New HHS Grant Terms May Affect DEI and Foreign Boycott Policies

AAFCPAs would like to make clients aware of new conditions in the Department of Health and Human Services (HHS) Grants Policy Statement (GPS), which was updated for the first time since 2007. The revised guidance, published on April 16, 2025, outlines new restrictions tied to Diversity, Equity, and Inclusion (DEI) activities and foreign boycotts that may affect eligibility for federal funding.

These provisions apply to any Notice of Award (NOA) issued on or after April 16, 2025. Grantees who accept funding through these NOAs will be considered to have certified compliance with new terms, including refraining from certain DEI activities and from participating in boycotts against companies based in or conducting business with Israel.

HHS has indicated that failure to comply with these conditions may lead to termination of funding and possible repayment of awarded funds. The agency also reserves the right to cancel future awards if it determines a grantee has violated these rules.

The updated GPS standardizes language and requirements across all HHS grants. It includes new instructions for identifying funding opportunities, applying for grants, amending budgets, and submitting extension requests. The document also includes definitions and clarifications on prohibited activities. Among these is a definition of “discriminatory equity ideology,” drawn from Executive Order 14190. The order describes this ideology as one that “treats individuals as members of preferred or disfavored groups, rather than as individuals, and minimizes agency, merit, and capability in favor of immoral generalizations.”

HHS advises grant recipients to review the terms carefully and refer directly to agency-issued guidance. The Bureau of Primary Health Care (BPHC) has made available updated language for use in grant justifications, which may help ensure compliance. Clients may review the full policy update in the HHS Grants Policy Statement.

How We Help

AAFCPAs works closely with clients to help them navigate the shifting landscape of federal funding, regulatory compliance, and operational oversight. Our advisors understand the unique obligations tied to HHS grants and guides Federally Qualified Health Centers and other healthcare entities through the financial and reporting requirements that accompany public funding.

For more than 50 years, our Healthcare Practice has supported providers across a wide range of settings including FQHCs, behavioral health, senior care, hospice, and private practice. Our team includes CPAs, consulting CFOs, tax attorneys, business analysts, and IT specialists who bring clarity to complex funding compliance structures, optimize reimbursements, and strengthen internal controls.

These insights were contributed by Courtney McFarland, CPA, MSA, 340B Apexus Certified Expert™. Questions? Reach out to our author directly or your AAFCPAs partner. AAFCPAs is closely monitoring shifts in funding and offers strategic insights as developments unfold to support clients in navigating funding uncertainty. Subscribe to get alerts and insights in your inbox.