TSU finance committee: federal grant draws suspended; key NEFA award appears lost, university pauses spending

Jim Gray, TSU grants lead, told the Tennessee State University Board of Trustees’ finance committee on March 12, 2025, that the university is operating under a temporary pause on federal grant spending after multiple USDA/NIFA awards were suspended in February.

Gray said the university identified “70 active federal grama [grants]” that were suspended, representing about $45,000,000 in available balances. He told trustees that around $23,000,000 of that total was restored on or around March 3, while “we have $22,000,000 that remains suspended.” Gray also said an $18,000,000 NEFA award with roughly $14,400,000 remaining “appears that that grant is not coming back,” and that the university is treating that $14,400,000 as suspended indefinitely.

Why it matters: Gray said the suspended awards fund personnel and student supports. TSU identified about 62 employees fully funded on federal grants and another 112 who are partially supported. Gray said grant-related changes could affect staff and students and that the university is working to absorb costs in the short term. He said the university paused all federal grant spending “to mitigate any sort of increasing any exposure” while it evaluates the situation and coordinates with federal officials.

What the committee heard and what the university is doing

- Suspension and partial restoration: Gray described a two-stage outcome after the February suspensions. About $23,000,000 of the roughly $45,000,000 in suspended grant balances was restored in early March, while about $22,000,000 remained suspended. Of the restored amount, Gray noted that an $18,000,000 NEFA award had roughly $14,400,000 left to draw but now appears not to be reinstated.

- Operational response: Gray said TSU paused spending on all federal grants from Feb. 28 “until today” as a risk-mitigation measure. He said the campus has held daily briefings under President Tucker’s leadership and is working with federal contacts and internal grants accounting to determine when and how spending can safely resume.

- Employee and student impacts: When asked whether faculty, staff or programs would be eliminated, Gray said the university intends to “run this through the next 90 days” and that, for now, programs and people should not see immediate changes. General Counsel Brown clarified the timing: notices tied to a federal termination letter would trigger a 30‑day window for the university to submit incurred expenditures for reimbursement, and TSU expects notices around the six‑week mark tied to that 90‑day period. A staff speaker identified as Brady said the university has about six graduate assistants and roughly 33 undergraduate students whose scholarships are connected to the affected grants; Brady said those undergraduates “won't be affected this year, but they won't be eligible for that scholarship come this fall.”

- Financial exposure and indirect cost changes: Gray flagged a separate risk: a proposed cap of 15% on indirect costs for certain NIH/NA grants. He said TSU estimated that change would cost the university “roughly a million to $2,000,000.”

- Next steps: Gray said the university has identified internal sources that can cover some costs for about 90 days and is prioritizing submission of allowable expenditures if a termination letter is issued. He told trustees that once an official USDA termination letter arrives a 30‑day clock begins to submit the last 30 days of expenditures for reimbursement.

Trustee questions and committee response

Trustees asked about staff notice and student support. Trustee Winton asked whether the grant loss would lead to personnel changes; Gray said the university expects to operate through a 90‑day period before making longer‑term employment decisions and that notices would be handled in keeping with grant terms. Trustee Smith Knight asked whether employees hired specifically for the affected grants were aware of the suspension; staff confirmed those employees were aware and that the university would follow required notice periods.

Committee members requested follow-up information on the number and classification of affected employees and students, and on whether any scholarships attached to the suspended grants can be covered from other funds. Gray said the university will continue daily monitoring and report back to trustees.

Ending

Committee members were not asked to take formal action on the grants update at the March 12 meeting. Trustees were told TSU will continue coordinating with federal offices, that spending will remain paused where necessary, and that staff will return to the committee with further details on personnel and student impacts and any reimbursement opportunities tied to official federal notices.