The rules governing how counties administer federal grants may be headed for a major update.
The US Office of Management and Budget (OMB) has released a proposed rule that would significantly revise the federal government’s Uniform Guidance regulations governing grants and cooperative agreements. According to a NACo article, the proposal represents the most substantial overhaul of federal grant rules since the Uniform Guidance was first established in 2013.
The Uniform Guidance establishes the administrative requirements, cost principles, and audit standards that apply to federal financial assistance programs. Because these regulations govern virtually every federal grant program, the proposed changes could have broad implications for local governments that receive federal funding.
From the NACo article:
The proposed rule applies government-wide and affects every federal grant program counties participate in, including programs administered by the U.S. Departments of Agriculture, Commerce, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, Transportation and Treasury, as well as the Environmental Protection Agency and other federal grantmaking agencies. Counties who often serves and operate as pass-through entities administering federal funds to subrecipients are subject to additional requirements under the proposed rule.
The rule does not directly amend State and Local Fiscal Recovery Fund (SLFRF) requirements; it will shape the broader regulatory framework governing compliance and audits for many federal funding streams used by local governments.
OMB is accepting public comments on the proposed rule through July 13, 2026.
