Award Advisors Insights

OMB Proposes Significant Revisions to Federal Financial Assistance Rules

Thu, 28 May 2026 16:48:32 GMT

The Office of Management and Budget has proposed significant revisions to the government-wide guidance governing federal financial assistance, including grants, cooperative agreements, and related forms of federal assistance.

The proposed rule is significant because OMB’s guidance establishes the baseline requirements federal agencies use to administer financial assistance programs. These requirements affect how awards are issued, managed, monitored, reported, and closed out across the federal government.

Although the specific effect of the proposed rule will depend on the final regulatory text and agency implementation, the proposed rule warrants close attention from recipients, subrecipients, pass-through entities, auditors, and grants professionals.

Purpose of the Proposed Rule

OMB states that the purpose of the proposed rule is to improve government-wide policies and requirements related to the management of federal financial assistance.

That purpose is important. OMB is not proposing a narrow program-specific change. It is addressing the broader regulatory framework that applies across federal agencies and federal assistance programs.

Federal financial assistance is administered through a layered structure. OMB establishes government-wide requirements, and federal agencies implement those requirements through agency regulations, notices of funding opportunity, award terms, program guidance, and oversight practices.

As a result, changes to OMB’s guidance can have effects beyond the text of the proposed rule itself. They may influence agency-specific requirements, award administration procedures, recipient compliance obligations, and future monitoring expectations.

Scope of the Proposed Rule

The proposed rule applies to the Guidance for Federal Financial Assistance. That guidance is the central federal framework for grants, cooperative agreements, and other forms of assistance.

The scope is therefore broad.

The proposed rule is relevant to organizations that receive federal awards directly from federal agencies, as well as organizations that receive federal funds through pass-through entities. It is also relevant to pass-through entities responsible for issuing subawards, flowing down federal requirements, monitoring subrecipients, and documenting compliance.

The proposed should also be monitored by auditors, consultants, legal counsel, finance officials, procurement staff, program managers, and executive leadership involved in federal award administration.

Federal financial assistance requirements affect multiple areas of award management, including:

pre-award requirements;
award terms and conditions;
financial management;
internal controls;
cost allowability;
procurement;
subrecipient monitoring;
performance reporting;
record retention;
remedies for noncompliance;
closeout; and
audit requirements.

Because the proposed rule addresses government-wide guidance, stakeholders should evaluate it as a federal grants management issue, not merely as a technical rulemaking notice.

Why the Proposed Rule Is Significant

2 CFR 200 plays a foundational role in federal award administration.

When OMB revises government-wide financial assistance guidance, the effect can extend across the federal grants system. Federal agencies may need to revise their own regulations, update award terms, adjust program guidance, modify monitoring tools, and align internal procedures with the revised framework.

Recipients do not operate under OMB guidance alone. A federal award is typically governed by multiple sources of authority, including the OMB guidance, agency-specific regulations, the notice of funding opportunity, the award document, program statutes, program regulations, agency guidance, approved budget documents, special conditions, and pass-through requirements.

Accordingly, any revision to the OMB framework may create downstream implications for how agencies administer awards and how recipients document compliance.

The proposed rule is also significant because federal assistance management has become increasingly complex. Recipients are expected to manage not only spending, but also performance, documentation, internal controls, procurement compliance, subrecipient oversight, and audit readiness. A revision to the governing framework may affect how those responsibilities are interpreted and applied.

The Role of Agency Implementation

One of the key issues to watch is agency implementation. OMB establishes the government-wide framework, but federal agencies are responsible for applying that framework within their own programs. Agencies may do this through agency supplements, program regulations, award terms and conditions, policy memoranda, grants manuals, monitoring protocols, and other guidance.

This means the proposed rule should be reviewed in two stages.

First, stakeholders should review the proposed rule text itself.
Second, stakeholders should monitor how federal agencies respond if the rule is finalized.

For many recipients, the agency implementation phase may be where the practical effects become most visible. Changes may appear in future notices of funding opportunity, award conditions, reporting instructions, monitoring requests, closeout procedures, and pass-through requirements.

Comment Period and Stakeholder Participation

Because this is a proposed rule, stakeholders should pay close attention to the public comment process.

The comment period is the formal opportunity for affected parties to respond to OMB’s proposed rule before the rule is finalized. Recipients, pass-through entities, associations, auditors, and other stakeholders may use the comment process to identify practical concerns, request clarification, address implementation issues, and propose alternative language.

Effective comments are typically specific. They should identify the relevant provision, explain the issue, describe the practical or legal effect, and, where appropriate, recommend revised language.

Stakeholders should avoid treating the comment period as a general feedback exercise. The strongest comments are tied directly to the proposed regulatory text and explain how the proposed rule would affect federal award administration in practice.

What Happens Next

The proposed rule is not final. Yet.

After the comment period closes, OMB will review submitted comments and determine whether to revise the proposed text before issuing a final rule. The final rule may adopt the proposed language, modify it, clarify it, or decline to finalize certain provisions.

Once final guidance is issued, federal agencies may need to take additional steps to implement the revised requirements. That may include updates to agency regulations, award templates, NOFO language, program guidance, monitoring procedures, and internal grants management practices.

Recipients and pass-through entities should therefore monitor both the OMB rulemaking process and subsequent agency implementation activity.

Key Takeaway

OMB’s proposed revisions to the Guidance for Federal Financial Assistance are significant because they concern the government-wide framework for managing federal awards. The proposed rule should be reviewed carefully by organizations involved in federal financial assistance, including recipients, subrecipients, pass-through entities, auditors, and grants professionals. At this stage, the most important task is to understand the purpose, scope, and potential significance of the proposed rule; evaluate whether comments should be submitted; and monitor how the rulemaking develops.

Award Advisors is conducting regulatory analysis to determine the most impactful proposed changes and their implications for federal award recipients, pass-through entities, and the broader grants community.

A Major HHS Agency Quietly Tightens Indirect Cost Rules—And Almost No One Noticed

Wed, 29 Apr 2026 14:35:07 GMT

On April 20, 2026, the National Institutes of Health (NIH) issued Notice NOT-OD-26-072 , implementing provisions tied to the Consolidated Appropriations Act, 2026. The notice was released without significant announcement or accompanying interpretation, yet it introduces important considerations for organizations performing on NIH awards.

