45 CFR Part 75 Is Gone: What HHS Grantees Need to Know About the Most Significant Compliance Shift in a Decade

HiQuity Solutions
1 day ago
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POST 2 of 10

Series - Grant Ready: A Compliance Readiness Framework for Federal Award Recipients

Introduction

If your organization receives federal funding from the Substance Abuse and Mental Health Services Administration, the Health Resources and Services Administration, the Administration for Children and Families, the Administration for Community Living, or any other operating division of the Department of Health and Human Services, your compliance framework changed significantly in 2024 and again in 2025.

For most HHS grantees, that change has not yet been fully absorbed. Organizations are still referencing compliance policies built around a regulatory framework that no longer exists. Staff are being trained on citations that have been rescinded, and when monitoring visits and audits arrive, the gap between what an organization's written policies say and what the current governing regulation requires is itself a compliance finding.

This post explains what changed, when it changed, and what your organization needs to do about it.

The Regulatory History, Why HHS Was Different

When the Office of Management and Budget issued the Uniform Guidance at 2 CFR Part 200 in 2014, it was designed to create a single, consistent compliance framework for all federal award recipients across all agencies. Most federal agencies adopted it directly, but HHS did not.

Instead, HHS codified its own adapted version of the Uniform Guidance at 45 CFR Part 75, a parallel regulatory track that contained largely similar requirements but with HHS-specific modifications, different citation structures, and enough variation from the government-wide framework to create ongoing confusion and administrative burden for organizations receiving awards from multiple federal agencies.

For a decade, HHS grantees operated under 45 CFR Part 75 while the rest of the federal grant world operated under 2 CFR Part 200. Community action agencies, behavioral health providers, and health center networks that received funding from both HHS and non-HHS agencies had to navigate two versions of what was supposed to be a uniform framework simultaneously. As one leading authority in federal grants law described it, the full transition to Part 200 was ten years overdue.

Phase 1 - October 1, 2024: The Threshold Changes

On October 2, 2024, HHS published an Interim Final Rule announcing a phased approach to adopting 2 CFR Part 200. The first phase went into effect immediately for new awards issued on or after October 1, 2024, and adopted eight specific provisions from the revised Uniform Guidance, all threshold increases and flexibilities that the broader federal grant community had already received.

For HHS grantees, these changes were immediately meaningful:

De minimis indirect cost rate - increased from 10% to up to 15% of Modified Total Direct Costs for eligible organizations without a current negotiated indirect cost rate. This is additional indirect cost recovery available to every qualifying HHS grantee, effective immediately for new awards. Note that HHS retained the 8% de minimis cap for training grants and foreign awards; those are not covered by the 15% ceiling.

MTDC subaward exclusion threshold - increased from $25,000 to $50,000. Organizations with significant subaward activity now exclude a larger portion of those costs from the MTDC base, which affects indirect cost calculations across the award.

Equipment threshold - increased from $5,000 to $10,000 per unit. Items below this threshold are now classified as supplies rather than equipment, reducing the inventory and disposition requirements that apply at closeout.

Supplies threshold - the reporting threshold for unused supplies at closeout also increased from $5,000 to $10,000 in aggregate value.

Single audit threshold - increased from $750,000 to $1,000,000 in federal award expenditures during the fiscal year. (Smaller HHS grantees that were previously required to undergo single audits may no longer be subject to that requirement.)

Fixed amount subaward ceiling - increased from $250,000 to $500,000, expanding flexibility in how some subawards can be structured.

Closeout reporting period - HHS aligned with the government-wide standard of 120 calendar days after the end of the period of performance for recipients to submit all final reports, replacing the more restrictive HHS-specific closeout provisions under 45 CFR Part 75.

Phase 2 — October 1, 2025: The Full Transition

The second phase was more consequential in scope. Effective October 1, 2025, HHS fully repealed 45 CFR Part 75 and adopted 2 CFR Part 200 in its entirety. Twelve HHS-specific provisions that had been maintained at 45 CFR Part 75 were relocated to a new 2 CFR Part 300, covering items like conflict of interest requirements, for-profit organization provisions, hospital cost principles, and indirect cost allocation for research and development.

As of October 1, 2025, all HHS awards, from SAMHSA, HRSA, ACF, NIH, AHRQ, and every other HHS operating division, are governed by 2 CFR Part 200 and 2 CFR Part 300. The regulatory framework that HHS grantees spent a decade learning (45 CFR Part 75) has been rescinded.

