Nevada Education Department submits emergency predraws after OMB memo briefly paused discretionary federal grants

The Nevada Department of Education (NDE) responded immediately after the Office of Management and Budget issued memorandum M-25-13, which directed agencies to review federal financial assistance, by inventorying outstanding reimbursement requests and submitting predraws to cover eligible costs before federal deadlines.

The department's director of the Office of District Support Services said NDE leadership '2ecame aware of the memo late Monday night'2 and "took action first thing Tuesday," coordinating Superintendent Joan Ebert, Deputy Superintendent Peterson, district superintendents and CFOs to identify payroll, invoices and other payables that could be submitted for reimbursement before the federal cutoff. "We were well positioned, and we were ready, to respond," the director said.

Why it matters: the OMB memorandum referenced the federal definition of "federal financial assistance" in 2 CFR part 200 and directed agencies to pause activities tied to such assistance; that pause initially applied broadly but the U.S. Department of Education later clarified it did not apply to formula grants and instead targeted discretionary funds. That distinction affected which grants NDE needed to prioritize for predraws.

What NDE did and told partners - Inventory and predraws: NDE said its fiscal operations and grants management staff performed a rapid inventory of outstanding requests for reimbursement, NDE payables and administrative costs and submitted many predraws before the stated federal cutoff. The department said predraws are permitted in exigent circumstances. - Priorities: NDE instructed districts to prioritize personnel and payroll and suggested pausing nonessential encumbrances for the short term to preserve cash flow. - Communication and escalation: NDE coordinated with the governor's office, the state attorney general and the state treasurer to align timing and submissions and urged subrecipients to send urgent cash‑flow needs to grantsinfo@doe.mb.gov so the department could route requests and provide assistance.

What changed after litigation and federal clarification NDE relayed that U.S. Department of Education guidance indicated the pause would not apply to formula (entitlement) grants; after that clarification, the department shifted emphasis but continued to act conservatively while legal challenges moved through court. Presenters said a federal court in the District of Columbia placed an administrative stay and temporary injunction on the OMB order and that related litigation could alter agency instructions further.

Systems and technical constraints NDE staff warned partners that a recent state financial system upgrade introduced processing steps that complicated submission of draws; coupled with heavy national demand and some federal systems returning error codes, the predraw effort was "hectic and chaotic" though the department said it successfully submitted many predraws.

What NDE advised subrecipients to do now - Prioritize payroll and other personnel costs. - Freeze or delay nonessential supply purchases where possible until guidance stabilizes. - Ensure your accounting systems and grant job numbers (ALN/CAN) are up to date so itemized expenditures and projections can be sent quickly to NDE to support draws. - Route urgent requests and questions to grantsinfo@doe.mb.gov to ensure redundancy and tracking.

Next steps NDE said it will continue to monitor federal actions, share verified guidance when available, and follow the litigation and any official rescission or instruction. The department emphasized that subrecipients should avoid speculative spending changes until guidance is confirmed.

Quotes in this report come from the Department of Education's director of the Office of District Support Services, speaking during the quarterly subrecipient meeting.