A key feature of the notice is the explicit treatment o f indirect costs (F&A)—an area that continues to receive increased attention at both the congressional and agency levels.

Key Implications for NIH Award Recipients

While the notice itself is concise, its practical implications are meaningful and warrant careful consideration.

1. Inability to utilize increased de minimis indirect cost rates

Recent updates to federal guidance have trended toward increasing the de minimis indirect cost rate to 15%. However, under this notice, NIH-funded activities are not positioned to benefit from those increases.

Organizations that:

Do not have a negotiated indirect cost rate, or
Were considering transitioning to a higher de minimis rate

should be aware that this flexibility is effectively limited for NIH awards under the current framework.

2. No expansion of the Modified Total Direct Cost (MTDC) base

The notice also reinforces constraints around the MTDC base, including existing thresholds and exclusions.

As a result:

Organizations cannot expand the categories included in the MTDC base
Existing limitations—such as subaward caps—remain unchanged
Adjustments to reflect evolving cost structures are not permitted within this context

This limits the ability to align indirect cost recovery with actual cost drivers.

3. Constrained indirect cost recovery

Taken together, these provisions may result in:

Reduced indirect cost recovery relative to broader Uniform Guidance trends
Less flexibility in budget development and cost allocation strategies
Increased need to absorb administrative and infrastructure costs outside of the award

For organizations with significant NIH funding, these constraints may have a measurable financial impact over time.

Broader Context

The use of appropriations language to influence indirect cost treatment is not new. However, its application through agency-level notices—rather than formal regulatory changes—can make these shifts less visible.

This approach allows for:

Program-specific or agency-specific limitations
Implementation without revisions to Uniform Guidance
Incremental changes to cost recovery practices over time

Conclusion

Although issued without significant visibility, Notice NOT-OD-26-072 introduces clear limitations affecting indirect cost recovery on NIH awards.

Organizations should take note of the following:

Increased de minimis rates are not applicable in this context
MTDC base definitions and thresholds remain fixed
Indirect cost recovery flexibility is more limited than broader federal guidance may suggest

Careful planning and review of current and future NIH-funded budgets will be important to account for these constraints.

Award Advisors will continue to monitor developments related to indirect cost policy and provide updates as additional guidance becomes available.

Could You Be Subject to a 2 CFR 200 Subpart F Audit Without Realizing It?

Mon, 09 Feb 2026 14:53:31 GMT

Delayed Determination Results in Poor Audit Preparation and Results

As year-end approaches, many organizations turn their attention to financial statement audit preparation—closing the books, pulling schedules, and coordinating with auditors. For December year-end organizations, this work is already well underway.

What often gets missed in the process is a more uncomfortable question:

Are we also subject to a federal compliance audit under 2 CFR 200 Subpart F?

In our experience, some organizations don’t discover the answer until auditors raise it—often late in the financial statement audit, when timelines are tight and options are limited.

When Federal Awards Trigger a Subpart F Audit

Under Uniform Guidance (2 CFR 200 Subpart F), an organization that expends more than $1 million in federal awards during its fiscal year is required to undergo a federal compliance audit.

For most organizations, this means a Single Audit, which includes:

An audit of the organization’s financial statements, and
Compliance testing over major federal programs

In more limited cases, a program-specific audit may apply, focusing only on compliance for a single federal program. Determining which audit applies is not automatic—it depends on how the federal funding is structured and how many programs are involved.

A Common (and Costly) Misunderstanding: Terminated Grants Still Must Be Audited

One of the most frequent surprises we see is this:

Even if a federal grant was terminated, the expenditures made before termination still count toward the Subpart F threshold.

Termination does not eliminate compliance obligations tied to funds already spent. If cumulative federal expenditures exceed $1 million for the fiscal year, the audit requirement may still apply—regardless of whether the award is active, suspended, or closed early.

Organizations are often caught off guard by this, particularly when terminated awards are no longer front of mind during year-end close.

Another Overlooked Trigger: Cost-Reimbursement Contracts

Another common misconception is the belief that only grants trigger Single Audit requirements.

In reality, certain federal contracts—especially cost-reimbursement contracts—are also subject to Uniform Guidance (via FAR 52.215-2(h)) and must be included in federal expenditure totals.

For nonprofits, this is a frequent blind spot. Cost-reimbursement contracts may look and feel like fee-for-service arrangements, but when they:

Are funded by a federal agency or federal pass-through entity, and
Reimburse allowable costs under federal rules

they may meet the definition of a federal award for Subpart F purposes.

When these contracts are excluded from the SEFA—or not evaluated at all—organizations can unknowingly cross the audit threshold.

Expenditures—Not Cash Received—Drive the Requirement

Another persistent source of confusion is the assumption that the Subpart F threshold is based on federal funds received. It’s not.

The requirement is driven by federal expenditures, which may include:

Federal grants and cooperative agreements
Pass-through awards from state or local governments
Cost-reimbursement contracts subject to FAR 52.215-2(h)

Because pass-through funding and federal contracts are often administered outside traditional “grants management” functions, they are easy to miss during year-end evaluation.

Why the SEFA Is the Starting Point—and the Pressure Point

Determining whether a Subpart F audit applies begins with a complete and accurate Schedule of Expenditures of Federal Awards (SEFA).

The SEFA identifies:

Federal agencies and pass-through entities
Assistance Listing numbers
Federal program names
Total federal expenditures for the fiscal year

Preparing the SEFA is often where issues surface—particularly around:

Determining whether a contract is subject to Uniform Guidance
Identifying pass-through funding correctly
Including terminated awards appropriately
Reporting expenditures consistently and defensibly

If the SEFA isn’t right, everything that follows is exposed.

Why Timing Matters More Than Organizations Expect

Discovering Subpart F applicability late in the financial statement audit can create real disruption:

Audit scope changes with little notice
Compliance documentation is requested under tight deadlines
Internal staff are pulled into reactive cleanup mode
The likelihood of audit findings increases

Organizations that identify these requirements early have more control—over scope, timing, and outcomes.

The Year-End Question That Deserves a Real Answer

As part of year-end close and audit preparation, organizations with federal funding should be asking:

Have we evaluated all federal expenditures—including terminated awards and cost-reimbursement contracts—to determine whether a 2 CFR 200 Subpart F audit applies?

Answering that question accurately requires more than a threshold check. It requires a clear understanding of Uniform Guidance, federal award structures, and how auditors interpret compliance.

