The revisions to Title 2 of the Code of Federal Regulations (CFR) were recently published in Federal Register. USG agencies (including USAID, the State Department and the Centers for Disease Control) must fully implement the new policies by October 1.
Below we’ve outlined a few of the changes that will benefit the USAID partner community the most.
Key Takeaways of the Revised Uniform Guidance
- SAM.gov registration flexibility: A new exception included in the revised Uniform Guidance allows agencies to exempt a foreign entity from full registration in SAM.gov when an award is less than $500,000 and will be performed outside the United States (2 CFR 25.110). SAM.gov registration has been a barrier for many non-U.S. organizations in the past, and the new flexibility is expected to facilitate the Agency’s work with new local partners.
- De minimis rate increase: The revised guidance increases the de minimis rate from 10 percent to 15 percent to allow for greater cost recovery for partners that do not have a negotiated indirect cost rate agreement (NICRA) (2 CFR 200.414). This change will allow USAID partners to achieve a more reasonable, sustainable, and realistic recovery of indirect costs, particularly for new or inexperienced local partners that may not have the capacity to undergo a formal rate negotiation required to obtain a NICRA, but still deserve to be fully compensated for their overhead costs.
- Language accessibility: Under the revised guidance, agencies are explicitly permitted to translate Notices of Funding Opportunities (NOFOs) and award documents into non-English languages and to receive applications, reports, and other award documentation in languages other than English (2 CFR 200.111). Previous language requirements presented challenges for partner organizations without English language capabilities, such as the added cost and time required for translation.
- Allowable closeout costs: In the spirit of ensuring that organizations have fair cost recovery—similar to the de minimis rate change described above—the revised guidance explicitly permits organizations to treat closeout costs incurred after the end of the period of performance as allowable (2 CFR 200.472).
- Increased threshold for fixed amount subawards: The revisions increase the ceiling for fixed amount subawards from $250,000 to $500,000 (2 CFR 200.333). Many organizations begin working on USAID programming through subawards, and fixed amount subawards, in particular, are often utilized for new local partners, as they are simpler both for oversight and for compliance. Increasing the ceiling will allow more impactful work to be carried out through these subawards.
- Simplified assistance solicitations: The revisions introduce a simplified Notice of Funding Opportunity (NOFO) template as well as guidance around using plain language in NOFOs. The goals of the template include reducing complexity and improving partners’ understanding of NOFOs.
- Increased audit threshold: The revision increases the single audit and program audit threshold from $750,000 to $1,000,000 (2 CFR 200.501). This change will ease the administrative burden on all USAID partners, but especially on new or inexperienced partners that may not have the sophisticated financial systems or personnel necessary to support an audit each year.
What’s Next?
These revisions will go into effect on October 1, but USAID may adopt several changes sooner. To begin implementing these exciting changes, there are a number of steps USAID will need to carry out in coordination with OMB, including developing an implementation plan. In addition, the Agency will be working to ensure that its other regulations and policies align with these revisions. For example, USAID will revise 2 CFR 700, its supplemental regulation to 2 CFR 200, its standard provisions (ADS 303 maa, mab, and mat), and other regulations and policies to ensure that OMB’s revisions can be implemented effectively. USAID also plans to host a variety of webinars for its partners to explain what has changed and to raise awareness about how these important changes will impact their work together. STAY TUNED!
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