Office of Grants Management warns council federal changes are disrupting grants; nonprofits most at risk

The Montgomery County Office of Grants Management told the County Council on Oct. 14 that recent federal actions are creating daily uncertainty for grant programs, producing reimbursement delays and new reporting and certification requirements that will hit nonprofit grant recipients hardest.

Rafael Pumejo Murphy, director of the Office of Grants Management, said the changes trace to several national moves including HR 1 (the so‑called One Big Beautiful Bill Act) and an Aug. 7 executive order directing federal agencies to impose additional oversight on grantmaking. “We are seeing new challenges and new disruptions on literally a daily basis from the federal government that impact across our sectors,” Murphy said. He added that while the county has so far continued to receive reimbursements for work already completed, delays and added reporting requirements are increasing workload and cash‑flow risk for smaller organizations.

Why this matters: Murphy said federal grants made up about 9 percent of county revenue in FY 2024 and that the county has substantial reserves and capacity to endure short‑term payment delays. Nonprofit partners, by contrast, typically lack large reserves; Murphy warned that delayed reimbursements or cancelled future awards could threaten payroll and operations at community organizations. He noted one locally affected program — the low and middle income electrification grant — is on hold pending federal clearance.

Council discussion and follow‑up: Councilmembers pressed staff on which nonprofits are affected. Murphy said his office has informal contacts with organizations and is coordinating with Nonprofit Montgomery; he did not provide a comprehensive list but agreed to follow up. Vice President (Councilmember) raised a figure reportedly from Congressman Jamie Raskin’s office—473 frozen or terminated grants—and asked whether the county had identified local recipients; staff said the number came from the congressman’s office and that the county will work to map which local nonprofits are affected.

Other points Murphy made: - The White House and federal agencies are issuing frequently changing directives; courts are hearing challenges and outcomes influence grant stability. - Existing, obligated grants are more secure than awards not yet obligated or where terms have not been signed. - Federal changes are not uniform by agency; grants administrators must read each Notice of Funding Opportunity closely. - The county has about $895 million in reserves to cover short‑term shocks; nonprofits do not have that buffer. - Office of Grants Management recommends steady grants management, more staff training, and closer coordination with the Office of the County Attorney and Office of Intergovernmental Relations.

County and executive branch response: Earl Stoddard, assistant chief administrative officer, told the council the executive branch is preparing to use supplemental appropriations if needed and is assembling triage plans to prioritize gaps. Health and Human Services staff said county departments and nonprofit partners are working on predictive modeling to identify likely service gaps (homelessness prevention, Medicaid supports and other social safety‑net services) and will present more specific proposals to the council as the federal situation evolves.

What remains uncertain: Murphy said the largest immediate unknowns are (1) whether court rulings or further executive action will rescind obligated funds and (2) how the federal fiscal year budget and any shutdown negotiations will affect grant awards and reimbursements moving forward. The council scheduled additional briefings and committee follow‑ups in coming weeks to examine potential budget responses and to map impacts to local service providers.