Category: Uniform Guidance

by Erin MurphyOctober 28, 2025

Secure Federal Grants with This Complete Audit Checklist

If the thought of a federal grant audit makes your pulse quicken, you’re not alone. For many grant-funded organizations, the process can feel like navigating a maze of regulations, documentation requests, and compliance standards—often under the looming pressure of potential penalties or the dreaded “high-risk grantee” label.

At the center of this complexity lies the OMB’s Uniform Guidance (2 CFR Part 200)—the federal government’s framework for managing grants and ensuring accountability. It governs everything from allowable costs to subrecipient monitoring (more on that later), and it’s the foundation every grant manager must understand before audit season begins.

This article isn’t just another procedural checklist. It’s a strategic guide designed to help you think like an auditor, anticipate problem areas, and confidently demonstrate compliance. Whether you’re preparing for your Single Audit or strengthening your internal controls, this checklist will help you:

  • Gather the right documentation and evidence of compliance
  • Identify and address potential red flags before the auditor does
  • Strengthen financial management systems
  • Reduce the risk of disallowed or questioned costs

By the end, you’ll have a roadmap to turn audit preparation from a source of stress into a strategic advantage—keeping your organization trusted, compliant, and ready to secure future federal funding.

Stay compliant and stay confident. Grants Compliance Expert has you covered with real-time insights. Click to get started,

Federal Grant Audit FAQs 

Navigating a federal grant audit can feel daunting—even for experienced grant managers. To help you prepare, here are key answers to the most frequently asked questions, based on Thompson Grants’ Single Audit Requirements Guide and the OMB’s Uniform Guidance.

What is a Single Audit?

A Single Audit is a comprehensive review that combines a financial statement audit with an assessment of compliance with federal program requirements. According to Thompson Grants’ guide, “A single audit is a rigorous review that combines a financial statement audit with an assessment of compliance with federal program requirements. It is required for any non-federal entity that spends $1 million or more in federal awards during a fiscal year for fiscal years starting Oct. 1, 2024.”

It’s called a “single” audit because it consolidates all of a grantee’s federal programs into one review rather than requiring separate audits for each award. A properly conducted Single Audit helps prevent:

  • Loss of funding
  • Repayment of disallowed or misused funds
  • Heightened audit scrutiny
  • Damage to organizational reputation

Ultimately, the Single Audit ensures public funds are spent responsibly and transparently.

Who is required to have a Single Audit?

As of October 2025, any non-federal entity—including nonprofits, universities, hospitals, and local governments—that expends $750,000 or more in federal awards during a fiscal year must undergo a Single Audit. This threshold will increase to $1 million for fiscal years ending on or after September 30, 2025, reducing the burden on smaller entities while maintaining oversight of larger, higher-risk grantees.

The threshold applies to total federal expenditures, not individual awards. Subawards and pass-through funds all count toward this total.

What’s the difference between a recipient, subrecipient, and contractor?

When a federal agency awards a grant, it places its trust and funds in the hands of the nonprofit, which is officially referred to as the Prime Recipient. This recipient is now 100% accountable for every dollar and every project goal.

However, complex programs are rarely executed by one organization alone. Complex Recipient nonprofits might need to partner with other organizations to deliver services or secure resources.

The moment a recipient decides to pay one of these outside entities with federal grant money, they must make a critical classification. Understanding these functions (and noting them on your audit paperwork) is critical. Here are the roles to remember:

  • Recipient (Prime Recipient): Receives federal funds directly from an agency and is responsible for programmatic and financial compliance.
  • Subrecipient: Receives a subaward from a recipient to carry out part of a program and may also require a Single Audit if their federal expenditures exceed the threshold.
  • Contractor (Vendor): Provides goods or services for the recipient but does not perform programmatic functions. Contractor payments are not subject to Single Audit requirements, though procurement rules still apply.

Misclassifying these relationships is one of the most common Single Audit findings, so ensure your team understands these roles.

How should grantees select an auditor?

Choosing your auditor is one of the most important procurement decisions your organization will make. You aren’t just hiring an accountant to check your math; you are hiring a technical expert to test your compliance with the complex federal regulations. 

Furthermore, a low-quality audit that is late or gets rejected by the government can put your organization in “high-risk” status and jeopardize future funding. A good auditor, on the other hand, can be a vital, long-term partner in strengthening your internal controls.

