Background and Overview
June 22, 2026 — On May 29, 2026, the U.S. Office of Management and Budget (OMB), in coordination with all federal grantmaking agencies, published a proposed rule in the Federal Register to comprehensively rewrite 2 CFR Part 200, commonly known as the Uniform Guidance. Public comments must be submitted by Monday, July 13, 2026.
This is the largest revision to the Uniform Guidance since its initial publication in 2013 and carries significant implications for every organization that receives federal funding. The proposed rule is government-wide and would apply to every federal grant, cooperative agreement, and pass-through award, including those received directly by local governments and those passed through state or regional intermediaries.
The Uniform Guidance establishes the administrative requirements, cost principles, and audit requirements that govern how federal funds are applied for, awarded, administered, monitored, and audited across all federal agencies. When first issued in 2013, it consolidated eight previously separate sets of federal grant rules into a single, consistent framework applicable to states, local governments, nonprofits, universities, and hospitals.
Transition from Guidance to Regulation
This proposal reclassifies 2 CFR Part 200 from informal guidance to a legally binding OMB regulation, giving it the force of law.
- Regulations (Hard Law): Legally binding; noncompliance may result in penalties, enforcement actions, or withholding of funds.
- Guidance (Soft Law): Non-binding; agencies cannot impose penalties based solely on guidance if underlying laws are followed.
Funding Restrictions and Local Mandates
The proposal introduces significant policy and compliance changes:
- Implements 2025 executive orders restricting certain DEI-related uses of federal funds.
- Requires viewpoint neutrality for events held on publicly controlled property.
- Mandates senior political appointee review of discretionary awards.
- Allows agencies to terminate awards midyear based on shifting priorities, with exceptions for formula-based funding (e.g., block grants, disaster recovery grants).
Strengthened Federal Oversight
The proposal significantly increases oversight and compliance requirements:
- Inspectors General must report evidence of fraud or violations within 10 days.
- Agencies must use the Treasury’s ‘Do Not Pay’ system prior to issuing funds.
- New conflict-of-interest disclosures are required for applicants.
- Subaward reporting must be submitted to SAM.gov, with expanded monitoring obligations.
Additionally, restrictions on communication include:
- Prohibiting federal funds for public relations, advocacy, or voter registration unless required by law.
- Limiting funding for publications and conferences without prior approval.
While evaluation frameworks largely remain intact, agencies must use lower indirect cost rates as a tiebreaker between equally ranked discretionary proposals.
Summary
The proposed revisions would transform the Uniform Guidance into the Uniform Grants Regulation, marking a significant shift in federal funding policy. The changes introduce new compliance obligations and operational risks for governments, universities, and other recipients.
Stakeholders are encouraged to participate in informational webinars and submit public comments by July 13, 2026. The final rule is anticipated by October 1, 2026.
