The Word for Today is “Overhead”: OMB Uniform Guidance Takes Effect

The Word for Today is “Overhead”: OMB Uniform Guidance Takes Effect

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The OMB Uniform Guidance, the new rules for nonprofits that work on government contracts which went into effect at the end of 2014, is hugely significant. Prior to this, nonprofits working on government contracts had to study various OMB “circulars,” such as A-110, A-133, A-87, and others, as though they were books of scripture and hope that they all made sense—and that following their directives wouldn’t end up impaling nonprofit operating budgets on a federal regulatory sword. The new Uniform Grant Guidance supersedes all of those circulars and others, streamlining the rules governing administrative requirements, cost principles, and audit requirements on federal awards.

The new rules aren’t a panacea, to be sure. They don’t fix many aspects of government contracting that bedevil nonprofit contractors, particularly the agency behavior of not fully funding nonprofits’ service delivery costs or changing contract terms mid-stream. But they do remove plenty of inconsistencies in the old circulars and, probably most importantly in Uniform Guidance text, require that governments pay their nonprofit contractors reasonable indirect costs—administrative costs, that is, or “overhead.”

Working on practical solutions for nonprofits that contract to deliver government-funded services has long been a priority of the National Council of Nonprofits under CEO Tim Delaney’s leadership. Delaney’s policy focus at the helm of this association of state nonprofit associations appears to be the quotidian challenges nonprofits face. The Council’s extensive involvement in the effort to replace the old circulars and to ensure that government agencies pay for overhead will affect the lives of tens of thousands of nonprofits.

Source Name: 
Nonprofit Quarterly

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