Policy Watch: What’s Next in Federal Grants Regulations

Federal grants remain a cornerstone of advancing national priorities, including public health, infrastructure, education, and disaster recovery. They provide essential financial support to eligible entities for public purposes while also strengthening local capacity, driving economic growth, and helping communities address complex challenges. In today’s evolving federal environment, funding priorities, regulatory expectations, and oversight mechanisms are shifting quickly. 

Staying up to date supports compliance and helps entities not only meet requirements but also maintain existing funding and remain competitive for future opportunities. Much like recent funding pauses, modifications, and cancellations, many of these regulatory and oversight changes are driven by broader federal realignments.  

 Key Takeaways 

• Federal grant regulations are experiencing significant changes, with an increased emphasis on accountability, transparency, and outcome-driven performance throughout the grant’s lifecycle.
• Key regulatory updates include the 2 CFR 200 Uniform Guidance, Executive Order 14332, and the 2025 OMB Compliance Supplement, all aimed at improving oversight, incorporating stricter compliance requirements, and adapting to evolving funding priorities.
• Organizations are encouraged to adopt proactive compliance measures, leverage technology, and continuously engage in education to navigate the evolving grant landscape best. 

Understanding the Current Federal Grants Landscape  

Recent developments in the federal grants landscape have pointed to significant changes, including funding shifts, revisions to regulatory guidance, updated reporting expectations, and increased administrative oversight. For federal agencies, the shifts signal a heightened focus on fund accountability, transparency, outcome‑driven performance, risk management, and compliance.  

Grant recipients are operating in an environment shaped by shifts in federal funding priorities, expanded oversight and monitoring expectations, updated administrative and audit guidance, and increased emphasis on measurable results and documented internal controls. These changes affect the full grant lifecycle—from application and award management to reporting, monitoring, and closeout. 

Key Regulatory Changes Affecting Federal Financial Assistance Programs 

These developments point to greater oversight, federal expectations, and accountability, all aimed at improving transparency, reducing risk, and promoting responsible use of grant funding.  

2 CFR 200 Uniform Guidance Updates (Effective Oct. 1, 2024) 

This release incorporated the most significant updates to Uniform Guidance since its initial publication in 2013. Changes in the update include streamlining administrative requirements, increasing federally established thresholds for procurement, equipment, and supply purchases, and Single Audit determinations, and clarifying expectations for reporting requirements and internal control documentation.  

Executive Order 14332: Improving Oversight of Federal Grantmaking (Aug. 7, 2025) 

This Executive Order reinforces interagency coordination and expert review to identify program effectiveness and outcome-driven projects that support government objectives and administrative priorities. It signals increased scrutiny across award decisions, performance monitoring, and financial stewardship, with agencies expected to integrate these priorities into Notices of Funding Opportunity and award terms. 

Office of Management and Budget’s 2025 Compliance Supplement (Nov. 25, 2025) 

The 2025 Compliance Supplement introduces key changes, including refined compliance requirements and audit procedures, updated program-specific guidance, and expanded expectations for documentation, subrecipient monitoring, and internal controls. 

Key Drivers for Changes in Federal Grants Regulations   

Federal financial assistance programs are being shaped not only by regulatory updates but also by broader operational, policy, and oversight trends. Recent changes are driven by several key factors, including: 

• Government-wide efforts to improve the accountability and transparency of public spending 
• Need for enhanced outcome-driven performance reporting requirements
• Importance of transparency, risk mitigation, and oversight
• Ongoing fiscal pressures and budget realignments
• Technology transitioning into a core compliance infrastructure rather than a back-office tool 

Current Federal Grants Trends Shaping 2026 

Federal financial assistance programs are being shaped by broader operational, policy, and oversight trends that directly affect how funding is awarded, managed, and monitored.  Key trends organizations should be aware of include: 