When selecting an auditor, follow these best practices:

  • Develop a clear statement of work and timeline
  • Issue a formal Request for Proposals (RFP)
  • Evaluate bids based on experience and qualifications—not just price
  • Ensure the auditor is independent and qualified in Single Audits

Also, remember that auditors who have prepared an organization’s indirect cost proposal or cost allocation plan cannot perform the audit due to conflict of interest.

Where and when do I submit my Single Audit Report?

Completed audit reports must be submitted to the General Services Administration’s Federal Audit Clearinghouse (GSA FAC) within the earlier of:

  • 30 days after receiving the auditor’s report, or
  • Nine months after the end of the fiscal year.

Late submissions can delay reimbursements, trigger added scrutiny, or jeopardize future funding eligibility.

Never miss a compliance update! Get started with our Single Audit Information module. Click to access now.
Federal Grant Audit Checklist

Federal Grant Audit Checklist

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Financial & Compliance Documentation

Are financial statements prepared in accordance with GAAP?
Do you have a complete Schedule of Expenditures of Federal Awards (SEFA) that aligns with your general ledger?
Are supporting documents—like invoices, receipts, and contracts—organized and accessible?
Have you documented internal controls to prevent fraud and misuse?
Are all account reconciliations current and reviewed regularly?

Resource Management

Are all costs charged to federal awards allowable, reasonable, and necessary under 2 CFR §200.403?
Can you provide accurate time and effort reports for employees working on federal programs?
Are payroll allocations supported by certifications or system-generated reports?
Do you have a process for reviewing indirect cost rates and ensuring alignment with approved cost allocation plans?

Procurement & Subrecipient Monitoring

Does your procurement policy comply with 2 CFR §200.317–§200.327?
Can you provide records of competitive bids or sole-source justifications?
Have you verified subrecipient eligibility and issued compliant subaward agreements?
Do you monitor subrecipients through reports, site visits, or reviews?
Are there procedures for addressing subrecipient audit findings?

Reporting & Record Retention

Are all financial and performance reports accurate and submitted on time?
Are reports reviewed and reconciled before submission?
Do you retain records for at least three years after final reporting per 2 CFR §200.334?
Are electronic records securely stored with restricted access?
Congratulations!
You’re ready for a Single Audit.
Discover more insights with our ultimate guide

Completing this checklist not only helps you prepare for your next audit—it reinforces sound financial management and positions your organization for continued federal funding success.

Best Practices for Managing Federal Grant Audits 

A checklist is only one part of audit readiness. Long-term success depends on strong systems, clear communication, and an organizational mindset built around compliance.

Best practices for audit readiness (as explained below)

1. Implement a Culture of Compliance

Move beyond “audit season” thinking. Build compliance into daily operations across departments—from finance to program delivery. Maintain current policies, update documentation regularly, stay updated on federal grant news, and discuss compliance as part of routine reviews. Also, ensure your grant management tech is compliant by working with product experts.

When compliance is continuous, you’ll always be audit-ready rather than scrambling at the last minute.

2. Embrace Technology for Efficiency

Manual spreadsheets can’t keep pace with today’s complex grant environment. They are prone to typos, broken formulas, and version-control nightmares. More importantly, they lack the clear audit trail required to show auditors who approved an expense and when. This makes it incredibly difficult to prove you have strong internal controls.

Investing in a dedicated fund accounting or grant management system is a cornerstone of modern grant stewardship. These tools are designed to enforce compliance, streamline the process of tracking expenses by specific grants, prevent staff from accidentally coding a cost to the wrong award, and can generate accurate, real-time reports (like the SEFA).

  • Track expenses by grant
  • Automate reports
  • Flag unallowable costs
  • Centralize key records

This technology isn’t just a time-saver; it’s a tangible demonstration to your auditor that your controls are systematic and reliable.

3. Conduct an Internal Mock Audit

The worst time to find a weakness is when the external auditor is sitting in your office! Conducting a “mock audit” or internal self-assessment several months before the real one is the single best way to ensure a “no surprises” experience. Have a staff member—ideally one who is independent of the day-to-day grant accounting—use the official Compliance Supplement to test a sample of transactions.

