Information Sharing on Federal Funding: June 2026

The biggest news in the Federal grants world is the release of proposed changes to the Uniform Guidance, released on May 28. The 400+ page document contains changes that would be significant and impactful for how Federal grants are awarded and administered. The document has a 45-day public comment period, ending July 13, 2026, and we encourage everyone to submit feedback.

Today’s post focuses on our initial analysis and exploration of proposed changes with concentration on those that would impact large proportions of grantseekers and grantees. For brevity’s sake, we are paraphrasing the changes and describing by the effects. Note that many important changes affect certain types of grants and agencies, so we encourage you to seek analyses specific to your sector.

BACKGROUND

The Uniform Guidance (formally the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) is a framework and series of recommendations and rules established by the U.S. Office of Management and Budget (OMB) specific to Federal grants. Within the US Code of Federal Regulations or CFR, the Uniform Guidance is 2 CFR (Title 2, Federal Financial Assistance). It is used by Federal agency staff, grantees, and others to understand aspects of Federal grant posting, administration, management, and much more.  The updates released this week were largely foreshadowed in an Executive Order released in August of 2025 titled “Improving Oversight of Federal Grantmaking” (EO 14332).

CHANGES IN GENERAL AUTHORITY

• Proposed updates will change the Uniform Guidance itself from a description and characterization as “guidance” to “regulations.” This would require binding use across Federal agencies without agency-level rulemaking, providing OMB with tremendous power to update standards and control Federal funding.
• Previously, the development of changes to the Uniform Guidance included agencies in the process through direct involvement in rulemaking. With the proposed changes, this direct collaboration will no longer happen. Agencies would be sidelined to optional participation in interagency workgroups such as the Council on Federal Financial Assistance—an advisory body under OMB that has no regulatory or statutory authority.

CHANGES IN GRANT ANNOUNCEMENTS AND APPLICATION PROCESSES

• Non-competitive and limited competition awards expressly permitted for agencies and use of a preliminary screening process for interested applicants (Statement of Interest) is encouraged. In section 200.204, an addition would allow agencies to avoid publicly announcing funding opportunities “when the agency determines that publicly announcing an opportunity would pose a risk to national security or is in the national interest of the United States” – an exception that could be used very loosely to prevent knowledge of grants and further reduce open competition.
• The changes also require applicants to apply via Grants.gov unless there is a grant-specific exemption authorized through Federal statute or approved by the agency head or designee. This eliminates use of written applications, which are often used in rural and remote areas, and limits agency discretion to use application systems that may be better designed and/or streamlined for their grant programs.

CHANGES IN APPLICANT/GRANTEE SELECTION

• As previewed in EO 14332, the draft language specifies that senior appointees use independent judgment in making applicant selection decisions on all discretionary grants. Through a “pre-issuance review” appointees will check applications for alignment with a long list of considerations including advancement of the President’s policy priorities, lower indirect cost rates, and avoidance of any activities, promotion, encouragement, or support of racial preference or proxy considerations in employment or program participation, “Denial by the recipient of the sex binary in humans or the notion that sex is a chosen or mutable characteristic,” illegal immigration, or “other initiatives that compromise public safety or promote anti-American values.”
• As part of pre-award risk-assessment agencies will be required to consider past performance of applicants against the goals of the funding opportunity, giving equal weight to positive and negative results, and consider the “applicant’s history of questionable practices based on publicly available and verifiable information” and “affiliations with organizations engaged in activities that violate Federal law, undermine public safety or national security, or advocate for the overthrow of the United States Government.” These assessments appear to allow the awarding of grants based on political and allyship factors.

CHANGES IN GRANT ADMINISTRATION

• Changes to Section 200.340 allow termination of existing and future awards, suspension of awards, and additional conditioning of awards (at the individual or class level) at the discretion of agencies and political appointees, through a simple written rationale. Reporting failures to SAM.gov will also be a noncompliance issue that can result in grant termination. Agencies will have broader discretion to place specific conditions on awardees (200.800) based on risk assessment and are no longer required to remove conditions once satisfied/resolved, with the option to require ongoing additional payment reporting and financial integrity site visits. Given that grant awards are often multi-year, the specter of termination without cause or (much) process is incredibly destabilizing. It makes grant agreements with the Federal government largely a one-sided “commitment” and will allow the type of illegal and improper terminations we saw in 2025 and continue seeing in 2026.
• Provisions in Section 200.300 of the Uniform Guidance would codify the Administration’s views regarding DEI, gender ideology, transgender medical care, social and environmental justice, disparate impact grantmaking considerations, and similar. This is important because prior actions have largely been established through Executive Order, a non-legislative process that can be easily undone by future administrations and is weighed within the government and by courts against other potentially conflicting existing guidance, like CFR 200 and Congressional legislation.
• Unless otherwise authorized by statute, all awards will be on a cost-reimbursement structure and have full financial reporting. Agencies will no longer be able to use fixed award structures unless allowed through legislation. Updates to 200.305 will require recipients other than State governments to submit written justification for each drawdown/payment request, describing work progress. These financial changes create additional administrative burdens and could hold up timely payment.
• Changes to 200.300 include requirements of grantees and subgrantees to protect and support individuals’ ability to exercise religion, including consciousness-based objections (e.g., refusing to provide services to someone). President George W. Bush’s Faith-Based and Community Initiative established that religious organizations have eligibility and equal consideration for Federal funding while retaining their identity. The addition of language about exercising religion muddies the waters of a system that has worked well in ensuring taxpayer money is not used to promote, support, or perform religious activities by keeping grant-funded work separate from religious activities.
• Proposed changes to 200.303 would require all grant recipients to enroll in and use the Department of Homeland Security’s E-Verify system for each employee and any contractor working on a Federal award and to report findings that someone could not be verified to the awarding agency. The changes also include additional conflict-of-interest requirements, grantee and sub-awardee disclosures, and increased monitoring of sub-awardees—measures that would significantly increase the administrative burden on grantees.

CONCLUSION

There are (and should be) new and adapted grant programs that reflect the priorities of each administration and respond to the current needs of the nation. However, the relative stability of most grant purposes and the predictability and clear rules for selection, administration, and processes for grant terminations are important foundations for public investments and for agencies, applicants, and grantees.

Our initial review of proposed changes reveal a plan to fundamentally change grant activities at the Federal level in ways that introduce politics into processes, expand power and control by the Executive branch (reducing that of the legislative and judiciary branches), create uncertainty about the reliably of Federal funding, reduce the transparency and fairness of competitions, place additional administrative burdens on grantees, and cement priorities of a single administration across time and programs.

Upending this foundation—for awards that regularly span presidential terms—is not an improvement of Federal policies or use of taxpayer dollars. If enacted, this will establish the precedent for massive changes with each incoming administration, creating chaos within critical programs and funding streams affecting us all and eroding public trust and support in Federal grants.

As mentioned, the proposed changes to the Uniform Guidance have a short window for public comment, and we encourage you to participate and submit feedback and to call your representatives and let them know the importance of protecting Federal funding streams and the ability of funding recipients to do the work needed in our communities.

This is part of a monthly series on the impact of Federal funding cuts. Have resources to share? Let us know at mail@thegrantplantnm.com.

This post was filed under: Federal Grants