That’s often the point where organizations decide they don’t want to navigate this alone. Award Advisors is ready to help secure you a successful audit outcome. Contact us today.

What the Government Reopening Means for Organizations Seeking New Grants—Including R&D

Thu, 13 Nov 2025 14:32:01 GMT

A Historic Shutdown Has Left A Backlog of Awards

With the federal government now officially reopened, agencies are back at full operations and the Continuing Appropriations Act is in place, funding the government at FY2025 levels through January 30, 2026. For organizations preparing to pursue new federal grants—especially research and development opportunities—this is the moment to get back on offense.

Here’s what the reopening means for the funding landscape right now:

New Grant Competitions Will Start Moving Again

The shutdown paused several upcoming Notices of Funding Opportunity (NOFOs). With agencies back online, you can expect:

Delayed opportunities to be reposted
Competitions already in development to resume quickly
Proposal timelines to normalize over the next few weeks

Most R&D-focused programs will pick up exactly where they left off because the bill locks agencies into the same operational levels they used in FY2025.

If your proposals have been sitting in draft mode, now’s the time to activate your team.

Agencies Can Run Competitions, But They Can't Front-Load Funding

One restriction in the bill prevents agencies from making unusually large or early distributions of grant funds before full-year FY26 appropriations are passed.

Here’s what that means for you:

New grant opportunities can still be released.
Awards may be funded incrementally (a common practice in R&D programs anyway).
Agencies may pace their commitments conservatively early in the cycle.

This won’t stop competitions from proceeding; it simply encourages normal, steady timelines.

Federal Program Staff Are Stabilized and Fully Operational

The bill prohibits reductions in force and authorizes agencies to apportion funds to avoid furloughs. This is a quiet but important detail. For applicants, it means:

Program officers are available again
Technical assistance can resume
Application reviews won’t be short-staffed
Award negotiations can move forward without disruption

The administrative machinery behind federal grants is back to functioning normally.

Strong Outlook for R&D, Innovation, and Technology Funding

Programs across NSF, DOE, NIH, DoD research offices, USDA-NIFA, NOAA, NIST, DOT, and others will now restart their cycles. Because FY2025 funding levels are being carried forward:

You’re operating in a familiar environment
Previous levels of competitiveness should hold
Some applicants may be slower to re-engage after the shutdown—giving you an advantage if you move now

If your pipeline includes science, technology, demonstration projects, or commercialization efforts, the window is reopening fast.

What Organizations Should Do Right Now

If you're targeting new funding in the coming months, take these steps immediately:

Reconfirm anticipated NOFO release dates
Reconnect with federal program officers
Restart proposal development schedules
Finalize budgets and narrative frameworks
Ensure all registrations (SAM.gov, Grants.gov, UEI) are active and compliant
Move early, while others are still getting reorganized

The organizations that regain momentum quickly will be the first to benefit from the reopening.

Bottom Line

Grantmaking is resuming across the federal landscape, and competitive programs—including R&D—are gearing back up. With continuity at FY2025 levels and agency staff fully engaged, the funding environment is stable and predictable.

If you're preparing to pursue new grants, this is the moment to get back in motion.

2025 Single Audit Update: What Grantees and Auditors Need to Know

Wed, 27 Aug 2025 18:04:55 GMT

2025 OMB Compliance Supplement Now Available

The 2025 OMB Compliance Supplement has been released, and it represents one of the most consequential updates in recent years. This annual guide is essential for federal grantees, auditors, and pass-through entities—it sets the compliance expectations that will govern Single Audits for fiscal year 2025.

At the heart of the new Supplement is Appendix V (Section 8-V: List of Changes), which outlines what’s different from 2024. Below, we walk through the most important updates and what they mean for your organization.

1. Dual Framework for Compliance Testing (Part 3: Compliance Requirements)

One of the biggest changes is the introduction of two parallel compliance sections:

Part 3.1 – For awards subject to the pre-2024 Uniform Guidance (UG).
Part 3.2 – For awards governed by the 2024 UG revisions (effective October 1, 2024).

This means auditors—and grantees—must now evaluate which version of the Uniform Guidance applies to each award. For entities with both pre- and post-2024 awards, this adds complexity and demands clear tracking of funding sources.

Notable updates within Part 3 include:

Section B (Allowable Costs), Section F (Equipment & Real Property), and Section I (Procurement) revised for 2024 UG alignment.
Section L (Reporting) now directs to SAM.gov for subaward reporting, reflecting the full retirement of FSRS.

2. Extensive Program Updates (Part 4: Agency Program Requirements)

Section 8-V shows that dozens of federal programs and clusters were updated, added, or retired. Some of the most notable:

New Programs:
Summer Electronic Benefit Transfer (EBT) for Children (USDA)
Title IV-E Prevention Program (HHS)
Greenhouse Gas Reduction Fund initiatives (EPA)
Major Revisions:
Housing programs under HUD (e.g., CDBG-DR, Housing Voucher Cluster, Supportive Housing).
Education programs including Title I and English Language Acquisition grants.
Health programs like the Medicaid Cluster and CHIP, with updated compliance details.

Phasing Out COVID-19 Programs: Pandemic-era programs remain listed but with reduced emphasis as funding winds down.

For grantees, this means compliance testing scope will look different than in prior years, especially in housing, nutrition, and environmental funding streams.

3. Revisions to Clusters and Internal Controls

Clusters (Part 5): The Research & Development cluster was clarified to explicitly include NSF and NIH awards. Program names were updated to align with SAM.gov, reducing confusion in program identification.
Internal Controls (Part 6): Language shifted from “non-federal entity” to “recipient and subrecipient”, reinforcing accountability throughout the funding chain.
Auditing Programs Not Included (Part 7): Similarly revised to emphasize both recipients and subrecipients.

This language shift is more than semantics—it signals OMB’s expectation that pass-through entities strengthen oversight of subrecipients.

4. Appendices: Critical Updates

Appendix I–III: Updated lists of excluded programs, codified agency guidance, and agency audit contacts.
Appendix IV (Higher Risk Programs): Refreshed with the latest risk designations, which directly affect major program determination.
Appendix V (List of Changes): The definitive list of updates for 2025 (see Sections 1–3 above).
Appendix VII (Other Audit Advisories):

Reinforces the transition from FSRS to SAM.gov for all subaward reporting (effective March 2025).
Highlights audit threshold increases.
Notes audit deadline extensions granted for recipients impacted by Hurricanes Helene, Milton, and the California wildfires.

