In the final days of 2013, the White House Office of Management and Budget (OMB) released for publication long-awaited final guidance on administrative requirements, cost principles and audit requirements pertaining to federal grants and cooperative agreements. Guidance previously found in eight separate OMB Circulars has been consolidated in an attempt to reduce the administrative burden on recipients of federal funds, while also bolstering the government’s efforts to eliminate fraud, waste and abuse in federal funding. The new rules have significant ramifications for “non-Federal entities”—defined by OMB to include non-profit organizations, institutes of higher education (IHEs), state and local governments and Indian tribes — and may also apply to for-profit and foreign entities in limited circumstances.

In February 2013, OMB released draft uniform federal funding guidance and sought comments from stakeholders. The proposed reforms were developed by a newly created OMB Council on Financial Assistance Reform (COFAR), charged with cutting government red tape and reducing waste, fraud, and abuse in connection with the more than $500 billion spent annually on grants. OMB received more than 300 comments, which it considered in developing the final guidance.