Redpath Insights


Financial Memorandum for Federal Awardees

by Melissa Johnson, CPA

July 10, 2018 โ€” On June 20, 2018, the Office of Federal Financial Management issued a memorandum for Chief Financial Officers and Heads of Small Executive Agencies to implement statutory changes to the micro-purchase and the simplified acquisition thresholds.  The memorandum implements the provisions of the National Defense Authorization Acts (NDAA) for FYs 2017 and 2018, directs agencies to implement these changes in the terms and conditions of their awards, and allows recipients of federal awards to implement these changes in their internal controls.

Procurement Threshold Changes

Section 806 of the NDAA for FY 2018, Pub. L. No. 115-91, which became law on December 12, 2017, raised the micro-purchase threshold from $3,500 to $10,000, and section 805 raised the simplified acquisition threshold from $100,000 to $250,000.  OMB intends to revise the Uniform Guidance to conform with the law.  In the interim, OMB granted an exception, effective June 20, 2018, allowing recipients to use the higher threshold of $10,000 for micro-purchases and $250,000 for simplified acquisitions in advance of the revisions to the Federal Acquisition Regulation (FAR) at 48 C.F.R. Subpart 2.1 and the Uniform Guidance.  Recipients of federal awards should document any change to its micro-purchase and simplified acquisition thresholds in accordance with 2 C.F.R. Section 200.318 (general procurement standards).


We suggest organizations receiving federal awards review their current procurement policies and procedures to consider the updated federal micro-purchase and simplified acquisition thresholds in their procurement practices.  Any changes to procurement thresholds should be documented in organizationsโ€™ procurement policies.  Minnesota governmental entities should continue to ensure its policies and procedures still comply with the Uniform Municipal Contracting Law under Minnesota Statute Section 471.345, which require purchases over $175,000 to still follow a sealed bid or competitive bidding processโ€”a new limit effective starting 8/1/2018, up from the present limit of $100,000.

Melissa Johnson, CPA

Melissa Johnson, CPA

Melissa Johnson, CPA, MBA, is a manager at Redpath and Company, where she specializes in the government/not-for-profit audit and accounting services area. Melissa has over 15 years of experience working with federal awards for governmental, not-for-profit, and commercial organizations. Prior to joining the Redpath and Company team, Melissa worked with the U.S. Defense Contract Audit Agency providing contract audit services to various governmental agencies. Melissa has served as a committee member for the National Seminar for Government Contracts and has provided training on federal compliance requirements, application of cost accounting standards, and internal control requirements necessary to administer federal contracts. Melissa is a holder of The Advanced Single Audit Certificate issued by the AICPA. The Advanced Single Audit Certificate requires the ability to evaluate and analyze the core concepts related to client acceptance, engagement planning, engagement analysis, concluding an engagement, and guiding principles for single audits at an advanced level as outlined in the AICPA Competency Framework: Governmental Auditing. Additionally, she has also provided single audit training at the MNCPA Audits of Local Governments Conference.