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Federal Grant Rules Change Proposal

The Office of Management and Budget (OMB) has proposed major changes to the federal grant rules that govern how funding is awarded, managed, and monitored across all federal agencies. If finalized, the changes would turn key grant guidance into binding regulations, significantly increasing federal oversight of grant recipients.

 

Key impacts on organizations

If adopted, the proposal could affect nonprofits, local governments, Tribal entities, and other grant recipients by:

  • Increasing reporting, compliance, and monitoring requirements
  • Expanding applicant risk reviews and oversight of subrecipients
  • Requiring additional employment verification (E-Verify) for recipients
  • Strengthening national security and foreign partnership restrictions
  • Allowing broader federal authority to suspend or terminate discretionary grants based on shifting agency priorities
  • Potentially adding new limitations related to DEI-related programming depending on final language

Overall, organizations that rely on federal funding may face higher administrative burden and greater uncertainty in long-term funding stability.

The key thing to understand is that this is still a proposed rule, not final policy, and it is very much in flux.

The OMB has opened the rule for public comment, and that means everything in it is subject to change, revision, or removal based on feedback from states, nonprofits, local governments, and other stakeholders. It is also already drawing significant scrutiny and early legal and policy challenges, which is typical for proposals of this scope.

The public has until July 13, 2026, to comment on the proposal. After that date, OMB will consider comments before releasing a final rule, which may still undergo substantial revisions.

REA Analytics is keeping a close eye on this and will provide frequent updates, including important developments and implications for grant recipients from local governments and nonprofits.

Federal Register

Federal Funding Updates

DOJ/BJA Reporting Updates

FFATA reporting now through SAM.gov (replacing FSRS). Subawards ≥ $30,000, or those later exceeding that amount, must be reported. Check the DOJ Grants Financial Guide (Mar 2025) for details.

Maintain grant and subgrant records for 3 years after submitting the final SF-425.

Reporting requirements (Guide §3.15) updated; always verify terms in your Notice of Award.

Performance reporting is moving from PMT to JustGrants—confirm which applies to your award.

Financial reports (SF-425) remain required quarterly or per program; deadlines vary by award.

HHS / HRSA / SAMHSA Reporting Updates

HHS is replacing 45 CFR 75 with 2 CFR 200 effective Oct 1 2025, incorporating OMB’s Uniform Guidance; minor deviations under 2 CFR 300.

New thresholds: subaward $50k (MTDC), equipment/supplies $10k, fixed subawards $500k, indirect 15%, single audit $1M, 120-day closeout.

Reports: annual FFR (SF-425) via PMS, progress/performance reports as required; SAMHSA due 90/120 days post-period. Credits like rebates must adjust FFRs.

HRSA General Terms & Conditions and GPS updated 2025; new NOFOs follow revised Uniform Guidance.