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By Andy Gorham, HoganTaylor Assurance Senior Manager

The Uniform Grant Guidance (UGG) (Title 2 CFR 200) was issued December 26, 2013, and is effective one year from publication.  The UGG streamlines and consolidates governmental requirements for receiving and using federal awards in order to reduce administrative burden and improve outcomes.  The final guidance supersedes and streamlines requirements from OMB Circulars A-21, A-87, A-110, A-122,  A-89, A-102, and A-133, and the guidance in Circular A-50 on Single Audit Act follow-up.  This final guidance is located in Title 2 of the Code of Federal Regulations.

The UGG contains three major sections:

  • Subparts A-D: Reforms to administrative requirements
  • Subpart E: Reforms to cost principles
  • Subpart F: Audit requirements

Changes from the previous requirements include an emphasis on performance goals and reporting; increasing the audit threshold from $500,000 to $750,000 of federal expenditures; assessment of low and high risk programs; disclosures in the Schedule of Expenditures of Federal Awards (SEFA) and related footnotes; and a heightened focus on sub-recipient monitoring.  Additionally, administrative and cost principal changes are applicable for new awards and additional funding increments of existing awards made after December 26, 2014.  An Organization should review and update its policies and procedures as necessary.

Organizations have a grace period of two years after the effective date of uniform guidance to comply with the new procurement standards.  Therefore, if an Organization’s fiscal year begins on January 1st,  that Organization’s procurement procedures will not have to comply with the UGG until January 1, 2017. For an Organization’s first full fiscal year that begins on or after December 26, 2014, the entity must document whether it is in compliance with the old or new procurement standard.

Auditees may have heard that audit burden and fees should be reduced with the new UGG.  The burden and fee reduction relates to the approximately 5,000 entities that no longer require a single audit due to the increase in the threshold to $750,000 in federal expenditures.  In reality, Organizations requiring a single audit may experience an increase in the number of major programs tested, as well as an increase in testing on internal control and compliance of each major program.  Single audits may be more complex as new guidelines are implemented, and the additional testing may lead to an increase in the number of findings reported in the audit report and to the Federal Clearinghouse.

The implementation of the UGG will likely result in challenges and raise additional questions.  The Council of Financial Assistance Reform (COFAR) maintains a website at to provide information and a set of Frequently Asked Questions to ease with the implementation.

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