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NC Pro summarizes recent U.S. Treasury guidance: reclassification, multiyear contracts and single‑audit threshold changes
Summary
NC Pro staff highlighted recent U.S. Treasury updates that may affect how SFRF recipients classify projects, use funds for multiyear contracts, and whether they are subject to single‑audit requirements.
Natalie Garrett, who leads policy strategy and reporting at NC Pro, reviewed recent U.S. Treasury compliance and reporting guidance changes that the office said are likely to affect certain SFRF recipients and projects. Garrett cautioned that Treasury has issued initial guidance language in some areas and that additional clarification is likely.
Why it matters: the guidance can change recipients’ compliance obligations and closeout treatment, especially for large infrastructure or nonrevenue replacement projects.
What NC Pro highlighted
- Reclassification: NC Pro said Treasury provided additional flexibility for moving funds among already obligated SFRF projects when recipients encounter difficulty spending funds as planned. The office said Treasury will provide more detail in follow‑up guidance and that NC Pro will assist recipients that need to reclassify funds. NC Pro noted that reclassification also may require approval steps involving the state legislature because the legislature determines SFRF fund allocations.
- Multiyear contracts: NC Pro reported Treasury’s language that SFRF funds may not be used to pay costs that occur after the SFRF period of performance ends (the presenter described the period as ending December 2026). Garrett said the change could affect multiyear contracts that extend beyond the period of performance and that NC Pro is discussing consequences with state budget officers and federal partners; she identified larger infrastructure projects managed by DEQ and DIT as likely affected.
- Cost principles and 2 CFR part 200: NC Pro flagged Treasury’s discussion of which parts of 2 CFR part 200 apply to revenue‑replacement projects versus nonrevenue projects and encouraged recipients to consult NC Pro for questions specific to their project classification.
- Single audit thresholds: NC Pro said Treasury added a clause affecting Single Audit Act coverage: recipients that expend more than $750,000 in federal awards during a fiscal year (or $1,000,000 for fiscal years starting on or after Oct. 1, 2024, as described by Treasury) may be subject to a single audit. Garrett said Treasury provided the language without much contextual explanation and that NC Pro will help recipients interpret the change as additional guidance becomes available.
NC Pro’s guidance to recipients
Garrett said recipients should review the guidance text (NC Pro provided page references during the presentation), raise specific questions with their grant manager if the guidance appears to apply, and expect NC Pro to seek additional clarification from Treasury where necessary. She emphasized the guidance is evolving, with some initial language and further details likely to follow.
Attribution
Direct explanations of the guidance were given by Natalie Garrett, lead of policy strategy and reporting at NC Pro. Garrett repeatedly described the current Treasury language as initial guidance and said NC Pro expects future clarifications.