• Expanded Policy and Oversight Review of Grant Awards: Agencies are placing greater emphasis on alignment with administration priorities, national objectives, and program effectiveness. This has resulted in more detailed Notice of Funding Opportunity (NOFO) language, additional award conditions, and expanded agency discretion to modify, pause, or terminate awards tied to shifting priorities.
• Increased Emphasis on Outcomes, Evaluation, and Evidence: Agencies should prioritize measurable results. Grant recipients should demonstrate how funded activities achieve stated objectives using performance metrics, data, and evaluation frameworks. 
• Strengthened Subrecipient Oversight and Monitoring Expectations: Ongoing audit findings and oversight reviews continue to highlight risks associated with subrecipient monitoring. Prime recipients are expected to perform stronger risk assessments, document monitoring activities, and maintain clear audit trails.
• Administrative Simplification Coupled with New Expectations: Recent Uniform Guidance updates aim to clarify requirements and reduce administrative burden; they also introduce refined documentation, reporting, and internal control expectations.
• Technology as a Compliance Infrastructure: Grants management technology is increasingly viewed as a foundational compliance tool, as financial tracking, performance reporting, document retention, and monitoring systems are becoming essential to meet evolving federal expectations. 

How Do the Federal Grants Regulations Impact Stakeholders? 

Navigating ongoing regulatory change requires organization-wide commitment. Clear expectations, training, documented procedures, and leadership engagement help embed compliance into daily operations and reduce long-term risk. Grant administrators should implement more structured monitoring, enhance risk assessments, and fully document compliance reviews to align with current requirements. 

• Grant seekers must clearly demonstrate need, alignment with federal priorities, and the ability to track and report outcomes. To remain competitive for federal funding, applicants should also take a proactive approach to strategic planning, risk management, and audit readiness. 
• Subrecipients should reassess internal controls, documentation policies, and overall compliance readiness. Failure to align with updated requirements may result in audit findings, increased monitoring, delayed reimbursements, funding restrictions, or termination of the award. Effective compliance preparation, supported by sound documentation practices, is critical to maintaining eligibility and reducing risk. 

Effective Dates Stakeholders Need to Know 

• Executive Order 14332 requires federal agencies to enhance oversight and coordination and implement updates as policies, review processes, and procedures are revised. Recipients will be expected to comply with these changes as they are updated in Notices of Funding Opportunities, terms and conditions, and future guidance.
• The 2025 OMB Compliance Supplement is currently in effect for audits of fiscal years beginning after June 30, 2024. Recipients must adhere to the updated requirements for any active awards during this period. Organizations should confirm that their documentation, internal controls, and reporting processes are fully aligned with the revised standards to maintain audit readiness. 

Strategies to Navigate Future Regulatory Changes   

Staying current on regulatory and compliance changes requires a proactive, structured approach. To successfully navigate changes, agencies and grant recipients can:  

• Conduct regular internal reviews and briefings to validate if new updates are applied. 
• Participate in federal training webinars and conferences for continued education on emerging trends.
• Strengthen relationships with program officers and openly communicate with peer networks.
• Leverage technology for enhanced visibility across programs for improved efficiency.
• Build a compliance- focused culture by integrating governance practices into daily operations to stay ahead of regulatory changes, lower compliance risk, and maintain grant readiness. 

Organizations that prioritize continuous monitoring, education, innovation, and compliance are better positioned to adapt to regulatory shifts, reduce risk exposure, and sustain funding over the long term. 

Policy Watch: An Outward Look 

As federal requirements continue to evolve, understanding and adapting to changes in the grants landscape is essential. Organizations that are proactive in staying informed are better positioned to remain compliant, competitive, and audit‑ready.  

EisnerAmper’s grants management team takes a compliance‑first approach, helping organizations meet federal requirements through this period of transformation. Whether navigating new Uniform Guidance updates, strengthening internal controls, identifying new and existing funding opportunities, preparing for audits, or exploring targeted compliance trainings, our experienced advisors support clients through every stage of the grant lifecycle. To learn more, contact us below.