Sponsored Projects Accounting

The updated Uniform Guidance is effective October 1, 2024 for all new awards and all existing awards that receive additional funding. New rules apply prospectively and not retrospectively. While many of the provisions are currently active as of October 1, 2024, others will not impact budgeting and post-award activities at Pitt until further notice.

What is Uniform Guidance?

Title 2 of the Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is also known as the Uniform Guidance (UG). UG is essentially a set of regulations that determines how the federal government broadly administers funding it provides for sponsored projects. Different federal agencies may have more specific rules or policies for how these regulations are implemented, but ultimately their procedures and policies are based in the UG.

UG was established by the Office of Management and Budget (OMB) to provide a set of consolidated, streamlined guidance that superseded requirements from previously separate OMB Circulars that provide a government-wide (not individual agency-specific) framework for managing Federal financial assistance (e.g., grants and cooperative agreements). The overarching goal of the UG is to improve program performance, reduce administrative burden on award recipients, and mitigate the risk of the inappropriate use of Federal funds.

Why is it being updated now?

Reasons for updating the UG at this time include: (1) to incorporate statutory requirements and federal administration priorities, (2) to reduce federal agency and recipient burden, (3) to clarify ambiguous sections that recipients or agencies have interpreted in different ways, and (4) to rewrite applicable sections in plain language, improve flow, and address the inconsistent use of terms.

Equipment/Supplies

What is the change to capital equipment threshold?
Equipment threshold definition (Subpart A) has changed from $5,000 to $10,000. This means items under $10,000 may be considered supplies and be included in the MTDC base per the updated UG.

When should I start using the new equipment threshold for sponsored project budgets?
The short answer is, not yet. Until the University’s DHHS rate agreement is renegotiated, and applicable University policy is updated accordingly, this change will not affect budgeting for new proposals or existing/new awards. We anticipate this change occurring with the commencement of FY27. A University-wide notice will be issued when this change is implemented per our DHHS rate agreement and you can begin using the $10,000 equipment threshold as part of your sponsored project budgeting.

Subawards

What is the change to subaward threshold for budgeting?
The amount per subaward that can receive indirect costs in the pass-through entity’s budget per the updated UG has changed from $25,000 to $50,000.

When should I start using the new subaward threshold for sponsored project budgets?
The short answer is, not yet. This change will be effective when the University’s next rate agreement is negotiated, and we anticipate this change occurring with the commencement of FY27. A University-wide notice will be issued to start using this new threshold in budgeting.

What changes affect subawards now?
All outgoing subawards on new awards starting 10/1/24 and on existing awards that receive additional funding starting 10/1/24 must be amended to include the new UG references from the prime award. New awards with subawards contemplated under them should also be carefully assessed to ensure that all applicable terms and conditions, including updated UG, are flowed down. The de minimis rate has also increased from 10% to 15%; the higher rate may be used now on proposals. The Office of Sponsored Programs has also issued an updated Statement of Intent template that should be used now which includes an updated certification statement.

What about fixed amount subawards?
Fixed amount subawards may now be issued for up to $500,000 (increased from $250,000).

Cost Share

What’s going on with cost sharing?
The 10/1/24 update affirms that voluntary committed cost share cannot be included in proposal budgets unless the NOFO specifically allows it. Voluntary committed cost share can only be offered if authorized by the awarding agency. Carefully review each NOFO to see how cost share should be treated for a particular program or proposal.

Prior Approvals

How are prior approvals changing under the new UG?
Prior approval is now required for changes in key personnel (employees and contractors) listed by name or position in an award notice. Reminder: all prior approvals must be in writing – VERBAL APPROVALS ARE NO LONGER ACCEPTABLE!

The updated UG also removes nine different prior approval requirements. The most impactful on the University community is the removal of prior approval to include administrative and clerical effort on proposal budgets. This change does not remove any of the requirements for admin/clerical allowability (must be integral to the project, specifically identified with the project, and not also recovered as indirect costs).

The nine prior approval requirements that have been deleted in the updated UG are related to the use of Fixed Amount Awards, real property encumbrance, equipment encumbrance, direct administrative staff, entertainment costs, memberships, participant costs, selling and marketing costs, and taxes. These changes may impact you depending on your situation.