Uniform Guidance: Quick Tips & Tricks

By Marrissa MacLeod February 6, 2026

Allowed & Unallowed Activities 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The first compliance requirement concerns allowed and unallowed activities. This requirement is designed to ensure federal funds are used strictly for their intended purposes. Allowable activities must align with the terms and objectives of the federal award, while unallowed activities—such as lobbying, entertainment, or expenses outside the award’s scope—can trigger audit findings. To stay compliant, organizations should maintain strong internal controls, document all expenditures clearly, and regularly review the terms and conditions of their awards. 

 

Tips and tricks:  

• Thoroughly read the grant award agreement to ensure you understand what the funds can and cannot be used for. 

• Keep records of all activities performed under the federal award, including who performed them, when, and how they relate to the award’s objectives. 

• Don’t overlook activities of any subrecipients of the award, those also must be monitored and comply with the same objectives. 

Allowable Costs Principles 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The second compliance requirement relates to allowable costs principles. This requirement requires that any costs allocated to a federal award must meet specific criteria to be considered legitimate and reimbursable. Key criteria that costs must meet in order to be considered allowable include the following: 

Reasonable: The cost should reflect what a prudent person would pay and shouldn’t be excessive 

Allocable: The cost must be directly related to the program or activity being reimbursed by federal award, or must be assignable to the award as an indirect cost 

Consistently treated: The cost must be treated the same way across all funding sources 

Conform to limitations: The cost must comply with any specific limitations or exclusions as outlined in the Uniform Guidance or the terms of the federal award 

In accordance with GAAP: The cost must be recorded in accordance with generally accepted accounting principles in the United States of America 

Not included as cost-sharing or matching: Unless specifically allowed, costs used to meet matching requirements cannot also be charged to a federal award 

Tips and tricks:  

• Ensure adequate documentation is maintained to support all costs allocated to the federal award. 

• Do not charge costs based on budgeted figures, federal funds can only used for actual costs incurred. 

• If wages are charged to the grant, be sure to consider federal award executive compensation thresholds. 

Cash Management 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The third compliance requirement relates to cash management. This requirement ensures that federal funds are drawn down and used efficiently, minimizing the time between receiving and spending the funds. Organizations must have written policies and procedures surrounding the management of federal cash to ensure compliance and prevent misuse or mismanagement of funds.  

Tips and tricks:  

• Ensure the time between when federal funds are received and when they are used is minimal. 

• If allowed under the federal award, any advance payments received must be limited to the minimum amount needed and funds must be used promptly. 

• Non-state entities must remit any interest earned on federal award advances in excess of $500 per year back to the U.S. Treasury. 

• Maintain federal funds in a separate bank account so usage and any interest earned can be easily tracked. 

Eligibility  

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The fourth compliance requirement relates to eligibility. This requirement is in place to ensure that federal funds are awarded and used for activities or programs that benefit only individuals or entities that meet specific criteria established by the federal program. This criteria can vary depending on the federal award, examples include eligibility based on geographic location, demographic characteristics or program-specific qualifications. It’s important to note that this requirement relates to the eligibility of individuals participating in the program funded by the federal award, rather than the eligibility of the primary recipient of the federal award itself. Robust internal controls should be implemented at your organization to ensure that eligibility is verified before federal awards are disbursed or utilized. 

Tips and tricks:  

• Program staff should be thoroughly trained to ensure they appropriately assess and document eligibility. 

• Checklists or forms are commonly used to standardize the process and ensure that documentation is retained. 

• Eligibility may need to be reassessed and recertified at various points established by the program, so thoroughly read the federal award agreement to ensure these requirements are understood and appropriate policies established. 

Equipment and Real Property Management 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The fifth compliance requirement governs equipment and real property management. This requirement is designed to ensure that federally funded assets are properly used, maintained, tracked and disposed of in accordance with federal rules. These assets are generally defined as tangible property with a useful life of more than one year and an acquisition cost of $10,000 or more ($5,000 for federal awards made prior to October 1, 2024). 

Tips and tricks:  

• Maintain robust property records for all assets acquired using federal funds, including description, identification number, title holder, cost, and acquisition date. 

• A physical inventory of all federally funded equipment is required to be performed and documented at least every two years. 

• When assets are no longer needed, be sure to obtain disposition instructions from the awarding agency or entity. 

Matching, Level of Effort, and Earmarking 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The sixth compliance requirement concerns matching, level of effort, and earmarking.  While these requirements are grouped together in the compliance supplement, these are distinct requirements under the Uniform Guidance, so let’s break them down. 

Matching: This requirement is applicable within some federal awards and requires recipients to contribute non-federal funds or resources to the program to ensure the organization has a financial stake in the program. For example, a federal award may require a 20% match, meaning for every $100 of federal funds spent, the organization must contribute $20 from other non-federal sources. 

Level of Effort: Requires the organization to maintain a certain level of financial or programmatic activity over a period of time. For example, a school may need to serve a certain amount of student lunches to maintain federal funding. 

Earmarking: This limits or specifies how federal awards must be used, often times by setting minimum or maximum spending thresholds for certain activities under the program. For example, a federal award may specify that no more than 10% of the funds can be used on general and administrative costs. 

