ETA grant implementation of 2024 OMB financial assistance rules

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                Grants Management
               ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                       OGM
             Washington, D.C. 20210                      DATE
                                                         October 8, 2024

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 05-24

TO:             STATE WORKFORCE AGENCIES
                STATE WORKFORCE ADMINISTRATORS
                STATE WORKFORCE LIAISONS
                STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS
                ALL ETA FEDERAL ASSISTANCE RECIPIENTS AND SUBRECIPIENTS

FROM:           JOSÉ JAVIER RODRÍGUEZ
                Assistant Secretary

SUBJECT:       Implementation of the 2024 Revisions to the Office of Management and Budget
               (OMB) Guidance for Federal Financial Assistance

1. Purpose. To provide guidance to Employment and Training Administration (ETA) grant
   recipients and subrecipients on the implementation of OMB’s Guidance for Federal
   Financial Assistance, which goes into effect on October 1, 2024. The final guidance revises
   several parts of 2 CFR subtitle A, “OMB Guidance for Federal Financial Assistance”
   (formerly “OMB Guidance for Grants and Agreements”). This includes revisions to 2 CFR
   part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
   for Federal Awards “Uniform Guidance.”

2. Action Requested. Please disseminate this guidance to all staff responsible for the
   management and administration of ETA federal assistance awards.

3. Summary and Background.

   a. Summary – This guidance provides information regarding the implementation of the
      2024 revisions to the Uniform Guidance.

   b. Background – The Uniform Guidance was first promulgated by OMB on
      December 13, 2014 (78 FR 78590). OMB issued its Final Rule entitled Uniform
      Administrative Requirements, Cost Principles, and Audit Requirements for Federal
      Awards (the “Uniform Guidance") which adopted the requirements from the 2014 OMB
      Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
      Federal Awards and outlined Department of Labor’s (DOL) exceptions in Title 2 Part
      2900. DOL adopted and gave regulatory effect to the OMB guidance supplementing it
      with additional DOL-specific policies and procedures for financial assistance

   RESCISSIONS                                            EXPIRATION DATE
   None                                                   Continuing

      administration on December 19, 2014 (79 FR 76081). These DOL-specific rules of
      grants administration are codified at 2 CFR part 2900, titled Uniform Administrative
      Requirements, Cost Principles, and Audit Requirements for Federal Awards. See
      Training and Employment Guidance Letter (TEGL) No. 15-14 (Implementation of the
      New Uniform Guidance Regulations). OMB revised the 2014 Uniform Guidance on
      August 13, 2020 (2020 revisions).

      On February 9, 2023, OMB issued a Notice of Request for Information in the Federal
      Register, which explained OMB was beginning the process of seeking public input for
      its proposed further revisions to OMB's Uniform Guidance in Title 2 of the CFR. See
      88 FR 8480 (February 9, 2023). Subsequently, on October 5, 2023, OMB issued a
      Notification of Proposed Guidance in the Federal Register, which explained that OMB
      was proposing revisions to parts 1, 25, 170, 175, 180, 182, 183 and 200 to title 2 of the
      CFR. See 88 FR 69390 (October 5, 2023).

      On April 22, 2024, OMB issued OMB Guidance for Federal Financial Assistance (the
      “2024 revisions to the Uniform Guidance”) which requires federal agencies to adopt
      and implement the changes by October 1, 2024. See 89 FR 30046 (April 22, 2024). In
      response to OMB’s recent revisions to the Uniform Guidance, DOL is updating its grant
      terms and conditions to conform to those changes.

4. Implementation.

   a. Effective Dates – The 2024 revisions to the Uniform Guidance apply to all federal grant
      awards issued on or after October 1, 2024, including any amendments to grant awards
      that result in the award of additional funds, or any incremental funding awarded by ETA
      on or after October 1, 2024. Additionally, ETA has included terms and conditions
      consistent with the 2024 revisions to the Uniform Guidance for grants awarded in
      September 2024 that have a period of performance beginning on or after October 1, 2024.

      Grant recipients with awards made before October 1, 2024, and that have a period of
      performance beginning prior to October 1, 2024, must continue to follow the Uniform
      Guidance revisions published in 2020. See Guidance for Grants and Agreements.

      Under the Workforce Innovation and Opportunity Act (WIOA), ETA makes Program
      Year (PY) WIOA Youth funds available to State Workforce Agencies (SWA) from
      appropriated funds that become available on April 1. WIOA Adult and Dislocated
      Worker programs are funded from two separate appropriations. The first appropriation
      for the Adult and Dislocated Worker programs becomes available on July 1 (this portion
      is commonly referred to as “base” funds) and the second appropriation for the Adult and
      Dislocated Worker programs becomes available on October 1 (this portion is commonly
      referred to as “advance” funds because they are provided in the appropriations act passed
      during the fiscal year immediately before the fiscal year when the funds become
      available). For example, funds for PY 2024 that are available on October 1, 2024, were
      appropriated during Fiscal Year (FY) 2024, but not made available until October, which
      is in FY 2025, and are called the FY 2025 “advance” funds.

