Connect with us

Accounting

Harvard intensifies funding fight with Trump administration

Published

on

Harvard University sued several U.S. agencies and top officials for freezing billions of dollars in federal funding, significantly ratcheting up a high-stakes showdown with the Trump administration.

The government unlawfully suspended Harvard’s funding after it refused to comply with “unconstitutional demands” to overhaul governance, discipline and hiring policies, as well as diversity programs, lawyers for the university argued in a lawsuit filed Monday in federal court in Massachusetts. The Trump administration has accused the nation’s oldest and richest university of failing to combat antisemitism on campus.

“Over the course of the past week, the federal government has taken several actions following Harvard’s refusal to comply with its illegal demands,” the university’s president Alan Garber said. “We filed a lawsuit to halt the funding freeze because it is unlawful and beyond the government’s authority.”

In a statement on the university’s website, Garber cited the government’s pause in federal funding, threats to block an additional $1.1 billion in grants, a crackdown on foreign students, and the possible revocation of Harvard’s tax-exempt status. 

The White House is pushing for sweeping changes at the most elite U.S. universities, and has frozen or is reviewing federal funding to Princeton, Cornell, Northwestern and Columbia universities. At Harvard, the government halted $2.2 billion of multiyear grants on April 14, claiming the school failed to enforce civil rights laws to protect Jewish students.

Harvard’s lawsuit claims that the funding freeze violates its First Amendment guarantee of free speech and the Administrative Procedures Act. It asks a judge to bar the U.S. from freezing the funding and declare the government’s actions unconstitutional. 

“The government has not — and cannot — identify any rational connection between antisemitism concerns and the medical, scientific, technological, and other research it has frozen that aims to save American lives, foster American success, preserve American security, and maintain America’s position as a global leader in innovation,” the lawsuit claims.

The White House and the Education Department didn’t immediately respond to a request for comment.

Education Secretary Linda McMahon on Tuesday morning emphasized that the government’s actions were designed to protect students’ civil rights rather than infringe on universities’ free speech. She said she hopes Harvard comes back to the table, signaling there may be a path to deescalating the situation.

“We remain open to talking to Harvard, but they responded by filing a lawsuit,” McMahon said in an interview on CNBC. 

Trump escalated his fight with Harvard after the school refused to bow to his administration’s demands. Since threatening its funding, Trump suggested the Internal Revenue Service should tax the university as a “political entity,” a move that would significantly hit the school’s finances and make it harder to raise money from wealthy donors.

Government demands

The showdown began last month when the government threatened about $9 billion in federal funding to Harvard. Days later, the administration demanded that Harvard remake its governance, transform admissions and faculty hiring, stop admitting international students hostile to US values and enforce viewpoint diversity. 

The government also called for scrapping any hiring preferences based on race or national origin, adopting a broad ban on masks and adding oversight for “biased programs that fuel antisemitism.” 

Harvard rejected those demands on April 14, saying it “will not surrender its independence or relinquish its constitutional rights” and that a private university “cannot allow itself to be taken over” by the U.S. government. 

McMahon said on CNBC that the demand letter to Harvard was a “point of negotiation” and that she had hoped the university would “come back to the table.”   

As part of its legal team, Harvard has hired two conservative lawyers with connections to the Trump administration — William Burck and Robert Hur. Harvard also tapped a lobbying firm, Ballard Partners, where Trump’s chief of staff used to be a partner. The school also named John Manning, a conservative lawyer, as its permanent provost, the second-most powerful leadership role at the university.  

“The government has only ratcheted up cuts to funding, investigations and threats that will hurt students from every state in the country and around the world, as well as research that improves the lives of millions of Americans,” the complaint claims.

The school has a $53 billion endowment but that money is restricted in how it can be spent, meaning the university relies on federal funding. Without that support, the school said in its complaint, it will be forced to either reduce or halt ongoing research projects and terminate employment contracts with researchers, staff and administrators, or make other cuts to departments or programs.

Campuses across the U.S. were roiled by protests after Hamas, which the U.S. considers a terrorist organization, murdered 1,200 Israelis and took more than 200 hostages in October 2023. Israel’s retaliation against Hamas in Gaza has killed more than 48,000 Palestinians, according to the Hamas-run health ministry.

Other university leaders, including Princeton’s, have expressed support for Harvard’s stance, but they also face pressure from the White House. The administration has already canceled $400 million in federal money to Columbia University and frozen dozens of research contracts at Princeton, Cornell and Northwestern universities. 

