Dear faculty and staff,

We are writing to keep you informed about the status of federal funding cuts and steps we are taking today to buffer against negative, long-term impacts on operations at the University of Michigan. While the university is fortunate to maintain a strong financial position, we have spent recent weeks modeling scenarios and taking prudent actions to be as prepared as possible to respond to financial events that may lie ahead.

This week, the university received legal notice from a federal agency instructing us to stop work on a multimillion-dollar project. We expect this is the first of what will likely be many orders, the combined impact of which could have significant repercussions on the university’s budget. As a result, we are announcing several important new requirements involving hiring, budgets and spending, which will be effective immediately.

1. Hiring Review: We are implementing a hiring review process in which deans and executive officers will recommend all new hires for regular and non-student temporary employees (faculty and staff). They will then be reviewed by the president or executive vice presidents (EVPs). Approval will be required for both replacement and incremental positions, as well as temporary and contract staff. Currently, outstanding offers made to candidates will be honored. Michigan Medicine teams should continue to use their existing review process. University human resources has posted an FAQ and the University Record has posted a story. Further details will be sent later today to campus HR officers as well as deans, directors, department heads and supervisors on the Ann Arbor Campus.  
2. Non-Essential Expenditures: Non-payroll commitments in excess of $50K must be reviewed for a decision by the president or EVPs. Approvals will be in writing and must be included with your requisition, sourcing or contract request to procurement services. We are also asking units to voluntarily review other non-essential spending – such as travel, conferences and consultants – to achieve additional savings.
3. Capital Spending: Capital projects – including new buildings, renovations and other infrastructure projects – will be reexamined. Capital expenditures requiring regental approval will continue to be reviewed by the university’s capital council. Projects that are currently in process will continue at this time.

Michigan Medicine will be subject to a separate guidance; faculty and staff should watch for a forthcoming communication.

We appreciate your cooperation as we work to ensure our response to federal funding changes remains considered and strategic. While it is always difficult to contemplate potential spending cuts, your thoughtful engagement will be vital in helping us continue to fulfill our mission.

Thank you for your attention to this important matter.

Sincerely,

Santa J. Ono
President

Geoffrey S. Chatas
Executive Vice President and Chief Financial Officer

Laurie K. McCauley
Provost and Executive Vice President for Academic Affairs

Marschall S. Runge
Executive Vice President for Medical Affairs