Agency Adaptation Needed Based on Uniform Grants Guidance Updates

In April 2024, the U.S. Office of Management and Budget (OMB) released its 2024 revisions (2 CFR 200) to what was commonly known as the Uniform Grants Guidance—the government-wide framework for grants management. Now referred to as OMB Guidance for Federal Financial Assistance, the updated guidance includes the most extensive changes in its 10-year history. These updates are primarily focused on reducing grant process administrative burdens, promoting program and service accessibility, and enabling efficient, effective federal program management and execution.

As agencies work to implement these revisions by October 1, 2024, they face the challenge of reducing the administrative burden on recipients while meeting the government’s increased emphasis on understanding program outcomes across the various communities served. To avoid further overburdening recipients, agency leaders will need to demonstrate the value of their programs by effectively focusing on the evaluation, data, and community engagement sections of the revised guidance.

Key Updates

Updates to relevant sections include:

• Section 200.202—Program Planning and Design
• Section 200.301—Performance Measurement
• Section 200.329—Monitoring and Reporting Program Performance
• Section 200.413—Direct Costs
• Section 200.455—Organization Costs

Evaluation

OMB defines evaluation as an assessment of program or policy effectiveness and efficiency. The updated guidance directs federal agencies to meaningfully link evaluation across the grant lifecycle so that evaluation activities measure recipient effectiveness. This can help identify promising practices as well as inform program and performance decisions.

Data Collection

Data collection is a primary component of federal award management and requires significant and ongoing investment from recipients. The updated guidance now mandates that federal agencies only request information from recipients that is necessary for effective communication of progress towards program objectives.

Community Engagement

Community engagement is essential to designing effective programs. Identifying desired program objectives and goals in collaboration with people who are impacted enables leaders to focus programs on critical issues and proven strategies. Despite its importance, this is the first time that the federal government has published uniform guidance for federal financial assistance related to community engagement. This updated policy encourages federal agencies and recipients to conduct community engagement activities to inform program design.

Allowable Costs

To further emphasize changes across evaluation, data, and community engagement, the updated guidance expands the definition of allowable costs—allowing recipients to spend government funds on evaluation, data collection and reporting, and community engagement activities.

Challenges

Right now, federal agencies require recipients to collect and report on significant amounts of information across the grant lifecycle. While this information can be valuable, community engagement and data collection activities are often not standardized at the program level. And federal agencies and programs typically don’t include impacted communities in program design or implementation. That results in reduced engagement effectiveness, data collection that’s disconnected from program goals, and evaluation that doesn’t inform program improvements.

Excessive reporting requirements and lack of engagement in program design make it difficult for federal agencies and their recipients to respond to community needs, accurately assess the effectiveness of their programs, and build a solid foundation of evidence. These challenges are exacerbated by the volume of requirements made by numerous federal agencies.

With the new guidance, federal agencies should anticipate that recipients may direct some funding toward newly allowable costs such as evaluation and data collection and away from foundational programmatic activities. That’s why it’s crucial to limit the time and resources required for evaluation and data collection so that recipients can focus on critical program activities and be responsive to community needs.

What Your Agency Can Do

The updated guidance presents an opportunity for your agency to make improvements related to evaluation, data collection, and community engagement expectations to increase operational efficiency and program impact. Here are five key changes to the guidance and recommendations for addressing them.

1. Recipients can now use funding for data, evaluation, and community engagement activities. Recommendations:

• Streamline and simplify data requested from recipients to eliminate redundancy, and clarify which data points recipients should collect and report throughout the grant lifecycle.
• Determine effective methods for recipients to engage communities and provide resources and training to help recipients conduct meaningful and effective engagement activities that contribute to program outcomes.

2. Recipients must limit data collection to what aligns with program objectives and agency goals. Recommendations:

• Reassess all award goals and objectives before developing criteria for program evaluation or merit review to ensure alignment with agency goals.
• Clearly articulate required data collection throughout the grant lifecycle.

3. Agencies should leverage resources at their disposal—including available data, evidence, and evaluation results from past programs—to inform program design. Recommendations:

• Access existing dashboards with performance measures from previous or similar notice of funding opportunities (NOFOs) to inform NOFO concept development.
• Talk to key staff involved with the administration of previous, similar NOFOs to understand facilitators, barriers, and challenges.

4. Agencies should develop programs in consultation with communities benefiting from or impacted by the program. Recommendations:

• Develop guidance through research and non-research activities for engaging communities benefiting from or impacted by the program. (Note that OMB has not suggested any particular methods for agencies and programs to engage communities or collect data about communities.)
• To help gather data for program design considerations, share information among agencies at conferences and site visits about best practices for engaging communities.

5. Applicants, not just funded recipients, are now encouraged to engage with the community to inform program design. Recommendations:

• Leveraging available tools, provide prospective applicants with information to engage communities about relevant topics before a NOFO is released. Be mindful about the limitations for engaging with applicants before a NOFO is released to avoid competitive advantage.
• Include program goals and outcomes on NOFO forecasts and grant/cooperative agreement webpages so that prospective applicants can begin engagement activities.

OMB’s updated guidance reflects the trend of setting expanded, standardized requirements for federal agency evaluation, performance measurement, and community engagement expectations. Agencies can reasonably expect increased scrutiny of program performance, evaluation data, and how findings are used for continuous improvements that are responsive to communities.

Agencies that continue to take traditionally siloed approaches to program design, performance management, and evaluation risk further overburdening recipients with reporting requirements and misdirecting funds from community-informed programming. To adapt to this new guidance, agencies should engage communities to help make changes across the NOFO lifecycle that will support achieving financial, operational, programmatic, and customer experience goals.

Action Items

Using the template developed by the Council on Federal Financial Assistance, conduct an assessment to identify which NOFOs should be prioritized for simplification in fiscal year 2025.

All federal agencies were required to submit their plans for implementing these changes by May 15. Connect with your agency point of contact and review the implementation approach to ensure your program is compliant.

With the experience, resources, and technology to interpret, manage, and cross-maximize federal funds, Guidehouse works with clients to successfully design, build, and operate grants management programs that deliver a positive community impact.