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Federal agency stop-work orders and NIH indirect-cost fight put WSU research funding at risk
Summary
The WSU finance committee heard that recent federal agency actions — stop-work orders, terminations and a proposed NIH indirect-cost cap — have reduced active grant work and could force units to absorb personnel costs; leaders described ongoing work to bill for some awards and to seek alternative funding while warning of staff impacts.
Leslie Ranelli, Washington State University’s vice president for finance and chief financial officer, told the Board of Regents’ Finance and Administration Committee that recent executive actions and agency grant reviews have produced a string of stop-work orders and terminations that are affecting WSU research projects and people funded on grants.
The committee was told the university’s active research portfolio is on the order of hundreds of millions of dollars systemwide and that the recent federal actions have affected a small but important share of that work. “We had 12 grants on stop work or termination in mid‑February; that number has shifted and is still shifting,” Ranelli said. “Some USAID awards have been terminated; we can bill through February 14 for those awards but remaining balances associated with terminated awards are not revenue we will realize.”
Why it matters: WSU researchers and staff are paid from a blend of federal grants, state funds and other sources. Ranelli said core questions now are how long the university should sustain operations on paused awards, which projects can be reassigned to other funding and which positions units may have to absorb temporarily. She said the university has more than 1,100 employees entirely funded on grants and about 880 partially funded by grants; those roles are the most directly exposed if federal support does not resume or is replaced.
Committee members and staff described several specific disruptions: the Department of Energy hydrogen hub award moved between stop‑work and partial reactivation and represented the largest single stop‑work dollar exposure; multiple USAID awards have been terminated; one multilateral DOD Minerva program award was cut before contract execution; and other agency reviews under executive order 14222 are causing rapid changes in award status. Kate McAteer, WSU faculty associated with the hydrogen hub effort, and other campus leaders are working directly with federal program offices and prime partners to seek clarity and alternative paths.
Ranelli and other leaders emphasized the operational complexity: some awards are legally terminable under 2 CFR 200 as not aligned with an agency’s priorities, which the administration’s February directive asked agencies to review. The university’s research compliance and federal relations teams are coordinating with congressional staff and state attorney general offices; the committee heard that WSU’s examples were included in a 62‑page federal court ruling that temporarily enjoined a planned NIH indirect‑cost cap.
The indirect‑cost issue: the committee discussed the widely publicized proposal to cap NIH facilities and administrative (F&A) rates. A temporary nationwide injunction has halted a change to NIH’s F&A cap, and Ranelli said WSU’s federal advocacy team — working with other regional research institutions and health systems — is pressing for preservation of negotiated indirect rates because those dollars pay for research infrastructure, animal care and regulatory compliance. “Our negotiated rate is not enough to fully cover research infrastructure; even at previous rates we lose money on many grants,” a university official told the committee.
What leaders are doing: WSU is (a) actively billing allowable costs on awards that remain billable through agency guidance, (b) trying to identify alternative federal or philanthropic sources for work on paused or terminated projects, and (c) asking unit leaders to prepare contingency staffing plans. Ranelli said central funds cannot permanently absorb all losses and that units will likely be expected to manage many of the adjustments at the college level.
What the committee asked for: Regents pressed for more transparent numbers and timelines for unit‑level decisions and for more detail on personnel impacts. Ranelli repeatedly advised caution, noting the back‑and‑forth nature of agency decisions; she described the situation as “chaotic” at times because agencies are changing positions rapidly.
Ending: Committee members said they will continue to press for quick, clear information for affected staff and faculty and for a federal advocacy strategy to protect major research funding streams, especially NIH and DOD sources.
