OMB Seems To Have Listened to Stakeholders When Making Revisions
In the hit 1990s TV show “Fraiser,” Dr. Fraiser Crane generally would preface his radio show calls with the line, “Go ahead caller, I’m listening.” In some way, the Office of Management and Budget (OMB) could say something similar looking at some of the changes made in last month’s 2024 revisions to Title 2 of the Code of Federal Regulations, including the uniform guidance (2 C.F.R. Part 200), in response to stakeholder comments to OMB’s Oct. 5 proposed changes to the uniform guidance.
While OMB opted not to change the language in the proposed version in response to every single comment received, there were areas in the final version that were amended to address critical stakeholder concerns. One key area that OMB amended in the final version compared to the proposed version pertained to pension plan costs. OMB revamped the language at §200.431(g)(6)(v) in the final version to now state that “payments for unfunded pension costs must be charged in accordance with the allocation principles of this subpart. Specifically, the recipient or subrecipient may not charge unfunded pension costs directly to a federal award if those unfunded pension costs are not allocable to that award.” OMB provided similar language at §200.431(h)(5) for unfunded post-retirement health plans.
Stakeholders were especially critical of language in the proposed guidance stating that, “in all cases, the payments for unfunded pension costs may not exceed the contribution rate of the employee’s current pension costs,” so OMB removed this sentence and other related proposed language within §§200.431(g)(6)(v) and 200.431(h)(5) (see “Associations Offer Concerns About Proposed Uniform Guidance Revisions,” January 2024). Some associations seeking this change stated that while the revised language is not perfect, they accept that it is better than the proposed version.
Among other changes in the final version in response to stakeholder comments, OMB removed a new definition included in the 2023 proposal for “key personnel,” as well as specific proposed language under the term “personally identifiable information (PII).” In addition, in §200.101, OMB deleted a sentence included in the 2023 proposal that stated that “if a federal agency does not apply subpart E to for-profit organizations, the cost principles of the FAR will apply.”
In subpart C at §200.216, OMB reworded the final version compared to the proposed version for greater clarity, and removed proposed language at §200.216(c) and (d) stating that “a recipient or subrecipient may use covered telecommunications equipment or services for their own purposes (not program activities) provided they are not procured with federal funds. The prohibition on covered telecommunications equipment or services applies to funds generated as program income, indirect cost recoveries, or to satisfy cost share requirements.“ However, it did update §200.216(e) to state that “when the recipient or subrecipient accepts a loan or grant, it is certifying that it will comply with the prohibition on covered telecommunications equipment and services in this section. The recipient or subrecipient is not required to certify that funds will not be expended on covered telecommunications equipment or services beyond the certification provided upon accepting the loan or grant and those provided upon submitting payment requests and financial reports.”
In subpart D at §200.308(c), OMB changed its proposed language in response to stakeholder comments to now state that “when requesting approval for budget revisions, the recipient or subrecipient must use the same format for budget information that was used in their application, except if the federal agency has approved an alternative format. Alternative formats may include the use of electronic systems, email or other agency-approved mechanisms that document the request.” At §200.314, OMB raised the limit in cases where supplies are sold, enabling a recipient or subrecipient to retain $1,000 (up from $500 in the proposal) from the federal share to cover selling and handling expenses (similar to the level for equipment). Also, under the termination provision at §200.340, OMB removed a provision in its October 2023 proposal stating that “a federal agency determination to not award continuation funding does not constitute a termination.”
In Subpart F, to avoid potential confusion and because it deemed it “not essential,” OMB removed language included in its proposed revisions to §200.502(b) stating that, when determining what types of federal awards are expended, “loan and loan guarantees retain their federal character through the end of the federal award period of performance unless otherwise specified in statute or federal agency regulations.” In addition, in the discussion of financial statements in §200.510(b), OMB in the proposed rule planned to add a new §200.510(b)(2) stating that for audits covering multiple recipients (such as departments, agencies, institutions of higher education and other organizational units), recipients must identify the specific recipient receiving the federal award. Due to comments explaining that this requirement would be overly burdensome, OMB removed this proposed change from the final version.
Hopefully, OMB has addressed in the final version of the uniform guidance a significant amount of concerns that were raised to the proposed version. It does appear that like Dr. Fraiser Crane, OMB was listening to stakeholders to make the final product a more practical document. We’ll see where we stand a few months from now when the 2024 revised uniform guidance becomes effective for awards issued on or after Oct. 1, unless federal agencies elect to implement it before then.
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