2026 Proposed Changes to the Uniform Guidance: What You Need to Know

The conversation focused on the surprising announcement of proposed changes to the Uniform Guidance scheduled for 2026. Despite just undergoing a recent update, the federal government has put forth new proposals, spurred by an executive order aimed at improving grantmaking processes and regulatory transparency.

From “Guidance” to Regulation

A key theme that emerged was the shift in terminology—from “Uniform Guidance” or “Uniform Grant Guidance” to “Uniform Grant Regulation.” The objective is to elevate the status from guidance that federal agencies must adopt individually to a binding regulation with a single, government-wide effective date. This change would enforce greater compliance and reduce the complexity surrounding multiple effective dates for different agencies.

Definitions and Annual Updates

Several points were raised, including proposed changes to definitions within the regulation. Updates and removals affect terms such as “Federal award date,” “improper payment,” and “unobligated balance.” Notably, the proposal eliminates the definitions for “fixed amount awards” and “protected personally identifiable information” (PPII).

One concept discussed was the annual compliance supplement. The conversation highlighted plans to delete the language mandating annual updates, potentially signaling a departure from yearly supplements. The Office of Management and Budget (OMB) is evaluating the appropriate frequency for these updates and intends to engage stakeholders further on this topic.

Elimination of Fixed Amount Awards

The discussion explored the surprising recommendation to eliminate fixed amount awards. This is particularly noteworthy since the most recent update had doubled the cap for such awards—from $250,000 to $500,000. The rationale for this reversal remains to be seen, but it demonstrates the evolving landscape of federal grant regulations.

Pre-Issuance Process and Language Requirements

In response to an executive order, new merit review and pre-issuance processes are proposed to enhance oversight before grants are awarded. There is an added emphasis on issuing all federal announcements in English and denominating all amounts in U.S. dollars, aimed at further standardizing communication.

Conflict of Interest and Transparency

A key theme that emerged was the focus on transparency. One proposal would require disclosure if employees preparing or supporting grant proposals were employed by the awarding federal agency within the prior two years. While intended for informational purposes, this measure seeks to address potential conflicts of interest and promote accountability.

Cybersecurity, Internal Controls, and Verification

The discussion explored enhancements to cybersecurity by proposing the inclusion of “confidential business information” as a protected category. Another notable change would remove prescriptive language suggesting that entities “should” use COSO or Green Book frameworks, thereby giving organizations more autonomy over their internal control structures.

Further tightening controls, all recipients and subrecipients would now be required to participate in the E-Verify program for confirming employment eligibility. Additionally, recipient eligibility would be validated through the Do Not Pay system to reduce improper payments.

Procurement and Contract Management

Several points were raised, including stricter requirements for contract pricing and documentation under time and materials contracts. The proposed changes aim to strengthen accountability and discourage the use of cost-reimbursement contracts, ensuring fair market pricing and preventing overbilling.

Subrecipient Monitoring and Reporting

For subrecipients, the conversation focused on new obligations for pass-through entities to report awards through SAM.gov and confirm that all subawards are properly documented. The proposals would prevent certain transfers from being treated as internal allocations exempt from subrecipient monitoring, further enhancing oversight.

Award Cancellation and Suspension

One concept discussed was the push to make canceling discretionary awards easier, including provisions for temporary suspension without requiring a stated reason. This change aligns with the executive order’s goal of improving federal oversight and flexibility.

Action Steps and Comment Period

The discussion concluded with details on how interested parties can respond to these proposals. There is a relatively short, 45-day public comment period ending July 13th. Comments can be submitted through Regulations.gov, and the full Federal Register document was issued on May 29th for those wishing to review the changes in depth.

These proposed updates reflect ongoing efforts to streamline federal grants management, bolster oversight, and reduce recipient burden. Whether you receive federal awards or audit single audits, staying engaged with these regulatory developments is essential for compliance and success.