Not all the changes to federal priorities and policies made by the new administration have been lasting. For example, the Office of Management and Budget’s pause on federal assistance funding in late January lasted less than 48 hours.
Nevertheless, the indication to the public sector is clear: Drastic shifts are afoot, and it’s likely that all of us — and the organizations, constituents, and communities we serve — will be impacted in some way.
Rest assured that the public sector team at Rehmann will continue to monitor and communicate new developments as they unfold. In the meantime, we’ve compiled a short list of proactive measures you, your team, and/or board members can take now to better prepare your organization for the challenges and opportunities this new era might bring.
Remember: Your advisor is standing by to help guide you in any of the below steps or discuss strategy specific to your organization’s needs and circumstances.
- Manage Funding Streams
Determine which aspects of your operational budget or services are directly dependent on federal funding, or on organizations — such as government agencies, nonprofits, businesses, contractors, or public schools — that do. Whether a vendor, partner, or client, the financial stability of these entities will affect yours if there are delays, cuts, or cancellations of essential federal resources.
Create a comprehensive list of the programs and projects that are tied to federal funds. Next, consider these actions:
- Manage cash flow to alleviate unexpected changes in funding. Ensure federal drawdowns are completed timely and in accordance with compliance requirements.
- Consider delaying any non-essential projects or purchases.
- Explore alternate funding strategies or sources — think philanthropic grants, financing, private investments, or public appeals — to cover potential shortfalls.
- Diversify funding streams, reducing dependence on federal sources by broadening support through state-level resources, private donors, or partnerships.
- Maintain open lines of communication with federal and oversight agencies so that you have the latest information when available should changes in funding occur.
- Address Federal Manpower Shortages
Federal layoffs and hiring freezes may create staffing shortages in key departments that your organization relies on for coordination and oversight. This ripple effect may slow pertinent approvals, funding distributions, and communications. If your organization is experiencing reduced availability of federal agency staff, adjust project timelines to the best of your ability and communicate to pertinent stakeholders the potential for delayed processing times and stalled workflows. Wherever possible:
- Build Relationships Locally: Strengthen ties with local representatives and state-level agency counterparts to reduce dependence on federal channels.
- Centralize Internal Processes: Streamline your reporting and response strategies to minimize inefficiencies caused by reduced federal staffing.
- Advocate for Clarity: Request clear communication from federal departments and oversight agencies regarding delays to adjust expectations accordingly.
- Look for Opportunity in the Unexpected
Although many unknowns remain, and the level of uncertainty may feel overwhelming, history shows us that times of challenge and disruption often open doors for growth and innovation. Public sector entities positioned to adapt have a unique chance to shape the future. Some opportunities to explore:
- Data & Technology Improvements: Invest in or optimize existing digital tools to help your organization streamline operational processes, streamline grant drawdowns, improve reporting compliance, and reduce bureaucracy.
- Process Audits: Assess financial management processes to identify areas for improvement.
- Strengthen Community Partnerships: Collaborate with local governments, businesses, and stakeholders to find creative solutions to funding and resource gaps.
- Drive Advocacy: Amplify your organization’s voice through associations or coalitions advocating for support from decision-makers.
Move Forward with Confidence
Change presents challenges, but remaining informed, agile, and proactive will allow your organization to weather these uncertain times and emerge more resilient than before.
Preparing your organization for unpredictable scenarios starts with keeping a pulse on federal changes, building contingency plans, and seeking new opportunities. Remember, you don’t have to do it alone. Collaboration, both within your organization and with external partners, is key to navigating uncertainty.
Unsure how to navigate a specific issue? Need support streamlining grants management and financial reporting, assessing risk and internal controls, or creating contingency plans? Reach out to your Rehmann advisor today or email [email protected].