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Trump sparks lasting panic with funding ban that ended in two days

Published

2 years ago

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The memo dropped late on Monday evening after a weeklong flurry of executive orders from President Donald Trump, and was rescinded less than 48 hours later. But the mandate to pause all federal loans and grants has reverberated across the country, from tiny nonprofits to sprawling health agencies. 

Providers of community services struggled to access government funds and now question what they can rely on going forward. Medical researchers are unclear how grants will be affected. States are grappling with how to plan their budgets.

The directive from the Office of Management and Budget, calling for a freeze on all federal grants, was temporarily blocked by a federal judge and raised questions about the limits of the president’s power. Yet the chaos it unleashed previews the types of fights to come in an administration that has made clear that it plans to reshape the U.S. government and eliminate what it considers to be wasteful spending and policies at odds with its conservative agenda.

“It’s hard for people to plan for the future and maintain current program services if they don’t think there’s going to be funding for those services going forward,” said Susanne Byrne, executive director of the York Street Project in Jersey City, New Jersey. 

Her organization, which offers rental assistance and operates a homeless shelter and a childhood development center, was set to make rent payments coming due on apartments for 45 different families using federal funds from the Department of Housing and Urban Development on Tuesday. The staff found themselves locked out of HUD’s payment portal.

Byrne spent Tuesday on numerous calls with other housing groups and with local representatives of HUD. Not only were the families she works with at risk of eviction if landlords didn’t receive payments by early February, but she worried how her own staffers might fare if the organization had to pare back its activity or lay off workers. 

“If people lose their jobs, how do they support their families themselves? They’re going to end up being people who need the services they used to provide to others,” she said. The group eventually regained access to the portal.

The White House abruptly rescinded the funding freeze memo on Wednesday, a move Press Secretary Karoline Leavitt immediately muddied with a social media post that said the rescission of the memo doesn’t end the pause on government money flows. Judges overseeing two pending legal challenges could rule in the coming days providing more clarity on what — if any — funds could continue to be held up. 

The confusion added to turmoil among federal workers who were already grappling with an executive order last week that banned diversity, equity and inclusion policies from the federal government. The order said the administration would cut off funding for programs that support those efforts, though the exact impact is still unclear.

The Department of Government Efficiency, led by Elon Musk, is trying to find ways to slash more expenses. Trump is offering buyouts to federal employees who were warned that he’s seeking a “more streamlined and flexible workforce.”

Agency anxiety

Already, the planned cutbacks to DEI have raised concerns about funding for medical research programs. The Trump administration sent a memo this week to organizations that have received funding from the Centers for Disease Control and Prevention and ordered them to end “all programs, personnel, activities, or contracts promoting” DEI, according to the document seen by Bloomberg News. 

Georges Benjamin, executive director of the American Public Health Association, said multiple health departments received the memo, and it wasn’t immediately clear how far-reaching the impact could be. He said it could affect the future of a wide range of public health projects, including research into the racial disparities of heart disease and cancer or programs for the disabled or elderly.

“The challenge is we’re allowing people to redefine DEI as not being merit-based when that’s not what it’s about,” Benjamin said. “It targets services to people who are more in need than others.”

The prospect of cuts has led to confusion and anxiety at the National Institute of Health, which invests most of its nearly $48 billion budget in medical research. Almost 83% of that goes toward grants awarded to outside scientists, institutions and medical schools across the US, according to the agency.

Employees have been advised to refrain from promoting certain funding opportunities related to disadvantaged populations so as not to draw attention to them, according to a person familiar with the matter, who asked not to be named speaking about internal discussions. NIH staffers have been warned against making social media posts that could put a target on their offices, the person said.

The NIH said in a statement that the Health and Human Services Department has issued a pause on mass communications and public appearances that aren’t related to emergencies to allow the new team “to set up a process for review and prioritization.” Clinical trials are continuing, though no new studies are being launched.

Within the Commerce Department, officials in charge of a $700 million effort to remake economically depleted cities into hubs of technological innovation scrambled in the wake of this week’s funding freeze announcement. The so-called Tech Hubs project was on a spreadsheet circulated by OMB that listed grants under scrutiny, instigating confusion among recipients of the grant funding, as well as former and current officials who helped to put the plan together.

The Tech Hubs initiative, funded by the Chips Act and a subsequent defense spending bill, poured hundreds of millions of dollars into technological projects in more than a dozen states, including red states like Indiana, Montana, South Carolina, Georgia and Ohio. Many of the projects focus on industries that the Trump administration has identified as key national security priorities, such as semiconductor manufacturing, quantum computing and critical mineral processing. 

But some of the hubs have programs aimed at including more women and minorities in the workforce, while others include “equity” or “climate resilience” in their missions.

So far, the tech hubs haven’t received any guidance from the Commerce Department, said spokespeople for six of the hubs. People within the hubs are setting up meetings with their lawmakers and trading texts with staffers on Capitol Hill, seeking a full-throated commitment that they won’t lose funding. The Commerce Department didn’t immediately return a request for comment.

