Federal Grant Recipients: Cybersecurity Compliance Challenges and Risks
In April 2024, the Office of Management and Budget (OMB) revised the Uniform Guidance, placing a renewed focus on cybersecurity compliance for organizations receiving federal funding. With cyber threats on the rise, these changes are designed to enhance the security of federal grant recipients by ensuring they have robust cybersecurity measures in place.
Cybersecurity Now a Key Factor in Federal Grant Compliance
Under the updated guidance, federal agencies are now required to assess cybersecurity risks during their risk evaluations. This means grant recipients must demonstrate that they have adequate protections in place to safeguard sensitive information and systems. Compliance with federal cybersecurity standards is no longer optional—it is now a fundamental requirement for maintaining funding eligibility.
For organizations applying for federal grants, this shift highlights the importance of proactively addressing cybersecurity vulnerabilities. Failure to meet these new requirements could result in funding delays, non-compliance penalties, or even disqualification from federal funding opportunities.
Restrictions on Telecommunications and Surveillance Equipment
Another significant update to the Uniform Guidance is the prohibition on using federal funds to purchase certain telecommunications and video surveillance equipment from companies deemed national security threats. This includes major Chinese firms such as Huawei Technologies and ZTE Corporation. The goal of this measure is to mitigate cybersecurity risks posed by equipment from entities that could potentially facilitate espionage or cyberattacks against U.S. systems.
Organizations receiving federal funding must carefully evaluate their existing and planned technology purchases to ensure compliance. Using prohibited equipment could result in grant violations, funding clawbacks, or legal consequences.
How Organizations Can Maintain Cybersecurity Compliance
To adapt to these changes, federal grant recipients should take proactive steps, including:
Conducting a Cybersecurity Risk Assessment – Evaluate existing security measures and identify potential vulnerabilities.
Aligning with Federal Cybersecurity Standards – Ensure compliance with frameworks like NIST Cybersecurity Framework and CMMC (for defense contractors).
Reviewing Equipment Procurement Policies – Verify that all telecommunications and surveillance equipment meet federal security requirements.
Engaging with Cybersecurity Experts – Partnering with compliance professionals can help organizations navigate these evolving regulations and mitigate risks.
Leverage CSH to Maintain Cybersecurity Compliance
With cybersecurity now playing a critical role in federal grant compliance, organizations must take proactive measures to protect sensitive information and meet federal security standards. Clark Schaefer Consulting is a trusted partner to many Fortune 1000 companies and high-growth organizations. They are well-positioned to navigate today's most complex risk and cybersecurity challenges, helping your organization maintain security and compliance.
By staying informed and implementing the necessary safeguards, grant recipients can not only protect their data but also ensure continued access to federal funding in an increasingly security-conscious environment. Connect with CSC today to learn more.
