Grants compliance has always been a moving target. Every few years, new rules, priorities, and technologies reshape the landscape—and the past year has been no exception. For local governments and nonprofits, keeping pace with evolving requirements isn’t just about avoiding penalties. It’s about safeguarding funding, building trust, and demonstrating accountability to the communities they serve.
So, what’s changed this year, and what should we be watching next? Let’s unpack the trends reshaping grants compliance.
Recent Grants Compliance Changes
Uniform Guidance Revisions
The Office of Management and Budget (OMB) issued significant updates to the Uniform Guidance (2 CFR Part 200), including revisions meant to reduce administrative burden and enhance transparency—effective for new awards issued on or after October 1, 2024, and for audit changes beginning in fiscal years starting after that date. These are some of the most substantial revisions since the Uniform Guidance first launched.
Audit Priorities Shift
The Government Accountability Office (GAO) continues to spotlight subaward oversight as a key risk area. Its March 2025 report emphasized persistent gaps in tracking where subaward funds end up—and flagged this as a major compliance vulnerability.
Equity Requirements Gain Traction
While some DOE programs have waived DEI or community benefits reporting requirements, the broader trend is toward more explicit equity reporting. Many federal programs are requiring grantees to track who benefits from funding and show how resources reduce disparities. Equity is no longer an optional talking point—it’s becoming a core compliance expectation.
Cybersecurity Expectations
Cybersecurity has officially entered the compliance spotlight. OMB now requires grant recipients to have incident response plans and staff training in place. Agencies that fall short could face penalties or disqualification. At the same time, federal programs like DHS’s cybersecurity grant initiative are injecting $172 million into helping state and local governments strengthen their defenses.
The Growing Role of Technology in Compliance
Technology is no longer just an add-on in grants management. It’s becoming a compliance backbone.
Task Automation
Modern grants management platforms now automate repetitive compliance work such as sending reminders, organizing documents, and generating audit-ready reports. Taking these time-consuming, laborious tasks off the backs of staff has two major benefits: it reduces the rate of human error while allowing team members to focus on more strategy-driven priorities.
Analytics and Early Risk Detection
Data analytics tools help managers become proactive rather than simply reactive, allowing them to more easily spot irregularities before they escalate—such as flagging unusually high spending in a certain category. Ensuring team members are never blindsided, this approach shifts compliance from reactive fixes to preventative safeguards.
Artificial Intelligence
AI has entered the conversation in nearly every industry, and public sector grants management is no exception. Already, AI-powered tools are starting to help with narrative-heavy tasks, like scanning applications for eligibility or summarizing lengthy reports. While this technology is still finding its place among grant management teams, it has the potential to save staff hours of tedious work.
Transparency Dashboards
One of the most visible shifts in grants compliance is the rise of public-facing dashboards. These tools give funders, oversight bodies, and even the public a window into how grant dollars are being spent and what impact they’re having.
For grants managers, these new dashboards serve two purposes. Internally, they act as a centralized hub where program, finance, and compliance teams can see progress in real time. Externally, they communicate accountability to funders and citizens, showing exactly where money is going and what outcomes are being achieved.
New Risks and Challenges for Grants Managers
Even with the help of stronger, digital tools, there are significant compliance hurdles for grants teams over the next year:
Staffing and Capacity Gaps
Lean teams have become the norm, which means compliance responsibilities often pile onto staff who are already stretched thin as it is. That extra pressure only increases the risk of mistakes and staff burnout, making it even tougher to navigate shifting regulations and standards.
Hybrid Funding Streams
These days, local government initiatives and programs are increasingly funded by a mix of federal, state, and philanthropic dollars. The downside? Each grant comes with different requirements, and juggling them all can feel like trying to solve three overlapping puzzles at once.
Equity Mandates and Measurement
Nowadays, it’s no longer enough to simply run a successful program—you have to also show the community it reaches. Collecting demographic and geographic data, and then proving funds are getting to the underserved groups that need it, adds another layer of compliance complexity.
Cybersecurity as a Compliance Burden
As digital systems become the new standard, grant managers must ensure compliance with cybersecurity requirements. This means encryption, incident response planning, and ongoing staff training. For many smaller agencies struggling with high turnover and limited resources, it’s a steep learning curve.
Compliance Trends on the Horizon
The compliance landscape will only continue to evolve. Grants managers should prepare for several big shifts:
From Annual Audits to Real-Time Monitoring
The era of once-a-year audits is fading. In its place, funders are moving toward continuous oversight—rolling data submissions, spot checks, and dashboards that provide live visibility into compliance.
Outcomes Over Outputs
Compliance will increasingly measure results, not just adherence to rules. Funders will ask: Did the grant achieve its intended impact? This means grants managers need to track and report performance outcomes alongside financial data.
Standardization Across Agencies
Federal agencies are working to align reporting requirements. While standardized templates and formats may ultimately simplify compliance, adapting to new systems in the short term will create additional work.
Equity Metrics as Decision Drivers
Equity performance won’t just be reported but will influence funding decisions. Agencies demonstrating success in reaching underserved populations could gain an advantage in securing future awards.
Cybersecurity Certifications as Baseline Requirements
Expect cyber compliance to become non-negotiable. Certifications or audits validating cybersecurity practices may soon be required before an award is even made.
How Grants Managers Can Stay Ahead
The compliance landscape is shifting quickly, but grants managers can stay ahead of the curve by taking proactive, practical steps. Here’s how:
Integrate Compliance into Daily Workflows
Too often, compliance is treated as something you scramble to handle when reports are due or audits are announced. That’s when mistakes surface and panic sets in. Instead, think of compliance as part of your everyday operating rhythm. Build regular check-ins to confirm documentation is current, use project management tools to align program milestones with compliance requirements, and keep reporting cycles visible to the entire team. Making compliance routine reduces the last-minute stress and ensures your organization is always audit-ready.
Invest in Ongoing Staff Training
Compliance is not just the responsibility of the finance or legal team. It touches everyone involved in a grant-funded program. Staff who don’t understand the rules around allowable costs, documentation, or reporting timelines can unintentionally put funding at risk. The fix? Regular training sessions, onboarding modules for new hires, and refreshers timed to reporting cycles. Even a short quarterly workshop can help reinforce expectations and keep compliance knowledge fresh across the team.
Work Closely with Subrecipients
If you’re managing pass-through funding, your compliance risk is directly tied to the performance of your subrecipients. That makes effective collaboration a must. Don’t just hand over funds and hope for the best. Instead, set clear expectations up front with written agreements, provide templates for reporting, and schedule regular check-ins to review progress. Consider hosting training sessions specifically for subrecipients to strengthen their compliance capacity. The stronger your oversight, the fewer surprises you’ll face when auditors come calling.
Stay Plugged into Policy Updates
Because federal and state agencies are constantly refining rules, missing an update can mean falling behind. Make it part of your routine to monitor OMB memos, GAO reports, and state-level oversight guidance. Subscribing to updates from organizations like NGMA (National Grants Management Association) or attending webinars from compliance experts can also keep your finger on the pulse. When you know what’s coming, you can prepare accordingly instead of having to simply react.
Wrapping It Up
The current grants compliance landscape isn’t just more complex—it’s smarter, tech-driven, and outcome-focused. The shift is clear: compliance is moving from reactive audits toward real-time accountability and results-based evaluation.
For grants managers, that means transforming compliance from a checklist to a strategic tool for building trust and transparency. By staying informed, embedding compliance into everyday workflows, and embracing the right technology, local governments and nonprofits can protect their funding and focus on what really matters: impact.
