Understand new grant compliance rules for schools

Why this matters right now

If your school or education nonprofit receives federal grant funds, the rules governing those awards are in motion. On August 24, 2026, the U.S. Department of Education published a Notice of Proposed Rulemaking to amend the Education Department General Administrative Regulations (EDGAR) and related provisions in 2 CFR parts 3474 and 3485. Public comments were due September 23, 2026. Separately, the Office of Management and Budget proposed a major overhaul of 2 CFR Part 200, the Uniform Guidance, with a proposed effective date of October 1, 2026.

You do not need to panic, but you do need a plan. The practical move is to strengthen the controls you already should have, then watch for final rules.

What is actually changing

Three threads matter for schools.

• EDGAR amendments. The Department proposes to streamline selection criteria for discretionary awards, clarify continuation award procedures, and revise termination language so grants can be ended if awards are found inconsistent with program goals or agency priorities. It also proposes a new provision allowing competitive preference for applicants that propose to charge lower costs.
• Uniform Guidance overhaul. OMB's proposed rule would reclassify Part 200 as a binding regulation, expand screening and oversight, and add policy-based funding restrictions. It would apply to new awards, not existing fixed-amount awards issued before the effective date.
• Streamlining efforts. A bipartisan bill, the Streamlining Federal Grants Act of 2026 (S. 3709), aims to simplify how federal grants are announced, applied for, and managed, including plain-language notices and a government-wide Grants Council.

For a plain-language summary of the EDGAR proposal, see the Federal Register notice. For the OMB context, see Potomac Law's overview.

A practical compliance checklist for school finance teams

Use this as a working list. It follows the award lifecycle and reflects the core obligations in 2 CFR Part 200.

Before you apply

• Confirm your SAM.gov registration is active and your entity information is current.
• Read the Notice of Funding Opportunity carefully for new certifications or policy restrictions.
• Document your indirect cost rate or de minimis election.

While you spend

• Keep financial management and internal controls running during the period, not just at year end.
• Follow procurement procedures and competition requirements.
• Document that costs are allowable, allocable, and reasonable.
• Maintain time and effort documentation for salaries charged to federal awards.
• Assess subrecipient risk and monitor their spending.

Reporting and records

• Submit financial and performance reports on time.
• Retain records for three years past the final report.
• Prepare for a Single Audit if you expend $1,000,000 or more in federal awards in a fiscal year.

A phase-by-phase checklist with current thresholds is available from GrantCue.

Common audit findings and how to prevent them

Most findings are not exotic. They are documentation failures.

• Missing time and effort records. Fix: require monthly or semiannual certifications for anyone charged to a federal award.
• Unallowable or undocumented costs. Fix: build a pre-approval step for purchases and travel.
• Procurement without competition. Fix: keep a written procurement policy and document every exception.
• Late or inaccurate reporting. Fix: put reporting deadlines on a shared calendar with an owner.
• Weak subrecipient monitoring. Fix: use a risk assessment and a monitoring schedule.

What to do in the next 30 days

1. Assign one person to track the EDGAR and Uniform Guidance rulemakings.
2. Pull your current grant agreements and list every reporting deadline.
3. Test one transaction from each major cost category for documentation.
4. Review your procurement policy against 2 CFR Part 200.
5. Confirm your SAM.gov registration and Single Audit status.

How the Featured Expert Can Help

Harness Potential provides outsourced CFO and back-office support tailored to charter schools, school districts, and nonprofits, covering accounting, budgeting, HR/payroll, and compliance reporting. Founded by Carrie Wagner, a former president and COO of Ex Ed who founded and operated a California charter school for 10 years, the team is primarily comprised of education and charter sector experience. Harness Potential positions itself as a mission-driven partner for schools needing audit-ready financial operations. Learn more at harnesspotential.com.

Quiz: Test your grant compliance knowledge

Federal grant rules for schools are shifting in 2026. Take this quick quiz to check your understanding of the key dates and thresholds.