5. Audit Threshold Increases and Practical Implications

The audit threshold under Subpart F has officially increased:

From $750,000 to $1,000,000 in federal expenditures, for fiscal years beginning on or after October 1, 2024.

Impacts:

Smaller entities may now fall below the audit requirement.
Larger recipients will see no reduction in audit scrutiny, but major program determinations may shift under the higher threshold.
Auditors must navigate the dual framework (pre- and post-2024 UG) when planning and executing audits.

6. Practical Takeaways for Grantees

Determine which UG rules apply to each of your awards—document this clearly.
Update policies and procedures to align with the 2024 UG revisions, especially procurement and reporting.
Prepare for SAM.gov reporting if you haven’t transitioned already. Subaward reporters need active SAM.gov accounts and permissions.
Review program-specific updates in Part 4 to anticipate where your compliance testing will change.
Work closely with auditors early to clarify which parts of the Supplement apply to your portfolio.

Final Word

The 2025 Compliance Supplement is a transition document—bridging old and new Uniform Guidance rules, phasing out pandemic-era funding, and strengthening federal oversight mechanisms.

For grantees, the message is clear: documentation, adaptability, and proactive planning will make the difference between a smooth audit and one filled with findings.

Award Advisors will continue to help recipients interpret these changes and build audit-ready systems that withstand federal scrutiny.

You can download a copy of the 2025 OMB Compliance Supplement here .

Another Round of Uniform Guidance Revisions: What the August 2025 Executive Order Means for Indirect Costs and Federal Grantmaking

Mon, 25 Aug 2025 12:00:29 GMT

New Executive Order Impacting Federal Grants

On August 7, 2025, President Trump issued Executive Order 14332, Improving Oversight of Federal Grantmaking . While much of the attention has focused on political oversight and the risks of midstream award termination, federal grant recipients should read this order as something more: a precursor to another round of revisions to the Uniform Guidance (2 CFR 200).

The last major overhaul in 2024 reshaped compliance standards across the grants ecosystem. This executive order sets the stage for further changes—particularly around indirect costs, cost principles, and financial management requirements.

Indirect Costs in the Spotlight

A core provision of the EO is the directive for agencies to show preference to "institutions with lower indirect cost rates." This is not an isolated move; it builds on proposals already circulating within several federal agencies to cap F&A rates, restrict cost pools, and require stronger justification for overhead.

For recipients, the implications are clear:

Reduced flexibility in covering overhead and infrastructure costs.
Greater pressure to justify and defend indirect cost rates.
Competitive differentiation : organizations with lean, transparent, and strategically structured rates will gain an advantage.

Turning Compliance Into Strategy

This environment presents an opportunity for recipients to reposition indirect costs not as a compliance hurdle, but as a strategic asset. Forward-looking steps include:

Revise Cost Allocation Practices
Adopt methods—such as direct charging—that connect administrative costs directly to program delivery.
Design Rates that Appeal to Funders
Structure indirect cost rates to be lean, defensible, and clearly tied to mission-critical operations.
Plan for Flexibility
Develop rate strategies that can withstand caps or adjustments without undermining organizational stability.
Proactively Engage Funders
Build a clear narrative showing how indirect costs sustain the infrastructure necessary to achieve program outcomes.

The Larger Shift: Grants as a Political Tool

Beyond cost recovery, the EO introduces sweeping changes:

Political review of FOAs and discretionary awards by senior appointees.
Termination-for-convenience clauses as a standard feature of agreements.
Increased delays in review and approval due to new oversight layers.
Priority-based funding decisions driven by administration policy, not just peer review.

In short, federal grants are becoming more politicized, more closely monitored, and more financially constrained. Recipients must adapt accordingly.

Award Advisors’ Perspective

At Award Advisors, we view this moment as a turning point. Organizations that continue treating indirect cost rates as an afterthought will struggle under new scrutiny. Those that rethink their rates as a signal of accountability, efficiency, and mission alignment will be better positioned to thrive. Now is the time to prepare for the next wave of Uniform Guidance revisions. Award Advisors helps recipients develop modern cost accounting practices, negotiate competitive indirect cost rates, and build resilient funding strategies that withstand political and financial shifts.

Contact us today to strengthen your indirect cost strategy—and position your organization for success in a new era of federal grantmaking.

What the “One Big Beautiful Bill Act” Means for Federal Grantees and Contractors

Mon, 07 Jul 2025 11:00:39 GMT

An Analysis of the FY25 Budget Reconciliation Package

The passage of the One Big Beautiful Bill Act marks a seismic shift in federal priorities—one that carries both risks and rewards for organizations working with the federal government. At nearly 1,000 pages, this sweeping legislation simultaneously tightens spending in several progressive initiatives while unlocking long-term funding for agriculture, defense, infrastructure, and compliance-heavy programs.

Award Advisors has reviewed the bill in detail to provide targeted insights for federal grantees and government contractors. Whether you're managing multi-year awards, seeking new opportunities, or adjusting to policy changes, this breakdown will help you plan accordingly.

What's Being Cut: Major Rescissions and Deprioritizations

Environmental & Climate Programs See Deep Cuts

The most significant immediate impact is the massive rescission of unobligated balances from prior appropriations—especially from environmental and climate-related initiatives. These include:

Greenhouse Gas Reduction Fund
Clean heavy-duty vehicles
Low-emissions electricity
Environmental Justice block grants
Public Wireless Innovation Fund
Methane reduction incentives
Section 211(o) Clean Air Act funds

This effectively dismantles core programs from the Inflation Reduction Act and Bipartisan Infrastructure Law that many grantees had come to rely on.

Implication for Grantees: Nonprofits, state and local governments, and academic institutions engaged in decarbonization, air quality, or low-income environmental justice work will find fewer opportunities—and may face the clawback of unobligated prior awards.

Implication for Contractors: Clean energy OEMs, infrastructure firms, and tech companies building EV infrastructure or carbon capture solutions may need to pivot to new verticals. Alternative funding or commercialization models will become necessary.

