Staying Compliant Under HHS’ New Grants Policy

With the U.S. Department of Health and Human Services’ (HHS’) new 2 CFR 200/300 framework, outdated policies and audit practices can trigger costly findings or even clawbacks. In recent years, Office of Inspector General (OIG) reviews have required recipients to repay millions in unallowable costs, underscoring the financial exposure associated with outdated grant management practices. The message is clear: staying ahead of these updates isn’t optional; it’s financial risk management.

The revised HHS Grants Policy Statement (GPS) fully aligns agency requirements with the federal Uniform Guidance at 2 CFR 200 and introduces new HHS-specific provisions at 2 CFR 300, replacing the legacy 45 CFR 75 framework. Effective October 1, 2025, Version 2.0 replaces the April 2025 edition of the GPS and applies to all discretionary awards issued or modified on or after that date, establishing a single, consistent set of administrative, cost and audit requirements for HHS-funded programs.

For recipients of discretionary awards (excluding National Institutes of Health (NIH), nondiscretionary awards and awards to individuals), these changes affect financial management, administrative oversight and compliance expectations. The revisions introduce updated terminology, citations and HHS-specific provisions, such as new conflict-of-interest policies, prior-approval standards and Title IX certification language that strengthen consistency and accountability across programs. While intended to streamline and clarify federal requirements, these changes also heighten administrative and financial management expectations that organizations should prepare to meet.

Key Updates in HHS’ Grants Policy Statement Version 2.0

Regulatory realignment and simplified framework

HHS’ revised GPS adopts the Uniform Guidance at 2 CFR 200 and introduces agency-specific provisions at 2 CFR 300, officially retiring 45 CFR 75. This update consolidates decades of policy into a single framework, giving recipients a clearer view of administrative, cost and audit requirements across all HHS discretionary awards (excluding NIH) while promoting alignment with Uniform Guidance standards applied by other federal awarding agencies.

NIH awards

The NIH GPS remains the governing policy for NIH awards and operates in parallel with the HHS GPS, both of which implement the Uniform Guidance at 2 CFR 200 with agency-specific provisions.

Under the legacy regulation at 45 CFR 75.216, for-profit recipients of HHS awards had two audit options:

1. A financial-related audit of a single HHS program or award
2. A financial-related audit covering all HHS awards received; alternatively, recipients could elect to undergo a full single audit under Subpart F

As of October 1, 2025, HHS has moved these provisions into 2 CFR 300.218 with no substantive changes. For-profit organizations receiving HHS or NIH funds still have the same two audit choices. If a for-profit organization spends less than the Subpart F audit threshold, it is exempt from audit but must still keep records available for review.

Terminology and cross-reference updates

Version 2.0 standardizes terminology and key definitions to align with the Uniform Guidance. Key updates include replacing “awarding agency” with “agency” and “match” with “cost share.” These revisions enhance clarity, ensure consistent federal usage and improve alignment in documentation and communication across HHS grant-funded programs.

Expanded compliance and certification requirements

Civil-rights assurances, including Title IX certification, now apply to all awards rather than only those where the language appears in a notice of award. HHS also updated its conflict of interest guidance and incorporated these standards into Appendix IX, which establishes HHS-specific cost principles and conflict of interest provisions for hospitals, state entities and commercial organizations receiving HHS funds. In addition, the policy clarifies deadlines for no-cost extensions. Requests must be submitted at least 10 days before the end of the final budget period and explicitly affirms HHS’ right to terminate awards for convenience, with no appeal rights.

Financial oversight and approval processes

Recipients must follow 2 CFR 200.308 for prior-approval requests related to budget or programmatic changes. A key update is that prior approval must be obtained for cumulative changes exceeding 10% of the total budget, including cost share which is a notable departure from the previous interpretation which generally required prior approval only when changes exceeded 25% of the total approved direct costs. The revised guidance providers clearer expectations for documentation, approval timing and communication with grant managers and is intended to reduce uncertainty while reinforcing accountability.

Administrative and policy clarifications

Appendix D updates national and administrative policy requirements, while plain-language revisions throughout the document improve readability and citation consistency. HHS also announced plans to update the GPS annually to reflect ongoing statutory and regulatory changes and to post a linked version of 2 CFR 300 when it becomes effective.

Updated Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) data rights language

Version 2.0 updates the data rights provisions in Chapter C.8.10.3 to align with current Small Business Administration policy and clarify the government’s rights and protection periods for data developed under SBIR and STTR awards.

Next Steps for Grant Recipients

As agencies and organizations adjust to Version 2.0, the most effective starting point is a thorough gap assessment to identify where current grant management policies and procedures diverge from the new requirements under 2 CFR 200 and 2 CFR 300. From there, recipients should update internal documentation, replace outdated 45 CFR 75 references and confirm that cost principles, reporting protocols and approval processes align with the updated framework. Training programs should also be refreshed to reinforce understanding of civil rights obligations, cost allowability and subrecipient monitoring. Strengthening communication between finance, compliance and program teams will help ensure these revisions are implemented consistently and that controls remain effective across every stage of the grant lifecycle.

Building Confidence Through Compliance

The revised HHS Grants Policy Statement underscores a stronger expectation for accountability and consistency across all stages of the grant process. Rather than treating these changes as a compliance exercise, organizations can use this moment to refine internal policies, improve documentation and clarify oversight responsibilities. Taking proactive steps now will help recipients strengthen their operational foundation, reduce audit risk and maintain long-term program stability.

How Weaver Can Help

Weaver’s public sector professionals work with government entities, not-for-profits and federally funded organizations to design effective compliance systems, strengthen internal controls and streamline grant management processes. Our team helps recipients interpret evolving federal guidance — including the transition from 45 CFR 75 to 2 CFR 200 and 2 CFR 300 — by conducting policy gap assessments, updating procedures and training staff on new administrative and reporting requirements.

Contact us today to learn how Weaver can help your organization prepare for these changes and navigate a smooth transition into the new HHS policy framework.

Authored by Jenn Garrett and Lauren Daigle

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