This morning, the Trump administration issued a memorandum halting all federal grant and loan disbursements, totaling approximately $3 trillion, effective today at 5 p.m. This pause will allow for a comprehensive review of all awards to ensure compliance with recent executive orders addressing foreign aid, nongovernmental organizations, diversity, equity, and inclusion (DEI) programs, gender ideology policies, and environmental initiatives.

Key Points to Note:

  1. Scope of the Pause:
    • Federal agencies must pause the obligation or disbursement of all federal financial assistance, including foreign aid, nongovernmental organizations, DEI initiatives, gender-related policies, and green energy programs.
  2. Exceptions for Legally Mandated Actions:
    • Agencies must continue meeting any legally mandated deadlines or actions for assistance programs during the pause, including closeout activities or obligations expressly required by law (e.g., 2 CFR 200.344).
  3. Case-by-Case Exceptions:
    • The Office of Management and Budget (OMB) may grant exceptions allowing federal agencies to issue new awards or take other actions on a case-by-case basis. If you believe your grant or program could qualify, we recommend engaging with your agency or legal counsel for guidance.
  4. Upcoming Deadlines:
    • Federal agencies must submit detailed information about paused programs to OMB by February 10, 2025. While there is no clear timeline for resuming funding, this deadline may indicate early when more guidance will be issued.
  5. Impact on Existing and Pending Programs:
    • Agencies have been authorized to withdraw published grant announcements, modify unpublished ones, and, where permissible by law, cancel existing awards that conflict with administration priorities. This could significantly impact ongoing and pending projects.
  6. Increased Oversight and Investigations:
    • Responsibility for federal financial assistance oversight is being assigned to senior political appointees. Agencies are also directed to investigate underperforming recipients, which may result in funding cancellations.

Recommendations for Civicus Group Clients:

  • Monitor Communications: Stay alert for updates from your granting agency about your funding status. Federal agencies may issue specific guidance in the coming weeks.
  • Assess the Impact: Evaluate how this pause might affect your ongoing or planned projects, particularly if they involve priority areas for review.
  • Maintain Compliance: Ensure all reporting and compliance obligations for active grants are met, even during the pause.
  • Consider Advocacy or Legal Guidance: If your project faces risks due to these changes, consult with legal counsel or advocacy organizations to explore options for preserving funding or obtaining exceptions.
  • Prepare for Potential Shifts: This review may significantly change federal funding priorities. Begin planning for adjustments to align with emerging requirements.

Affected Federal Grant-Making Agencies Include:

  • Department of Health and Human Services (HHS)
  • Department of Education
  • Department of Housing and Urban Development (HUD)
  • Department of the Interior (DOI)
  • U.S. Agency for International Development (USAID)
  • U.S. Department of Agriculture (USDA)
  • U.S. Department of Commerce (DOC)
  • U.S. Department of Labor (DOL)
  • U.S. Department of Veterans Affairs (VA)
  • U.S. Economic Development Administration (EDA)

Key Dates to Remember:

  • There will be a press conference today at which more information may be provided.
  • The temporary pause takes effect at 5 p.m. today, January 28, 2025.
  • Agencies must submit detailed reviews to OMB by February 10, 2025.

Given the significant implications of this funding pause, we strongly encourage clients to proactively monitor developments and prepare for potential disruptions. For assistance or further guidance, please don’t hesitate to contact us at Civicus Group.