2 CFR Part 300 is the regulation the Department of Health and Human Services uses to adopt the federal government’s Uniform Guidance for grants and cooperative agreements. Instead of writing its own full rulebook, HHS uses Part 300 to pull in 2 CFR Part 200 and then layers on a small number of department-specific requirements. If you receive an HHS award, Part 300 is the legal bridge that makes the Uniform Guidance binding on how you spend, document, audit, and close out those funds.
What Part 300 Does
The heart of Part 300 sits in a single adopting section. Section 300.106 states that HHS adopts the Office of Management and Budget guidance in 2 CFR Part 200, together with the additions in Part 300 and in 2 CFR Part 376.1eCFR. 2 CFR 300.106 – Adoption of 2 CFR Part 200 That one provision is what gives the Uniform Guidance regulatory force for every HHS grant. Part 300 itself is short, because it mostly points you to Part 200 and only speaks up where HHS needs to change or add something.
HHS restructured Part 300 in October 2024 and repealed its older parallel regulation at 45 CFR Part 75 at the same time.2Federal Register. Health and Human Services Adoption of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Before that, HHS kept a separate Title 45 codification that largely duplicated Part 200. If you run across older guidance that cites 45 CFR Part 75, those requirements now live in 2 CFR Part 200 through Part 300.
Who Has to Follow It
The Uniform Guidance applies to every non-federal entity that receives an HHS award. Under 2 CFR 200.101, federal agencies must apply the rules to all non-federal entities unless a specific statutory exception exists.3eCFR. 2 CFR 200.101 – Applicability In practice that reaches:
- State and local governments running health and social service programs
- Indian tribes and tribal organizations
- Universities and colleges receiving research funding from agencies such as NIH
- Nonprofits carrying out HHS-funded programs
For-profit organizations can receive HHS awards too, but Part 300 places a hard limit on them: no HHS funds may be paid as profit to a for-profit recipient, except under the Small Business Innovation Research and Small Business Technology Transfer Research programs.4eCFR. 2 CFR Part 300 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards For-profit recipients also have different audit options than nonprofits and governments.
The HHS-Specific Additions
Part 200 provides the baseline. Part 300 adds the pieces HHS wants tightened or handled its own way.
Conflict of Interest
Section 300.112 requires every HHS agency to maintain conflict-of-interest policies that identify when outside relationships, activities, or financial interests are acceptable and when they are not. The policies must include a process for advance notification and review. Agencies that fund Public Health Service research must also align their policies with the financial conflict-of-interest rules in 42 CFR Part 50, Subpart F.4eCFR. 2 CFR Part 300 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Indirect Costs
Section 300.414 supplements the Uniform Guidance’s indirect cost rules. If your organization doesn’t have a federally negotiated indirect cost rate, you can use a de minimis rate of up to 15 percent of modified total direct costs.5eCFR. 2 CFR 200.414 – Indirect Costs That base generally covers salaries, fringe benefits, materials, supplies, services, and up to the first $50,000 of each subaward. Want a higher rate? You’ll need to negotiate one with HHS’s Cost Allocation Services, which OMB has designated the cognizant agency for reviewing and approving indirect cost rate agreements.6HHS.gov. Cost Allocation Services
Financial Management and Allowable Costs
Adopting Part 200 pulls you into its financial management rules. You must maintain systems that identify the source, amount, and use of funds for each award.7eCFR. 2 CFR 200.302 – Financial Management You must also have internal controls that give reasonable assurance you’re managing the award in compliance with federal law.8eCFR. 2 CFR 200.303 – Internal Controls
Every cost you charge to an HHS grant has to pass the allowability tests in 2 CFR 200.403. A cost must be:
- Necessary and reasonable for the work under the award
- Allocable to the specific federal award being charged
- Consistent with policies that apply uniformly to both federally funded and non-federally funded activities
- In accordance with generally accepted accounting principles
- Adequately documented
- Not charged to another federal program in the current or a prior period
Fail any one of these and the cost is unallowable, meaning you have to cover it with non-federal money.9eCFR. 2 CFR 200.403 – Factors Affecting Allowability of Costs The consistency test snags a lot of organizations. Treating the same type of cost as a direct charge on one award and as indirect on another breaks the rule.
