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OMB Proposed Rewrite of Uniform Guidance

In September 2023, the federal Office of Management and Budget (OMB) released its proposed rewrite of the Uniform Guidance. The proposed changes would affect all nonprofit organizations receiving federal funding. The proposed changes are intended to reduce the burdens on recipients of federal funds and clarify some areas that currently have multiple interpretations by simplifying the language used.


Uniform Guidance

The Uniform Guidance was established in 2013, in part, to consolidate 8 federal circulars into a single document. It was established to provide guidance on administrative requirements, cost principles, and audit requirements as it relates to the expenditure of federal awards. It was last revised in 2020.


Proposed Changes Affecting Nonprofit Organizations

The proposed changes include a number of positives for the nonprofits that receive federal funding. Among them include:

  • Increasing the equipment threshold from $5,000 to $10,000
  • Increasing the single audit requirement from $750,000 to $1,000,000 of federal funds expended during a year
  • Increasing the indirect de minimus rate from 10% to 15%
  • No longer requiring English to be the language used in applications and reporting

There are also plans to improve the Notice of Funding Opportunities to reduce the application burden for recipients of funding. The rewrite also proposes to remove some of the prohibitions surrounding geographic preference in selecting vendors. Additionally, to ease the application process, a proposal to remove prior approval requirements for a number of costs has been included. Another positive coming from the proposed rewrite is that all entities would have to adopt the indirect de minimus rate, which some pass-through entities currently do not grant to the final recipients of funding.


Proposed Changes Affecting Auditors

Nonprofit auditors will also be affected by some of the proposed changes. The proposal includes an expanded definition of questioned costs and adds requirements for auditors when there are multiple recipients of federal funding included in a single audit. Specific audit requirements pertaining to for-profits, not included in Subpart F, are also being established in the proposal.

Potentially, these proposed changes are very exciting for the nonprofit industry, with the promise of making applying for federal funds, spending, and reporting, less burdensome. Another exciting aspect is that the rewrite includes mechanisms to auto-increase thresholds for inflation.

The implementation date has yet to be determined by the OMB. Its process for receiving comments from industry and affected parties concluded in December 2023, and the OMB will begin the work of sorting through those comments to consider if any changes to the proposed guidance are warranted. Be sure to work with your audit team to stay abreast of these changes as they are implemented and find out how your organization may be specifically affected.


This article was written by Windes Audit & Assurance Services Senior Manager, Alicia Manning.

Alicia Manning

Alicia Manning, CPA
Audit & Assurance Services Senior Manager



For more information or questions about this article, or to find out how Windes can assist, please contact our Nonprofit Team at or 844.4WINDES (844.719.2131).


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