Memorandum

As you are aware, the federal government shutdown continues and has led to a significant disruption in the federal funding streams that support federally sponsored projects.

At NC State, the shutdown has delayed payment of federally funded research activities which represent more than $25 million per month in reimbursable expenses.

We understand that this situation creates uncertainty and presents operational challenges for our research community. To ensure the long-term continuity of our research, we must take steps to preserve the university’s available resources that support our vital research projects.

Effective immediately, we are directing all colleges and units to limit all non-payroll expenses on federal contract, grant or other award mechanisms routed through ledger 5 projects.

This directive applies to all federal awards expenditures other than existing payroll, including but not limited to:

• New equipment purchases
• New hires (individuals not currently or previously employed, and who have not yet accepted a formal written offer)
• Non-essential travel
• Consulting services
• Supplies and materials
• Subaward payments

Meeting our payroll commitments to existing faculty, staff and students whose work is supported by federal awards is our highest priority and most critical obligation. These efforts are being implemented to conserve our operating capital so we can meet these payroll obligations for as long as possible during the federal government shutdown.

Prohibition on Cost-Shifting

Given the potential duration of the federal government shutdown and the current uncertainty surrounding our state budget, expenses that would normally be charged to federal grants may not be allocated to other fund sources, including state, trust or F&A (Facilities & Administrative cost recovery) funds. Charges to non-federal grants must be both allowable and allocable to said grant.

Exceptions for Critical Research Needs

While limiting non-payroll expenses is critical, we acknowledge that certain expenditures are absolutely essential. Exceptions to this directive are permitted only for expenses that are critical for:

1. The preservation of unique or perishable research samples;
2. The protection and welfare of human or animal subjects; or
3. The prevention of an immediate and catastrophic impact on research outcomes that would result in the irrecoverable loss of data or progress.

We appreciate your leadership, understanding and cooperation as we work together to navigate this challenging period. We are committed to providing updates as the situation evolves and will continue to review and adjust this directive as fiscally prudent to do so.

Thank you for your adherence to this mandatory directive.

Please direct any urgent questions or concerns to Justo Torres, Director of Contracts and Grants at justo_torres@ncsu.edu.