Big Changes Are Coming to the Uniform Guidance: Here's What Federal Grant Recipients Need to Know

Jun 2 / Rachel Werner
If your organization receives federal awards, the May 2026 proposed updates to 2 CFR Part 200 -- the Uniform Guidance -- deserve your full attention. OMB's proposed changes to 2 CFR Part 200, as proposed in May 2026, represent one of the most significant shifts in federal grants management in years. Where the 2024 revisions focused on streamlining compliance and reducing administrative burden, the 2026 proposal moves in the opposite direction -- toward tighter federal control, expanded agency discretion, and stricter accountability at every stage of the award life cycle

We've put together a full provision-by-provision handout breaking down every proposed change alongside the 2024 version and what it means in practice. You can grab that on our Free Resources page. But here's the high-level summary to get you oriented.

The Five Themes Driving Every Proposed Change

Nearly every update in the 2026 proposal ties back to one of these five priorities:

  • Stronger federal oversight across the entire award lifecycle
  • Increased political and agency control over award decisions
  • Heightened payment scrutiny before federal dollars go out the door
  • National security and domestic sourcing conditions woven into awards
  • Expanded enforcement with more tools for agencies to act


Here's how those themes show up section by section.

Subpart B - General Provisions: Broader Authority, Stronger Enforcement

Agencies now have more explicit authority to terminate or suspend awards when they no longer align with agency priorities or "national interest" - language tied to EO 14332, which brings political appointees into grants oversight. New conflict of interest disclosures are required for employees who previously worked at the awarding agency, and Offices of Inspector Generals (OIGs) must now forward mandatory disclosures to the U.S. Attorney's Office within 10 days.

Subpart C - Pre-Award Requirements: The "Squeeze"

This is where applicants will feel the most friction. Fixed-amount awards are eliminated unless specifically authorized by statute - a major reversal from 2024. Senior political appointees now play a role in merit review under EO 14332. Risk review criteria are expanding to include foreign affiliations, publicly verifiable questionable practices, and financial capacity for high-dollar awards. Three brand-new prohibitions are also being added, covering foreign collaborations, disparate-impact liability theories, and viewpoint-based event discrimination.

Subpart D - Post-Award Requirements: More Documentation, More Scrutiny

Recipients and pass-throughs will feel this subpart in their day-to-day operations. COSO is no longer referenced as the internal control standard. E-Verify participation is required for employees and contractors performing work under federal awards. The Treasury's Do Not Pay system must be used before any federal payment is issued. Fixed-amount subawards are eliminated alongside fixed-amount awards. Performance reports must now confirm that all subawards issued during the reporting period have been reported to SAM.gov.

Subpart E - Cost Principles: Tighter Allowability Across the Board

Advertising and PR costs are unallowable except in limited cases. Conference attendance requires express agency approval in the award terms. Memberships and subscriptions need prior approval and must be necessary to fulfill award requirements. The nonprofit cost principle exemption is narrowed significantly -- only organizations with 90% or more of their federal funding through contracts or FFRDCs qualify.

Subpart F - Audit Requirements: Watch the Compliance Supplement

The word "annual" has been removed from references to the Compliance Supplement, which means OMB is no longer committed to issuing it every year. References to the GAO Green Book and COSO frameworks are also being removed from the audit scope provisions, consistent with the internal controls change in Subpart D.

What Should You Do Right Now?

You don't need to wait for the final rule to start preparing. Review your award portfolio for fixed-amount awards and subawards, check your SAM.gov subaward reporting, update your internal control documentation, and talk to your auditors about the Compliance Supplement cadence change now.

For the full breakdown,  download our free handout on our Free Resources page. We'll keep sharing guidance as the comment period closes and final rules take shape.

Frequently asked questions

What is the 2026 Uniform Guidance proposal?

It's OMB's proposed update to 2 CFR Part 200, the regulation that governs how federal grant funds are managed, spent, and audited. The May 2026 proposal shifts the overall framework toward greater federal oversight, stricter pre-award scrutiny, and tighter cost allowability standards compared to the 2024 version.

Are fixed-amount awards still allowed under the proposed 2026 rules?

No. The 2026 proposal eliminates fixed-amount awards and fixed-amount subawards unless they're specifically authorized by statute. This is a direct reversal of the 2024 Uniform Guidance, which retained and refined them as a flexible award structure.

Does COSO still apply to federal grant recipients under the 2026 proposal?

No. The 2026 proposal removes explicit references to the COSO framework and the GAO Green Book as internal control standards under 2 CFR Part 200. Organizations whose internal control policies cite those frameworks as the 2 CFR standard will need to update their documentation.

Will the Compliance Supplement still be issued every year?

Not necessarily. The 2026 proposal removes the word "annual" from references to the Compliance Supplement, which means OMB is no longer bound to issue it on a yearly basis. Organizations and their auditors should build flexibility into audit planning to account for this uncertainty.

When do the 2026 Uniform Guidance changes take effect?

The May 2026 updates are still proposed, meaning they're in the comment period and not yet final. However, they reflect clear policy direction, and organizations that wait for the final rule before preparing will likely find themselves behind.