Federal Grants
2 CFR 200 Uniform Guidance: The Basics
Grant Writing Service Editorial Team
June 12, 2026 · 5 min read
Table of contents
Key takeaways
- 2 CFR Part 200, the Uniform Guidance, is the government-wide rulebook for federal grants and cooperative agreements to states, local governments, tribes, universities and nonprofits.
- The 2024 revision, effective October 1, 2024, raised the de minimis indirect rate to up to 15%, the equipment threshold to $10,000, the subaward amount in the indirect base to $50,000 and the single audit threshold to $1,000,000.
- A cost is chargeable only if it is necessary, reasonable, allocable, consistently treated, adequately documented and not otherwise prohibited.
- OMB proposed a broad rewrite in May 2026; as of October 2026 it is not final, so the 2024 text still governs.
2 CFR Part 200, known as the Uniform Guidance, is the government-wide set of rules for federal grants and cooperative agreements. Its full title says what it covers: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. It tells agencies how to announce and make awards, and tells recipients what they may charge to an award, how to manage and buy with federal money, what to report, and when they need an audit. If your organization spends federal grant funds, directly or as a subrecipient, this is the rulebook behind your award terms.
The current text is the 2024 revision, published by OMB in April 2024 and effective October 1, 2024. You can read it at eCFR.gov, which always shows the version in force.
How the six subparts fit together
| Subpart | Covers | Matters most when |
|---|---|---|
| A, Acronyms and Definitions (200.0 to 200.1) | Terms such as equipment, modified total direct costs, subaward, and the micro-purchase threshold | You need to know what a word legally means |
| B, General Provisions (200.100 to 200.113) | Who the rules apply to, exceptions, conflict of interest and mandatory disclosures | You are checking whether a rule applies to you |
| C, Pre-Federal Award Requirements (200.200 to 200.217) | Notices of funding opportunities, merit review, risk review, what an award must contain | You are applying |
| D, Post Federal Award Requirements (200.300 to 200.346) | Financial management, cost share, budget revisions and prior approvals, property, procurement, subrecipient monitoring, reporting, record retention, closeout | You are managing an award |
| E, Cost Principles (200.400 to 200.476) | What costs are allowable, direct and indirect costs, and rules for specific cost items | You are building a budget or charging a cost |
| F, Audit Requirements (200.500 to 200.521) | Single audits and program-specific audits | Your federal spending reaches $1,000,000 in a year |
Appendices fill in detail, including the required structure of a funding notice (Appendix I), indirect cost rate rules for different types of organizations, and the single audit Compliance Supplement.
The figures that changed in 2024
Many guides, templates and even official form instructions still carry the old numbers. These are the current ones:
| Item | Before | Since October 1, 2024 | Section |
|---|---|---|---|
| De minimis indirect cost rate | 10% of MTDC | Up to 15% of MTDC | 200.414(f) |
| Equipment threshold | $5,000 per unit | Lesser of your capitalization level or $10,000 | 200.1 |
| Subaward amount included in MTDC | First $25,000 of each subaward | First $50,000 of each subaward | 200.1 |
| Single audit threshold | $750,000 expended | $1,000,000 expended | 200.501 |
MTDC is modified total direct costs, the usual base for indirect costs. It includes salaries, fringe benefits, materials and supplies, services, travel and the first $50,000 of each subaward, and excludes equipment, capital expenditures, patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and subaward amounts above $50,000. Our guide to indirect cost rates shows the calculation, and the SF-424A walkthrough includes a worked example on the federal budget form.
The cost principles
Subpart E decides whether a cost can be charged to an award. Under 200.403, a cost must:
- be necessary and reasonable for the award, and allocable to it;
- conform to any limits in the regulation or the award terms;
- be consistent with policies that apply to both federal and non-federal work;
- be treated consistently, so a cost charged as direct on one award is not recovered as indirect on another;
- follow generally accepted accounting principles;
- not be used as cost share on another federal award;
- be adequately documented.
Reasonable (200.404) means a prudent person would incur the cost at that price in the circumstances. Allocable (200.405) means the award benefits in proportion to what it is charged.
Sections 200.420 to 200.476 then cover specific items such as compensation, fringe benefits, equipment, entertainment, travel, participant support and advertising. Personnel costs are the largest line for most awards, and 200.430 requires salary charges to rest on records that accurately reflect the work performed, supported by internal controls. Budget estimates made in advance do not qualify on their own. Our explainer on direct and indirect costs covers classification, which is where many errors start.
Indirect costs
To recover overhead, an organization either negotiates an indirect cost rate with its cognizant federal agency or, if it has no current negotiated rate, elects the de minimis rate of up to 15% of MTDC. Agencies generally must accept negotiated rates, though some programs cap indirect costs by statute. When using the de minimis rate, each cost must be charged consistently as direct or indirect, never both.
Managing the award: Subpart D
Subpart D is the part recipients live with day to day:
- Financial management (200.302): systems that identify every federal award, track spending against the budget, and separate federal from non-federal funds.
- Internal controls (200.303): reasonable assurance that you are managing the award in line with its terms.
- Budget revisions and prior approvals (200.308): certain changes, such as a change in scope or key personnel, need agency approval first.
- Procurement (200.317 to 200.327): documented procedures, conflict of interest standards, and methods scaled to purchase size, from micro-purchases through informal small purchases to sealed bids and proposals. States follow their own procurement rules.
- Subrecipient monitoring (200.332): if you pass funds to other organizations, you must assess their risk and oversee them.
- Reporting (200.328 and 200.329): financial and performance reports on the schedule in the award.
- Record retention (200.334): generally three years from submission of the final financial report.
- Closeout (200.344): recipients submit all final reports within 120 calendar days after the period of performance ends.
Our guides to managing an award after it is made and federal reporting requirements turn these into routines.
Audits: Subpart F
A non-Federal entity that expends $1,000,000 or more in federal awards in its fiscal year must have a single audit, or in limited cases a program-specific audit. Below that, there is no federal audit requirement, but records must still be available for review. The threshold, what auditors test and how to prepare are covered in our single audit guide.
The 2026 proposed rewrite
On May 29, 2026, OMB and 41 other agencies issued a proposed rule to amend 2 CFR 200. The Congressional Research Service summarizes the main proposals as giving the guidance regulatory effect government-wide, requiring program goals to align with administration priorities, adding review of merit-reviewed applications by senior appointees, and expanding agencies' authority to terminate or suspend awards when doing so is in their interest. As of October 2026 no final rule has been published, and CRS reports that a 2026 appropriations law bars finalizing it before December 11, 2026. Until a final rule appears, the 2024 text governs. Check eCFR.gov and your award terms before relying on any summary, including this one.