Tips and tricks:  

• These requirements are often overlooked, so pay special attention to the federal award agreement to identify specifics, as the requirements are unique to each federal program. 

• Uniform Guidance sets very specific rules for volunteer services and donated goods or services, so consult the guidance if applicable to your organization. 

Period of Performance 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The seventh compliance requirement relates to period of performance. This requirement is designed to ensure that federal funds are used only during the timeframe specified in the federal award agreement. Costs incurred outside of this timeframe are generally unallowable, so understanding the exact start date and end date applicable to your federal awards is critical. Noncompliance with this requirement can lead to audit findings, repayment of funds or potential loss of future federal funding opportunities. 

Tips and tricks:  

• Ensure that costs that may overlap the start or end date of the federal award are reviewed carefully – for example, employee wages for a pay period that begins before the start date of the federal award may contain wages that are outside of the period of performance. 

• In certain instances, approval may be given from the grantor to make an exception for costs incurred within a specified timeframe before or after the period of performance. Be sure to ask for formal approval before charging these costs to the federal award. 

Procurement and Suspension and Debarment 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The eighth compliance requirement governs procurement and suspension and debarment. The procurement requirement ensures that organizations using federal funds follow fair, transparent and competitive purchasing practices. Organizations must follow specific standards as defined in the Uniform Guidance when purchasing goods and services with federal funds and must document a formal policy surrounding such standards. The suspension and debarment requirement prohibits federal award recipients from contracting with or awarding funds to parties that are suspended, debarred or otherwise excluded from doing business with the federal government.  

Tips and tricks:  

• Organizations are required to formally document their procurement policies, so ensure that your organization has a written policy that is updated regularly. 

• Be sure to check SAM.gov and maintain evidence that suspension and debarment has been verified for all employees, vendors or individuals benefiting from the federal award funds. 

Program Income 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The ninth compliance requirement relates to program income. This requirement is designed to ensure that any income generated from federally funded activities is appropriately tracked, reported and used to support the objectives of the federal award. Program income may include any fee for services performed, funds received related to the use or rental of property acquired under the federal award, sale of goods made under the award or other payments from program participants. Organizations receiving program income are required to track and document all program income separately from other funds. These funds can only be used for allowable costs that support the purpose of the federal award and must be utilized before requesting additional federal funds under the award agreement.  

Tips and tricks:  

Program income may need to be reported and reflected on the Schedule of Expenditures of Federal Awards, so it’s crucial to maintain complete and robust documentation surrounding all program income received 

Reporting 

Uniform guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The tenth compliance requirement surrounds reporting. This requirement governs how recipients of federal awards must submit accurate, timely and complete reports to demonstrate how funds were used and whether program goals are being met. These reports help ensure transparency, accountability and proper stewardship of federal funds. Report types may include both financial and performance-based metrics. 

Tips and tricks:  

• Thoroughly read the grant award agreement to ensure you understand what reports are necessary and the timeframe in which submission is required. 

• All data included in reports must be complete, accurate and supported by underlying documentation. 

• Be sure to keep copies of all reports submitted and evidence of when submission occurred – your auditors will likely ask for these! 

Subrecipient Monitoring 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The eleventh compliance requirement governs subrecipient monitoring. This requirement means that when a recipient of federal funds passes those funds to another entity (a subrecipient), they must actively monitor the subrecipient to ensure their compliance with federal regulations, performance expectations and financial accountability. The entity monitoring the subrecipient is referred to as a pass-through entity. The pass-through entity must perform and formally document a risk assessment to evaluate the level of monitoring activities necessary over the subrecipient. Examples of monitoring activities include the review of financial and programmatic reports, verifying that necessary audits are performed, and following up on any audit findings or deficiencies noted to ensure they are remediated in a timely manner. 

Tips and tricks:  

• All subrecipient risk assessments are required to be documented so ensure you are  keeping good records of this. 

• Agreements related to awards to subrecipients are required to contain the applicable federal award identification, the name of the federal awarding agency, the assistance listing number and name, a project description, period of performance and all other requirements to ensure the award is used in accordance with federal standards and the terms of the award . 

Special Tests and Provisions 

Uniform Guidance compliance requirements are a set of federal guidelines that apply to nonprofit entities that receive and spend federal funds. These requirements are designed to ensure that federal awards are used properly and in accordance with laws, regulations, and the terms of the related grant agreements. In this article series, we’ll touch on each of the compliance requirements and provide a few tips and tricks to help ensure a smooth and efficient audit process for your organization. 

The last compliance requirement concerns special tests and provisions. This requirement is unique to each federal award and is found in the laws, regulations and provisions of a contract or award agreement related to the program. Examples could include that all personnel working under the federally funded program are required to possess certain certifications, that marketing materials need to clearly state the federal agency funding the program, or that certain inspections by regulatory bodies are required to be performed. If you’re managing a federal award, understanding whether your program includes special tests and provisions is key to staying compliant. 

Tips and tricks:  

• Thoroughly read the grant agreement and compliance supplement to identify any special tests or provisions related to your federal program. 

• Train staff on program-specific rules that may not be covered under other compliance requirements. 

• Consult with your auditors to ensure proper documentation and internal controls are present to address these unique provisions.