2024 Uniform Guidance Changes: What Nonprofit Finance Firms Need to Know

The short version

The uniform guidance 2024 changes are OMB's revision of 2 CFR Part 200, published April 22, 2024 (89 FR 30046) and effective October 1, 2024. For nonprofits, the numbers that matter most:

• Single Audit threshold: $750,000 to $1,000,000 in federal awards expended, for fiscal years starting on or after October 1, 2024.
• De minimis indirect cost rate: 10 percent to up to 15 percent of modified total direct costs (MTDC).
• Equipment threshold: $5,000 to $10,000 per unit, or the organization's lower capitalization level.
• Residual unused supplies threshold: $5,000 to $10,000 in aggregate value.
• Subaward amount included in MTDC: first $25,000 to first $50,000 of each subaward.
• Fixed amount subawards: up to $500,000 with prior written approval from the federal agency, double the prior threshold.

Federal agencies could apply the revision to awards issued earlier, but were not required to, and not before June 21, 2024.

When the Uniform Guidance 2024 changes apply

There are two clocks, and mixing them up is the most common error.

1. Award terms follow the award. The Federal Register notice sets the effective date at October 1, 2024 and says agencies may elect to apply the final guidance to awards issued before then, but are not required to. Our interpretation: a nonprofit with older and newer awards may be running two rule sets at once; the award document tells you which applies.
2. The Single Audit threshold follows the fiscal year. The Federal Audit Clearinghouse states the test as $750,000 or more for fiscal years starting before October 1, 2024, and $1,000,000 or more for fiscal years starting on or after that date.

Indirect cost rates have their own rule. Under 2 CFR 200.110(b), existing negotiated indirect cost rates remain in place until they expire, and the revisions take effect for rates when the rate is renegotiated.

Single Audit threshold: $1,000,000

The rule. Under 2 CFR 200.501(a), a non-federal entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit. Below that, it is exempt from federal audit requirements for that year, with limited exceptions, but its records must still be available to the federal agency, the pass-through entity, and GAO (200.501(e)). Awards expended as a recipient or a subrecipient count; payments received as a contractor do not (200.501(g)).

What it means for the books. For a calendar year organization, 2025 is the first year at $1,000,000; for a June 30 year end, the year that began July 1, 2025. Organizations spending between $750,000 and $1,000,000 may drop out of Single Audit scope, but not out of grant compliance.

The advisory conversation. For an organization that falls out of scope, the useful question is what replaces the audit as its control check: a reliable schedule of federal expenditures, documented allowability reviews, and readiness for monitoring by the funder or pass-through. For one approaching $1,000,000, the conversation is audit readiness. Our Single Audit threshold guide walks through year end timing in detail.

De minimis indirect cost rate: up to 15%

The rule. Under 2 CFR 200.414(f), recipients and subrecipients without a current federal negotiated indirect cost rate (including a provisional rate) may elect a de minimis rate of up to 15 percent of MTDC. The organization may choose the rate up to that limit. Federal agencies and pass-through entities may not require a lower rate unless a federal statute or regulation requires it. No documentation is required to justify it, it may be used indefinitely, and once elected it must be used for all federal awards until the organization negotiates a rate. It cannot be applied to cost reimbursement contracts issued directly by the federal government under the FAR. OMB said the increase from 10 percent allows more realistic indirect cost recovery, particularly for organizations without capacity for a formal rate negotiation.

What it means for the books. Costs must be charged consistently as either direct or indirect, never both. That makes the chart of accounts and cost allocation policy the real work: a nonprofit that charges some administrative salaries directly to one award and indirectly to another has a problem regardless of the rate. Also note that 200.211(b)(16) requires each federal award to state its indirect cost rate, including whether the de minimis rate is charged.

The advisory conversation. Three questions are worth asking: Is the organization still budgeting at 10 percent out of habit? Is it using the de minimis rate on newer awards while older awards carry earlier terms? And at its current size, would a negotiated rate recover more than 15 percent? Test that with numbers before suggesting it.

Equipment threshold: $10,000

The rule. Equipment is now tangible personal property, including information technology systems, with a useful life of more than one year and a per-unit acquisition cost at or above the lesser of the organization's capitalization level for financial statements or $10,000 (2 CFR 200.1). OMB described this as an increase from $5,000.

What it means for the books. The federal threshold is a ceiling, not a replacement for the organization's own policy. A nonprofit with a $5,000 capitalization policy still treats a $7,000 item as equipment for federal purposes, because the lesser amount controls. Equipment carries the property management requirements in 200.313(d): records that include the funding source and FAIN, a physical inventory reconciled at least once every two years, and loss controls. At disposition, items with a current fair market value of $10,000 or less per unit may be retained, sold, or otherwise disposed of with no further responsibility to the agency (200.313(e)(1)).