Review your procurement files, timekeeping records, and subrecipient monitoring checklists. Are the required documents actually there? Is the math correct? This process gives you invaluable time to identify and implement corrective actions for any issues you find. Walking into an audit with a problem you’ve already identified and started fixing is far better than being caught unaware.

4. Focus on the Human Element

A successful audit depends as much on communication and organization as it does on documentation. Your relationship with your auditor should be professional and transparent, not adversarial. Remember, they are on a tight deadline, and a disorganized client costs them time, which can increase your audit fees and strain the relationship.

The key here is to be proactive. Reach out early to clarify timelines and expectations. When they send the “Prepared by Client” (PBC) list, provide all requested materials promptly and in an organized digital format. Also, if you know there’s a problem (e.g., you discovered a misspent cost), don’t hide it. Disclose it proactively, along with the corrective action plan you’ve already put in place. This transparency builds trust and signals that you are a competent, responsible steward of federal funds.


Preparing for a federal grant audit doesn’t have to be daunting. By understanding the Single Audit process, maintaining organized documentation, and promoting a culture of compliance, your organization can approach audits with confidence.

Audits aren’t just a compliance requirement—they’re an opportunity to demonstrate accountability and strengthen your organization’s reputation.

About the Author

Erin Murphy

Erin Murphy, MBA, is the Vice President of Marketing at Thompson Grants, where she leads strategic initiatives to expand the organization’s reach and impact. She leads initiatives that connect grant professionals with expert guidance, training, and tools designed to simplify compliance and strengthen funding strategies. Erin combines her background in marketing with a passion for supporting nonprofits, governments, and institutions as they navigate the complex world of grants management.

You’ve got federal funds—we’ve got your back. Join the Single Audit Information Service and turn compliance from stressful to second nature. Click to start your trial.
by Erin MurphyAugust 27, 2025

Mastering Single Audit Requirements: An Essential Guide

If your organization receives a lot of federal funding, here’s something important to know: starting with fiscal years that begin on or after October 1, 2024, any group spending $1 million or more in federal awards will need to undergo a Single Audit (or, in some cases, a program-specific audit).

Think of the Single Audit as a financial “check-up.” It’s designed to make sure federal funds are being used properly and in line with program rules. This applies to a wide range of entities, including states, local governments, nonprofits, universities, and tribes. Federal financial assistance comes in many forms—grants, but also cooperative agreements, loans, commodities, insurance, and more—so it’s worth double-checking how your funding is classified.

Not every organization falls under the requirement (for example, some for-profits and international groups may be exempt), but award agreements will spell out exactly what’s expected. And even if you’re under the $1 million threshold, you still need to maintain good records and be prepared for possible reviews.

Never miss a compliance update! Get started with our Single Audit Information module. Click to access now.

Single Audit Requirements FAQs 

What Is a Single Audit?

A single audit is a rigorous review that combines a financial statement audit with an assessment of compliance with federal program requirements. It is required for any non-federal entity that expends $1 million or more in federal awards during a fiscal year for fiscal years starting Oct. 1, 2024. 

The primary purpose of the single audit is to verify that federal funds are managed properly, spent in accordance with laws and regulations, and that the intended program objectives are met. This process ensures accountability and transparency, helping federal agencies confirm that recipients fulfill their obligations and uphold the integrity of federal programs.

Why Are Single Audits Important?

Single audits are essential for promoting accountability and transparency in the use of federal funds. Failure to complete a required audit can lead to serious consequences, including loss of current or future funding, repayment of improperly used funds, increased audit scrutiny and reputational harm with funders and stakeholders.

Thresholds and Triggers 

The expenditure threshold applies to an organization that expends at least $1 million in total federal funding within a fiscal year, not to each grant individually. This threshold is based on an entity’s fiscal year: 

  • For January–December fiscal years, the rule applies Jan. 1, 2025, onward
  • For July–June fiscal years, July 1, 2025, onward
  • For October–September fiscal years, Oct. 1, 2024, onward. 

Entities should carefully review their fiscal year to determine whether their next audit is subject to the previous $750,000 threshold or the new $1 million requirement.

Who Performs a Single Audit?

