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Posted by Michelle Sylvia Spriggs on Tue, Jul 10, 2018 @ 06:01 PM

Audit

On June 20, the Office of Management and Budget (OMB) released a memo on new thresholds for micro-purchases and small purchases under the Uniform Grant Guidance. The OMB memo dramatically increased these thresholds, which should simplify purchase processes for not-for-profit organizations receiving federal funds.

The micro-purchase threshold increased from $3,000 to $10,000. Purchases of supplies or services that fall under the micro-purchase threshold do not require a competitive bidding process so long as the purchases are considered reasonable. Organizations may also request for a higher micro-purchase threshold from the federal agency supplying the grants so long as the organization has clean single audit findings or has adequate risk assessments for its purchases.

Also increased is the Uniform Grant Guidance’s simplified acquisition threshold, or the threshold for “small purchases.” Previously, the Uniform Grant Guidance had set the simplified acquisition threshold at $150,000. Effective immediately, the small purchase threshold is $250,000. Purchases that meet the simplified acquisition threshold follow a streamlined competitive bid process, one that requires an “adequate” number of bids (read: more than one). The streamlined process also leaves it up to the organization to determine how bids are received, such as orally, written or through an online search for prices.

Changes to the purchase thresholds come as part of the National Defense Authorization Acts (NDAA) and apply to organizations that receive grants and undertake cooperative agreements from federal agencies. Prior to the OMB’s memo, timing for the increased Uniform Grant Guidance thresholds had been a little murky.  OMB’s June 20 memo clarified that organizations can use the higher thresholds immediately and revisions to the Federal Acquisition Regulation 48 C.F.R. Subpart 2.1 and the Uniform Grant Guidance will follow.

For more information, including any comments, questions or concerns, please contact us.

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Michelle Sylvia Spriggs is a Shareholder in the Not-For-Profit & Education Practice. She can be reached at 774.206.8336 or MSpriggs@cbiz.com.

 

 

 

Copyright © 2018 CBIZ & MHM (Mayer Hoffman McCann P.C.). All rights reserved. CBIZ and MHM are separate and independent legal entities that work together to serve clients. CBIZ  is a leading provider of tax and consulting services. MHM is an independent CPA firm providing audit and other attest services. This article is protected by U.S. and international copyright laws and treaties. Use of the material contained herein without the express written consent of the firms is prohibited by law. Material contained in this alert is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their business.

Tags: not-for-profit, Federal OMB Grant, Michelle Spriggs, OMB, NFP, Uniform Grant Guidance, nonprofit, micro-purchase

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