Uniform Guidance: Update to Federal Thresholds

The US Government updated 2 CFR 200 (“The Uniform Guidance”) effective 10/1/24. This update increased the definition of equipment from tangible property with a per-unit acquisition cost of $5,000 or greater to tangible property with a per-unit acquisition cost of $10,000 or greater. Tangible property with a per-unit acquisition cost of less than $10,000 will now be considered “supplies.” The definition of Modified Total Direct Cost (MTDC) was also updated to increase the calculation of F&A on subaward costs (assessing F&A on the first $50K of each subaward instead of the first $25K).

Penn State will not incur costs in accordance with these new thresholds until Penn State enters into a new F&A rate agreement with the US government on 7/1/25. However, to ensure that Penn State budgets sufficient funds to cover F&A associated with supplies and subawards, Penn State will begin budgeting in accordance with the new UG definitions effective 12/1/24. Authorized Organizational Representatives (AORs) can continue to utilize the old definition of MTDC only on those proposals where they have a compelling reason to believe that the proposal will be funded prior to 7/1/25.

F&A rates are fixed at the time of the award (RA30). Thus, awards effective prior to 7/1/25 will be fixed at F&A rates established under the old UG definitions. Awards effective 7/1/25 and later will be fixed at F&A rates established under the new definitions.

Last updated 9/17/24 (jwh)