Q2 2026: Federal Assistance, Data Transparency, and More

Federal agencies extend web and mobile accessibility compliance dates

During the second quarter, the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) extended certain web content and mobile application accessibility compliance dates by one year.

For state and local governments subject to the Title II rule of the Americans with Disabilities Act, the DOJ extended the compliance date for public entities with a total population of 50,000 or more from April 24, 2026, to April 26, 2027. Public entities with a total population of less than 50,000 and special district governments now have until April 26, 2028. The extension applies to the web and mobile app accessibility requirements adopted by the DOJ in 2024.

HHS also extended compliance dates under Section 504 of the Rehabilitation Act for recipients of HHS federal financial assistance. Recipients with 15 or more employees now have until May 11, 2027, and recipients with fewer than 15 employees now have until May 10, 2028.

OMB and federal agencies propose revisions to federal financial assistance rules

On May 29, 2026, the Office of Management and Budget (OMB) and numerous federal grant-making agencies issued a proposed rule, “Regulation for Federal Financial Assistance,” that would revise governmentwide requirements for grants, cooperative agreements, and other forms of federal financial assistance. The comment period closed July 13, 2026.

The proposal is broad and would affect several areas relevant to recipients and pass-through entities, including notices of funding opportunities, merit review processes, internal control expectations, cybersecurity safeguards, mandatory disclosures, fixed amount awards and subawards, payment controls, and other federal award administration requirements. Among the notable proposed changes, fixed amount awards and fixed amount subawards would not be permitted unless authorized by federal statute. Federal agencies also would be required to use clearer summary information in notices of funding opportunities, generally make opportunities available for at least 60 calendar days, and use plain language in funding announcements.

One proposed change that could be especially significant for recipients and subrecipients is a new E-Verify requirement. The proposed rule would require recipients and subrecipients to participate in the Department of Homeland Security’s E-Verify program to confirm the employment eligibility of employees and contractors hired in, or performing work in, the United States under a federal award. Recipients and subrecipients also would be required to notify the federal agency or pass-through entity if they receive a final nonconfirmation notice through E-Verify.

IRS expands Business Tax Account access to government and tax-exempt entities

The IRS announced on April 6, 2026, that it expanded Business Tax Account access to partnerships, federal, state, and local governments, Indian tribal governments, and tax-exempt organizations. The Business Tax Account is a secure online platform that allows eligible users and designated officials to view tax balances, make payments, review payment history, download select digital notices, view eligible transcripts such as payroll and income transcripts, request tax compliance checks, and view the business name and address on file with the IRS. For governmental entities, this expansion could provide a more efficient way to access federal tax information and manage certain IRS interactions.

Federal data transparency developments continue under the FDTA

On June 8, 2026, the SEC announced a final joint rule establishing data standards under the Financial Data Transparency Act (FDTA). The standards are intended to promote interoperability of financial regulatory data across covered agencies through common identifiers for entities, geographic locations, dates, and certain products and currencies, as well as principles-based standards for data transmission, schema, and taxonomy formats. The SEC’s rulemaking page states that the joint rule is effective Oct. 1, 2026, but that it will not change reporting requirements without further agency action.

GAO report examines path toward governmentwide regulatory reporting standards

On May 14, 2026, the Government Accountability Office (GAO) issued a report required by the FDTA on the feasibility, costs, and potential benefits of building toward a broader governmentwide regulatory reporting model similar to Standard Business Reporting. GAO reported that standardized and interoperable data could improve regulatory analysis, oversight, and reporting efficiency, but also noted potential challenges and costs related to legacy system modernization, interagency coordination, data governance, reporting-entity system changes, and testing. GAO also observed that practitioners said the FDTA could put the United States on a path toward a governmentwide reporting system similar to Standard Business Reporting, although additional reforms and adoption would be necessary.

Clean energy tax credit deadlines affect governmental entities

Governmental entities with clean energy projects should evaluate whether they have met the filing and project timing requirements needed to claim federal clean energy credits through elective pay, also referred to as direct pay.

