The National Association of Counties (NACo) has submitted formal comments urging substantive changes to a proposed overhaul of federal grant rules, arguing that several provisions would create considerable new challenges for county governments administering federal funds.
Earlier this summer, Conduit Street highlighted a sweeping proposal from the US Office of Management and Budget (OMB) to significantly rewrite federal grant regulations governing roughly $1.1 trillion in annual federal financial assistance.
As counties across Maryland finalize comments before today’s July 13 public comment deadline, the National Association of Counties (NACo) has submitted formal comments urging OMB to revise several provisions that counties believe would create new administrative burdens, increase uncertainty, and complicate the delivery of federally funded programs.
NACo supports several portions of the proposal, including efforts to simplify Notices of Funding Opportunity, reduce duplicative audit requirements, and improve access to federal grants.
At the same time, NACo argues that several proposed changes would significantly affect county governments that administer federal programs ranging from transportation and public safety to housing, public health, elections, and emergency management.
Among its highest priorities, NACo asked OMB to:
- Extend the public comment period and conduct formal consultation with state and local governments;
- Delay implementation beyond the proposed October 1, 2026, effective date to give counties adequate time to update policies and internal controls;
- Narrow proposed authority allowing federal agencies to terminate discretionary grants based on a broad “national interest” standard;
- Scale new subrecipient monitoring and E-Verify requirements based on award size and risk rather than applying them universally;
- Limit proposed viewpoint-neutrality requirements to federally funded activities instead of applying them to county facilities and events unrelated to a federal grant; and
- Address longstanding data quality concerns before relying on SAM.gov information as a basis for grant monitoring or termination.
NACo also argues that OMB should reconsider its determination that the proposal carries no federalism implications, noting that counties serve as major intergovernmental partners responsible for administering thousands of federally funded programs nationwide.
MACo encourages counties submitting comments today to help inform NACo’s advocacy and provide federal officials with local perspectives.
Counties can use NACo’s template comment letter and tailor it to local grant programs and examples illustrating how the proposed changes could affect county budgets, operations, and service delivery.
Conduit Street will continue monitoring the rulemaking process and provide updates as OMB reviews comments and considers revisions to the proposed regulations.
