Alert
HHS Adopts New Federal Financial Assistance Rules to Streamline Grant Processes
The US Department of Health and Human Services (HHS) adopted the updated federal financial assistance regulations (2 CFR Part 200) on October 1, 2024—with full implementation by October 2025—to streamline federal financial assistance, making grants easier to access and manage.
For Federally Qualified Health Centers (FQHCs), this move can reduce administrative burdens and enhance grant management flexibility. Key changes include higher thresholds for subawards, equipment, and supplies, allowing FQHCs to better allocate resources. Additionally, increased audit and indirect cost thresholds provide financial relief and simplify compliance.
In tandem with these changes, HHS also released an updated Grants Policy Statement (GPS), providing clearer, more accessible information on the grant process.
Learn how the HHS’s adoption of the updated 2 CFR Part 200 regulations impact key provisions and how your organization can respond effectively.
Significant Changes
The new rules are part of the 2024 Revisions to the Uniform Administrative Requirements, which provide foundational guidelines for federal financial assistance programs, including grants and cooperative agreements.
The updates introduce several key provisions, such as:
- Increased Exclusion Threshold for Subawards. From $25,000 to $50,000 for modified total direct cost calculations.
- Equipment Threshold. Raised from $5,000 to $10,000, with a provision allowing Tribes to use their own equipment disposition procedures.
- Supplies Threshold. Increased from $5,000 to $10,000.
- Fixed Amount Subawards. Recipients may provide up to $500,000 with prior agency approval.
- Indirect Cost De Minimis Rate. Raised from 10% to 15%.
- Single Audit Threshold. Increased from $750,000 to $1 million.
- Micro-Purchase Threshold. Already raised to $50,000.
- Extended Reporting Period. Grant recipients are now allowed 120 days after the performance period for submitting final reports.
How to Respond
As part of this overhaul, HHS will phase out its separate Part 75 regulations, which have been in place since 2014. Starting October 1, 2025, HHS will fully adopt the broader federal framework under 2 CFR Part 200, with only minor amendments under 2 CFR Part 300, to better align with other federal agencies.
To prepare for these changes, FQHCs and other grant recipients are encouraged to review and update their internal policies, procedures, and handbooks to align with the new regulations and ensure a smooth transition. By adopting these changes early, organizations can take full advantage of the added flexibilities and compliance benefits.
We’re Here to Help
For more information on these changes, how they can impact your organization, and the best way to respond, contact your Moss Adams professional.