Uniform Guidance — Federal Grant Administrative Requirements

The Uniform Guidance (2 CFR Part 200) is the single administrative framework governing every organization that receives a federal grant — universities with NIH research funding, nonprofits running Head Start programs, cities building wastewater plants with EPA money, or state agencies administering federal workforce programs. It consolidates what were once separate OMB circulars for universities, governments, and nonprofits into one government-wide regulation covering financial management, allowable cost principles, procurement standards, and the Single Audit requirement. Any organization expending $1,000,000 or more in federal awards in a fiscal year must have an independent single audit submitted to the Federal Audit Clearinghouse.

Current Rule (2026)

What This Rule Does

Every organization that receives a federal grant — a university receiving NIH research funding, a nonprofit administering a Head Start program, a city building a wastewater treatment plant with EPA money, or a state agency running a federal workforce program — operates under a single unified framework of administrative requirements known as the Uniform Guidance. 2 CFR Part 200 consolidates and replaces what was previously a fragmented set of OMB Circulars (A-21 for universities, A-87 for governments, A-110 for nonprofits, A-133 for audits) into one government-wide regulation that applies consistently across all types of non-federal entities and all federal awarding agencies.

The Uniform Guidance does three things. First, it sets administrative requirements — the rules for how recipients must manage federal awards: financial management systems, property management, procurement standards, performance reporting, and record retention. Second, it establishes cost principles — the rules for determining which costs are allowable as charges to federal awards (direct and indirect), how indirect cost rates are negotiated and applied, and which specific cost categories have special rules (executive compensation caps, alcohol, lobbying). Third, it incorporates the Single Audit Act requirements — the mandate that non-federal entities expending $1,000,000 or more in federal awards in a fiscal year must have an annual single audit covering all their federal programs, submitted to the Federal Audit Clearinghouse.

The 2024 revisions (effective October 1, 2024 for new awards) made meaningful updates to indirect cost rate negotiations, procurement requirements, subaward monitoring, and the single audit threshold — reflecting lessons from 15 years of implementation since the original 2014 consolidation.

Key Provisions

Cost Allowability Principles (Subpart E)

• § 200.403 — Allowability factors: a cost is allowable if it is (1) necessary and reasonable for the performance of the award, (2) allocable to the award, (3) consistent with policies and procedures that apply uniformly to both federal and non-federal activities, (4) accorded consistent treatment, (5) determined in accordance with generally accepted accounting principles, (6) not used to meet cost-sharing or matching requirements of any other federal award, and (7) adequately documented
• § 200.404 — Reasonableness: a cost is reasonable if it does not exceed the amount a prudent person would pay under the same circumstances; this is a principles-based standard, not a market survey requirement, but unreasonably high costs (executive salaries, first-class travel) trigger heightened scrutiny
• § 200.405 — Allocability: a cost is allocable if (1) it was incurred solely for the award, (2) it benefits the award and other work on a proportional basis, or (3) it is necessary to the overall operation of the organization and assignable under generally accepted principles
• § 200.413 — Direct costs: any cost specifically identified with a particular award; common direct costs include salaries of researchers working on the project, project supplies, travel for the project, and subcontracts
• § 200.414 — Indirect costs (Facilities & Administration / F&A): costs incurred for common objectives that cannot be readily identified with a specific award; organizations must negotiate an indirect cost rate with their cognizant federal agency (typically the agency providing the largest share of funding); the rate is then applied to a direct cost base to calculate the indirect cost charge; new organizations that have never had a negotiated rate may use the 10% de minimis rate
• § 200.407 — Prior written approval: for certain expenditure categories that carry risk of being questioned (equipment purchases, domestic travel over 180 days, subcontracting, changes in key personnel, budget revisions over 10%), recipients may seek written prior approval from the awarding agency to protect against disallowance

Post-Award Requirements (Subpart D)

