Historic Overhaul of Uniform Grants Guidance Announced for Federal Financial Assistance

Federal Agencies Must Apply Revisions by October 1

The White House has issued a groundbreaking nine-page memorandum (April 4, 2024) that sets forth new rules for the administration of Federal financial assistance. The initiative, “Reducing Burden in the Administration of Federal Financial Assistance,” includes significant updates and revisions in Title 2 of the Code of Federal Regulations (CFR), otherwise known as Uniform Grants Guidance.

The guidelines impact the $1.2 trillion in funding provided by the federal government for thousands of programs that receive grants and other forms of financial assistance. The changes are meant to reduce complexity, administrative burden, and ambiguity. The new guidance also means new work for agencies to apply revisions by October 1, 2024.

In its April 4, 2024, announcement, the Office of Management and Budget (OMB) called the guidance “the most substantial revision to the Uniform Grants Guidance since it went into effect ten years ago,” and noted that changes were based on input from federal, state, and local governments, tribal organizations, nonprofits, universities, and companies.

OMB Deputy Director for Management Jason Miller, in an OMB briefing, said the new guidance will simplify grant announcements with plain language and, as a result, will strengthen accountability and compliance, streamline implementation, and broaden the pool of potential recipients. As the most substantial revision to the Uniform Grants Guidance, since it went into effect 10 years ago, Miller called it “a new era in the management of federal funds.”

The final version of the Uniform Guidance will be posted in the Federal Register. OMB released a pre-publication version. Federal agencies must submit how they plan to implement the revisions by May 15, 2024. This includes submitting plans for simplifying Notices of Funding Opportunities (NOFOs). The guidance requires agencies to redesign notices to improve accessibility, readability, and clarity. Targeting underserved communities, the goal of the guidance is to reduce paperwork burden and compose NOFOs in plain language.

Other key federal directives and goals from the memorandum include:

• Comprehensive Revision of Title 2: A key component of the memorandum is the extensive revision of Title 2 of the Code of Federal Regulations (CFR), which governs the administrative requirements, cost principles, and audit requirements for Federal awards. These changes, effective for all federal awards issued on or after October 1, 2024, aim to enhance the stewardship of federal funds, promote equitable access, reduce administrative burdens, and ensure effective oversight. Federal agencies are tasked with swiftly and consistently implementing these revisions to maximize their benefits.
• Post-Award Accountability and Transparency Enhancements: The memorandum addresses the need for maintaining accurate federal financial assistance award and sub-award data, establishing standardized core data elements, and implementing post-award administration efficiencies. These measures aim to reduce burden while enhancing accountability, transparency, and program outcomes.
• Consultation with the Grants Quality Service Management Office (QSMO): Federal agencies are reminded to consult with the lead Grants QSMO when updating their grants and cooperative agreements management systems. This ensures alignment with best practices and the provision of high-quality service offerings.

Roadwork Ahead for Federal Agencies

While the goal is to reduce burden, the new guidance requires significant changes in how federal agencies manage and administer grants and cooperative agreements.

• Systems and processes must be upgraded and could be time-consuming. Staff will need training on new requirements and processes.
• Enhancing post-award accountability and transparency means managing a vast amount of data accurately.
• Agencies must ensure that they can collect, manage, and report subaward data effectively.

With guidance emphasis on improving access and equity for Tribal Nations and underserved communities, agencies will need to engage and target communication with these communities more effectively. This could involve outreach, consultations, and the development of specialized application processes. Agencies must navigate the complexities of these engagements sensitively and effectively, which may be challenging without prior experience or established relationships.

Requirements to consult with QSMO when updating grants and cooperative agreements, agencies must align management systems with QSMO guidelines and best practices. This coordination could be challenging for agencies with unique or specialized grant management needs.

Addressing these challenges will require strategic planning, allocation of sufficient resources, and a commitment to continuous improvement and adaptation. As federal agencies navigate these changes, they must develop new strategies, tools, and partnerships to successfully implement the guidance and achieve its intended outcomes.

Barry Lawrence is a Senior Communication Program Manager for Highlight. The opinions expressed in this blog are his own and reflect a commitment to compliance and fostering a more accessible digital world for all Americans.