Where the Money Is: Opportunities Worth Chasing

Agriculture & Rural America Get a Boost

A multi-year commitment to core USDA programs signals a favorable environment for rural America:

$3.25B/year through 2031 for EQIP, CSP, and other conservation programs.
$450M/year for the Regional Conservation Partnership Program.
Crop insurance improvements for beginning farmers, specialty crops, and poultry operations.
Expanded disaster relief for livestock loss, honeybee colonies, and farm-raised fish.
Enhancements to the Dairy Margin Coverage, Sugar Program, and Marketing Loans.

Implication for Grantees: Nonprofits managing cooperative extension, rural economic development, conservation partnerships, and land management programs will see a resurgence in funding.

Implication for Contractors: Engineering firms, crop insurers, precision agriculture tech developers, and construction contractors supporting USDA field projects are likely to benefit from predictable, inflation-adjusted funding increases.

Defense Spending Expands Across the Board

This bill represents a massive reinvestment in Department of Defense priorities. Key investment areas include:

Cybersecurity modernization
Low-cost weapon scaling & missile defense
Nuclear modernization & Indo-Pacific command readiness
Supply chain resiliency for munitions and critical minerals
Military construction & border operations

Implication for Contractors: Contractors in cybersecurity, AI modeling, manufacturing, munitions, and logistics should prepare for high-volume solicitations and multi-year procurement tracks. If you haven’t explored DoD vendor onboarding, now is the time.

Implication for Grantees: Educational and nonprofit institutions specializing in STEM training, veteran support, or supply chain innovation can carve out specialized roles in public-private partnerships, especially through workforce development funds.

Other Regulatory & Programmatic Reforms Grantees Must Track

SNAP and Medicaid Tighten Eligibility & Cost Sharing

Key reforms include:

Lower federal administrative match for SNAP (drops from 50% to 25% by FY2027)
Stricter work requirements and narrower utility deductions
Medicaid payment reduction rules and redetermination mandates
Prohibitions on duplicate enrollments and deceased beneficiaries

Implication: Grantee organizations delivering outreach, eligibility assistance, or benefits counseling will need to upgrade systems, retrain staff, and budget for more intense reporting and compliance protocols. Many will need to supplement lost admin revenue.

Grants Move Toward “Payment for Performance”

Performance-based cost share models are expanding beyond SNAP:
States with higher SNAP error rates will now shoulder more cost.
Rural program waivers expire in 2028, making long-term efficiency plans essential.

Implication: Grant writers must now include strong performance management metrics. States and subrecipients will increasingly seek tools that integrate audit trails, compliance dashboards, and automated reporting.

Emerging Verticals: AI, Aerospace, Infrastructure

Federal AI & Broadband Tech Receive New Support

The bill includes a unique provision allowing AI integration under the Broadband Equity, Access, and Deployment (BEAD) Program.

Implication for Contractors: Developers of AI infrastructure, rural broadband tools, and network management systems have a new federal entry point. Stay alert for upcoming NTIA or FCC program guidance.

Artemis, Coast Guard, FAA Also Get Notable Increases

The Act commits funds to:

NASA’s Artemis and Moon-to-Mars programs
Air traffic control modernization
Coast Guard fleet and mission readiness

Implication: Contractors in aerospace, autonomous aviation, and launch logistics should re-engage federal procurement contacts. These line items point to long-term pipeline health in space-related R&D and satellite launch services.

Next Steps

This Act is a realignment—not just of funding but of federal philosophy. It rewards compliance-driven, outcome-focused organizations while pulling back from ideologically driven subsidies and discretionary pilots.

Grantee Strategy:

Double down on core competencies in agriculture, health access, disaster resilience, and workforce development.
Invest in compliance readiness: reporting systems, internal audits, and real-time dashboards will be key.
Re-evaluate all programs tied to IRA or climate funding and prepare contingency plans.

Contractor Strategy:

Shift toward defense, agriculture, and broadband modernization.
Get ahead of DoD multi-year plans by watching early acquisition forecasts.
Prepare for increased AI integration mandates in federal contracts.

Ready to Navigate the Shift?

Award Advisors stands ready to support your organization with:

Strategic grant and contract roadmapping
Mock audits and risk assessments
Real-time compliance tracking tools
Application development and forecasting

To learn more, contact us today.

Ditch the Spreadsheets: Smarter Strategies for Grant and Contract Management

Fri, 23 May 2025 23:12:28 GMT

Ditch the Spreadsheets: Smarter Strategies for Grant and Contract Management

Managing federal grants and contracts with spreadsheets, siloed systems, and manual checklists is increasingly unsustainable. As regulatory expectations evolve and funders demand more transparent, timely reporting, organizations need integrated solutions to manage complexity. This shift has led many to explore modern grants management software and contract management software as a strategic upgrade.

The Limitations of Legacy Systems

Many organizations still depend on outdated methods for managing federal awards and contracts—spreadsheets, shared drives, disconnected financial systems. These approaches introduce risk and inefficiency, especially when it comes to collaboration, data accuracy, and regulatory compliance.

Common challenges include:

Missed deliverables and reporting deadlines
Inconsistent budget monitoring and expense tracking
Limited visibility into award or contract progress
Fragmented documentation and audit readiness gaps

As funding accountability increases, these issues can hinder not only operational efficiency but also future funding eligibility.

The Benefits of Modern Management Software

Modern platforms for grant and contract management consolidate key functions, enabling:

Real-time tracking of expenditures and milestones
Automated reminders for critical deadlines
Centralized access to documentation and communication
Enhanced collaboration across departments and teams

With cloud-based access and built-in compliance tools, these solutions help reduce administrative burden while improving oversight and accountability.

A Smarter Approach to Oversight

Organizations that adopt grants management software or contract management software often find they gain more than efficiency—they gain insight. Dashboards provide real-time updates on performance, automated workflows reduce errors, and structured document management ensures readiness for audits or site visits.

Whether you manage R&D grants, or multi-year contracts, adopting the right system can make a measurable difference in your outcomes.

Next Steps

If you're evaluating how to streamline your management processes, consider what integrated platforms can offer in terms of transparency, control, and scalability.

Learn more about how award management technology is evolving with AwardEdge.

What is DPA Title III and Why It Matters for U.S. Manufacturers

Mon, 19 May 2025 16:32:40 GMT

How to Leverage DPA Title III Funding and OTAs to Scale Domestic Production and Support National Security

Understanding the Defense Production Act Title III

The Defense Production Act (DPA) Title III is a powerful funding mechanism that enables the U.S. government to strengthen the industrial base by supporting the expansion of domestic manufacturing capabilities. Originally enacted in 1950, DPA Title III has evolved to address modern national security needs, including semiconductors, energy storage, biotechnology, and advanced manufacturing.