A single audit must be conducted by an independent certified public accountant (CPA) with experience in federal grant auditing. The auditor is responsible for reviewing the organization’s financial statements, Schedule of Expenditures of Federal Awards (SEFA), internal controls and compliance with federal requirements. They identify major federal programs, issue findings and submit audit reports. 

Meanwhile, the entity being audited must maintain complete and accurate records, prepare the SEFA, provide access and documentation to the auditor, respond to any findings, and ensure all required reports are submitted promptly to the Federal Audit Clearinghouse (FAC).

Single Audit Requirements to Know

Single audits must meet rigorous federal standards to ensure proper stewardship of federal funds. Key requirements include:

  • Governing Regulations: Audits are conducted under the authority of the Single Audit Act and the Office of Management and Budget’s (OMB) Uniform Guidance. Auditors must also adhere to the annually updated OMB Compliance Supplement, which provides detailed rules for auditors testing specific federal programs for compliance.
  • Scope of the Audit: The audit must cover the entity’s entire financial operations. This includes both a standard financial statement audit and a detailed compliance audit of federal program requirements to ensure funds were spent appropriately.
  •  Major Program Determination: The auditor identifies “major programs” for in-depth testing. This selection is based on total expenditure levels and a risk assessment that considers program complexity, past audit findings and any federal oversight concerns.
  • Schedule of Expenditures of Federal Awards (SEFA): Your organization is responsible for preparing a SEFA, a comprehensive list of all federal awards expended during the fiscal year. This schedule must include Assistance Listing Numbers (ALNs), program names, award amounts and pass-through entity details.
  • Reporting Requirements: The final audit package is a comprehensive collection of documents. It must include the auditor’s opinion on the financial statements, a report on compliance and internal controls, the SEFA, a schedule of findings and questioned costs, and a corrective action plan for any identified issues.
  • Submission Requirements: The complete audit package and a Data Collection Form (DCF) must be submitted to the Federal Audit Clearinghouse (FAC) by the specified deadline. Copies must also be provided to any pass-through entities that awarded subrecipient funding.

Common Single Audit Findings

Understanding the most frequent audit findings can help organizations proactively address potential issues before they become compliance problems. These recurring deficiencies often stem from inadequate preparation, poor internal controls or misunderstanding of federal requirements.

Things that successful single audits can prevent, as explained below.

  • Inaccurate or Incomplete SEFA: The SEFA frequently contains errors such as missing federal awards, incorrect Assistance Listing numbers or unreported subawards to other organizations.
  • Late FAC Submission: Missing the Federal Audit Clearinghouse deadline typically results from delayed auditor work, poor project scheduling or inadequate coordination between the entity and its auditor.
  • Weak Internal Controls: Common control deficiencies include insufficient segregation of duties, undocumented financial processes and inadequate review procedures for federal expenditures.
  • Failure to Meet Program Objectives: Auditors often find spending that’s misaligned with stated program goals or evidence of missed performance milestones and deliverables.
  • Cybersecurity Deficiencies: Organizations frequently struggle with weak access controls, unencrypted sensitive data and inadequate information security policies.

Addressing these areas proactively can significantly reduce audit findings and demonstrate strong stewardship of federal funds.

Best Practices for Preparing for a Single Audit 

Effective preparation for a single audit involves year-round organization, clear roles and diligent documentation. Focusing on a few core best practices will help ensure smoother audits and fewer findings.

Best practices for preparing for a single audit, as explained below.

Establish Strong Internal Controls

Strong internal controls are the backbone of audit readiness. Start by creating clear, written policies and procedures that cover tracking, reporting, and compliance. Designate a single audit coordinator who can serve as the central point of contact and keep everyone aligned. To reduce risk, separate key duties among staff so no single person controls an entire process. Finally, build in regular internal compliance checks to identify and resolve potential issues before they become problems.

Understand All Compliance Requirements

A successful audit starts with knowing the rules that apply to you. Stay informed of relevant regulations by reviewing grant agreements and the most recent OMB Compliance Supplement, which explains compliance requirements in detail. Determine your oversight or cognizant federal agency, since they may have specific requirements. 

Maintain Accurate Financial and Program Records

Strong recordkeeping and effective tech is essential for passing an audit. Use separate accounts or fund codes for each grant, and document every expenditure and approval. Reconcile accounts regularly to catch discrepancies early and confirm that costs are allowable, allocable, and reasonable. For staff working on multiple programs, maintain clear time and effort reports so labor costs are properly supported.

