Federal funding is set to lapse at the end of the federal government’s fiscal year, meaning a government shutdown could occur on October 1, 2023. Shutdowns have become increasingly common in recent history, with 21 in the last five decades. While many past shutdowns lasted mere days, the most recent shutdown—from late December 2018 to late January 2019—was the longest in history, lasting for 35 days.
What might a shutdown mean for recipients of federal financial assistance? As a starting point, a grantee’s notice of award obligates the full amount of grant funding awarded, so absent a barrier to performance (such as inaccessibility of federal lands or facilities), the grantee will generally still be able to perform and incur allowable costs during a shutdown.
That said, while federal grantees are less likely than federal employees to be directly impacted by a lapse in federal funding, the possibility of a shutdown should not be taken lightly. Indeed, in recent remarks to the Congressional Black Caucus Foundation, President Biden called out research institutions and Head Start programs as among those a shutdown could detrimentally impact.
In preparing for a possible shutdown, federal grantees would do well to consider two areas of potential impact: (1) administrative grant management challenges; and (2) potential physical hurdles to project accomplishment.
The following table provides key considerations to assist in planning and preparing for the possibility of a shutdown: