New Guidance for Organizations Receiving Federal Assistance Effective October 1, 2024

If your organization receives federal assistance, the Office of Management and Budget (OMB) has released updated regulations you need to be aware of. The 2024 updates to the Uniform Guidance, effective October 1, 2024, introduce several important changes to the requirements for single audits. Here are the key points:

1. Increased Audit Threshold: The threshold for requiring a single audit will increase from $750,000 to $1,000,000 in federal expenditures for fiscal years beginning on or after October 1, 2024. This change will be good news for smaller entities that receive federal funds as it reduces the audit burden.
2. Program-Specific Updates: The 2024 revisions include updates to the list of programs designated as higher risk. Programs designated higher risk by the OMB are more likely to be selected as a tested major program during your annual audit. Programs such as Medicaid and the Coronavirus State and Local Fiscal Recovery Funds remain high-risk, while others like the Homeowner Assistance Fund have been removed from this designation.
3. Increased Type A Program Threshold: The threshold for identifying Type A programs, which are subject to more detailed audit procedures, has also increased from $750,000 to $1,000,000. This change aligns with the new audit threshold.
4. Changes to Equipment and Supplies: The capitalization threshold for equipment has been raised from $5,000 to $10,000, and the same increase applies to the threshold for remitting unused supplies.
5. De Minimis Indirect Cost Rate: The de minimis indirect cost rate, which allows entities to recover a portion of their indirect costs, has been increased from 10 percent to 15 percent. This change will benefit entities that do not have a negotiated rate by allowing them to claim a higher rate for administrative costs associated with federal awards. 
6. Cybersecurity and Internal Controls: The guidance now places a greater emphasis on the need for recipients and subrecipients to document internal controls and take reasonable measures to safeguard sensitive information, including personally identifiable information.
7. Fixed Amount Subawards Threshold: The threshold for awarding fixed amount subawards without prior approval has been increased from $250,000 to $500,000.
8. Procurement Changes: Recipients and subrecipients are now required to document support for any conclusion that a micro-purchase is reasonable and does not require solicitation of competitive bids, confirm that subrecipients are not suspended or debarred, and are encouraged to consider veteran-owned businesses for procurement contracts.
9. Costs Principles: Payments for unused leave are to be allocated as general administrative expenses for all activities.

These revisions are part of an effort to modernize and streamline the guidance while reducing administrative burdens on federal fund recipients​. If you need guidance specific to your situation, contact your R&A advisor.