HHS also released a revised Grants Policy Statement effective October 1, 2025, the first substantial revision to the GPS since 2007. For organizations whose compliance training, policy manuals, and staff orientation materials reference the GPS, that document has changed significantly and those materials need to reflect the current version.

What This Means Operationally

The substantive compliance obligations that HHS grantees carry: procurement standards, cost principles, subrecipient monitoring, and closeout requirements, were largely similar under 45 CFR Part 75 and 2 CFR Part 200. The transition does not mean everything your organization knew about federal compliance is wrong.

What it does mean is that every compliance-related document your organization maintains, including policies, procedures, staff training materials, subaward agreement templates, and subrecipient monitoring checklists, needs to be reviewed against the current regulatory framework and updated where the citations, thresholds, or specific requirements have changed.

Organizations that built compliance infrastructure before 2024 and have not reviewed it since are carrying several specific gaps:

Indirect cost policies that reference the 10% de minimis rate rather than the updated ceiling of up to 15%, and that calculate the MTDC base using the $25,000 subaward exclusion rather than $50,000. These organizations may be under-recovering indirect costs on every new award.

Procurement policies that reference 45 CFR Part 75 citations rather than 2 CFR Part 200 citations. When an auditor asks for written procurement procedures and your policy document references a regulation that has been rescinded, the documentation problem compounds the underlying compliance question.

Subaward agreement templates that use Part 75 citations in the required federal data elements. Those templates need to be updated to reflect 2 CFR Part 200 and 2 CFR Part 300 as applicable.

Closeout checklists built around the old HHS-specific 90-day closeout timeline rather than the current 120-day standard under 2 CFR § 200.344.

Equipment and supply tracking systems calibrated to the old $5,000 thresholds rather than the current $10,000 thresholds.

Staff training materials that reference 45 CFR Part 75 sections. Even if the substance of what is being taught is largely correct, training that cites rescinded regulatory language signals to auditors that the organization's compliance infrastructure has not kept pace with the current governing framework.

A Note on Awards That Predate the Transition

For HHS grantees managing awards issued before October 1, 2024, the applicable regulation for specific provisions depends on the award date and the specific provision at issue. The threshold changes adopted in Phase 1 were generally applied to active awards. For the full adoption of Part 200 under Phase 2, active awards were updated through revised terms and conditions; recipients should review their current Notice of Award documents to confirm which regulatory framework governs each active award.

If there is any uncertainty about which version of the Uniform Guidance governs a specific provision of a specific active award, the answer is in the award's terms and conditions, not in organizational assumption.

What to Do Now

	Conduct a regulatory audit of your compliance documentation. Pull every compliance-related policy, procedure, template, and training material your organization uses for federal awards. Identify every reference to 45 CFR Part 75 and assess whether the corresponding provision in 2 CFR Part 200 or 2 CFR Part 300 is substantively the same or has changed. Update accordingly.
	Recalculate your indirect cost recovery. If your organization has been claiming the 10% de minimis rate on HHS awards and is eligible for the updated ceiling of up to 15%, assess whether your current awards and budget structures allow for that additional recovery. For proposals currently being written, the updated ceiling should be reflected in the budget narrative.
	Update your subaward templates and monitoring procedures. Every subaward agreement your organization issues for an HHS award should reference 2 CFR Part 200 and 2 CFR Part 300, not 45 CFR Part 75.
	Review the updated HHS Grants Policy Statement. The 2025 GPS is the governing policy document for HHS awards. If your organization's compliance training or internal guidance references the GPS, staff should be working from the current version.
	Confirm the applicable framework for each active award. For organizations managing multiple HHS awards with different issue dates, review each active Notice of Award to confirm which regulatory framework governs each award's specific requirements.

Why This Series Uses 2 CFR Part 200 Citations Throughout

Every post in the Grant Ready Compliance Framework series cites 2 CFR Part 200 as the governing framework for federal award compliance. For HHS grantees, that is the correct regulatory reference for all new awards issued on or after October 1, 2025, and, for the threshold-related provisions, for awards issued on or after October 1, 2024. Where HHS-specific modifications apply, they are found at 2 CFR Part 300.

If your organization's compliance infrastructure is still organized around 45 CFR Part 75, the rest of this series will help you understand what the current framework requires, but the most urgent task is updating your documentation to reflect the regulatory framework that now governs your awards.