Prepare the SEFA Early

Begin work on your SEFA well ahead of deadlines. List all direct and pass-through awards, including correct Assistance Listing numbers, award amounts, clusters and subrecipient details. Reconcile the SEFA with your general ledger and double-check for common errors like missing awards or incorrect numbers to avoid findings.

Use Thompson Grants’ Compliance Alerts

Written by leading experts in auditing, Thompson Grants’ Single Audit Information Service Module is the most extensive and easy-to-use guide of its kind that delivers detailed analyses of every aspect of single audit requirements and procedures, ranging from determining major programs, procuring an auditor, reviewing auditee reports, conducting site visits, and preparing auditor findings.

Wrapping Up

Preparing for a single audit doesn’t have to be overwhelming when you have the right strategies in place. By establishing strong internal controls, understanding compliance requirements, maintaining accurate financial records, preparing your SEFA early and leveraging Thompson Grants’ specialized compliance information, your organization can navigate the audit process with confidence. 

Start by reviewing your current processes to identify areas for improvement, then implement systematic changes that strengthen your compliance framework year-round. Take advantage of available resources, expert guidance and compliance tools to ensure your organization is audit-ready. With proper preparation and the right support, you can transform single audit compliance from a challenge into a demonstration of your organization’s commitment to responsible stewardship of federal funds.

You’ve got federal funds—we’ve got your back. Join the Single Audit Information Service and turn compliance from stressful to second nature. Click to start your trial.

About the Author

Erin Murphy

Erin Murphy, MBA, is the Vice President of Marketing at Thompson Grants, where she leads strategic initiatives to expand the organization’s reach and impact. She leads initiatives that connect grant professionals with expert guidance, training, and tools designed to simplify compliance and strengthen funding strategies. Erin combines her background in marketing with a passion for supporting nonprofits, governments, and institutions as they navigate the complex world of grants management.

by Timika RileyJuly 18, 2023

Unlocking the Secrets of the Uniform Guidance: The Often-Overlooked Allowable Cost for Federal Grants Training

Many nonfederal entities may focus on securing federal financial assistance and executing their grant-funded project. However, an often-overlooked cost principle in the uniform guidance can significantly impact an organization’s success in the grant award lifecycle – using grant funds as an allowable cost for staff training and professional development.

By investing in staff training, entities can improve their compliance with grant regulations, optimize their grant management processes, limit risks, and ultimately increase their chances of success in securing future grant funding. Let’s explore the importance of staff training as recipients aim to progress through the federal grants lifecycle successfully and how nonfederal entities can leverage federal grant funds to invest in their staff to serve the public through their grant-funded projects better.

According to the Subpart E cost principles of the uniform guidance (2 C.F.R. Part 200), the cost item provision for memberships, subscriptions, and personal activity costs at §200.454 states: ”the cost of a nonfederal entity’s subscription to business, professional, and technical periodicals are allowable,” adding that “the cost of training and education provided for employee development is allowable.”

Of course, you should check with your program director, finance officer, or awarding agency to ensure no restrictions in the approved grant budget or the award documents preventing such subscriptions or training. If subscriptions or training are not covered under your approved budget, you may request a budget amendment or check to determine if these costs can be included within your indirect costs pool.

Above all, consider that a better-trained staff can encourage improved award administration and fewer audit findings and/or risks of improper payments, which could threaten access to current or future federal funding for your programs.

In conclusion, this often overlooked provision related to training is pivotal for entities seeking to maximize their success in the grant award lifecycle. By leveraging federal grant funds to invest in staff training, organizations can improve compliance with grant regulations, optimize grant management processes, and enhance their capacity to secure future grant funding. With Thompson Grants, federal grant professionals can benefit from expert training options, including Federal Grants Forums, workshops, eLearning courses, webinars, and custom group training programs. These resources help your team stay compliant and provide valuable continuing education credits, allowing your organization to excel in the competitive world of grant funding. If you’re considering a Thompson Grants subscription or training program, remember that you can charge the cost to a federal grant, making it even more accessible for your organization. Don’t ignore this important provision; it can help you gain training opportunities to propel your organization to new heights in federal grant management.

