Finally, OMB proposes to reformat the definitions section of 2 CFR part 200, subpart A-Acronyms and Definitions by removing the section numbers to facilitate future additions to this section.

To support this goal, OMB proposes changes to emphasize the importance of focusing on performance to achieve program results throughout the Federal award lifecycle, starting with a proposed new section 2 CFR Program planning and design

The President’s Management Agenda, Results-Oriented Accountability for Grants CAP goal is working toward shifting the balance between compliance and performance while reducing burden. Agencies are encouraged to promote promising performance practices that support the achievement of program goals and objectives. By shifting the focus to the balance between performance and compliance, agencies line burdensome compliance requirements for programs that demonstrate results. This new section formally requires practices that are already expected of Federal awarding agencies to develop a strong program design by establishing program goals, objectives, and indicators, to the extent permitted by law, before the applications are solicited. Consistent changes are proposed in 2 CFR Information contained in a Federal award and 2 CFR Performance measurement requiring Federal awarding agencies to provide recipients with clear performance goals, indicators, and milestones. Further, OMB proposes changes to Exceptions section to emphasize that Federal awarding agencies are encouraged to request exceptions to certain provisions of 2 CFR 200 in support of in designs that apply a risk-based, data-driven framework to alleviate select compliance requirements and hold recipients accountable for good performance. OMB recognizes that Federal financial assistance program goals and their intended results will differ by type of Federal program. For example, criminal justice grant programs may focus on specific goals such as reducing crime, basic scientific research grant programs may focus on expanding knowledge, and infrastructure projects may fund building or infrastructure projects. OMB is interested in receiving public comments on existing promising performance practices that Federal awarding agencies may be able to leverage within existing and proposed flexibilities or future exceptions, and in general on how grant makers can better hold recipients accountable for results. This is of particular interest as Federal agencies implement and carry out the requirements of the Foundations of Evidence-Based Policymaking Act of 2018, which emphasizes collaboration and coordination to advance data and evidence-building functions in the Federal government.

Many Federal agencies are working together to innovate and develop a risk-based approach that incorporates performance to achieve results-oriented grants (where applicable)

Related to the above proposals to strengthen program planning and Federal award terms and conditions, OMB proposes changes to Information contained in a Federal award and Termination to strengthen the ability of the Federal awarding agency to terminate Federal awards, to the greatest extent authorized by law, when the Federal award no longer effectuates the program goals or Federal awarding agency priorities. Federal awarding agencies must clearly articulate the conditions under which a Federal award may be terminated in their applicable regulations and in the terms and conditions of Federal awards. The intent of this proposal is to ensure that Federal awarding agencies prioritize ongoing support to Federal awards that meet program goals. For instance, following the issuance of a Federal award, if additional evidence reveals that a specific award objective is ineffective at achieving program goals, it may be in the government’s interest to terminate the Federal award. Further, additional evidence may cause the Federal awarding agency to significantly question the feasibility of the intended objective of the award, such that it may be in the interest of the government to terminate the Federal award. OMB also proposes the elimination of the termination for cause provision because this term is not substantially different than the provision allowing Federal awarding agencies to terminate Federal awards when the recipient fails to comply with the terms and conditions. OMB seeks feedback on the impact of these proposed changes and whether the language meets the intended outcome of these provisions.