Important Information About Sequestration

As you are likely aware, Congress failed to reach a deal on balanced deficit reduction to avoid the across-the-board budget reductions commonly known as “sequestration.”  Thus, the President was required by law to issue a sequestration order.  This order cancels approximately $85 billion in budgetary resources across the Federal government for the remainder of the Federal fiscal year. 

Given your relationship with the Corporation for National and Community Service, we wanted to provide you with information about how these unfortunate budget cuts will affect our programs. 

CNCS’s senior leadership team has engaged in extensive planning efforts to mitigate the effect of these cuts. In planning how to implement a possible sequestration, our guiding principle has been to protect the ability to perform our core mission on behalf of the American people.   While these types of cuts are painful, we have carefully considered how to use the various tools at our disposal to reduce costs and mitigate to the extent possible the disruption to our operations, to our programs, and to all of you.  

Impact on AmeriCorps State and National

As a result of sequestration, an estimated 3,600 individuals would be denied the opportunity to serve as AmeriCorps members through the State and National program and earn money for college through national service.  As a result, AmeriCorps would provide up to 3.7 million fewer hours of critical service to community organizations that help Americans devastated by national disasters, improve academic performance of disadvantaged students, provide care for vulnerable populations and help improve the quality of life for our Nation’s veterans.  Additionally, Governors and States would receive less funding for community supports.

Under sequestration CNCS will experience a funding reduction of 5% for all programs in FY 2013, including $17.3 million for the AmeriCorps State and National program.   We have carefully considered how to use the various tools at our disposal to reduce costs so as to mitigate the disruption to our operations, our programs, and all of you to the greatest extent possible. 

2013 Competitive funds: In awarding funds, CNCS considers level funding for continuation grants first followed by new and re-competing grants and continuation expansions.  AmeriCorps State and National will absorb the sequestration reduction by adjusting grant funds available for new/re-competing programs accordingly.   Less funding means a more competitive process as demand for funds will far exceed the availability. As stated in the Notice of Funding Opportunity (NOFO), there is a competitive advantage to high quality programs with a lower cost per member.  In any event, a reduced budget will have an impact on the number of new/re-compete grants awarded as well as a reduction in the number of members. This will be done in the context of applicable laws and regulation, and the agency’s strategic plan.  

2013 Formula funds:  The cuts as a result of sequestration will result in a smaller pool of formula funds.  Thus we anticipate that states will have fewer formula funds with which to make grants.

2012-13 Competitive and Formula funds: There is no anticipated impact of sequestration on the 2012-13 program year as the funds associated with those grants are FY 12 funds. Current AmeriCorps members should not experience any impact as a result of sequestration. 

2013 Commission Support Grants/Administrative Grants: All states would receive at least a minimum of allotment of $200,000. The states that would be eligible for more than the statutory minimum under the current allocation formula will have their allocations reduced by 8.75%.

Thank you for your continued work with our agency, and for your cooperation as we manage these unfortunate circumstances.

Sincerely,
Bill Basl
Director, AmeriCorps