Additional Resources:

Intro To Indirect Cost Recovery Webinar

The Dos and Don’ts of Cost Allowability

This blog post is not official or legal guidance. Recipients should consult the federal awarding agency regarding whether the Uniform Guidance applies to a particular federal award. Subrecipients should consult with the pass-through entity. Thompson Grants is not a grantmaking organization and does not award grants.

by Timika RileyJuly 12, 2023

Preserving Trust and Accountability: The Importance of Grants Integrity for Every Grants Professional

Integrity is the foundation of any successful organization, especially in grants management. Grants are a critical source of funding for many nonfederal entities, and taking steps to oversee grants administration effectively is essential to ensuring that funds are used correctly, efficiently, and in compliance with all applicable regulations. When applying for a grant or cooperative agreement, nonfederal entities generally know their applications will be judged on recipient risk and the proposal’s merits. Recipient integrity is just as important when awarding agencies evaluate who will receive an award for financial assistance.

In this blog, we will discuss the importance of maintaining grant integrity and the steps that program managers and grant managers can take to ensure they maintain proper program compliance integrity. Readers should be aware that the Office of Management and Budget (OMB) is considering potential revisions to the uniform guidance and other guidance within Title 2 of the Code of Federal Regulations during 2023, which could ultimately affect requirements related to program integrity once this year’s revisions become effective.

Upholding Ethical Standards: The first step in maintaining grant integrity is ensuring that your entity supports ethical standards in all operations. This includes adhering to the highest standards of conduct regarding financial reporting, recordkeeping, and hiring and training personnel. Ethical conduct is essential for maintaining the trust of donors and the public and ensuring that your organization follows all applicable regulations and guidelines.

Complying with Regulations: Grants are subject to a myriad of regulations and policies at the federal, state, and local levels. As a result, program and grant managers must stay current on these regulations and policies and take steps to ensure that their organizations comply with all applicable rules. Failure to comply with regulations can result in losing funding, negative press coverage, and even legal action.

Proper Governance: Organizations like non-profits must have appropriate governance structures to maintain grant integrity. This includes having a board of directors overseeing the organization’s finances, operations, and compliance with regulations. Good governance also requires that entities have a robust system of internal controls in place to prevent fraud, waste, and abuse.

Grant Reporting: Accurate and timely reporting is a crucial component of grants management. Grant managers must ensure that all reporting requirements are met and that all financial and programmatic information is accurate and complete. Failure to meet reporting requirements can result in the loss of funding and can damage an entity’s reputation.

Ongoing Monitoring: Finally, maintaining grant integrity requires constant monitoring of an entity’s operations, finances, and compliance with regulations. This includes conducting regular internal audits and risk assessments and taking corrective action when necessary. By staying vigilant and taking proactive steps to maintain integrity, grant managers can help ensure that their entity uses grant funding for its intended purposes and comply with all applicable regulations.

In conclusion, ensuring grant integrity is crucial for any entity that receives grant funding. Upholding ethical standards, complying with regulations, implementing appropriate governance mechanisms, conducting accurate and timely reporting, and constant monitoring are all vital elements of maintaining grant integrity. To help grant managers maintain compliance and stay aware of the latest grant developments, visit thompsongrants.com to access our resources. Thompson Grants offers valuable tools and information to help organizations manage grants confidently and successfully. Explore our resources now and take your grant management to new heights!

Please note: This blog post is not official or legal guidance. Recipients should consult the federal awarding agency regarding whether the Uniform Guidance applies to a particular federal award. Subrecipients should consult with the pass-through entity. Thompson Grants is not a grantmaking organization and does not award grants.

by Timika RileyJuly 12, 2023

Stay Ahead of the Curve: Top Strategies for Meeting Grant Requirements and Maintaining Compliance in 2023

It is vital for recipients of federal financial assistance to meet regulatory requirements and ensure the effective and efficient use of federal funds for their intended purpose ― to benefit the public. While this can be daunting, non-compliance with the Uniform Guidance can result in costly penalties, such as the revocation or reduction of grant funding, and the potential suspension or debarment from federal funding opportunities in the future, which could damage an organization’s reputation. In this blog, we will explore the importance of successful compliance in managing federal grants and how to achieve it. 