• § 200.302 — Financial management: recipients must maintain a financial management system that provides accurate, current, and complete disclosure of all financial results; accounts receivable and payable must be tracked; award expenditures must be compared against budget; cash balances must be minimized
• § 200.303 — Internal controls: organizations must establish and maintain effective internal control over their federal awards, consistent with the "Green Book" (Standards for Internal Control in the Federal Government) or the COSO framework; documented policies and procedures for authorization, approvals, and expenditure verification are required
• § 200.308 — Budget and program plan revisions: recipients must obtain prior approval from the federal awarding agency (or pass-through entity) before making certain changes — reallocating more than 10% of the total award between budget categories, changing key personnel or scope, acquiring equipment not in the budget, or changing cost-sharing commitments
• § 200.313 — Equipment: equipment purchased with federal funds is owned by the recipient but subject to federal conditions; must be used for the awarded purpose during the award period and for other federal programs afterward; if equipment with a current fair market value over $5,000 is no longer needed for federal programs, the recipient must contact the federal agency for disposition instructions
• § 200.317–200.327 — Procurement: recipients must use competitive procurement methods; must maintain written procurement procedures; small purchases (under $10,000 simplified acquisition threshold for micro-purchases; under $250,000 for simplified acquisitions) have streamlined requirements; contracts over $250,000 require full competitive bidding; recipients must not award contracts to debarred or suspended parties
• § 200.329 — Subrecipient monitoring: pass-through entities (organizations that receive federal funds and award subawards to subrecipients) must monitor subrecipient performance; conduct risk assessments before making subawards; verify that subrecipients have audits when required; take corrective action when subrecipient compliance issues are found

Audit Requirements (Subpart F — Single Audit)

• § 200.501 — Organizations that expend $1,000,000 or more in federal awards in a fiscal year must have a single audit for that year; the audit must cover all federal award activity, not just one agency's grants; organizations with multiple smaller programs may qualify for a program-specific audit instead
• § 200.508 — Auditee responsibilities: the audited organization must arrange and pay for the audit, prepare its own financial statements, prepare the Schedule of Expenditures of Federal Awards (SEFA), follow up on prior audit findings, and submit the audit package to the Federal Audit Clearinghouse within 30 days of receiving the audit report (but no later than nine months after year-end)
• § 200.511 — Audit findings follow-up: the auditee must prepare a corrective action plan addressing every finding; federal agencies review the CAP and may withhold future payments, impose special conditions, or suspend awards if corrective action is inadequate

How It Affects You

Statutory Authority

This rule implements:

• 31 U.S.C. §§ 7501–7507 (Single Audit Act Amendments of 1996) — Core audit requirements for non-federal entities receiving federal awards
• 31 U.S.C. § 503 — OMB authority to establish government-wide management policies for federal financial assistance programs

Agency-Specific Implementation — DOD Grant Financial Management (2 CFR Part 1128)

The Department of Defense supplements the government-wide Uniform Guidance with agency-specific grant award terms at 2 CFR Part 1128 — Recipient Financial and Program Management: General Award Terms and Conditions. Part 1128 implements the OMB guidance from 2 CFR Part 200 (Subparts E and F, plus §§ 200.302–200.309 and 200.328) for recipients of DoD grants and cooperative agreements, organizing compliance obligations into seven "Financial Management System (FMS) Articles" that become standard award clauses:

