There are a number of features common to all federal grant programs.
First, grantees are not – by virtue of receiving grants – arms, agents, or agencies of the United States. They are independent entities. Grantee operations are subject to federal legal and regulatory requirements only
- as specified in the terms and conditions of the grant award, and
- to the extent that they would be were no federal funds involved.
Grantees are not bound by the same rules applicable to the Federal government in matters of employment, contracting, and administration. By the same token, grantees do not enjoy many of the protections that Federal agencies enjoy.
Second, all Federal grant programs have been subject to a common foundation of governing rules found primarily in “circulars” promulgated by the White House Office of Management and Budget (OMB). At the end of 2013, the OMB began to change the Circular framework, moving from a system with different circulars and different grants administration requirements for different types of entities to a streamlined, one-size-fits-all Supercircular (also called the “Omnicircular”) that sets forth grants administration systems, Cost Principles, and Audit Requirements.
Third, there is a common foundation of legal principles announced in federal judicial decisions over the past few decades. For example, courts have held that grant conditions and obligations must be explicit and cannot attach “by implication,” that changes in substantive requirements for a federal grant program generally cannot attach retrospectively and that a grantor agency may not impose “unconstitutional conditions” on a grantee’s access to federal funds.