
Navigating Federal Grant Compliance Amid Executive Order Changes
Recent executive orders have sparked conversations about their potential impact on federal funding, leaving many grant recipients uncertain about what, if anything, they need to change in their grant management practices. While political debates continue, organizations must focus on what the law says and how regulations are implemented.
At BFS, we take a compliance-first approach, ensuring that organizations navigate regulatory changes with clarity and confidence. This article breaks down three key areas:
- How the Code of Federal Regulations (CFR) is updated and the timeline for changes.
- How Diversity, Equity, and Inclusion (DEI) policies are embedded in multiple federal regulations, policies, and acts.
- Proactive steps grant recipients can take to ensure compliance with executive orders while managing grants, particularly under 2 CFR 200.
How the CFR is Updated: The Timeline & Process
Understanding how federal regulations change is crucial for grant recipients. Executive orders alone do not immediately alter the Code of Federal Regulations (CFR)—instead, they direct federal agencies to review, propose, or revise policies within their regulatory authority.
Key Steps in the Regulatory Process
- Executive Order Issued – The President directs federal agencies to evaluate policies or propose new regulations.
- Agency Review & Rulemaking – Agencies review existing regulations and determine what, if anything, needs revision.
- Notice of Proposed Rulemaking (NPRM) – Agencies publish proposed changes in the Federal Register, allowing public comment (typically 30–60 days).
- Public Comment & Review Period – Agencies analyze feedback and may modify proposed rules accordingly.
- Final Rule Published – If adopted, the rule is published in the Federal Register and assigned an effective date.
- Incorporation into the CFR – Once finalized, the new regulation is integrated into the CFR, legally binding grant recipients.
Implications for Grant Recipients
- Executive orders may signal upcoming changes, but they do not override existing CFR provisions until the rulemaking process is complete.
- Compliance should always be based on the current version of the CFR, not anticipated changes.
- Agencies may issue guidance documents in the interim, which should be reviewed but do not carry the force of law.
DEI Policies: Pervasive and Embedded Across Federal Regulations
Many recent discussions center on Diversity, Equity, and Inclusion (DEI) policies, with questions about how they interact with federal grant requirements. Whether or not changes are made, DEI principles are already embedded in multiple regulations, policies, and funding acts.
Examples of places where DEI Appears in Federal Grants & Compliance
- Non-Discrimination Requirements – DEI aligns with laws such as:
- Title VI of the Civil Rights Act (race, color, national origin).
- Section 504 of the Rehabilitation Act (disability protections).
- Title IX of the Education Amendments (gender equity in federally funded programs).
- Federal Procurement & Contracting – DEI appears in:
- Small Business Administration (SBA) programs supporting disadvantaged businesses.
- Affirmative action in federal contracting under EO 11246.
- Program Participation & Reporting – Many agencies require recipients to:
- Track demographic data on program beneficiaries.
- Ensure accessibility and language accommodations.
- Conduct outreach to underrepresented populations.
- Non-Discrimination Requirements – DEI aligns with laws such as:
Considerations for Grant Recipients
- Even if executive orders modify agency priorities, existing statutes and regulations governing DEI remain intact unless formally changed through rulemaking.
- Compliance with civil rights laws and existing federal mandates continues to be required.
- Changes may occur in reporting requirements, grant conditions, or federal oversight.
Proactive Compliance Steps for Grant Recipients
Given the evolving regulatory landscape, organizations should take proactive steps to ensure compliance while adapting to potential shifts in federal policies.
1. Monitor Federal Rulemaking & Agency Guidance
- Regularly check the Federal Register for notices related to 2 CFR 200 and other grant regulations.
- Subscribe to updates from your federal awarding agency (e.g., HHS, DOE, DOT).
- Track compliance changes through professional organizations such as NGMA.
2. Conduct an Internal Compliance Review
- Assess current grant policies and procedures to identify areas impacted by executive orders.
- Verify compliance with existing DEI-related grant requirements (e.g., reporting, procurement, accessibility).
- Identify potential risks or gaps that may require policy adjustments.
3. Stay Audit-Ready & Maintain Strong Documentation
- Maintain thorough records of decision-making to demonstrate compliance.
- Ensure all documentation aligns with the current version of 2 CFR 200.
- Keep internal policies flexible to adjust to regulatory changes without violating current requirements.
4. Engage with Funding Agencies for Clarity
- When in doubt, seek guidance from your awarding agency regarding compliance expectations.
- Participate in training sessions, webinars, or advisory groups to stay informed.
- Ensure subrecipients and contractors are also in compliance with grant terms.
Conclusion
Executive orders can influence federal funding policies, but they do not immediately change regulations. Organizations should focus on compliance with the law as it stands today while proactively preparing for possible changes.
By understanding the CFR update process, recognizing the pervasiveness of DEI in regulations, and implementing strong compliance strategies, grant recipients can effectively manage their funding while staying ahead of regulatory shifts.
For organizations navigating these changes, a compliance-first approach remains the best strategy. Stay informed, document decisions, and align policies with current federal regulations—not speculation or political debates.
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