• Subpart A — FMS Article I: Financial Management System Standards (2 sections): recipients must maintain financial management systems that meet OMB standards — accurate, current, and complete financial reporting; effective internal controls; comparison of expenditures against budget by award; accounting for unobligated balances; identification of all federal awards by agency, program, and CFDA number; the system must link financial and performance data so that both can be reported to DoD simultaneously
• Subpart B — FMS Article II: Payments (5 sections): DoD prefers reimbursement over advance payments; advance payments are permitted only when recipients cannot meet project needs without them and the recipient demonstrates adequate financial controls; cash advances must be held in insured bank accounts and drawn only as needed; recipients must return interest earned on federal advances above $500 per year
• Subpart C — FMS Article III: Allowable Costs (6 sections): cost principles from 2 CFR Part 200 Subpart E apply — costs must be necessary, reasonable, allocable to the award, and comply with federal regulations; the period of availability means costs may only be incurred during the performance period (and up to 90 days post-period for closeout costs); equipment and supplies purchased with DoD awards must be inventoried and used for authorized purposes only
• Subpart D — FMS Article IV: Budget and Program Revisions (7 sections): recipients may transfer funds among budget categories (direct cost categories) without prior approval if the reallocation does not change the project's scope or objectives and does not exceed the lesser of 10% of the total award or $250,000; reallocations above those thresholds, changes in scope, and key personnel changes require written DoD approval before they take effect
• Subpart E — FMS Article V: Non-Federal Audits (2 sections): recipients expending $1,000,000 or more in federal awards in a fiscal year must obtain a Single Audit under 2 CFR Part 200 Subpart F; DoD awards count toward the $1M threshold; audit costs are allowable as indirect costs
• Subpart F — FMS Article VI: Cost Sharing or Matching (8 sections): if the award includes a cost-sharing or matching requirement, the recipient must maintain records verifying the match; non-federal contributions must be verifiable from the recipient's records, not already claimed for other federal awards, necessary and reasonable for the project, and incurred during the performance period; unmet cost-sharing is a noncompliance finding
• Subpart G — FMS Article VII: Program Income (6 sections): if an award activity generates income (fees, proceeds from sales of award-funded materials, royalties), the income must be used consistent with the deduction, addition, or cost-sharing method specified in the award; the default under DoD awards is the addition method — program income is added to the award funds and must be used for the same allowable purposes

Part 1128 does not replace 2 CFR Part 200 — it operationalizes it by translating OMB standards into standardized contract language that flows through every DoD grant and cooperative agreement. Recipients should read their award terms with Part 1128 in hand; the FMS Articles are typically incorporated by reference rather than reprinted in each award document.

Agency-Specific Implementation — DOD Grant Property Administration and Subaward Requirements

Two additional DOD supplement Parts extend the framework beyond financial management:

2 CFR Part 1130 — Property Administration: General Award Terms and Conditions (30 sections, "PROP Articles" I–VI): governs how DoD grant recipients must handle equipment, supplies, real property, federally owned property, and intangible property (including IP and data rights). The six PROP Articles translate the OMB property standards from 2 CFR §§200.310–200.316 into standardized award clauses:

• PROP Article I (§§1130.100–1130.125) — Title to Property: title to equipment and supplies acquired with DoD grant funds vests in the recipient immediately at acquisition — but the recipient holds the property in trust for the federal government (§1130.110) for the period of the award and as long as it is used for award purposes; when the recipient no longer needs the property for the original purpose, it must request disposition instructions; federally owned property loaned to recipients (Government Furnished Equipment) carries a different rule — title stays with the U.S. Government and the recipient must return it at award close
• PROP Article II (§§1130.200–1130.215) — Property Management System: recipients must carry insurance on real property and equipment acquired with DoD funds (§1130.205); states follow their own property standards; universities, nonprofits, local governments, and tribes must follow OMB's property management standards; property records must include description, identification number, source of funding, acquisition date, cost, location, and disposition
• PROP Article III (§§1130.300–1130.310) — Real Property Use and Disposition: award-funded real property must be used for the authorized purpose for the life of the property; if a recipient wants to sell or repurpose the property, it must first obtain DoD approval and may be required to pay back a federal share proportional to the fair market value
• PROP Article IV (§§1130.400–1130.410) — Equipment and Supplies: equipment costing $10,000 or more must be inventoried annually (matching physical count to records); equipment no longer needed for the award purpose can be used on other federal awards, sold (with proceeds above $10,000 split proportionally with DoD), or transferred to DoD; supplies with aggregate remaining value exceeding $5,000 at closeout require disposition instructions
• PROP Article VI (§§1130.500–1130.525) — Intangible Property: data, software, patents, and copyrights created under DoD awards are subject to data rights provisions that differ from those in commercial contracts; DoD retains a royalty-free license to use, reproduce, and disclose all data first produced under an award; technology transfer and licensing arrangements require DoD approval for the recipient's retained rights to survive the award period

