Last week, the White House announced the final Office of Management and Budget (OMB) Uniform
Grants Guidance. This guidance is designed to create a streamlined set of rules and regulations for
federal grants that ensure that Congress, agencies, and applicants have standard language and
processes for grant awards and administration. Last week’s announcement brings a big win for cities,
towns and villages that receive federal grants in terms of how they can use federal funds.
Over the last two years, NLC has been actively working with Congress and OMB on improving the ability of local governments to manage the life cycle of the federal grant process—from finding and applying for the Notice of Funding Opportunity to closeout. Based on the experience of the nation’s 19,000 cities, towns, and villages with the State and Local Fiscal Recovery Funds program (SLFRF) and its grant compliance and management, and the subsequent experience of grant applications with the Bipartisan Infrastructure Law, CHIPS, and Science Act, and Inflation Reduction Act, we understand the challenges communities have faced with federal grant compliance. Last year, OMB published its proposed changes to the Uniform Guidance, and NLC submitted two rounds of comments (see letters under the Resources section below) that advocated or reforms that would streamline the process for municipalities and make it easier to meet the needs of your residents.
Seven big wins in last week’s guidance include:
1. Use of plain language in Notice of Funding Opportunities (NOFOs) – The guidance calls for the use of plain language to ensure accessibility to diverse communities, including underserved communities and calls for efforts to limit the length and complexity of the announcement. As many communities do not have full-time grant or finance staff with the bandwidth to wade through the different terms used by federal agencies, NLC advocated for this change to ensure greater accessibility for more communities.
2. Raising the Single Audit threshold from $750,000 to $1,000,000 per fiscal year – When a municipality previously expended federal funds of $750,000, that city would have to engage in a costly audit known as a Single Audit. With the increased volume of federal grants available to cities, towns, and villages through historic infrastructure investment, more and more cities are coming close to or crossing that threshold. Raising this threshold will ensure fewer communities are subject to a Single Audit.
3. Increased Language Access – NLC pushed for and secured a win that agencies will be able to distribute Federal award information in languages other than English, ensuring greater access for communities with language access barriers.
4. Elimination of prohibition on geographic preference – Federal grantees will now be permitted to use many innovative policies like local hire and local sourcing when contracting out services to incentivize the creation of good jobs, equity, sustainability, and community participation in all contracting with federal funds. NLC worked closely with our partners at Jobs to Move America in support of this significant change.
5. Simplification of sub-awards – Federal agencies will not need to be asked for prior written approval for fixed amount sub-awards below $500,000, up from $250,000.
6. Increased Community Engagement – Federal agencies will develop programs in consultation with communities benefiting from or impacted by the program.
7. Improved User Experience – NOFOs will now include links to relevant regulations and
other sources and use cross-references between the sections, including hyperlinks in
electronic versions to make the user experience easier.
As local leaders move forward from this week’s announcement, NLC will continue to support your
community as you engage in the federal grants process.
Resources:
- Updated Uniform Guidance
- Letter 1 – Proposed revisions to Title 2 of the Code of Federal Regulation, Subtitle A, Chapters I and II
- Letter 2 – Response to Request for Information for Guidance for Grants and Agreements, OMB-2023-0017
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