Title III funding is particularly important for businesses producing materials or components essential to defense readiness. It provides non-dilutive capital that helps companies scale, reduce supply chain dependencies, and enhance resilience in critical sectors.

What Makes DPA Title III Awards Unique?

U nlike traditional government grants or contracts, DPA Title III awards can take the form of cost-sharing agreements, direct investments, or purchase commitments that:

Encourage rapid scale-up of emerging technologies
Fill gaps in the defense supply chain
Mitigate risks from foreign dependency
Drive innovation in manufacturing

These awards are often aligned with Department of Defense (DoD) strategic priorities and industrial base assessments, making them both impactful and competitive.

The Role of OTAs and Consortiums

Many DPA Title III initiatives are managed through Other Transaction Authorities (OTAs) and specialized consortia. OTAs are flexible contracting vehicles designed to attract non-traditional contractors and accelerate technology adoption.

Many of the major OT-focused consortia are managed by Advanced Technology International (ATI), such as:

Defense Industrial Base Consortium (DIBC)
National Armaments Consortium (NAC)
Naval Surface Technology & Innovation Consortium (NSTIC)
Medical Technology Enterprise Consortium (MTEC)
Countering Weapons of Mass Destruction Consortium (CWMD)
Information Warfare Research Project (IWRP)
Defense Automotive Technologies Consortium (DATC)
Expeditionary Missions Consortium (EMC2)
Biopharmaceutical Manufacturing Preparedness Consortium (BioMaP-Consortium)

Understanding how to align with these organizations’ missions and evaluation criteria is key to winning awards.

How Award Advisors Supports Your Success

At A ward Advisors, we help clients navigate the full lifecycle of DPA Title III opportunities. Our support includes:

Identifying and prioritizing high-potential opportunities
Shaping a winning narrative and proposal strategy
Budgeting, indirect rates, and compliance planning
OTA and Technology Investment Agreement (TIA) negotiation
Post-award implementation and reporting

Whether you are new to federal funding or seeking to scale your compliance infrastructure, our team brings decades of experience to every engagement.

Ready to Pursue DPA Title III or OTA Opportunities?

If your business is working in advanced manufacturing, biotech, energy, or other defense-critical sectors, DPA Title III funding may be the catalyst you need. Let Award Advisors be your strategic partner in pursuing, securing, and managing this transformative federal funding.

Don’t Let FAR 52.216-7 Trip You Up: How to Use the DCAA ICP Adequacy Checklist to Your Advantage

Mon, 12 May 2025 13:01:25 GMT

It’s ICP Season—Are You Ready?

Each year, millions of government contractors and federal grantees are required to submit an Incurred Cost Proposal (ICP) under FAR 52.216-7(d). For most calendar-year contractors, this means a hard deadline of June 30 to file their submission with the federal government.

What’s at stake? Late or inadequate proposals can lead to payment delays, audits, or even disallowed costs. That’s why understanding and properly using the DCAA’s Adequacy Checklist is not just recommended—it’s essential.

What Is the DCAA Incurred Cost Proposal Adequacy Checklist?

The checklist—currently published in Version 3.4—is the tool used by the Defense Contract Audit Agency (DCAA) to determine if your ICS (Incurred Cost Submission) meets all of the minimum requirements to be accepted for audit.

It evaluates your submission across 47 criteria to ensure it is:

Complete with all required schedules
Mathematically accurate with proper tie-outs
Aligned with FAR 52.216-7, agency billing clauses, and relevant DCAA guidance

If your submission fails to meet adequacy, it may be returned—delaying reimbursement and cost recovery.

How Contractors Can Use the Checklist to Their Advantage

Here are several key ways contractors can use the checklist not just for compliance, but as a tool for improved oversight and cost control.

Conduct a Pre-Audit Review

Before submission, perform a line-by-line assessment using the checklist. Pay close attention to tie-outs between key schedules like A, H, and K. Even one inconsistency could flag your entire proposal.

Watch for the Blended Compensation Cap Trap

If you are applying blended compensation caps under FAR 31.205-6(p), you must have an executed advance agreement with your Administrative Contracting Officer (ACO). Without it, DCAA will reject your submission—even if it is otherwise complete.

Clarify and Defend Indirect Cost Allocations

The checklist requires detailed support for how you calculate and allocate indirect rates across cost centers. Schedules B through E must align with your general ledger and explain every allocation base, pool, and adjustment.

Close Out Contracts and Recover Working Capital

Schedules I and O can be powerful tools to help you identify and close out physically complete contracts. Proper closeouts reduce your audit backlog and allow you to recover unused funding.

Common Trouble Spots We Help Clients Fix

Mismatched totals between general ledger and ICS schedules
Missing explanations for adjustments or exclusions
Indirect cost pools not aligning with fringe, G&A, or occupancy allocations
Lack of labor cost reconciliation to IRS Form 941
Missing signatures on the Certificate of Final Indirect Costs
General misunderstanding of what needs to be reported

How Award Advisors Supports Your ICS

At Award Advisors, we specialize in helping federal contractors and grant recipients navigate the technical and compliance-heavy world of incurred cost reporting. Our services include:

Turnkey ICS preparation tailored to your business
Compliance checks using the DCAA Adequacy Checklist
Help securing required advance agreements for blended caps
Audit support and liaison services with DCAA and ACOs
Strategic guidance on indirect rate structuring for future cost recovery

We’ve helped dozens of organizations streamline their Indirect Cost Proposals and maintain their ability to claim allowable costs without disruption.

Get Expert Help Before the Deadline

T he DCAA isn’t forgiving when it comes to late or inadequate proposals. If your organization is required to submit an ICS under FAR 52.216-7, now is the time to act.

Let us help you prepare a complete, audit-ready submission that protects your funding, satisfies government reviewers, and positions you for long-term success.

Contact Award Advisors today to book a complimentary review of your draft submission or schedule an engagement for full ICS support.

The Current State of Federal Grant Funding in 2025

Sun, 04 May 2025 19:06:09 GMT

Federal grant funding is undergoing a major transformation. Are you ready?