Here are five key steps for successful grant compliance:

  1. Understand the Grant Agreement: Before managing any grant funds, it’s crucial to understand the grant agreement fully. The grant agreement is a legal financial assistance instrument between a federal awarding agency and a nonfederal entity. Before grantees accept award funds, they should carefully review the terms and conditions of the grant, including the reporting and compliance requirements and any potential exceptions under the grant program as allowed by federal statute. Understanding the grant agreement increases the likelihood that grant recipients will comply with the terms and conditions of the award and encourage program success.
  2. Implement a Compliance Plan: Once the grant agreement is understood, grantees should develop an internal compliance plan. A compliance plan, in writing, provides an overview of the grant requirements, the timeline for each requirement, personnel responsibilities, the importance of recordkeeping, how compliance will be monitored, and the potential consequences of an audit finding for noncompliance.
  3. Provide Regular Training: According to an annual grants managers’ survey conducted by REI Systems, NGMA, and George Washington University, grant management training remains a top priority for organizations. All employees involved in grant-funded activities should receive regular training on grant requirements and the organization’s compliance plan. Training should include reviews on overall grant compliance, financial management, procurement, sub-recipient monitoring, and record-keeping; this training is especially critical for new employees. Even highly experienced professionals in the field should regularly attend training to stay current with the ever-changing regulatory environment and to remain compliant.
  4. Maintain Accurate Records: Expenditures of federal funds require grantees to keep comprehensive records for all grant-related activities. Documents must be complete and detailed so the organization can efficiently respond to audits or requests for information from funding agencies. Additionally, accurate recordkeeping increases transparency and accountability in the grantee’s organization between agencies and the public.
  5. Conduct Regular Monitoring and Internal Audits: The Uniform Guidance at §200.501 requires nonfederal entities to have a system of internal controls to ensure compliance with federal regulations and the terms of the grant agreement. Although not required under the Uniform Guidance, internal audits can be a critical part of maintaining a robust internal control system, and organizations should consider conducting such internal reviews regularly to ensure the effectiveness of the control environment. Grantees should review the requirements outlined in the grant agreement and consider the organization’s risk assessment when determining the frequency of internal audits.

Complying with federal grant regulations is of utmost importance to ensure the success of a grant program. By following these five critical components outlined in this blog, grantees can better manage their federal funds and reduce the risk of penalties or serious single audit findings. It is important to remember to continuously plan, communicate effectively, conduct regular training, monitor progress and maintain accurate records throughout the grant’s lifespan. With over four decades of experience, Thompson Grants can assist your team by providing comprehensive and easily understandable compliance guidance. Learn how to manage your federal funding like a pro. Contact Thompson Grants today.

Please note: This blog post is not official or legal guidance. Recipients should consult the federal awarding agency regarding whether the Uniform Guidance applies to a particular federal award. Subrecipients should consult with the pass-through entity. Thompson Grants is not a grantmaking organization and does not award grants.

by Timika RileyJuly 12, 2023

What is 2cfr200? An Overview of Uniform Guidance | Thompson Grants

If you have any federal grant experience, you most likely have heard the term “Uniform Guidance. ” But even some experts need help properly understanding the requirements under the guidance. In December 2014, through the Code of Federal Regulations, the Office of Management and Budget (OMB) implemented “Uniform Administrative Requirements, Cost Principles, And Audit Requirements for Federal Awards “ (2 C.F.R. Part 200). It was created to streamline and simplify the existing federal grant management process and replace and consolidate eight previously separate sets of federal grant guidance into a comprehensive set of rules. This simplification aims to reduce the administrative burden for recipients and improve consistency and transparency in federal grantmaking. By including reforms such as new procurement standards and clarified cost allocation rules, the Uniform Guidance also promotes effective and efficient use of federal grant funds. Finally, the Uniform Guidance also benefits the public at large through efforts to reduce administrative costs and improve efficiency for the grantor and grantee, ultimately enhancing stewardship of taxpayer dollars. Federal agencies have implemented the Uniform Guidance within their regulations in other sections of Title 2. The Uniform Guidance was revised in August 2020, and OMB plans to make more revisions in 2023. stewardship of taxpayer dollars.

This blog will help you understand the importance of guidance, how to keep your organization compliant, and best practices for staying aware of the ever-changing grants landscape and the Uniform Guidance.

