What Is the Uniform Guidance?
Title 2 of the Code of Federal Regulations, Part 200 — universally known as “the Uniform Guidance” or simply “2 CFR 200” — is the single most important regulatory framework for organizations that receive federal funding. It establishes the rules for how federal awards are administered, what costs can be charged, how procurement must be conducted, and when audits are required.
Before 2 CFR 200, federal grant compliance was governed by a patchwork of eight separate OMB circulars, each targeting a different type of recipient. A nonprofit followed A-122 for cost principles and A-133 for audit requirements. A state government followed A-87 and A-133. A university followed A-21. The administrative requirements were split between A-102 (for governments) and A-110 (for nonprofits and higher education). This fragmentation created inconsistency, confusion, and unnecessary administrative burden.
In 2013, OMB consolidated all eight circulars into a single regulation. The Uniform Guidance took effect on December 26, 2014, creating one set of rules for all non-federal entities. The goal was straightforward: reduce administrative burden, strengthen oversight of federal funds, and make compliance requirements consistent regardless of who receives the award.
The Circulars That Became 2 CFR 200
Understanding the predecessor circulars helps when reading older grant terms, audit findings, or guidance documents that still reference them.
| Former Circular | Subject | Now in 2 CFR 200 |
|---|---|---|
| A-21 | Cost principles for higher education | Subpart E |
| A-87 | Cost principles for state/local/tribal governments | Subpart E |
| A-110 | Administrative requirements for nonprofits & higher ed | Subparts B–D |
| A-122 | Cost principles for nonprofits | Subpart E |
| A-133 | Audit requirements for all non-federal entities | Subpart F |
| A-102 | Administrative requirements for governments | Subparts B–D |
| A-89 | Federal domestic assistance program information | Subpart A |
| A-50 | Audit follow-up | Subpart F |
Structure of 2 CFR 200
The Uniform Guidance is organized into six subparts, each addressing a distinct area of federal award management. Understanding this structure helps you find the specific requirements that apply to your situation.
Subpart A — Acronyms and Definitions (§200.0–200.1)
Defines over 90 key terms used throughout the regulation, including critical distinctions like “subaward” vs. “contract,” “equipment” vs. “supplies,” and “period of performance.” These definitions are legally binding — when a term is defined in Subpart A, that definition controls everywhere else in the regulation.
Subpart B — General Provisions (§200.100–113)
Establishes the purpose, applicability, and effective dates of the Uniform Guidance. It specifies which entities must comply, how federal agencies implement the requirements, and the relationship between the Uniform Guidance and agency-specific regulations. Subpart B also addresses conflict of interest requirements and mandatory disclosures.
Subpart C — Pre-Federal Award Requirements (§200.200–213)
Covers the federal side of grant-making: how agencies must announce funding opportunities, review applications, assess applicant risk, and structure award terms. For recipients, the most relevant provisions are the risk assessment criteria (§200.206) that determine what specific conditions a federal agency may impose on your award.
Subpart D — Post-Federal Award Requirements (§200.300–346)
The operational core of the Uniform Guidance for recipients. Subpart D governs financial management systems (§200.302), internal controls (§200.303), payment methods (§200.305), cost sharing (§200.306), property management (§200.310–316), procurement (§200.317–327), subrecipient monitoring (§200.331–333), record retention (§200.334), reporting (§200.328–329), and closeout (§200.344–345). Most day-to-day compliance work centers on Subpart D requirements.
Subpart E — Cost Principles (§200.400–475)
Defines which costs may be charged to federal awards and how. The central test is whether a cost is “reasonable, allocable, and consistent” with the organization's policies. Subpart E covers direct costs, indirect (F&A) costs, the de minimis rate, and 55 specific items of cost (§200.420–475) that address everything from advertising to travel.
Subpart F — Audit Requirements (§200.500–521)
Establishes the Single Audit framework for organizations expending $1,000,000 or more in federal awards during their fiscal year. Covers auditor selection, audit scope, major program determination, reporting requirements, and submission to the Federal Audit Clearinghouse (FAC). For detailed Single Audit preparation guidance, see our Single Audit compliance hub.
Who Must Comply?
The Uniform Guidance applies to all “non-federal entities” that receive federal awards. In practice, this means five categories of recipients:
- State governments — including state agencies and departments that administer federal programs and pass funding through to subrecipients.
- Local governments — counties, cities, municipalities, townships, school districts, and special-purpose districts that receive federal funding directly or as subrecipients.
- Indian tribal governments — federally recognized tribes and tribal organizations receiving competitive federal grants. Note: ISDEAA 638 compact and contract funds are governed by ISDEAA, not 2 CFR 200. See our tribal funding guide for details on the dual compliance framework.
- Nonprofit organizations — 501(c)(3) organizations, community health centers, behavioral health providers, and other nonprofits that receive federal grants or subawards.
- Institutions of higher education — universities, colleges, and community colleges receiving federal research grants, training awards, or other federal funding.
For healthcare organizations specifically, 2 CFR 200 compliance intersects with program-specific requirements from agencies like HRSA (Section 330), CSBG, SAMHSA, CDC, and ACF. The Uniform Guidance sets the floor — federal agencies may add program-specific requirements on top.
Key Concepts Every Grants Manager Should Know
The Cost Allowability Test
Every cost charged to a federal award must pass a three-part test under §200.403: it must be reasonable (a prudent person would have incurred it), allocable (it benefits the federal award and can be assigned proportionally), and consistent (treated the same way regardless of the funding source). Failing any one prong makes the cost unallowable.
Direct Costs vs. Indirect Costs
Direct costs (§200.413) are expenses that can be identified specifically with a particular federal award — staff salaries for grant-funded positions, supplies purchased for the project, travel to grant-related conferences. Indirect costs (§200.414), also called facilities and administrative (F&A) costs, are shared expenses that benefit multiple activities and cannot be readily assigned to a single award — rent, utilities, accounting staff, IT infrastructure. Organizations either negotiate an indirect cost rate with their cognizant agency or use the de minimis rate of 15% of MTDC.
Period of Performance
The period of performance (§200.1) is the time during which the non-federal entity may incur new obligations to carry out the work authorized under the federal award. Costs incurred outside the period of performance are generally unallowable unless specifically authorized. The period begins and ends on the dates specified in the award document, and recipients have 120 days after the end date to complete closeout activities.
Prior Written Approval
Many cost categories and actions under 2 CFR 200 require prior written approval from the federal awarding agency. Examples include pre-award costs (§200.458), budget transfers exceeding the threshold, no-cost extensions, and certain selected items of cost. Failure to obtain required prior approval can result in costs being disallowed — even if the costs would otherwise be reasonable and allocable.