provisions that will remain (e.g., for hospitals and for indirect cost rate negotiation differences by entity type)
  • Consider alternative methods of negotiating indirect cost rates, such as flat rates
  • Explore alternatives to time and effort reporting

The proposal is voluminous at 241 pages and contains many other detailed recommendations. See the detailed report for additional discussion.

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The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.