   The PY 2024 formula funds that SWAs receive for WIOA Youth funds and the base
   funds that SWAs receive for WIOA Adult and Dislocated Worker prior to
   October 1, 2024, will continue to follow the earlier Uniform Guidance revisions
   published in 2020. However, the FY 2025 advance funding for WIOA Adult and
   Dislocated Worker programs awarded and issued on or after October 1, 2024, must
   comply with the 2024 Uniform Guidance revisions. States must take into consideration
   that they will be operating PY 2024 WIOA formula funds in accordance with both the
   2020 and 2024 revisions of the Uniform Guidance.

b. Implementation by ETA Grant Recipients and Subrecipients – The 2024 revisions require
   grant recipients and their subrecipients to review and update their financial and
   administrative policies, procedures, and systems. In certain circumstances, recipients
   may be simultaneously managing multiple federal awards, some of which were issued
   before October 1, 2024, and are thus subject to the 2020 revisions to the Uniform
   Guidance, and other federal awards that were issued under the new 2024 revisions to the
   Uniform Guidance. While it may be necessary for recipients to implement certain
   systematic changes across their organization to implement new grant awards
   incorporating the 2024 revisions to the Uniform Guidance, recipients must also keep in
   mind that the flexibilities provided by the 2024 revisions to the Uniform Guidance are not
   available for federal awards issued before October 1, 2024. Those awards remain subject
   to the Uniform Guidance revisions published in 2020.

   Pass-through entities (PTE) must adhere to the revisions applicable to their original grant
   awards when releasing funds as a subaward. Funds awarded by ETA with a period of
   performance starting prior to October 1, 2024, must follow the 2020 revisions to the
   Uniform Guidance. Therefore, all subawards under those awards must also follow the
   2020 revisions, regardless of whether those subawards are issued before or after October
   1, 2024. Subawards must follow the revisions applicable to the original grant award.

   Also, for PTEs receiving awards after October 1, the 2024 revisions to the Uniform
   Guidance do not prevent PTEs from applying more stringent requirements to their
   subrecipients, as was permitted by the prior version of the Uniform Guidance. The PTE
   is required to provide technical assistance and monitor its subawards in accordance with
   the 2024 revisions to the Uniform Guidance. During this transition period, grant
   recipients are required to engage in discussions with federal staff on the specific changes
   they must make to their federal awards.

c. Applicability for Audits – The updated audit and major program determination threshold
   of $1,000,000 applies to non-federal entities with fiscal years that begin on or after
   October 1, 2024.

   For fiscal years beginning before October 1, 2024, auditors must adhere to the 2020
   revisions to the Uniform Guidance. Additionally, direct grant recipients must submit
   their single audit reporting packages to the Federal Audit Clearinghouse (FAC), which is
   now maintained by the U.S. General Services Administration. Please refer to the website
   for instructions on how to submit and review single audit reporting packages. The

        cognizant agency for audit or oversight agency for audit (in the absence of a cognizant
        agency for audit) may authorize an extension when the nine-month timeframe would
        place an undue burden on the auditee.

   d.   USAspending.gov and Federal Funding Accountability and Transparency Act (FFATA) –
        Recipients must continue implementing efficiencies in the post-award administration and
        management of their federal grant awards to reduce burden while promoting
        accountability and transparency and delivering program outcomes for the American
        people. Maintaining high-quality and accurate federal financial assistance award and
        subaward data is essential for providing transparency with respect to how federal funding
        is spent.

        The prime recipient continues to be responsible for reporting subaward data to the
        FFATA of 2006 Subaward Reporting System (FSRS) that is subsequently displayed on
        USAspending.gov. Federal award and subaward descriptions are critical to informing the
        public of federal spending by providing the public with an understanding of the purpose
        of the federal grant award provided to the recipient. Recipients should include
        descriptions of award-specific activities and avoid using acronyms, or federal or agency-
        specific terminology.

   e. Update to 2 CFR Part 2900 – DOL is updating the DOL-specific rules of grants
      administration at 2 CFR part 2900 to align with the 2024 revisions to the Uniform
      Guidance. Information regarding an updated 2 CFR part 2900 will be announced shortly.

5. Inquiries.

   Questions regarding this guidance should be directed to the appropriate ETA Regional
   Office.

6. References.

   •    Office of Management and Budget (OMB) 2 CFR Parts 1, 25, 170, 175, 180, 182, 183,
        184, and 200. Guidance for Federal Financial Assistance; Final Rule. April 22, 2024.
        https://www.federalregister.gov/documents/2024/04/22/2024-07496/guidance-for-
        federal-financial-assistance.
   •    Office of Management and Budget (OMB) 2 CFR Parts 25, 170, 183, and 200. Guidance
        for Grants and Agreements; Final Rule. August 13, 2020.
        https://www.federalregister.gov/documents/2020/08/13/2020-17468/guidance-for-grants-
        and-agreements.
   •    Office of Management and Budget (OMB) CFR Chapter II, Part 200, et al. Uniform
        Administrative Requirements, Cost Principles, and Audit Requirements for Federal
        Awards; Final Rule. December 26, 2013.
        https://www.federalregister.gov/documents/2013/12/26/2013-30465/uniform-
        administrative-requirements-cost-principles-and-audit-requirements-for-federal-awards.

   •   Department of Labor (DOL) 2 CFR Part 2900 Uniform Administrative Requirements,
       Cost Principles, and Audit Requirements for Federal Awards. April 27, 2021.
       https://www.federalregister.gov/documents/2021/04/27/2021-08731/uniform-
       administrative-requirements-cost-principles-and-audit-requirements-for-federal-awards.
   •   Department of Labor (DOL) 2 CFR Part 2900 Uniform Administrative Requirements,
       Cost Principles, and Audit Requirements for Federal Awards; Final Rule.
       December 19, 2014. https://www.govinfo.gov/content/pkg/FR-2014-12-19/pdf/2014-
       28697.pdf.
   •   Training and Employment Guidance Letter (TEGL) 15-14, Implementation of the New
       Uniform Guidance Regulations. December 19, 2014.
       https://www.dol.gov/agencies/eta/advisories/training-and-employment-guidance-letter-
       no-15-14.

7. Attachment(s). N/A.