The advisory conversation. Ask whether the board ever revisited the capitalization policy. Whether to raise it is a judgment call with financial statement and audit implications, and it belongs with the organization's auditor. Also review how equipment is budgeted: equipment is excluded from MTDC, so classification affects indirect cost recovery.

Supplies and computing devices

The rule. A supply is any tangible personal property that is not equipment. A computing device is a supply if its acquisition cost is below the lesser of the capitalization level or $10,000, regardless of useful life (2 CFR 200.1). Under 200.314(a), when unused supplies exceed $10,000 in aggregate value at the end of the period of performance and are not needed for another federal award, the organization may retain or sell them, and the federal agency or pass-through entity is entitled to compensation for its share. The aggregate counts all supply types, not just like items. OMB raised this threshold from $5,000.

What it means for the books. Laptops and similar devices under the threshold are supplies, and supplies are included in MTDC. For year end and closeout, someone should be able to state the value of unopened, unused supplies on each award.

The advisory conversation. Closeout is a natural point to offer a supplies and equipment review, since a recipient must submit all final reports within 120 calendar days after the period of performance ends, and a subrecipient within 90 (2 CFR 200.344(b)).

Subawards in MTDC: first $50,000

The rule. MTDC includes direct salaries and wages, fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward, regardless of the subaward's period of performance. It excludes equipment, capital expenditures, patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward above $50,000 (2 CFR 200.1). OMB described this as an increase from $25,000, and stated that the $50,000 applies once per subaward, not per year.

What it means for the books. A pass-through nonprofit needs to track cumulative charges by subaward so the indirect base stops at $50,000 for each one. Our interpretation: a spreadsheet that resets annually will overstate the base on multi-year subawards.

The advisory conversation. For organizations that pass funds to partners, recomputing the indirect base is a concrete, bounded engagement.

Fixed amount subawards: up to $500,000

The rule. With prior written approval from the federal agency, a recipient may provide subawards based on fixed amounts up to $500,000 (2 CFR 200.333). OMB said it doubled the prior threshold. Under 200.201(b), fixed amount awards are negotiated using the cost principles as a guide, accountability is based on performance and results, and no financial reporting is required, though record retention and audit access still apply. They may not be used in programs that require cost sharing, and at the end the recipient or subrecipient must certify in writing that the project was completed as agreed or identify what was not.

What it means for the books. The subrecipient's accounting shifts from documenting each cost to documenting milestones and deliverables; incomplete activities reduce the award amount.

The advisory conversation. A larger cap makes fixed amount subawards practical for more partnerships, and firms advising either side can help price milestones and track deliverables.

Other notable changes

• Pass-through entities must accept all federally negotiated indirect cost rates for subrecipients (200.414(d)), and must evaluate each subrecipient's fraud risk as well as its risk of noncompliance (200.332(c)).
• Federal agencies and pass-through entities must collect financial reports at least annually and not more often than quarterly unless a specific condition applies (200.328(b)).
• Micro-purchases made without competitive quotes still require documentation supporting the decision (200.320(a)(1)(ii)).

What finance firms should do now

1. Inventory each client's federal awards by award date and note which carry the 2024 terms.
2. Confirm fiscal year start dates to place each organization on the right Single Audit threshold.
3. Compare the capitalization policy to the $10,000 federal ceiling.
4. Recheck indirect cost budgets: the de minimis rate elected, consistency of direct and indirect charging, and the $50,000 subaward base.
5. Build a closeout checklist that covers unused supplies and equipment records.

Keep the evidence honest when you raise these with a prospect.

• VerifiedWhat a filing or award states, such as a fiscal year in a Form 990 or an award date in federal award data.
• InferredA reasonable reading, such as "a new multi-year award likely carries the 2024 terms."
• UnknownThe organization's current policies, rates, and advisers.

Ask rather than assert.

How AwardNote uses this

Sources

All retrieved October 29, 2026.

• OMB, Guidance for Federal Financial Assistance, final guidance, 89 FR 30046 (Federal Register, April 22, 2024): federalregister.gov
• 2 CFR 200.1, Definitions (eCFR): ecfr.gov
• 2 CFR 200.110, Effective date (eCFR): ecfr.gov
• 2 CFR 200.201, Use of grants, cooperative agreements, fixed amount awards, and contracts (eCFR): ecfr.gov
• 2 CFR 200.211, Information contained in a Federal award (eCFR): ecfr.gov
• 2 CFR 200.313, Equipment (eCFR): ecfr.gov
• 2 CFR 200.314, Supplies (eCFR): ecfr.gov
• 2 CFR 200.333, Fixed amount subawards (eCFR): ecfr.gov
• 2 CFR 200.344, Closeout (eCFR): ecfr.gov
• 2 CFR 200.414, Indirect costs (eCFR): ecfr.gov
• 2 CFR 200.501, Audit requirements (eCFR): ecfr.gov
• Federal Audit Clearinghouse, eligibility and thresholds: fac.gov

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