New Proposed OMB Rules Would Impact LEAs
June 02, 2026
The Office of Management and Budget (OMB) has proposed , which dictates the terms under which federal awards must be managed, as well as how and when they can be granted and rescinded. These changes will impact LEAs as well as many other recipients of federal funding.
Âܲ·AVÊÓÆµhas identified three initial concerns with the proposed regulation:
1). Of greatest importance to districts are revisions that would require payment requests from recipients and subrecipients to include justifications describing the purpose of the payment and the specific award-related work it supports. Payment requests must include a brief, written justification regardless of whether the payment is made in advance or to reimburse the recipient or subrecipient. This justification must include information on the activities or aspects of the Federal award that corresponds to the payment request. For example, this may include project milestones, project activities, administrative activities, or other requirements that must be completed under the Federal award. Âܲ·AVÊÓÆµanticipates that this mandate will impose substantial administrative burdens on LEAs receiving federal formula funds. This new proposed mandate aligns with the administration’s Defend the Spend (DFS) initiative, which the Department of Labor (DOL) participates in. As federal education programs have transferred to DOL, grantees have reported additional administrative burden linked to DFS. Given that formula funding is already subject to rigorous fiscal oversight and recordkeeping requirements, we urge the Administration to exempt these funds from the new requirement.
2). Âܲ·AVÊÓÆµalso opposes a new prohibition that federal grant awards cannot be utilized for advertising costs to recruit personnel, which has been removed from the allowable uses of funds. While this cost will still be permitted when authorized under statutes like Title II-A, frequently, districts utilize Title I dollars, among others, to attend job fairs and post notices about open positions for Title I-funded positions. While the funding for this is not substantial, it is typically budgeted through federal dollars.
3). We are also concerned by the prohibition on using federal funding for conferences unless the cost is approved by the Federal awarding agency and included in the grant’s terms and conditions. With any grant award involving new activities or staff, it can be very beneficial to attend a conference to learn how to best utilize the grant funding and conduct appropriate oversight. Given staff turnover and the challenges this creates for staffing federal programs long-term, we would urge OMB to reconsider these two proposals.
Other potential issues for districts that rely on competitive grants:
- New viewpoint-neutrality requirements for events on property under a public entity's control, which would apply to any event held on district property regardless of whether the event itself is federally funded
- New limits on the use of federal funds related to implementing policy because of disparate-impact analysis
- Expanded authority for federal agencies to terminate awards at their discretion, with categorical exceptions for block grants, formula grants, and disaster recovery grants
Comments on the proposed rule are due July 13, 2026. Âܲ·AVÊÓÆµencourages districts to review the proposed rule and submit comments reflecting any impacts, questions, or concerns.
Subscribe to AASA's Blogs
Subscribe via RSS feed below. Learn more about RSS feeds here.