As federal grant funding continues to evolve, recipients must adapt to new priorities, regulatory changes, and heightened oversight. Here’s an overview of the trends shaping federal grants in 2025:

1. The DOGE Initiative and Its Impact

The Department of Government Efficiency (DOGE) Initiative has reshaped federal funding, resulting in nearly 12,000 grant terminations and $37 billion in “savings.” While this has created significant disruptions, only 6-9% of active federal grants were affected. Agencies like USAID, the Department of Education, and HHS experienced notable consolidation and funding freezes, signaling a “new normal” for grant recipients.

2. Rise of Cooperative Agreements

Cooperative agreements, which involve substantial federal involvement, have surged in popularity. These agreements allow agencies to maintain tighter control over spending, ensuring alignment with policy goals and enhancing performance monitoring. This reflects a broader trend toward fiscal conservatism and accountability.

3. Challenges in Indirect Cost Recovery

Research institutions and universities are under increased scrutiny as agencies impose caps on indirect cost recovery. Notably, the Department of Energy (DOE), the National Institutes of Health (NIH), and the National Science Foundation have introduced a 15% cap on university indirect cost rates applied to research, challenging the viability of many programs. Such restrictions underscore the importance of strategic financial planning for recipients relying on federal funding.

4. Shifts in Funding Priorities

The “America First” agenda has redirected resources toward domestic-focused initiatives, such as U.S. manufacturing, energy independence, and infrastructure. Simultaneously, international collaborations and diversity, equity, and inclusion (DEI)-related programs face reduced funding and termination.

5. Heightened Oversight and Audit Pressures

The federal government’s emphasis on accountability has brought about stricter compliance and audit requirements. Executive Order 14151 and OMB Memo M-25-13 outline policies that prioritize federal oversight, from modifying grant announcements to investigating underperforming recipients. These measures place an additional compliance burden on organizations seeking or maintaining federal funding.

6. The Role of the Compliance Supplement

The annual Compliance Supplement remains a critical resource for grant recipients and auditors. By outlining key compliance requirements for federal programs, it streamlines the audit process and helps recipients maintain adherence to evolving federal standards. The 2025 Compliance Supplement is expected to reflect increased oversight on federal grant programs and an emphasis on performance accountability.

Key Takeaways

Federal grant recipients must navigate a complex landscape marked by shifting priorities, regulatory changes, and increased oversight. Proactively understanding these dynamics and implementing robust compliance strategies will be crucial to maintaining funding and achieving programmatic objectives. Stay tuned to the Award Advisors blog series as we will be tracking updates and providing insights.

Navigating Federal Grant and Contract Terminations in the Era of DOGE

Sat, 05 Apr 2025 02:28:13 GMT

Guidance for Contractors and Grantees

As part of the federal government’s evolving policy direction under the DOGE initiative, many federal contracts and grants are facing unexpected Terminations for Convenience (T4C) . These terminations are not breaches of agreement but reflect shifts in government priorities, funding reallocations, or geopolitical circumstan ces. For both contractors and grantees, understanding your rights, responsibilities, and cost recovery options is critical during this transition.

Understanding Terminations for Convenience (T4C)

A Termination for Convenience allows the government to cancel an award—partially or fully—when it is deemed in the government’s best interest. While disruptive, T4Cs entitle awardees to recover certain costs, provided claims are submitted in accordance with specific timelines and procedures.

According to USAID’s March 2025 guidance, terminations may arise from:

Technological advancements or changes in scope
Budget constraints or lack of funding
Shifts in domestic or international political priorities
Delays without directive to resume work

Contractors: What You Need to Know

If you are a federal contractor, the termination process includes several key steps:

1. Notification

You will receive a formal notice outlining:

Authority and effective date
Scope of termination (partial or full)
Specific instructions, such as stopping work and settling subcontracts

2. Settlement Proposals

Within one year of notification, contractors must submit settlement proposals based on one of the following methods:

Inventory Basis – For materials and goods
Total Cost Basis – Common for service contracts
No Cost – When there are no outstanding obligations or costs

3. Recoverable Costs

Typical allowable settlement costs include:

Incurred performance costs (labor, materials, indirect expenses)
Loss of useful value on specialized equipment
Settlements with subcontractors
Legal, accounting, and clerical costs related to the settlement
A reasonable allowance for profit on completed work

Grantees: Termination and Closeout Under 2 CFR §200.472

For grantees, the federal regulations under 2 CFR §200.472 outline what costs are allowable in the event of a termination:

Allowable Termination Costs

Grantees may recover:

Costs of items not reasonably usable elsewhere (with justification)
Non-discontinued costs that continue temporarily post-termination (if not due to negligence)
Loss in value of special equipment, when not usable in other work
Unexpired lease costs, provided they were necessary and efforts to mitigate were made
Settlement costs, including legal/accounting expenses related to the termination or subawards
Storage and disposition costs for federal property
Claims under subawards, including appropriate indirect costs

Closeout Costs

Administrative costs related to award closeout are also allowable—such as:

Staff time for preparing final reports
Equipment disposition costs
Printing/publication expenses
Related indirect costs

These costs must be incurred and liquidated before the final report due date (typically 120 days following the effective date of termination) unless specified otherwise by the agency.

Key Timelines to Track

Per USAID guidance:

Contractors: 1 year to submit settlement proposal (per FAR 49)
U.S. grantees: 120 days to report and liquidate obligations
Non-U.S. grantees: 30 days to return funds, 90 days to file claims
Interagency agreements and PIOs: Varies by agreement clause

Final Thoughts: Be Proactive and Document Everything Separately

Whether you’re a contractor or grantee, the key to navigating a termination successfully lies in timely action, accurate documentation, and clear communication with your Agreement or Contracting Officer.

At Award Advisors, we’re here to support organizations through the complexities of federal award terminations, helping you identify allowable costs, develop fair settlement claims, and remain compliant with federal requirements.

If your organization has recently received a termination notice—or anticipates one under DOGE—reach out to us for a tailored consultation.

Why Nonprofits Should Negotiate an Indirect Rate (NICRA)

Sat, 05 Apr 2025 01:56:01 GMT

Every Dollar Counts

Nonprofits operate in an environment where funding is competitive and transparency is essential. Yet, many organizations miss out on critical cost recovery opportunities by overlooking a powerful financial tool: the Negotiated Indirect Cost Rate Agreement (NICRA). Whether you're applying for federal grants or managing diverse funding streams, having a NICRA based on a well-prepared Indirect Cost Proposal can significantly strengthen your organization’s financial foundation.