Audits
Any non-federal entity that spends $1,000,000 or more in federal awards during a fiscal year must undergo a Single Audit or a program-specific audit.10eCFR. 2 CFR 200.501 – Audit Requirements The 2024 revision raised the threshold from $750,000, so organizations that spend between those two figures no longer trigger the federal audit requirement. If you’re below the threshold, you still have to keep records available for review by the awarding agency or the Government Accountability Office.
A Single Audit looks at both your financial statements and your compliance with the terms of each major federal program, and it’s performed by a certified public accountant or other qualified auditor. Significant deficiencies or material weaknesses typically require a corrective action plan on a set timeline. Repeated or serious findings can lead to closer monitoring from the awarding agency.
Record Retention
You have to retain records related to a federal award for three years from the date you submit your final financial report.11eCFR. 2 CFR 200.334 – Record Retention Requirements For awards renewed quarterly or annually, the clock runs from the most recent quarterly or annual report. Several situations extend the period:
- Active litigation, claims, or audit findings keep the retention obligation alive until the matter is resolved and final action taken.
- The awarding agency, cognizant agency for audit, or cognizant agency for indirect costs can direct you in writing to extend retention.
- Records for property and equipment bought with federal funds must be kept for three years after final disposition of the property, not three years after the final report.
Mandatory Disclosures
If your organization has credible evidence of federal criminal law violations connected to an HHS award, you must disclose them promptly and in writing. Under 2 CFR 200.113, this covers fraud, bribery, conflict of interest, and gratuity violations under Title 18 of the U.S. Code, along with civil False Claims Act violations.12eCFR. 2 CFR 200.113 – Mandatory Disclosures Disclosure has to go to both the awarding agency and its Office of Inspector General. Failing to disclose can itself lead to suspension or debarment.
The regulation doesn’t leave room to quietly fix an internal problem and move on. Once you have credible evidence, the obligation to report is running.
Closeout
After the period of performance ends, you have 120 calendar days to submit all final reports and liquidate outstanding financial obligations.13eCFR. 2 CFR 200.344 – Closeout Subrecipients get 90 calendar days to file reports with their pass-through entity and liquidate obligations. Extensions exist, but asking for one after the deadline is not a strong position.
If you don’t yet have a final indirect cost rate for the period of performance, submit the final financial report on time anyway and revise it once the rate is set. Administrative closeout costs incurred between the end of the performance period and the report due date are allowable, but they must be liquidated before the deadline and charged to the last budget period.
Exceptions
The Uniform Guidance isn’t absolute. 2 CFR 200.102 recognizes three routes to an exception:14eCFR. 2 CFR 200.102 – Exceptions
- OMB can waive requirements for entire classes of awards or recipients, often to support innovative program designs or respond to emergencies. OMB cannot waive the Single Audit requirements in Subpart F this way.
- When a federal statute or regulation requires different treatment for a class of awards, the agency implements the difference without OMB approval.
- A federal agency can grant case-by-case exceptions for individual awards or recipients, unless the law prohibits it. Only the cognizant agency for indirect costs can authorize exceptions related to cost allocation plans or indirect cost rate proposals.
None of the three routes reach the audit requirements in Subpart F. For everything else, expect to justify why the standard rule doesn’t fit and how your alternative still protects federal interests.
What Noncompliance Costs
Enforcement tools run from mild to severe. When monitoring or an audit turns up problems, the awarding agency can add conditions to the award, temporarily withhold payments, or require the return of misspent funds. Patterns of poor performance or refusal to correct deficiencies can lead to suspension or termination.
Debarment is the most serious administrative outcome and bars an organization from receiving federal awards across all agencies for a set period.15Acquisition.GOV. Federal Acquisition Regulation Subpart 9.4 – Debarment, Suspension, and Ineligibility It’s reserved for serious misconduct and is meant to protect the government rather than punish.
Fraud raises the stakes past administrative remedies. The civil False Claims Act imposes penalties plus triple the government’s damages on anyone who knowingly submits false claims for federal funds.16Office of the Law Revision Counsel. 31 U.S. Code 3729 – False Claims Criminally, submitting a false claim to a federal agency carries up to five years in prison under 18 U.S.C. 287.17Office of the Law Revision Counsel. 18 U.S. Code 287 – False, Fictitious, or Fraudulent Claims The same conduct can trigger both civil and criminal liability.