‘Unnecessary disruption’

At the local government level, the questions over federal aid introduce new uncertainty at a time many states are preparing their budgets for fiscal 2026, said Lucy Dadayan, principal research associate with the Urban-Brookings Tax Policy Center at the Urban Institute.

This has “caused unnecessary disruption and confusion, as well as considerable anxiety regarding the amount of federal funds that will be allocated to the states,” she said.

Local organizations are preparing for more shocks. The childcare industry, for one, is bracing for potential changes that could upend businesses already on the brink of collapse. Federal dollars are states’ main funding source for subsidies that help low-income families afford child care. Some 1.8 million children receive them each year, according to the U.S. Government Accountability Office.

Easterseals, a 106-year-old nonprofit that provides services to people with disabilities, senior citizens, veterans and their families, was concerned about funding troubles when its payment system portal shut off hours before the OMB memo was released, said Kendra Davenport, CEO of its national office. The group’s affiliates use this portal to access federal grants to cover operational costs and payroll. 

“It really was foreboding not knowing how quickly we were going to have to shut down programs that are 100% funded with federal funds and how quickly we would have to determine how many people we were going to lay off,” Davenport said.

After hearing about the freeze, Easterseals assessed whether it could maintain programs without federal funding but knew that most nonprofits, including its own, operate on tight margins. Most affiliates are so focused on programmatic work that they don’t have time to raise private funding that would fill gaps, Davenport said.

As the national office looks at future revenue, staff are scrutinizing nonessential expenses that can be taken out of the budget and put into reserves. 

“We now know we are operating in a very different federal funding climate,” Davenport said. “So we have been very careful.”

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Accounting

SEC’s Semiannual Reporting Proposal Faces Investor Pushback: What CFOs Need to Know

Published

1 week ago

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August 25, 2026

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U.S. Securities and Exchange Commission (SEC)

A proposal from the U.S. Securities and Exchange Commission to potentially shift some public companies away from quarterly financial reporting toward a semiannual model is drawing significant pushback from investors, even as it continues moving through the regulatory process. The debate has direct implications for corporate finance teams, auditors, and the broader transparency of U.S. capital markets.

What the SEC Proposed

According to a summary published by accounting advisory firm Cohen & Co., the SEC issued a proposed rule on May 19, 2026, aimed at simplifying financial reporting requirements for many U.S. public companies. The proposal would potentially reduce the frequency of certain mandatory disclosures from quarterly to semiannual, a structural change that has not been made to core U.S. reporting requirements in decades.

The proposal follows an extended debate within U.S. policy circles, with proponents arguing that reduced reporting frequency could lower compliance costs and free up management time for longer-term strategic planning rather than quarter-to-quarter results management.

Why Investors Are Pushing Back

Comment letters submitted in response to the proposal have been extensive, and according to Cohen & Co.’s review of the public record, investors “appear to be largely opposed” to the shift, viewing frequent interim reporting as a core benefit of U.S. capital markets relative to other jurisdictions.

Accounting and law firms have taken a more measured position, generally urging any changes to remain aligned with the Financial Accounting Standards Board (FASB), whose existing disclosure requirements and guidance are built around a quarterly reporting cadence. A shift to semiannual reporting without corresponding changes to FASB guidance could create friction between SEC filing requirements and GAAP-based disclosure expectations.

Lessons From the U.K. Experience

The debate is not without precedent. The United Kingdom moved away from mandatory quarterly reporting for listed companies in 2014, returning to a semiannual disclosure requirement. According to Cohen & Co.’s analysis, that experience offers a cautionary data point: there was no measurable increase in capital expenditure or R&D investment following the change, while analyst coverage of affected companies declined as reliable interim information became less available — a particular risk for smaller and newly public companies that rely on analyst coverage to maintain investor visibility.

Practical Implications for Finance Teams

Beyond the debate over disclosure philosophy, the proposal carries practical complications. Many companies have debt covenants and credit agreements structured around quarterly financial delivery; a shift to semiannual reporting could require renegotiating those terms. Reduced reporting frequency would also extend the “window of market silence” between disclosures, a factor that governance and investor-relations teams would need to manage carefully to avoid information asymmetry.

Separately, and unrelated to the reporting-frequency debate, the SEC and FASB have continued finalizing more routine updates this year. New Accounting Standards Updates are taking effect for December 31, 2026, fiscal year-ends covering income tax disclosures, credit loss measurement, induced debt conversions, and stock compensation, according to Eide Bailly’s review of 2026 ASU activity. Additional guidance on paid-in-kind dividends and environmental credits is also on the near-term horizon.

What to Watch Next

The semiannual reporting proposal remains in the comment and review phase, and no final rule has been adopted as of this writing. Finance leaders should monitor the SEC’s regulatory agenda for further movement, while treating the current quarterly reporting requirement as the operative standard until any final rule is issued and an effective date is set.

Given the extent of investor opposition documented in the comment file, a full shift to mandatory semiannual reporting appears more likely to result in either a scaled-back compromise or continued study rather than swift adoption — though the SEC’s ultimate direction remains uncertain.

 

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

Published

3 weeks ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

Published

4 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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