Recently, the White House Office of Management and Budget released a proposed rule that would rewrite 2 CFR Part 200. Since 2 CFR Part 200 is the framework of administrative requirements, cost principles, and audit requirements that we need to follow when dealing with federal grants, this proposed rule would have significant impacts on how we work with Federal grants. A few of our main concerns at the moment include:

 

1) Federal agencies would be able to terminate or suspend grants in the middle of projects.

 

2) Federal agencies will have more flexibility to issue reimbursement grants instead of advance payment grants.

 

3) Restrictions or limitations in use of federal grant funds to cover costs memberships in professional organizations, costs of conference attendance, and costs associated with public outreach campaigns that are not directly part of the scope of the grant award.

 

These changes would go into effect on October 1st, 2026. The National Association of County Organizations (NACo) has published a resource hub with informational resources on this proposed rule, which can be found here (OMB Proposed Rule: 2 CFR Part 200 County Resource Hub | National Association of Counties). A more detailed breakdown and analysis of potential impacts to counties has also been published by NACo here (https://naco.sharefile.com/share/view/s86b23a08a8e94f809f7be6bce7605d9c).

 

I encourage all of you to take some time to familiarize yourselves with these potential changes and their impacts. To take action, you can bring your concerns to your Congressional and Senate offices about how this proposed rule may impact your program, and you can submit comments on this proposed rule at this link (https://www.regulations.gov/commenton/OMB-2026-0034-0001) by Monday, July 13th.