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Uniform Guidance changes: de minimis rises to 15% and MTDC/subaward, audit and equipment thresholds increase
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Summary
Panelists at an OJP webinar summarized Uniform Guidance updates effective Oct. 2024: the de minimis indirect-cost allowance increased from 10% to 15%, the MTDC subaward inclusion allowance rose to $50,000 per subaward for the period of performance, single-audit threshold rose to $1,000,000 and equipment capitalization threshold rose to $10,000.
At an OJP webinar on indirect-costs, panelists summarized several Uniform Guidance revisions that took effect in October 2024 and explained how they affect grantees.
Hatim Bretzua of OJP told attendees that the de minimis indirect-cost rate "got recently, revised and going up from 10% to 15%," and emphasized that organizations electing the de minimis must use the Modified Total Direct Cost (MTDC) base when applying that percentage. He repeated that MTDC requires excluding equipment, participant support costs and subaward amounts above the MTDC allowance when calculating the base.
Panelists also described the raised MTDC subaward allowance: organizations may include the first $50,000 of each subaward over the period of performance in the MTDC base; amounts beyond $50,000 must be excluded. They cautioned grantees that the $50,000 allowance applies across the entire period of performance for the subaward (not on a per-year basis) and that previously included amounts can cause subsequent-year exclusions if the $50,000 cap has already been used.
The session covered two additional threshold changes in the Uniform Guidance: the single-audit requirement (major-program threshold) increased from $750,000 to $1,000,000 in total federal expenditures, and the equipment capitalization threshold increased from $5,000 to $10,000. Panelists clarified that increasing the equipment capitalization threshold does not change the MTDC rule — equipment (capitalized items) remains excluded from MTDC regardless of the capitalization threshold.
Panelists highlighted a jurisdictional nuance: during the Q&A a panelist said, "State government is not allowed to use the de minimis rate," and the speakers advised state entities to contact OJP for options because states typically use statewide cost-allocation plans or negotiated rates rather than the de minimis election.
Grantees were advised to incorporate these changes into budget narratives (stating which indirect-cost rate method is used and how the MTDC base was calculated), and to submit budget modifications (GAMs) where budgets must be adjusted for a new indirect-cost election or rate.