2 CFR Part 1138 — Subawards: General Award Terms and Conditions (35 sections, "SUB Articles" I–XII): the companion framework governing how prime recipients manage subawards — the flow of DoD grant money to universities, smaller nonprofits, or community organizations working as subrecipients. The SUB Articles implement the subaward-specific provisions of OMB Uniform Guidance (2 CFR Part 200 Subparts A–F and Parts 25, 170, 180):

• SUB Article I (§§1138.100–1138.105) — Subaward vs. Procurement Distinction: requires prime recipients to determine, for every lower-tier transaction, whether it is a subaward (the subrecipient carries out a substantive portion of the program activities) or a procurement contract (the contractor provides goods or services for the recipient's use); the distinction determines which compliance requirements flow down — subaward recipients get the full 2 CFR Part 200 treatment; contractors get only the specific clauses required by federal acquisition and grants law
• SUB Article II (§§1138.200–1138.205) — Pre-Award Risk Assessment: before making a subaward, prime recipients must: verify the subrecipient's UEI in SAM.gov (no award to excluded entities); conduct a risk assessment of the subrecipient's financial management capacity, compliance history, and ability to perform the program activities; document the risk assessment in their records
• SUB Article X (§§1138.1000–1138.1005) — Subrecipient Monitoring: once a subaward is made, prime recipients must monitor subrecipient performance and compliance; monitoring must include reviewing subrecipient financial and progress reports, following up on audit findings, and conducting site visits when risk warrants them; the prime recipient cannot delegate its monitoring obligation to the subrecipient and is financially responsible to DoD for subrecipient misuse of funds
• SUB Article XI (§§1138.1100–1138.1105) — Lower-Tier Subawards: prime recipients who believe their subrecipients may in turn make further-tier subawards must include in the subaward agreement the same SUB Article requirements — so that the compliance chain extends to all levels of the federal funding hierarchy, not just the first subrecipient tier
• SUB Article XII (§§1138.1200–1138.1205) — Fixed-Amount Subawards: prime recipients may make fixed-price subawards (where payment is tied to deliverables rather than actual costs) only when DoD approves the arrangement; fixed-amount subawards have different audit exposure — subrecipients do not need to track expenditures by line item but must document that deliverables were completed

The DOD grant award terms framework (Parts 1120, 1128, 1130, 1134, 1136, and 1138) together constitute a comprehensive body of standardized contract language that flows automatically into every DoD grant and cooperative agreement. Researchers and organizations receiving DoD funding — particularly defense research universities, defense contractor R&D performers, and small business innovation research (SBIR/STTR) awardees — should treat these regulations as the practical rulebook for their award terms, alongside their agency-specific grant agreements.

Agency-Specific Implementations — DOL and DOI

2 CFR Part 2900 — Department of Labor Uniform Administrative Requirements (22 sections supplementing 2 CFR Part 200 for all DOL discretionary grants, including workforce development, occupational safety, and labor statistics grants):

• § 2900.1 — Budget approval not authorization to spend: DOL clarifies that approving an awarded budget does not automatically mean the recipient may begin all activities — recipients must confirm that specific activities may begin under the award terms before spending on them; this provision addresses a common misunderstanding where grantees treat the Notice of Award as blanket permission to spend
• § 2900.10 — Prior written approval requirements: if a DOL award requires agency permission for changes, the recipient must request approval in writing through DOL's grants management system; verbal approvals are not sufficient; this applies to budget modifications, scope changes, and key personnel changes
• § 2900.11 — No-cost extensions: recipients seeking additional time to complete DOL award activities must submit a written request at least 30 days before the award end date; requests must explain why the extension is needed and what work remains; the Grant Officer decides whether to grant the extension
• § 2900.12 — Prior approval for budget/program changes: recipients must obtain written DOL approval before changing the budget or program plan if the change affects the nature, scope, or objectives of the project — even if the reallocation stays within the 10% threshold that would otherwise not require approval under standard 2 CFR Part 200 rules (§ 200.308); DOL's restriction is stricter than the government-wide default
• § 2900.13 — Intellectual property rights: work produced with DOL discretionary grant funding is subject to DOL's IP rights provisions; recipients may retain copyright in works first produced under the award, but must grant DOL a royalty-free, worldwide, nonexclusive license to use, reproduce, publish, and distribute the work; DOL retains the right to make works publicly available without restriction

