On Monday, July 13, AMWA joined a coalition of water sector associations in responding to the Office of Management and Budget (OMB) proposed Regulation for Financial Assistance, which would codify into regulation guidance on how federal agencies administer federal grants, agreements, and financial assistance programs. The comments highlighted the importance of federal financial assistance for water systems and demonstrated how the proposed changes could potentially disrupt and harm water systems’ use of key federal funds.
The proposed rulemaking would codify major changes to administrative guidance on 2 CFR Part 200, which governs how federal agencies manage federal financial assistance, into binding regulation. Some of the major proposed changes include mandatory review and of all discretionary awards by political appointees, expanding agency discretion to terminate or restrict funding, and other changes to align with recent Presidential Executive Orders, including prohibitions on certain activities by recipients of federal assistance. Codifying the guidance into regulation would also give OMB the ultimate rule authority.
The coalition’s comments identified numerous ways that the proposed regulation could negatively impact the use of federal financial assistance by water systems at a time when the country’s drinking, waste, and stormwater infrastructure requires over $3.4 trillion in investments over the next 20 years. The letter identified the various ways that the proposed regulatory changes undermined the dependability of federal financial assistance for water systems, leading to negative downstream impacts from investors and potential practical loss of funds. In the letter, the organizations highlighted the need for clarity with respect to the applicability of various aspects of the rulemaking in order to ensure that water system assistance is not undermined.
AMWA and partners across the water sector joined numerous other organizations representing key areas of the economy that receive federal financial assistance affected by the proposed rulemaking. Given that the rulemaking would affect over $1 trillion in assistance, organizations representing state and local governments, Tribes, universities, nonprofits, research institutions, healthcare organizations, and more responded to the proposed rulemaking. If finalized, OMB will publish a final rulemaking in the Federal Register.