Proposed 2026 Uniform Guidance Changes: What Federal Award Recipients Should Do Now

The Office of Management and Budget (OMB) has proposed a sweeping rewrite of the federal grant rules commonly known as the Uniform Guidance. Published on May 29, 2026, the proposal would revise 2 CFR Part 200, the government-wide framework for administering federal grants, cooperative agreements, and subawards.

The proposed changes have drawn an unusually large response from local governments, colleges and universities, nonprofits, and other federal award recipients. Although the proposal is not final, it is significant enough that organizations should assess the potential operational effects now and not wait until it is issued in final form.

Current Status of the Proposal

The public comment period closed on July 13, 2026. OMB proposed an effective date of October 1, 2026, but that date is not settled. As of the date of publication, a Senate Appropriations Committee continuing-resolution proposal included language that would delay implementation until at least December 11, 2026. That provision still needs to become law, and the final rule could also change in response to the comments received. Recipients should therefore treat October 1 as a proposed target, and not a guaranteed implementation date, and continue monitoring developments.

Why Uniform Guidance Matters

Uniform Guidance establishes common requirements for how federal awards are applied for, awarded, managed, documented, monitored, and audited. It addresses areas such as financial management, internal controls, procurement, allowable costs, payments, subrecipient oversight, and Single Audit requirements.

The requirements can apply whether an organization receives federal funds directly from a federal agency or receives them through a state, county, another government, or a nonprofit pass-through entity. An organization has Uniform Guidance responsibilities even when its federal expenditures are below the Single Audit threshold. Maher Duessel has previously discussed this distinction in Got a Federal Award? Compliance Tips Governments and Non-Profits Must Follow.

The 2026 proposal is notable because it is not simply another technical update. It reaches across much of the award lifecycle and could affect multiple departments within an organization.

Potential Operational Changes to Watch

Uniform Guidance Could Become More Immediate

One of the most structural changes would be to clarify that 2 CFR Subtitle A carries regulatory effect in its own right. Under the proposal, future OMB changes could take effect government-wide on OMB’s effective date rather than waiting for each federal agency to separately adopt them.

For recipients, greater uniformity could also mean less time to prepare. Organizations may have fewer months to update policies, train staff, revise subaward agreements, and coordinate with auditors or pass-through entities. “More uniform” may also mean “more immediate.”

Payment Requests Could Require More Written Support

The proposal would require recipients and subrecipients other than states to include a brief written justification with payment requests, whether the payment is made in advance or as a reimbursement. The justification would describe the activities, milestones, or other aspects of the federal award that correspond to the request. This could make the payment process more documentation intensive, and may add documentation and review steps to the payment process.

Some Familiar Costs May Require Additional Review

The proposal would revise the treatment of several cost categories, including publication costs, conference attendance, memberships and subscriptions, advertising and public relations, fundraising, and commencement or convocation expenses. Depending on the category, costs could be presumptively unallowable or require specific agency approval and inclusion in the award terms.

The practical response is not to assume that every cost is prohibited. Instead, recipients should strengthen pre-charge review and retain a clear explanation of why a cost is necessary, allocable, and consistent with the award. Where prior approval is required, the approval should be obtained before the cost is incurred.

OMB Proposes to Eliminate Fixed-Amount Awards and Subawards Unless Authorized by Federal Statute

OMB proposes to eliminate fixed-amount awards and fixed-amount subawards unless authorized by federal statute. These arrangements were designed, in part, to reduce administrative burden by focusing on agreed deliverables or results rather than detailed support for every individual cost.

If the proposal is finalized as written, some awards may shift toward a more traditional incurred-cost model. That could increase the need for transaction-level documentation, staff review, and record retention—particularly for smaller or simpler programs that benefited from a less intensive structure.

Pass-Through Entities May Face More Oversight Responsibility

The proposal would place additional emphasis on subrecipient and contractor determinations, subaward reporting, monitoring, and downstream accountability. It also would clarify that payments to affiliates, subsidiaries, or related entities cannot simply be treated as internal transfers without evaluating whether they should be classified as subawards or contracts.

This is especially important for states, counties, and cities that pass federal funds to other organizations. Their responsibility is not limited to sending the money. They also need to communicate applicable requirements, monitor performance and compliance, follow up on issues, and retain evidence of that oversight.

Award Terms May Change after the Award is Issued

The proposal would clarify and expand the ability of federal agencies—and, where applicable, pass-through entities—to add, modify, or remove specific conditions during the period of performance, subject to applicable law and the risks associated with the recipient or program.

Examples could include requiring reimbursement instead of advance payments, additional or more detailed financial reports, information about payments to contractors or vendors, additional monitoring or financial integrity site visits, technical or management assistance, or additional prior approvals.

Recipients should not assume that compliance requirements are frozen when an award notice is accepted. However, the proposal would not give agencies unlimited discretion: changes based on specified risk factors would be subject to proposed timing requirements, while changes based on other factors generally would require the recipient’s agreement. Organizations should assign responsibility for reviewing amended award terms, assessing their operational impact, and communicating changes to program, finance, procurement, human resources, and other affected staff.

Practical Steps to Take Now

Organizations should not make wholesale changes based solely on a proposed rule. They should, however, use the proposal as a readiness checklist:

• Inventory all direct federal awards, pass-through awards, and subawards.
• Identify which awards rely on reimbursement, fixed amounts, or other funding structures that could be affected.
• Assign responsibility for monitoring award terms, agency guidance, and implementation developments.
• Review the current payment process from the initial cost through draw preparation, approval, submission, and reimbursement, and evaluate the impact of potential changes.
• Reassess sub-recipient and contractor classifications and update monitoring templates where needed.
• Identify cost categories that may require additional approval or documentation.
• Coordinate with grant leadership, finance, procurement, human resources, program staff, and auditors.
• Monitor the final rule, any delay or implementation legislation, agency guidance, and the terms of individual awards.

The Bottom Line

The proposed 2026 revisions could change how recipients manage federal awards well before an auditor tests the transactions. The most important preparation is practical: know where federal funds are coming from, understand who is responsible for each part of the compliance chain, strengthen the documentation supporting payments and costs, and make sure subrecipient oversight is consistent.

The rule remains subject to change, and the implementation timeline is uncertain. Organizations should monitor the final outcome without waiting passively for it. If needed, Maher Duessel can help your organization assess its federal award processes and evaluate how proposed or final Uniform Guidance changes may affect its operations. Learn more about our Single Audit services or contact your Maher Duessel representative with questions.

Sources and Related Reading

• Federal Register: Regulation for Federal Financial Assistance
• National Association of Counties: OMB Proposed Rule Resource Hub
• NACUBO: Response to the Proposed Uniform Guidance Revisions
• National Council of Nonprofits: 2026 Proposed OMB Uniform Guidance Comment Guide
• Maher Duessel: 2024 Single Audit Update