2 CFR Part 1402 — Department of the Interior Financial Assistance Interior Regulation (19 sections supplementing 2 CFR Part 200 for DOI grants, including fish and wildlife, natural resources, Indian affairs, and land management programs):

• § 1402.100 — OMB Uniform Guidance adoption: DOI adopts 2 CFR Part 200 as its own rules; any DOI bureau or office policy that appears in a Notice of Funding Opportunity also becomes binding on recipients (§ 1402.103)
• § 1402.102 — Indian Self-Determination and Education Assistance Act (ISDEAA) exception: grants and contracts made under ISDEAA (25 U.S.C. §§ 450 et seq.) are governed by 25 CFR Parts 900 and 1000 and 2 CFR Part 200, not by standard DOI grant rules; ISDEAA grants to tribal nations, which fund tribes to self-administer federal Indian programs, occupy a separate legal regime reflecting tribal sovereignty — tribal grantees retain more autonomy and fewer federal oversight requirements than standard nonprofit or state recipients
• § 1402.112 — Conflict of interest: DOI requires that non-federal entities include full conflict-of-interest policies in their Notices of Funding Opportunity and awards; conflicts must be disclosed and managed; this provision is stricter than the government-wide standard because DOI manages sensitive land and resource decisions where contractor and grantee conflicts have historically created problems

Recent Rulemakings

• 89 FR 30136 (April 2024) — Comprehensive update effective October 1, 2024: increased the single audit threshold from $750,000 to $1,000,000; raised micro-purchase threshold to $10,000 and simplified acquisition threshold to $250,000; updated indirect cost rate provisions; strengthened subrecipient monitoring requirements; updated record retention from 3 years post-closeout (unchanged) but clarified scope; added cybersecurity reporting requirements for certain programs
• 89 FR 79732 (October 2024) — Companion update addressing implementation questions raised after the April rule; technical corrections and clarifications
• 79 FR 75871 (December 2014) — Original Uniform Guidance rule consolidating OMB Circulars A-21, A-87, A-102, A-110, A-122, and A-133; the landmark consolidation that created Part 200 as it is known today

SAM.gov and the Unique Entity Identifier (UEI)

2 CFR Part 25 — Unique Entity Identifier and System for Award Management: OMB rules requiring federal agencies and recipients to use the Unique Entity Identifier (UEI) and the System for Award Management (SAM.gov) as the standard identifiers and registration system for all federal financial assistance (implements 31 U.S.C. §§ 503, 6101–6102, 6307; 41 U.S.C. § 2313):

