The recent suspension or potential interruption of SNAP funding has created real concern for human service organizations. Beyond the impact on clients, there are also serious compliance, operational, and audit risks to consider. Because federal awards fall under the U.S. Office of Management and Budget’s Uniform Guidance, organizations should act now to protect their funding, maintain continuity, and stay audit ready.
SNAP is administered by the U.S. Department of Agriculture (USDA) and reaches organizations through several federal programs, including Assistance Listings 10.551 (Supplemental Nutrition Assistance Program) and 10.561 (State Administrative Matching Grants for SNAP).
So, what steps should your organization take now?
1. Take inventory of your awards & sub-awards
Start by identifying all funding streams connected to SNAP or SNAP-related services such as outreach, nutrition education, or food-security programs.
Next, determine whether your organization is a prime recipient, subrecipient, or pass-through entity under a USDA award or state-administered program tied to those Assistance Listings.
2. Review your award terms & conditions
Pull out your award documents and review the details. Be sure to look for allowable cost provisions, suspension or termination clauses, and close-out obligations.
Under Uniform Guidance (2 CFR Part 200), pay close attention to cost principles, administrative requirements, and close-out sections.
If your funding has been paused or could be paused, determine whether the award is still legally active, whether performance obligations must continue, and whether you should request a no-cost extension or amendment.
3. Stop or separate unsupported costs
When a funding interruption becomes known or likely, stop incurring costs that are no longer allowable under the award.
Continue charging only those costs that:
- Fall within the active award period
- Are allocable to the award
- Are reasonable and allowable under cost principles
Document all costs up to the interruption date and make sure any ongoing commitments are justified under the award terms.
4. Communicate with your awarding agency (and pass-through entity)
If your SNAP funding is uncertain, contact your USDA or state representative as soon as possible. Ask key questions such as:
- Can the award be amended?
- Will a no-cost extension be granted?
- Are there temporary or alternative funding sources available?
Get all guidance in writing and keep a record of your communications.
5. Plan for service continuity
If your services depend on SNAP funding, start planning for possible disruption. Be sure to engage with stakeholders such as clients, partners, volunteers, and state agencies to anticipate impacts.
Review your performance metrics and decide what can realistically be achieved under current conditions. You may need to adjust budgets, prioritize essential services, or scale back operations.
Continue to comply with Uniform Guidance performance monitoring and reporting requirements. Auditors will expect to see evidence of how your organization managed through the disruption.
6. Strengthen internal controls & audit documentation
Make sure your internal control systems can track changes to budgets, obligations, and cost allocations. Auditors will likely review how your organization responded to the funding interruption, including any changes in scope or communication with funders.
Keep everything. Retain award letters, modification notices, cost records, revised budgets, and documentation of service changes. Strong recordkeeping will make the audit process much smoother.
7. Explore alternative funding & partnerships
Do not wait for clarity on federal funding. Explore other sources such as state or local grants, private philanthropy, or community partnerships.
Local United Way organizations have often been strong partners for food banks and other human service providers during funding challenges.
Additional Considerations
- Timing matters: Under Uniform Guidance, allowability depends on when costs are incurred and obligated. Only costs tied to an active and authorized award are allowable.
- State pass-through agencies: If you operate under a state-administered USDA program, stay in close contact with your pass-through agency. They are responsible for monitoring subrecipients and may issue additional guidance.
- Close-out and termination: If the award is terminated or suspended, follow the required close-out process. Submit final reports, reconcile budgets, and retain records for the required retention period.
- High-risk status: Funding interruptions can lead to enhanced monitoring or additional reporting requirements. Be prepared for closer oversight.
- Matching and cost-sharing: If your program includes matching funds or leveraged SNAP-related services, review how the suspension affects those commitments.
- Service delivery: Think through the practical impact on clients, staff, and volunteers, and develop a communication plan that keeps everyone informed.
The potential suspension of SNAP funding presents real challenges, but organizations can take practical steps to manage the risk.
Start by understanding your awards, stopping unsupported costs, engaging with funders, and documenting every decision. Then plan for service continuity and strengthen internal controls.
If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