“All told, the tradeoff put to Harvard and other universities is clear: allow the government to micromanage your academic institution or jeopardize the institution’s ability to pursue medical breakthroughs, scientific discoveries and innovative solutions,” Harvard argued in its lawsuit.

Presidents of some of the most prestigious universities and small colleges signed a joint letter opposing “undue government intrusion in the lives of those who learn, live, and work on our campuses,” according to a statement from the American Association of Colleges and Universities, a trade group. 

“As leaders of America’s colleges, universities and scholarly societies, we speak with one voice against the unprecedented government overreach and political interference now endangering American higher education,” according to the letter, signed by leaders of schools including Princeton, Amherst College and the Massachusetts Institute of Technology.

Harvard named several cabinet secretaries as defendants in the lawsuit, including Robert F. Kennedy Jr., whose agency, Health and Human Services, funds the most research, as well as other agencies including the Department of Defense and the National Aeronautics and Space Administration.

The case is President and Fellows of Harvard College v. U.S. Department of Health and Human Services et al, 25-cv-11048, U.S. District Court, District of Massachusetts (Boston).

Continue Reading

Accounting

FASB Standardizes Carbon Offsets Accounting Rules

Published

on

FASB Standardizes Carbon Offsets Accounting Rules

In a decisive move toward standardized environmental financial reporting, accounting standards boards issued updated implementation guidance during the week ending July 25, 2026, regarding the formal recognition and valuation of corporate carbon offsets and environmental credits. The revised frameworks establish precise rules for how enterprises must measure, record, and disclose carbon credits on balance sheets, eliminating years of inconsistent reporting practices across public capital markets.

Under the finalized accounting standard, purchased carbon offsets can no longer be categorized under vague administrative expenses or unstandardized intangible asset accounts. Instead, organizations must classify environmental credits based on underlying operational intent—distinguishing between credits held for immediate compliance compliance obligations, long-term offset obligations, or active market trading. Furthermore, companies are required to evaluate carbon holdings for fair value impairment at the end of each reporting period, ensuring that depreciated or low-quality environmental credits do not distort corporate asset values.

The standardized rules carry significant implications for corporate audit committees and chief accounting officers. External audit firms are implementing rigorous verification protocols to validate the physical legitimacy, legal ownership, and scientific permanence of carbon credits claimed on balance sheets. Inaccurate or overstated carbon accounting claims now carry substantial financial litigation risk, alongside potential regulatory enforcement for misleading ESG disclosures.

To remain fully compliant, corporate accounting departments must establish centralized carbon tracking systems integrated into primary standard ERP ledgers. Accounting teams that proactively adopt standardized environmental reporting protocols will build investor credibility, streamline annual audit processes, and insulate their organizations against evolving regulatory scrutiny.

Continue Reading

Accounting

Automated Tax Compliance Tools Reduce Risk

Published

on

Automated Tax Compliance Tools Reduce Risk

Corporate tax departments reached a critical juncture in automated operational management. With nations worldwide rapidly enacting digital service taxes, localized value-added tax (VAT) mandates, and real-time electronic invoicing requirements, manual tax calculations have become obsolete. Modern corporate tax divisions are aggressively deploying AI-driven tax engine software to automate complex cross-border indirect tax calculations in real time.

The imperative for automated tax compliance stems from the sheer complexity of current trade policies and multi-jurisdictional commerce. E-commerce platforms, software vendors, and global manufacturers face constantly changing regional tax rates, statutory exemption rules, and cross-border tariff structures. Automated tax engines embed directly into enterprise enterprise resource planning (ERP) architectures, automatically applying correct tax codes at the point of sale, calculating real-time withholding amounts, and generating compliant e-invoices.

Automated audit trail generation represents another key advantage of modern tax tech integration. Advanced compliance platforms log every transactional tax determination on immutable digital ledgers, providing tax authorities with transparent, self-verifying audit trails. This capability drastically reduces the operational duration and administrative cost of corporate tax audits, protecting enterprises against severe penalties resulting from calculation errors or missed reporting deadlines.

For chief financial officers and tax directors, investing in automated tax compliance is a vital operational risk mitigation strategy. Automating routine tax calculations frees high-level accounting professionals to focus on strategic tax planning, transfer pricing optimization, and risk management in an increasingly complex global economic environment.

Continue Reading

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

on

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.

Continue Reading

Trending