February 18, 2025
Sent by electronic mail

Dear County and District Chief Business Officials and Charter School Administrators:

Federal Office of Management and Budget Uniform Guidance Implementation

The Office of Management and Budget (OMB) updated portions of Title 2 of the Code of Federal Regulations (CFR) that went into effect October 1, 2024, including 2 CFR Part 200, which is commonly known as the “Uniform Guidance”. The Uniform Guidance establishes uniform administrative requirements, cost principles, and audit requirements for federal awards.

The California Department of Education (CDE) received updated information from the U.S. Department of Education (ED) regarding the effective date of when local education agencies (LEAs) may apply Uniform Guidance changes to federal awards. CDE previously provided information during the Standardized Account Code Structure (SACS) Forum in November 2023 that changes would be applicable to 2024–25 Fiscal Year (FY) awards; however, because CDE’s updated indirect cost plan is awaiting ED approval, the implementation timelines below are effective for the following Uniform Guidance changes:

• Uniform Guidance Requirement: The threshold for single audits increased from $750,000 to $1,000,000 (2.CFR 200.501).
  
  Implementation Timeline: 2025–26 Fiscal Year
  
  The single audit requirements (Subpart F) do not apply to the 2024–25 FY, because the FY began before the effective date.

• Uniform Guidance Requirement: The exclusion threshold for subagreements has increased from $25,000 to $50,000 (2.CFR.200.1).
  
  Implementation Timeline: 2025–26 Fiscal Year
  
  The $50,000 threshold will go into effect once the U.S. Department of Education approves the CDE’s LEA indirect cost plan with the updated threshold. Meanwhile, the existing indirect cost plan, which includes the previous exclusion threshold of $25,000, has been extended until June 30, 2025.

• Uniform Guidance Requirement: The threshold for determining the items that are considered equipment for federal awards increases from $5,000 to $10,000 (2.CFR.200.1).
  
  Implementation Timeline: 2025–26 Fiscal Year
  
  The $10,000 threshold for equipment capitalization for indirect cost rate calculation will go into effect once the U.S. Department of Education approves the CDE’s LEA indirect cost plan with the updated threshold. Meanwhile, the existing indirect cost plan, which includes the previous exclusion threshold of $5,000, has been extended until June 30, 2025.

For more information about the indirect cost rate calculation or general indirect cost issues, please refer to Procedure 915, Indirect Cost Rate, of the California School Accounting Manual (CSAM). The 2024 edition can be accessed on the CDE's Definitions, Instructions, & Procedures web page at https://www.cde.ca.gov/fg/ac/sa/.

Additionally, the Indirect Cost Frequently Asked Questions (FAQ) document provides further resources and can be found on the CDE’s Indirect Cost Rates web page at https://www.cde.ca.gov/fg/ac/ic/.

If you have any questions, please contact our office by email at sacsinfo@cde.ca.gov.

Sincerely,

/s/

John Miles, Administrator
Fiscal Oversight and Support Office

JM:dm