• § 25.100 — Purpose: federal agencies must use the UEI as the single identifier for any entity that applies for or receives federal financial assistance; the UEI replaced the DUNS number (issued by Dun & Bradstreet) as of April 2022 — SAM.gov now issues UEIs directly at no cost
• § 25.105 — Applicability: applies to all federal financial assistance programs and all applicants, recipients, and subrecipients unless an exception is granted; covers grants, cooperative agreements, and other financial assistance instruments; does not cover procurement contracts (which have a separate vendor registration process in SAM.gov)
• § 25.110 — Exceptions: agencies may grant exceptions from the UEI or SAM.gov registration requirement in limited circumstances — including: individuals receiving awards (personal fellowships, scholarships); classified or sensitive programs where public registration creates security risk; emergency situations where immediate action is needed and registration cannot be completed in time; exceptions must be documented and justified
• § 25.200 — Notice in funding opportunities: federal agencies must include the UEI and SAM.gov registration requirements in every funding opportunity announcement, regulation, and application instruction issued; applicants who do not have a valid UEI and active SAM.gov registration before the application deadline cannot receive a competitive award
• § 25.205 — Noncompliance consequences: federal agencies may not make a new federal financial assistance award to an entity that does not have a valid UEI and an active, current SAM.gov registration; agencies may not increase funding on existing awards to non-registered entities; this prohibition applies at the point of award — organizations that have lapsed SAM.gov registrations during a grant period must re-register before receiving additional payments
• § 25.300 — Subrecipient UEI requirement: recipients who make subawards must obtain the subrecipient's UEI before making the subaward; recipients cannot flow federal funds to a subrecipient who cannot provide a UEI; this means the UEI requirement flows through the full recipient/subrecipient chain, not just the prime award level

SAM.gov registration must be actively maintained — registrations expire annually and must be renewed to remain active. An expired SAM.gov registration is one of the most common compliance problems for nonprofit and university grant recipients: a registration that lapses mid-award does not cancel the award, but can delay reimbursement payments and may create technical noncompliance findings during audits. Large research universities and nonprofit organizations typically assign SAM.gov maintenance to their sponsored programs or grants administration offices and set renewal reminders well before the annual expiration date. For new organizations applying for federal funding for the first time, completing SAM.gov registration — including the UEI issuance process and the full entity information requirements — can take days to weeks and should begin well before any grant application deadline.

Recent Developments

• 2024 Uniform Guidance revision (effective October 1, 2024): OMB published significant updates to 2 CFR Part 200 effective for new federal awards made on or after October 1, 2024. Key changes include: the single audit threshold increased from $750,000 to $1,000,000 in federal expenditures; updated indirect cost rate negotiation provisions; clearer subaward monitoring requirements; revised procurement standards; and language addressing equity and environmental justice considerations in grant administration. Organizations with existing awards should consult with their federal program officers about whether and when updated terms apply.
• Federal grant freeze attempts (2025): The Trump administration's Office of Management and Budget issued a memorandum in late January 2025 directing a broad pause on federal grant and loan disbursements, creating widespread alarm among nonprofits, universities, state agencies, and local governments. Courts issued injunctions against the freeze within days. The episode highlighted the tension between executive spending authority and Congress's appropriation power, and raised significant questions about the scope of executive discretion to withhold already-appropriated grant funds.
• DEI grant condition restrictions (2025): The Trump administration issued executive orders directing federal agencies to remove diversity, equity, and inclusion-related requirements from grant terms and conditions, and to terminate grants that the administration characterized as promoting DEI. Several universities and research institutions faced funding termination threats or actual terminations. These actions generated widespread litigation contesting whether the grant terminations complied with Uniform Guidance's procedures for termination and the Administrative Procedure Act.
• DOGE and grant program reviews: The Department of Government Efficiency's reviews of federal programs affected multiple grant programs subject to the Uniform Guidance, including reviews of EPA environmental justice grants, USAID foreign assistance grants, and NIH research grants. Organizations that received grants subject to these reviews faced uncertainty about payment processing, performance period extensions, and program continuation.

Pending Action

The 2024 revision to 2 CFR Part 200 (effective October 1, 2024) is the major recent change; federal awarding agencies are still updating their award terms, internal procedures, and recipient training to implement the revised standard. Watch for agency-specific supplements to the Uniform Guidance in each agency's CFR chapters — agencies publish their own implementing regulations that add requirements beyond the OMB standard. The litigation over Trump administration grant terminations and DEI conditions is proceeding in federal district courts; the outcomes will affect the legal landscape for grant termination procedures and whether program-specific conditions can override Uniform Guidance termination procedures. OMB may issue additional administrative guidance on the grant freeze litigation outcomes.