To whom does the Uniform Guidance Apply?

The Uniform Guidance applies to entities that receive and administer federal grant funding, including state and local governments, tribal nations, nonprofit organizations, and higher education institutions. Compliance with the guidance is required to receive and maintain federal grant funding. Grant professionals must understand the rules and requirements, including financial management, procurement, and reporting standards, to ensure continued receipt of federal funding, avoid penalties and legal actions, improve risk management, reduce errors, and enhance reputation and credibility. 

Check out this free resource: 2 C.F.R. Frequently Asked Questions: Using OMB’s Vital Companion Resource

What does the Uniform Guidance cover?

The Uniform Guidance covers several areas related to federal grant management, including:

  • Financial management: The Uniform Guidance outlines rules for managing federal grant funds, including how to budget, account for, and report on grant funds.
  • Procurement: The Uniform Guidance establishes requirements for grant recipients purchasing goods and services with federal grant funds.
  • Administrative requirements: The Uniform Guidance outlines various administrative requirements, including documentation and recordkeeping standards.
  • Cost principles: The Uniform Guidance determines the reasonable and allowable costs when using federal grant funds.
  • Audit requirements: The Uniform Guidance outlines the requirements for ensuring compliance with federal grant regulations, including Single Audit requirements.

How can organizations comply with the Uniform Guidance?

Grants professionals can help their organizations stay compliant with the Uniform Guidance by implementing the following:

  1. Familiarizing their staff with 2 C.F.R. Part 200 by conducting regular training sessions. This ensures your staff understands their roles and responsibilities under their guidance.  This reduces the risk of non-compliance, errors, and any legal repercussions. Many grantmaking agencies and third-party organizations offer training sessions on Uniform Guidance.
  2. OMB requires all nonfederal entities and organizations to have written policies. Your entity should implement internal policies and procedures to reflect the latest Uniform Guidance requirements and promote efficient grant management.
  3. Maintaining detailed records can help grantee entities identify potential compliance issues and errors early, enabling them to proactively address them and reduce risks. A focused effort on maintaining records can also enhance communication and coordination between team members responsible for managing grant activities leading to improved collaboration, reduced documentation duplications, increased accountability, and greater efficiency.
  4. Conduct regular internal audits to verify compliance with the Uniform Guidance. This can enable grantee organizations to take necessary corrective actions proactively, reducing the risk of financial mismanagement and non-compliance.
  5. Work with grantmaking agencies, professional organizations, or third-party consultants when providing additional guidance and support on issues related to the Uniform Guidance. Third-party consultants can offer technical assistance, conduct training or assessments, or even provide a one-stop shop for all the organization’s compliance needs.

How to stay updated with the latest changes to the Uniform Guidance?

Staying current with the Uniform Guidance is imperative but a necessary investment for grant professionals. Grants professionals can stay informed of the ever-changing grant landscape by:

  • Attending webinars or conferences lets you hear from federal grant management experts and earn CPE and GPCI CEU credits as needed. Attend sessions that feature guest speakers or presentations on the Uniform Guidance.
  • Joining groups or networks for grant professionals, such as NGMA, can offer a space to share updates, learn from others and ask questions about the Uniform Guidance.
  • Participating in professional development workshops, technical assistance, and compliance training can provide a wealth of resources to inform you on the latest Uniform Guidance.
Unlock the secrets of indirect rate recovery with our on-demand webinar, ‘Indirect Rate Recovery Under the Uniform Guidance.’

In short, the Uniform Guidance is a comprehensive set of standardized guidelines that outlines fiscal management, procurement, and reporting standards. It applies to organizations that receive federal grant funding, and their adherence to these regulations determines their eligibility for additional funding in the future. Understanding and implementing these guidelines is crucial for successfully administering grants and minimizing the risk of penalties or lawsuits. At Thompson Grants, our experts deeply understand these regulations and their impact on federally funded organizations. Learn how we can help your organization maintain compliance with the Uniform Guidance.

Please note: This blog post is not official or legal guidance. Recipients should consult the federal awarding agency regarding whether the Uniform Guidance applies to a particular federal award. Subrecipients should consult with the pass-through entity. Thompson Grants is not a grantmaking organization and does not award grants.

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