2 CFR 200.308 Budget Revisions: Prior Approval and Transfers

Under 2 CFR 200.308, the prior approval requirements for federal award recipients cover a fixed list of programmatic and financial changes: shifting the scope or objectives of the project, replacing key personnel, adding federal funds, changing the cost-sharing commitment, moving money out of participant support, incurring costs that carry their own approval requirement under Subpart E, and starting new subaward activities that were not in the original application. Agencies may also restrict how you move money between direct cost categories once cumulative transfers cross a threshold. Every one of these changes needs written approval from the federal awarding agency, or from the pass-through entity if you are a subrecipient, before you act.¹

Programmatic Changes That Require Prior Approval

The most consequential trigger is any change in the scope or objective of the project. This applies even when no budget line moves. If the deliverables, target population, or goals shift, the change needs written approval first.¹

Key personnel named by name or position in the award cannot be swapped without approval. That covers employees and contractors. Approval is also required if the approved project director or principal investigator will be absent from the project for more than three months, or will reduce their time and effort on the award by more than 25 percent over the period of performance. The agency funded the work partly on the strength of who would run it, so those changes go back to the agency before they take effect.¹

New subaward activities that were not proposed in the application and approved in the award also require approval. Swapping to a different subrecipient for previously approved work is different: it only needs approval if the award terms specifically say so, and agencies are discouraged from imposing that requirement unless the particular subrecipient mattered to the merit review. Ordinary procurement of goods and services falls outside this rule.¹

Financial Changes That Require Prior Approval

Four financial triggers stand alongside the programmatic ones, and each stands on its own. A single revision can hit more than one, and each has to be addressed in the request.¹

Any change to the total approved cost-sharing amount requires prior approval. If your organization’s matching commitment shifts up or down, the agency must sign off.
If the project cannot be completed within the original budget and additional federal funds are needed, prior approval is required, and the agency has to confirm that adequate funds are available.
Money budgeted as participant support costs — stipends, travel allowances, and subsistence for trainees and participants — cannot be moved to other budget categories without approval.
Certain cost items carry their own approval requirement under Subpart E, such as equipment purchases and foreign travel. Including those costs in a revision triggers the approval process unless the agency has waived it.

When Budget Transfers Between Cost Categories Trigger Approval

Separate from the mandatory triggers, the agency has discretionary authority to restrict how you move money between direct cost categories like personnel, travel, and supplies. This restriction is not automatic. It attaches only when two conditions are both met: the federal share of the award exceeds the simplified acquisition threshold, and cumulative transfers among direct cost categories exceed or are expected to exceed 10 percent of the total budget, including cost share, as last approved by the agency.¹ As of October 2025, the simplified acquisition threshold rose from $250,000 to $350,000.²

Two details often get missed. First, the 10 percent is measured against the total budget including cost share, not just the federal portion. Second, it is cumulative across the life of the award, not per revision. Most agencies exercise this authority and build the restriction into their standard terms and conditions, so treat it as a live constraint unless your award explicitly says otherwise.

One absolute limit sits above all of this: the agency cannot permit any transfer that would cause a federal appropriation to be used for purposes inconsistent with that appropriation. No waiver overrides that.¹

Construction Awards

Construction awards follow the same programmatic and financial triggers, with one added rule. Transferring funds between construction and non-construction work under the same award always requires prior written approval.¹ If your award funds both building a facility and running a program inside it, you cannot shift money between those two sides without agency sign-off. Cost overruns that need additional federal money and changes to the intended use of the facility both fall under the standard scope and added-funds triggers as well.

No-Cost Extensions

When a project needs more time but not more money, the regulation offers two paths. If the agency has authorized it in the award terms, the recipient can initiate a one-time extension of up to 12 months without prior approval. The recipient must notify the agency in writing, with a justification and revised timeline, at least 10 calendar days before the current period of performance ends. That extension cannot be used solely to spend down leftover funds.¹

Even the one-time extension needs prior approval in three situations: the award terms prohibit self-initiated extensions, additional federal funds are needed, or the extension involves a change in scope. Any extension beyond the one-time option also needs formal prior approval, and those requests should be submitted at least 10 calendar days before the period of performance ends. Agencies can approve multiple no-cost extensions on a single award unless a statute or regulation prohibits it.¹

Pre-Award Costs and Research Award Waivers

If the agency authorizes it, a recipient may incur project costs up to 90 calendar days before the official award date without a separate approval request. Costs incurred more than 90 days before the award still require written approval. All pre-award spending is at the recipient’s own risk. If the award never materializes or comes in lower than expected, the agency has no obligation to reimburse.¹

Research awards get broader flexibility. Prior approval requirements for pre-award costs, one-time extensions, and carryover of unobligated balances are automatically waived for awards that support research, unless the agency’s regulations or the specific award terms say otherwise. The narrow exception is that a one-time extension on a research award still needs approval if the award prohibits it, additional funds are required, or the scope changes.¹

How To Submit the Request

Use the same budget format as your original application unless the agency has approved an alternative such as an electronic system or email submission.¹ The request should include a written narrative explaining why the change is needed and how it connects to the original goals of the award. For a key personnel change, include the replacement’s qualifications. For added funds, lay out the cost drivers. Attach supporting documentation like vendor quotes, salary data, or a revised timeline.

The agency should respond within 30 calendar days of receiving the request, either approving or denying the revision. If the review will take longer, the agency must tell you in writing when to expect a decision.³ Do not implement any change that requires prior approval until you have that written confirmation in hand.

What Happens If You Skip Approval

Making a change that required approval without getting it is one of the fastest ways to put an award at risk. When an agency or pass-through entity determines that a recipient has not complied with the terms of the award, it can temporarily withhold payments until the problem is corrected, disallow the costs tied to the unauthorized change, or suspend or terminate the award.⁴

In serious cases the agency can initiate debarment proceedings, barring the organization from future federal awards, or withhold continuation funding. Unapproved costs are among the most common audit findings and are much easier to avoid than to defend. If there is any doubt about whether a change needs approval, ask the program officer before spending the money.⁴

Subrecipients

The same rules apply to subrecipients, with one structural difference. The approval authority is the pass-through entity, not the federal agency directly. If you receive federal funds through a state agency, university, or other intermediary, your revision requests go to that pass-through entity under the same 30-day response timeline.¹

Limits on Agency-Imposed Requirements

Unless the Uniform Guidance itself provides for it, a federal agency cannot add prior approval requirements beyond those in 2 CFR 200.308 without OMB approval.¹ If an agency is asking for approvals on actions the regulation does not cover, raise it with the program officer or your grants compliance team before treating the requirement as binding.

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eCFR. 2 CFR 200.308 – Revision of Budget and Program Plans
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Acquisition.GOV. Threshold Changes – October 1st, 2025
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eCFR. 2 CFR 200.308 – Revision of Budget and Program Plans
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eCFR. 2 CFR 200.339 – Remedies for Noncompliance