By Cathy Hwang, CPA
By now, all organizational recipients of federal funds or grant awards should have familiarized themselves with changes to the Uniform Guidance, issued at the end of 2014 through the Office of Management and Budget (OMB). The grace period for enhanced procurement compliance has ended, and affected organizations will need to ensure that their contracts and processes are up to date. For any procurements after June 20, 2018, there is an even bigger reason to ensure compliance.
The 2018 National Defense Authorization Act (NDAA) has added an interesting element, specifically as to how all federal recipients can procure goods and services through micro-purchases or simplified acquisitions. The 2018 NDAA has increased the micro-purchase threshold from $3,500 to $10,000 and the simplified acquisition threshold from $150,000 to $250,000. Further, certain institutions may request micro-purchase thresholds higher than $10,000. Also, a memo issued by the OMB granted an exception allowing all recipients to implement higher thresholds while the Federal Acquisition Regulation (FAR) and the Uniform Guidance are being updated.
For many not-for-profits that receive federal funding, this means that there may be more flexibility in procuring materials and services using federal funds even before calendar year-end in 2018, but certainly in 2019. It is critical that each organization incorporates the proper language of its procurement processes in line with OMB Uniform Guidance.
Also note that these thresholds apply beyond not-for-profit organizations within higher education or certain research and development functions, which is one of the key differences between the 2017 NDAA guidelines and the 2018 NDAA.
LvHJ can provide guidance and templates regarding the new Uniform Guidance requirements for not-for-profits as well as guidance on the effective dates of increased micro-purchase and simplified acquisition thresholds. To avoid any potential noncompliance findings, talk to us about your organization’s compliance and funding issues. We will continue to monitor federal communications from the OMB as we move toward the new year. Contact Cathy Hwang, firstname.lastname@example.org