HHS Finally Aligns Grant Policies with Rest of Federal Government

HHS is the largest grant-making department in the Federal government and has maintained its own administrative standards under 45 CFR 75. The agency has now joined the rest of the Federal Government in fully adopting 2 CFR 200 in the interest of making it more flexible, making compliance easier, and reducing administrative burden on agencies and recipients.

Here are the key provisions:

1. Increased exclusion threshold of subawards from $25,000 to $50,000 for modified total direct cost calculations (2 CFR § 200.1 definition of Modified Total Direct Cost).
2. Increased threshold for equipment from $5,000 to $10,000, and clarification that Indian tribes may use their procedures for equipment disposition (2 CFR § 200.313(e)).
3. Increased threshold for supplies from $5,000 to $10,000 (2 CFR § 200.314(a)).
4. An increased amount of fixed amount sub-awards that a recipient may provide with the agency prior written approval to $500,000 (2 CFR § 200.333).
5. Increased indirect cost de minimis rate from 10 to 15 percent (2 CFR § 200.414).
6. Increased single audit threshold from $750,000 to $1 million (2 CFR § 200.501).

HHS has already adopted these provisions:

1. Increased micro-purchase threshold to $50,000 (2 CFR § 200.320).
2. Allowing 120 days after the period of performance for submission of all final reports related to award closeout (2 CFR § 200.344).

Note that HHS has maintained the 8% indirect cost rate for foreign organizations in its revised Grants Policy Statement, page 88. In Appendix E to HHS’ revised Grants Policy Statement, the definition of MTDC excludes the first $50,000 of each subgrant, but for foreign organizations, $25,000 for each sub-award is the exclusion for MTDC. As you can imagine, this remains an important concern for foreign organizations receiving grants from the CDC.

Read the HHS announcement here.