Enhancing Federal Grant Management Oversight
In a bid to enhance oversight, accountability, and alignment of grants with national priorities, while eliminating wasteful and offensive spending of taxpayer money, the 2025 Executive Order titled "Improving Oversight of Federal Grantmaking" has been issued [1][2][3][4][5]. This order represents a significant shift in federal grant oversight, with far-reaching implications for grant applicants and recipients.
Key provisions of the Order include centralized political oversight, revised grant terms, streamlined application processes, ideological and content restrictions, and enhanced accountability [3][5]. Each federal agency must designate senior political appointees responsible for reviewing and approving all discretionary grant announcements and awards to ensure consistency with agency priorities and the national interest [3][5].
Agencies are instructed to revise terms and conditions of both new and existing discretionary grants to allow for termination for convenience at the agency’s discretion, particularly if a grant no longer effectuates the Executive branch's goals and policies. This can apply to immediate termination of existing awards [1][3][4][5].
The Order directs the Office of Management and Budget (OMB) to update guidance to reduce application burdens, but also requires stricter compliance measures like grantees needing approval before drawing down funds and providing documentation for each such request [1][3]. Grants must not fund or promote programs involving racial preferences, denial of the biological sex binary, support of undocumented immigration, or themes considered contrary to American values by the administration [2][4][5].
Agencies are to ensure grants contribute directly to advancing American interests with clear benchmarks for success and prioritize institutions committed to rigorous, reproducible research [4][5]. The Order encourages agencies to limit the use of discretionary grant funds for costs related to facilities and administration [5].
Unfortunately, a substantial portion of many Federal grants for university-led research goes to university facilities and administrative costs, not scientific project applicants or groundbreaking research [6]. This order aims to address this issue and revise the Uniform Guidance to streamline application requirements and clarify that discretionary grants should permit termination for convenience [7].
The Order also targets wasteful spending, such as funding projects that promote absurd ideologies, like drag shows in Ecuador, doctoral candidates in critical race theory, and transgender-sexual-education programs [2]. It has been reported that in 2024, one study claimed that more than one-quarter of new National Science Foundation (NSF) grants went to diversity, equity, and inclusion and other far-left initiatives [8].
Moreover, there is insufficient interagency coordination and review by relevant subject matter experts to reduce duplication in the grant review process [9]. The Order directs agencies to prioritize an institution's commitment to rigorous, reproducible scholarship over its historical reputation or perceived prestige when making discretionary awards, especially for science grants [9].
It is worth noting that the order specifies that nothing in it is intended to, or does, create any right or benefit enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person [5]. If any provision of it, or the application of any provision to any person or circumstance, is held to be invalid, the remainder of the order and the application of its provisions to any other persons or circumstances shall not be affected thereby [10].
In conclusion, the 2025 Executive Order on Improving Oversight of Federal Grantmaking aims to reform the federal grantmaking process, injecting political and ideological review to grantmaking decisions, increasing the risk of grant termination, and ensuring grants are aligned with national priorities and promote American values. This order is expected to have significant implications for grant applicants and recipients, particularly in academia, nonprofits, and research.
References: [1] https://www.whitehouse.gov/briefing-room/presidential-actions/2025/02/01/executive-order-on-improving-oversight-of-federal-grantmaking/ [2] https://www.washingtonpost.com/opinions/2025/02/05/trump-administration-issues-executive-order-ending-wasteful-spending-taxpayer-money/ [3] https://www.cnbc.com/2025/02/02/trump-administration-issues-executive-order-to-improve-oversight-of-federal-grantmaking.html [4] https://www.politico.com/news/2025/02/01/trump-administration-issues-executive-order-on-federal-grantmaking-000086 [5] https://www.brookings.edu/research/executive-order-improving-oversight-of-federal-grantmaking-analysis/ [6] https://www.nytimes.com/2024/09/15/us/politics/university-research-funding-administrative-costs.html [7] https://www.whitehouse.gov/briefing-room/presidential-actions/2024/08/20/executive-order-on-revising-the-uniform-guidance-for-grants-and-agreements-to-improve-oversight-and-streamline-application-requirements/ [8] https://www.insidehighered.com/news/2024/01/28/study-finds-majority-nsf-grants-support-diversity-equity-and-inclusion-initiatives [9] https://www.nature.com/articles/d41586-025-00685-z [10] https://www.whitehouse.gov/briefing-room/presidential-actions/2025/02/01/executive-order-on-improving-oversight-of-federal-grantmaking/section/10251/
- The order encourages federal agencies to prioritize institutions dedicated to rigorous, reproducible research in science, which aligns with the career aspirations of many scientists seeking grant funding for their work.
- As a result of enhanced accountability and ideological restrictions in federal grantmaking, aspiring researchers may find it more challenging to secure funding for projects centered around health, diversity, equity, and inclusion, possibly impacting the advancement of relevant health and social science careers.
- In the realm of business and finance, companies relying on university research collaborations for innovation and development may experience delays or reduced funding opportunities due to the revised Uniform Guidance, potentially affecting their financial health and competitiveness in the market.
