Surviving the Grant Uncertainty: Strategies for Local Governments

The change in administration has brought a shift in federal priorities, creating uncertainty in grant funding. As new policies take shape and funding pauses occur, local governments must proactively ensure financial stability. Here’s how to navigate the evolving grant landscape effectively.

1. Maximize Grant Reimbursements

Ensuring that all eligible and allowable expenditures are reimbursed is critical for maintaining financial stability. Most governments process grant drawdowns monthly, aligning with their financial statement closing process. However, increasing the frequency of drawdowns to at least weekly can demonstrate effective grant administration and help maintain cash flow.

Tip: Submit drawdown requests frequently and follow up daily to track their status. Faster reimbursements improve liquidity and reduce financial strain.

2. Submit Grant Reports on Time

Federal grants require regular reporting—typically monthly or quarterly. Missing reporting deadlines can result in delayed funding once normal operations resume. Ensure all required reports are submitted promptly to secure your place in the processing queue, even during a funding pause.

Tip: Staying compliant with reporting requirements positions your organization for a smoother transition when funding resumes.

3. Identify Alternative Funding Sources

While many programs rely on federal funding, alternative financing options may be available. Consider:

• State grant programs with similar objectives.
• Private foundation grants that align with your funding needs.
• Not-for-profit funding partnerships for community-based programs.
• Lines of credit or letters of credit as short-term funding solutions.
• Revenue anticipation notes (RANs) as a last-resort funding measure during extended federal pauses.

Tip: Diversifying funding sources helps maintain operations and financial resilience during uncertain times.

4. Prepare for Operational Adjustments

If federal funding delays impact critical programs, local governments must assess which operations are essential. Consider:

• Prioritizing essential services by reallocating funds accordingly.
• Developing contingency plans to manage non-essential operations efficiently.
• Communicating changes with the public in advance to set expectations.

Tip: A well-defined contingency plan ensures service continuity and financial sustainability during uncertain times.

How UHY Can Help You Navigate Grant Uncertainty

At UHY, we specialize in helping local governments manage grant compliance, financial planning, and regulatory challenges. Our experts provide strategic guidance to:

• Optimize grant reimbursement processes for faster fund access.
• Strengthen grant reporting and compliance to mitigate funding delays.
• Identify and secure alternative funding sources.
• Develop contingency plans to prioritize spending and maintain operations.

Contact UHY today to discuss how we can support your financial stability during grant uncertainty.