What Is an Indirect Rate?

An indirect rate represents the percentage of overhead costs your nonprofit can apply to federal or eligible grants. Indirect costs include essential expenses like rent, HR, IT, and administrative salaries—costs that support the entire organization but aren’t tied to a specific program. These costs are recovered through your NICRA, which is negotiated with your cognizant federal agency.

Why a NICRA Matters for Nonprofits

1. Recover True Administrative Costs

Without an approved indirect rate, many nonprofits rely on unrestricted funds to subsidize indirect expenses. A NICRA enables you to recover your full cost of doing business, ensuring every grant-funded project contributes to organizational sustainability.

2. Strengthen Financial Planning

A negotiated NICRA, based on a formal Indirect Cost Proposal, allows for predictable budgeting. Rather than estimating indirect costs per grant, you can use a consistent, approved rate across multiple awards, simplifying your planning and reporting.

3. Enhance Credibility With Funders

Having a federally negotiated indirect rate shows funders that your organization has undergone financial scrutiny and adheres to best practices. It builds trust and positions you as a mature, grant-ready nonprofit.

4. Maximize Federal Grant Revenue

Federal grant programs now allow either the 15% de minimis rate or a negotiated indirect rate. If your actual indirect costs exceed 15%, pursuing a NICRA can lead to significantly higher cost recovery, ensuring your programs aren't operating at a loss.

5. Greater Flexibility in Grant Management

With a NICRA, you can allocate indirect costs strategically—applying them only where allowable and beneficial. This flexibility supports more effective fund management and long-term growth.

When to Consider Negotiating an Indirect Rate

You should consider submitting a n Indirect Cost Proposal if your organization:

Manages multiple federal grants or cooperative agreements
Has over $500,000 in annual federal expenditures
Is expanding programs or infrastructure
Routinely covers indirect costs with general funds

Even if you currently use the 15% de minimis rate, you could be eligible for a much higher negotiated rate based on your actual cost structure.

What Is an Indirect Cost Proposal?

An Indirect Cost Proposal is the document submitted to request a NICRA. It typically includes:

Audited financial statements
A detailed cost allocation plan
Organizational chart and salary breakdowns
A calculation of your proposed indirect rate

This proposal is submitted to your cognizant agency, who reviews and negotiates the final NICRA.

Get Expert Help With Your NICRA

At Award Advisors, we specialize in helping nonprofits navigate the NICRA process—from preparing a compliant Indirect Cost Proposal to representing your interests during federal negotiations. Our goal is to ensure your organization gets the indirect rate it deserves.

Ready to Maximize Your Funding?

Let’s talk about how we can help you develop a strong Indirect Cost Proposal and secure a NICRA that supports your mission. Contact Award Advisors today.

Reasonable Cybersecurity Controls for Federal Grantees

Sat, 05 Apr 2025 00:52:46 GMT

A Practical Guide to Meeting Cyber Safeguarding Expectations Under Updated Federal Grant Rules

As federal cybersecurity expectations continue to evolve, so must the internal controls of grant recipients. The recent update to 2 CFR 200.303(e) reaffirms that recipients and subrecipients of federal funds must “take reasonable cybersecurity and other measures to safeguard information including protected personally identifiable information (PII) and other types of information.”

This includes information:

Defined as sensitive by the Federal awarding agency or pass-through entity,
Deemed sensitive by the grantee themselves,
And governed by relevant Federal, State, local, and tribal privacy and confidentiality laws.

In this environment, federal grantees—whether large institutions or small nonprofits—must go beyond paper compliance and actively implement reasonable cybersecurity controls. But what does “reasonable” actually look like in practice?

Applying the 52.204-21 Standard as a Baseline

The Federal Acquisition Regulation (FAR) clause 52.204-21 outlines 15 basic safeguarding requirements that provide a helpful blueprint. Though primarily applicable to federal contractors, these principles represent a solid foundation of reasonable practices for all recipients of federal funds.

Here’s how federal grantees can apply them:

1. Limit System Access

Only authorized users should have access to sensitive information. Implement unique user IDs, strong passwords, and role-based access controls.

2. Control Information on Portable Devices

Use encryption or disable storage on portable devices (e.g., USB drives, laptops) that contain sensitive data.

3. Sanitize Media Before Disposal

Ensure that data on electronic devices is wiped or destroyed before disposal or reuse.

4. Limit External System Connections

Prohibit unauthorized connections to external systems. For example, restrict personal email access on work devices handling grant data.

5. Monitor and Control Remote Access

Use secure VPNs and multi-factor authentication (MFA) to protect remote connections to your systems.

6. Implement Session Timeout

Automatically terminate sessions after a period of inactivity to prevent unauthorized access.

7. Safeguard Information During Transmission

Encrypt sensitive information during transmission using SSL/TLS or other secure protocols.

8. Block Unnecessary Software

Restrict the use of software or applications that are not authorized or necessary for the organization's operations.

9. Provide Security Training

Train all staff—including part-time and volunteers—on cybersecurity awareness, phishing, and safe data handling.

10. Update Software Regularly

Patch operating systems and applications frequently to protect against known vulnerabilities.

11. Audit and Log User Activity

Maintain system logs and regularly review them to detect unauthorized access or anomalies.

12. Physical Access Controls

Limit access to systems and servers that house sensitive information through locks, keycards, or monitored entry points.

13. Detect and Respond to Incidents

Implement an incident response plan for handling cybersecurity breaches and notify appropriate authorities as required.

14. Backup Critical Data

Maintain regular backups of critical data in secure locations to ensure availability in the event of loss or corruption.

15. Document and Review Controls

Establish written cybersecurity policies and periodically assess their effectiveness.

The Stakes Are High — But So Is the Opportunity

Cyber threats to nonprofit and public sector entities are increasing, and noncompliance can result in costly audit findings, reputational damage, or worse—loss of funding.

The good news? Implementing these controls not only protects your organization but also strengthens your credibility as a responsible steward of federal funds.

Ready to Assess Your Cyber Controls?

At Award Advisors, we help grantees navigate complex compliance landscapes. Our internal control assessments go beyond the checklist—we offer tailored guidance to match your mission, size, and technical maturity.

Schedule a cybersecurity and internal controls assessment with Award Advisors today.

Let’s ensure your grant-funded programs are not only impactful—but secure.