Major Uniform Guidance Changes Effective October 1, 2024: What you need to know

Overview

The Office of Management and Budget (OMB) has issued significant revisions to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), commonly known as the Uniform Guidance. These changes, effective October 1, 2024, will impact federal award recipients and their auditors in substantial ways. Here’s what you need to know.

1. Single Audit Threshold Increased to $1,000,000

Effective for fiscal years beginning on or after October 1, 2024, the threshold for requiring a Single Audit has increased from $750,000 to $1,000,000 in federal expenditures.

• If your organization expends less than $1,000,000 in federal funds and your fiscal year ends September 30, 2025 or later, you are no longer required to undergo a Single Audit.
• This change is a welcome relief for many smaller organizations.

2. Dual Guidance Rules: Know Which Version Applies

For organizations that do meet the new Single Audit threshold, things get more complicated. You must determine which version of the Uniform Guidance applies on an award-by-award basis:

• Awards issued before October 1, 2024 – Follow the old Uniform Guidance.
• Awards issued on or after October 1, 2024 – Follow the new Uniform Guidance.
• Optional Flexibility: A federal awarding agency may allow use of the new guidance for older awards, but cannot require use of the old guidance for new awards.
• Refer to the Dual Compliance Framework (Part 3) of the 2025 Compliance Supplement which provides a list of changes to accommodate for both the old and new Uniform Guidance requirements.

3. Key Changes in the 2024 Uniform Guidance

Here are the most impactful updates:

• Single Audit Threshold: Increased to $1,000,000.
• Type A Program Threshold: Now $1,000,000 for entities expending $34 million or less in total federal awards (previously $750,000 for entities under $25 million). Thresholds scale for larger entities.
• De Minimis Indirect Cost Rate: Increased from 10% to 15% of Modified Total Direct Costs.
• Equipment Threshold: Per unit acquisition cost increased from $5,000 to $10,000. Consider updating capitalization thresholds.
• Subaward Exclusion Threshold: Increased from $25,000 to $50,000. When calculating the Modified Total Direct Costs (MTDC) can now include up to $50,000 of subawards. This does not change subrecipient monitoring requirements.
• Cybersecurity Requirements: Introduction of a specific change requiring recipients to take reasonable cybersecurity measures, which include, but are not limited to, data encryption, multi-factor authentication, and other safeguards. Federal awarding agencies are now required to conduct cybersecurity risk assessments as part of their evaluation before issuing awards. Please note that Uniform Guidance does not mandate a specific cybersecurity framework, leaving that to the discretion of the recipient.
• Terminology Overhaul: For example, ‘Non-federal entity’ is replaced with clearer terms like ‘recipient’ and ‘subrecipient.’
• Plain Language Rewrite: The entire guidance has been rewritten for clarity and accessibility.

4. Compliance Supplement Now Finalized

The 2025 Compliance Supplement has been officially released. The Supplement includes appendices that compare the old and new guidance.

You can issue a Single Audit report now that the final Compliance Supplement has been released.

Next Steps for your organization:

• Review your federal awards to determine which version of the guidance applies.
• Update internal policies and procedures to reflect the new thresholds and requirements.
• Stay tuned for additional agency-specific guidance.
• Reach out to your audit team with questions or for help navigating these changes.

Abdo is here to help you make sense of the chaos — one federal award at a time. If you have questions regarding this matter, please don’t hesitate to reach out to your dedicated Abdo advisor or to info@abdosolutions.com.