A Reminder from PCG’s Cost Allocation Team to Reference the Correct Federal Guidance in Cost Allocation Plans and Indirect Cost Rates

December marked five years since the Federal Office of Management and Budget (OMB) consolidated eight prior OMB Circulars into a single source of federal guidance, and four years since that guidance went into effect. Yet, despite all the years, our Cost Allocation team still sees federal, state, and other agencies referencing the former OMB Circulars—such as OMB A-87 and OMB A-133—rather than the consolidated and streamlined guidance. These OMB circulars were replaced by the Uniform Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

The Uniform Guidance streamlined the eight OMB Circulars (outlined below) into one source of Federal guidance across state and local governments and tribal organizations, non-profits, and institutions of higher education:

OMB Circulars Superseded by The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
OMB A-21 (Codified at 2 CFR Part 220) Cost Principles for Educational Institutions
OMB A-50 Audit Follow-Up – This relates to Single Audi Report
OMB A-87 (Codified at 2 CFR Part 225) Cost Principles for State, Local, and Indian Tribal Governments
OMB A-89 Federal Domestic Assistance Program Information
OMB A-102 Grants and Cooperative Agreements with State and Local Governments
OMB A-110 (Codified at 2 CFR Part 215) Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations
OMB A-122  (Codified at 2 CFR Part 230) Cost Principles for Non-Profit Organizations
OMB A-133 Audits of States, Local Governments and Non-Profit Organizations

OMB issued the final regulations for the Uniform Guidance on December 26, 2013. Adopted in Title 2 Code of Regulations (CFR 200), the Uniform Guidance went into effect on December 26, 2014.

The Uniform Guidance is divided into the following key sections:

  • Subpart A – Acronyms and Definitions (200.10 – 200.99)
  • Subpart B – General Provisions (200.100 – 200.113)
  • Subpart C – Pre-Award Requirements (200.200-200.211)
  • Subpart D – Post Award Requirements (200.300 -200.345)
  • Subpart E – Cost Principles (200.400 – 200.475)
  • Subpart F – Audit Requirements (200.500 – 200.521)
  • Appendices I-XI – Contract Provisions, ICR, PACAP

Many federal agencies also adopted the Uniform Guidance into their own regulations, including the Federal Department of Health and Human Services, which adopted the Uniform Guidance in 45 CFR Part 74.

The Uniform Guidance also contains changes that impact cost allocation and audit requirements—for example, changes to standards of documentation requirements to support payroll charges to federal grants and raising the threshold for the Single Audit to $750,000.

Why does it matter if you are still referring to Office of Management and Budget (OMB) A-87 or OMB A-133?

Citing the correct federal requirement in requests for proposals (RFPs), cost allocation plan submissions, claiming documents, and other communication ensures that documents are substantively up-to-date and the proper guidance is being applied. Citing out-of-date regulations calls into question the quality and accuracy of the document or process, even if it is otherwise correct.

If you have any questions about the Uniform Guidance and best practices for referencing it or for assistance with cost allocation, indirect cost rates, or administrative claiming, our subject matter experts can help. Please contact PCG’s Amy Ferraro (aferraro@pcgus.com), Kelly Gallagher(kgallagher@pcgus.com), or Ruth Quirion (rquirion@pcgus.com).


  1. […] more information about the consolidated guidance and why referencing it matters, click here for insights from PCG’s Cost Allocation […]


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