On January 27 and January 28, the Office of Management and Budget (OMB) issued guidance as follows:
OMB Memorandum M-25-13
Published on January 27, 2025, the OMB Memorandum M-25-13 outlines a directive for federal agencies to review all financial assistance programs to ensure they align with the Administration’s stated priorities. The memorandum defines federal financial assistance via 2 Code of Federal Regulations (CFR) 200.1, which lists the following funding pathways:
- Grants;
- Cooperative agreements;
- Non-cash contributions or donations of property (including donated surplus property);
- Direct appropriations;
- Food commodities;
- Loans;
- Loan Guarantees;
- Interest subsidies;
- Insurance; and
- Other financial assistance
Federal contracts are not included in this memorandum’s definition of federal financial assistance.
M-25-13 requires a temporary pause on issuing new awards, disbursing funds, and other related activities to allow for a comprehensive evaluation of these programs. The pause, effective January 28, 2025, at 5:00PM, is intended to ensure federal funds are used efficiently and in accordance with policy objectives.
M-25-13 requires that Federal agencies immediately identify any legally mandated actions or deadlines for assistance programs to OMB by February 10, 2025, alongside detailed analyses of affected programs. Exceptions to the pause may be granted by OMB on a case-by-case basis. Each agency is also tasked with assigning senior appointees to oversee compliance, reviewing and potentially modifying or canceling conflicting programs, and ensuring oversight to address any underperformance or misuse of federal resources.
OMB Clarification
On January 28, 2025, in response to an initial wave of questions regarding the funding freeze, the OMB issued a clarifying document outlining the following key points:
- Programs not implicated by the President’s recent Executive Orders (Executive Orders) are not subject to the pause. Programs associated with the following EOs listed in the OMB clarification are subject to the pause:
- Protecting the American People Against Invasion
- Reevaluating and Realigning United States Foreign Aid
- Putting America First in International Environmental Agreements
- Unleashing American Energy
- Ending Radical and Wasteful Government DEI Programs and Preferencing
- Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government
- Enforcing the Hyde Amendment
- Any program that provides direct benefits to individuals is not subject to the pause.
- Any payment required by law to be paid will be paid without interruption or delay.
Federal Financial Assistance Program Analysis
As stipulated in the memorandum and subsequent clarification, senior political appointees for applicable programs will be required to perform an analysis of their programs for compliance with OMB Memorandum M-25-13. This template lists thousands of affected programs and for each one, the following questions must be answered:
General Program Information
- Which federal agency and sub-agency oversees the program?
- What is the Assistance Listing Number and program title?
- What is the program’s primary objective?
- What are the SAM.gov and USASpending.gov links for reference?
- Who is the senior political appointee responsible for overseeing the program?
Funding Status and Obligations
- Are there any pending funding announcements for this program?
- Are there anticipated obligations or disbursements of funds before March 15, 2025?
- Are there any statutory requirements mandating the obligation or disbursement of funds before March 15, 2025?
- What is the estimated date of the next obligation or disbursement of funds?
Policy Compliance Questions
- • Does this program provide federal funding to NGOs that support or provide services to removable or illegal aliens?
- Is this program a foreign assistance program, or does it support activities overseas?
- Does this program provide funding affected by the revocation of the U.S. International Climate Finance Plan?
- Does this program impose a burden on the development or use of domestic energy resources (including funding under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act)?
- Is this program implicated in efforts to end DEI, “diversity, equity, inclusion, and accessibility” (DEIA) mandates, environmental justice, or equity-related grants?
- Does this program promote gender ideology?
- Does this program support abortion or activities related to abortion as defined under the Hyde Amendment?
- Does this program support any activities that must not be funded based on executive orders issued after January 20, 2025?
- Are there any additional relevant details about program activities that should be provided?
What Does This Mean?
For now, the immediate task falls on federal agencies, which must conduct a comprehensive review of their financial assistance programs and report their findings to OMB by February 10, 2025. They are required to identify which programs align with administration priorities and which may face further modification, reduction, or elimination. These reports are identified in the files attached below, which also includes the OMB memo itself. It appears contracts and programs that do not meet the criteria above should be ok.
Until those reports are submitted and reviewed, the freeze will remain in effect and everyone should anticipate delays. While the administration has left open the possibility of granting exceptions on a case-by-case basis, it remains unclear how those decisions will be made – or how quickly they will be processed. OMB has also clarified the freeze could last as little as one day and that many programs have been submitted for and been approved to continue even before the pause has gone into effect.
For recipients of federal financial assistance, the best course of action in the coming weeks is preparation and patience. Organizations should review active projects, assess potential risks, and monitor communications from their funding agencies. Institutions awaiting disbursements should seek clarity on whether their funding falls under statutory mandates that might allow payments to proceed.
We are closely monitoring this evolving situation and will keep you informed as further guidance becomes available. If you have specific concerns or would like to discuss how this memo may affect your initiatives, reach out to: