How to Follow Uniform Guidance When the Guidance Is No Longer Uniform

The Uniform Guidance (UG)—published by the Office of Management and Budget (OMB) in 2014 and now codified at 2 CFR Part 200—was intended to standardize administrative requirements, cost principles, and audit standards for all non federal entities receiving federal financial assistance.¹ The original promise of consistency, however, has steadily eroded.

Today, federal agencies apply the UG differently, adopt revisions on different schedules, and layer in agency-specific rules that with which award recipients must comply. Some agencies are further deviating on indirect cost rates as the current Administration puts downward pressure on cost recovery.

If that’s not enough to keep up with, OMB issues major revisions to the UG approximately every five years, and minor technical and policy updates in between. The most recent major revisions made in 2024 increased the spending threshold for a Single Audit to $1M, along with many other changes throughout the publication.2

The takeaway: Compliance with UG requires ongoing attention to navigate variance in application by agency and keep up with constant OMB revisions.

This article explains some of these inconsistencies and the challenges they present for federal award recipients and offers practical strategies for staying informed and compliant.
 

Uniform Guidance: Many Different Applications

Although UG establishes a government wide baseline, agencies retain discretion in how they interpret and apply it. As a result, recipients often encounter conflicting instructions.

When this happens, a clear order of precedence applies (in order of most to least authoritative):
1. Federal statutes
2. Award terms and conditions
3. Agency regulations
4. Uniform Guidance
Despite its name, Uniform Guidance carries the least authority when conflicts arise. If an agency’s regulations differ from UG, the agency’s rules govern. If award terms are more restrictive, those terms take precedence. ³

Agency-specific interpretation

The rules adopted by several federal agencies illustrate how far interpretation of the guidance has diverged. Examples include:
• Department of Health and Human Services (HHS) adopted the 2024 UG revisions on a phased timeline, reaching full implementation on October 1, 2025. In addition, the HHS Grants Policy Statement may supplement or override UG provisions, making close review of award terms essential.⁴
• Department of Energy (DOE) applies a non standard definition of “non federal entity” that includes for profit entities and retains certain legacy requirements alongside UG. DOE also imposes enhanced eligibility and compliance requirements for energy and infrastructure projects.⁵ They also deviate on indirect costs (more on that below).
• Department of Justice (DOJ) applies revised UG requirements based on the date of action under an award rather than the original award date. Award amendments or modifications made after the most recent major revision to the UG (October 1, 2024), may trigger the new requirements even when the underlying award predates them.6
For recipients managing multiple federal awards, this patchwork approach creates a complex compliance environment that demands federal awards expertise.

Indirect costs

Indirect costs have become an increasingly political issue and one of the most challenging areas of divergence. Some agencies apply indirect cost definitions and rate structures that depart significantly from traditional UG concepts. For example, DOE defines indirect costs to include all fringe benefits and applies its maximum 15% indirect cost rate to the total award budget—rather than to a modified total direct cost base per the UG.7 These variations can materially affect budgeting, cost recovery, and long term organizational sustainability.
To add to this environment of uncertainty, in August 2025, the Administration issued an Executive Order titled “Improving Oversight of Federal Grantmaking.” While implementation details vary by agency, the order calls for increased scrutiny of funding opportunity announcements, inclusion of termination for convenience clauses in all awards, and a preference for applicants proposing lower indirect cost rates.8
The order also formalizes increased agency oversight of drawdowns, requiring advance approval and detailed justification of reimbursement requests. For many recipients, this means longer waits for cash reimbursement and increased administrative burden.
Ultimately, applicants will be forced to weigh competitiveness against fiscal sustainability.
 

How to Navigate Inconsistency and Stay Compliant

In an environment where compliance requirements vary widely across agencies, the most effective strategies are straightforward:
• Read award terms carefully and completely before signing Raise questions if you do not fully understand the terms.
• Maintain strong relationships with federal program and grants management officials.
• Advocate for your needs and connect with your peers and the National Council of Nonprofits.
• Monitor agency-specific guidance, policy statement specific guidance, and policy statements.
• Track regulatory applicability throughout the life of each award.
• Diversify revenue sources so as not to be heavily dependent on a single revenue source. Consider grants, donations, earned income, and partnerships. This has the added benefit of developing alternatives to support indirect costs.
• Identify at-risk programs, especially those that rely heavily on capped agency funding.
• Prepare for multiple financial outcomes. Build contingency plans to respond quickly to changes in funding, costs, or compliance requirements.
Uniform Guidance may no longer be uniform—but informed, proactive recipients can still navigate it successfully.
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References
1. Office of Management and Budget, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200 
2. OMB, Revisions to 2 CFR Part 200, Federal Register (2024) 
3. 2 CFR §200.301 
4. U.S. Department of Health and Human Services, HHS Grants Policy Statement 
5. Department of Energy Assistance Regulations, 2 CFR Part 910 
6. U.S. Department of Justice, Grants Financial Guide 
7. Energy Department Aligns Award Criteria for For-profit, Non-profit Organizations, and State and Local Governments, Saving $935 Million Annually 
8. Executive Order, Improving Oversight of Federal Grantmaking (August 2025)