Prior Approval Required For
- Change in scope or objectives — any modification to the approved project scope, research questions, or program design
- Change in key personnel — PI/PD change, or any key person reducing effort by 25% or more from approved level
- Rebudgeting to equipment — transferring funds into equipment category when not in original budget
- Adding or changing subawards — any new subaward or change to an existing subaward's scope or budget exceeding authorized levels
- Transferring funds between direct cost categories exceeding 10% of the total award (for awards with this restriction in terms and conditions)
- No-cost extension (prior-approval type) — when automatic NCE authority is not available
Summary
Federal grant awards come with an approved budget, scope of work, and key personnel. Deviating from any of these requires either agency notification or written prior approval, depending on the type of change and the agency involved. Under 2 CFR 200.308, certain changes require prior written approval from the awarding agency's Grants Management Specialist before the change is made. Making a change without required prior approval — even if you spend the funds on legitimate project costs — is a compliance finding that can result in disallowed costs and audit findings. This guide covers what requires prior approval, what is generally permitted without approval, and how to submit a modification request.
The Regulatory Framework: 2 CFR 200.308
2 CFR 200.308 is the Uniform Guidance section governing prior written approval for post-award changes. It establishes a baseline set of changes that require agency approval, and gives agencies the authority to add more requirements in their own terms and conditions. The baseline prior approval requirements under 200.308(c) include: changes in scope or objectives; changes in a key person named in the award (or 25%+ reduction in PI effort); the need for additional federal funding; transferring the performance obligation to a third party; changing the PI; and acquiring or substituting equipment valued over $5,000 when equipment was not included in the approved budget.
Agencies build on this baseline. NIH has a 25% rebudgeting rule: direct cost rebudgeting that cumulatively exceeds 25% of the total award amount in a budget period requires prior approval. NSF permits rebudgeting between direct cost categories without prior approval for most awards (though scope changes still require approval). DOJ programs often impose stricter controls and require prior approval for any budget modification over 10% of the direct cost budget. Your award terms and conditions — not just the Uniform Guidance — define what requires your specific agency's sign-off.
Key Personnel Changes: The Most Frequently Triggered Requirement
Key personnel changes generate more prior approval requests than any other budget modification category. Under 2 CFR 200.308(c)(2), prior approval is required when the PI/PD named on the award is being replaced or when a key person's involvement in the project is reduced by 25% or more from the level approved in the application. This 25% threshold refers to effort — not salary. If your PI was approved for 50% effort (20 hours/week on a 40-hour week) and proposes to reduce to 35% effort, that's a 30% reduction in approved effort and requires prior approval.
The practical implication: effort changes for key personnel must be tracked and managed during the award. An investigator who informally reduces their time on a project — because of teaching load increases, new awards, or shifting priorities — without a corresponding prior approval request is creating a compliance vulnerability. If an auditor reviews effort reports and finds that the PI's actual time was substantially below the approved effort level, the salary costs attributed to that effort during the period may be disallowed. Document effort changes promptly and request prior approval before the reduced effort period begins.
GrantMetric Analysis
- Scope changes are the modification category where organizations most often underestimate the requirement. Federal agencies define "scope" broadly — not just the programmatic objectives, but the population served, the geographic area, the intervention model, and the deliverables. An organization that decides mid-award to shift from serving adults to serving youth because the adult population is harder to recruit has changed scope, even if the budget is unchanged and the general program goal is the same. Organizations that make this kind of programmatic pivot without a prior approval request — often because the program staff feel the change is an operational adaptation, not a fundamental shift — create a compliance exposure that surfaces at closeout or in subsequent monitoring visits. When in doubt about whether a change requires prior approval, the correct action is to ask your Grants Management Specialist in writing, not to assume it's fine.
- Retroactive prior approval requests are processed, but they start from a position of weakness. Agencies technically require prior approval before the change — "prior" means before the action is taken. If your organization already hired a replacement PI, already rebudgeted into equipment, already transferred a portion of the work to a subcontractor, and then sends a modification request, the agency will typically process the request — but the communication acknowledges that you acted without required authorization. In most cases, if the change was substantively appropriate, agencies will approve it retroactively without penalty. But a pattern of retroactive requests, or a retroactive request for a change the agency would not have approved prospectively, creates significant risk: the unauthorized change may result in disallowed costs and a compliance finding regardless of whether the expenditures were otherwise legitimate.
Changes That Generally Don't Require Prior Approval
Within the constraints of the award terms and 2 CFR 200.308, many budget adjustments are permitted without prior approval. Most agencies allow rebudgeting between salaries and fringe benefits, between supplies and other direct costs, and between travel line items — as long as the rebudgeting doesn't cross the agency's percentage threshold and doesn't reflect a change in scope. Hiring a different staff member than the one budgeted, at the same or lower salary and for the same role, generally doesn't require prior approval as long as the person is not a key person named in the award.
Purchasing specific supplies or materials not listed in the original budget — but within an approved supplies line — is generally permitted. Attending a conference not originally planned, using the approved travel line, is generally permitted as long as the conference is relevant to the project. The flexibility principle in 2 CFR Part 200 is that grantees are expected to manage their awards actively, and not every minor operational decision needs agency approval. The prior approval requirements exist for changes that affect the fundamental nature of the award: scope, key personnel, major reallocation of resources, and subaward changes.
Budget Modification Request Checklist
- Identify the type of change and check both 2 CFR 200.308 and your award terms to determine if prior approval is required
- Submit the request to your Grants Management Specialist (not Program Officer) in writing before making the change
- Include: award number, description of the requested change, rationale, budget impact (revised budget if applicable), and effective date
- Do not make the change until you have written approval from the agency — verbal agreement from a Program Officer is not sufficient
- Retain the approval documentation in your grant files for the full record retention period
- If you discover an unapproved change has already occurred, disclose it to your GMS promptly and request retroactive approval