On May 14, 2026, the IRS reminded federal, state, and local government entities filing Form 990-T to make an elective payment election that Form 8868 may be used to request an automatic six-month filing extension. For calendar-year entities with 2025 projects, the original Form 990-T due date was May 15, 2026; if properly extended, the due date generally is Nov. 16, 2026, because Nov. 15 falls on a Sunday.

Government officials also should note that several project-related dates recently passed. The IRS states that the Section 30C alternative fuel vehicle refueling property credit applies to eligible property placed in service through June 30, 2026, and IRS instructions for the clean electricity production credit indicate that applicable wind and solar facilities generally must have begun construction on or before July 4, 2026, or be placed in service before 2028.

Treasury releases updated SLFRF reporting guide as expenditure deadlines approach

The U.S. Department of the Treasury released an updated July 2026 Project and Expenditure Report User Guide on July 1, 2026, for the Q2 2026 State and Local Fiscal Recovery Funds (SLFRF) reporting cycle. The guide states that there are no notable system changes for the Q2 reporting cycle. For recipients required to submit quarterly Project and Expenditure Reports, Q2 2026 reports are due July 31, 2026.

Recipients also should keep closeout and expenditure deadlines in mind. Treasury recently reminded recipients that SLFRF funds generally must be expended by Dec. 31, 2026, except for Surface Transportation and Title I projects, for which funds must be expended by Sept. 30, 2026. Recipients are required to return SLFRF funds that have not been expended by the applicable deadline. Recipients that have fully expended their SLFRF allocation should continue submitting Project and Expenditure Reports unless and until Treasury notifies them that they have been invited to close out their SLFRF award.

FEMA required to create public disaster reimbursement dashboard

H.R.7147, the Homeland Security and Further Additional Continuing Appropriations Act, 2026, enacted April 30, 2026, includes a new Federal Emergency Management Agency (FEMA) disaster reimbursement transparency requirement. Section 313 of the law requires FEMA to post an interactive dashboard on its public-facing website with reimbursement requests for covered individual assistance and public assistance expenses related to emergency and major disaster declarations under the Stafford Act. The dashboard is expected to include information such as damage category code, cost estimates, applicant ID, submission dates, project descriptions, federal and nonfederal cost share, FEMA review and approval status, project-level progress updates, and explanations for certain delays or denials. The law requires the information to be posted within 90 days after FEMA receives it and within 60 days after the information is under final review by the U.S. Department of Homeland Security. For governments seeking FEMA reimbursement, the dashboard could provide additional visibility into reimbursement status and timing.

AICPA updates auditing standards for external confirmations

On May 14, 2026, the American Institute of CPAs (AICPA) Auditing Standards Board approved a new Statement on Auditing Standards (SAS) on External Confirmations. The new SAS introduces a requirement for auditors to use external confirmation procedures for cash and cash equivalents held by third parties unless certain conditions exist. It also updates guidance for the use of intermediaries in the confirmation process, negative confirmations, and situations in which auditors directly access information maintained by a knowledgeable external source.

The new SAS will be effective Dec. 15, 2028, with early adoption permitted. For state and local governments, the standard could affect future audit procedures over bank accounts, pooled cash, custodial accounts, investment accounts, fiscal agents, bond trustees, and other third-party cash or cash-equivalent arrangements.

IIA seeks feedback on draft Anti-Corruption Topical Requirement

The Institute of Internal Auditors (IIA) released a draft Anti-Corruption Topical Requirement for public comment. The draft focuses on governance, corruption risk assessment, third-party risk, whistleblower mechanisms, training, monitoring, and the design and effectiveness of anti-corruption controls. It also outlines auditor expectations for evaluating how organizations prevent, detect, and respond to corruption risks. Topical Requirements are a mandatory component of the International Professional Practices Framework and apply when internal auditors provide assurance services on a covered topic.

For governments, the draft may be relevant to internal audit activities involving procurement, grants management, third-party relationships, ethics and compliance programs, fraud risk management, hotline or whistleblower processes, and other areas with elevated corruption risk. Comments were due July 23, 2026.