Sneak Preview: HHS To Implement 2 C.F.R. Part 200 in Dual Phases

(The following is excerpted from a recent Thompson Grants Compliance Expert article.) The Department of Health and Human Services (HHS) recently issued an interim final rule stating that the agency and its various subagencies will forgo the current separate codification of its financial assistance regulations and, instead, will adopt the Office of Management and Budget’s (OMB) 2024 revisions to the uniform guidance (2 C.F.R. Part 200) as part of a dual-phased implementation. The agency will also reduce the current amount of HHS-specific exceptions within its regulations and codify them at 2 C.F.R. Part 300.

HHS is the largest federal grantmaking agency. Under the interim rule, which impacts many programs and requirements under Titles 42 and 45 of the Code of Federal Regulations, HHS will implement the majority of provisions in the uniform guidance, along with the HHS-specific modifications at 2 C.F.R. Part 300, on Oct. 1, 2025, to give its agencies and recipients time to prepare to fully implement these revisions. However, certain thresholds and other key administrative revisions in the 2024 uniform guidance became effective for its awards issued on or after Oct. 1.

The key provisions, which took effect Oct. 1, 2024, are the:

• increased exclusion threshold of subawards from $25,000 to $50,000 for modified total direct cost calculations (§200.1, definition of modified total direct cost (MTDC));
• increased threshold for equipment from $5,000 to $10,000, and clarification that Indian tribes may use their own procedures for equipment disposition (§200.313(e));
• increased threshold for supplies from $5,000 to $10,000 (§200.314(a));
• increased amount of fixed amount subawards that a recipient may provide with agency prior written approval to $500,000 (§200.333);
• increased indirect cost de minimis rate from 10% to up to 15% (§200.414); and
• increased single audit threshold from $750,000 to $1 million (§200.501).

HHS had already adopted the increased micro-purchase threshold of $50,000 (§200.320) and the allowance of 120 days after the period of performance for submission of all final reports related to award closeout (§200.344).

(The full version of this story has now been made available to all for a limited time here.)

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Federal Grants Forum: Navigating the 2024 Uniform Guidance Changes | Oct. 29-30, 2024 | Virtual Event
Thompson Grants Workshop: Subrecipient Monitoring |Nov. 13, 2024 | Virtual Event