Catholic Charities Fort Worth expects to receive over $47 million of federal funds that have been paused since January by early next week.
The Fort Worth nonprofit operates the Texas Office for Refugees, the statewide agency designated by the federal government to lead refugee resettlement. In early March, the organization filed suit against the U.S. Department of Health and Human Services and Secretary Robert F. Kennedy Jr., accusing the government of unlawfully freezing grants that were allocated to the refugee resettlement program.
After weeks of legal back-and-forth, Catholic Charities learned during a Friday court hearing that all pending payment requests “will be processed within 48 business hours,” according to a March 14 joint statement by Michael Iglio, CEO of Catholic Charities Fort Worth, and Jeff Demers, state refugee coordinator of Texas Office for Refugees.
The withholding of the funds led to significant challenges, Friday’s statement said, including widespread layoffs at other nonprofits that rely on federal funds and the “disruption of vital services for more than 100,000 individuals and families across 29 partner agencies throughout Texas.”
“The anticipated release of these funds marks a pivotal step toward restoring and enhancing the support systems that empower individuals and families to achieve self-sufficiency and build successful lives within our communities,” Iglio and Demers said.
The decision came the same day that Catholic Charities Fort Worth could have laid off 169 employees, according to a notification the charity submitted to the Texas Workforce Commission’s Worker Adjustment & Retraining Notification. Catholic Charities Fort Worth did not respond to questions about whether the court decision meant the charity would no longer face layoffs by time of publication.
Of the charity’s 29 partner agencies, 24 have had to lay off staff or furlough employees, leading to a 64% drop in staffing capacity in cities like Dallas and Houston. By the end of February 2025, nearly 750 partner agency staff had been laid off or furloughed as a result of the funding freeze, according to the lawsuit.
Catholic Charities argues that many other organizations received their federal funds in the weeks since the attempted freeze. In their response to the lawsuit, U.S. attorneys acknowledged that of the 50 jurisdictions where the federal government funds refugee services, only the grant in Texas — administered by Catholic Charities Fort Worth — remained paused through March 14.
Edward Waters, the lawyer representing Catholic Charities, told the Austin American-Statesman that clients were “hopeful that it will now be business as usual.”
“But hopeful is not definitive,” Waters told the newspaper. Waters asked U.S. District Judge Loren AliKhan to hold off on a ruling until payments resumed.
What happened in the Catholic Charities case?
Catholic Charities Fort Worth has acted as the sole replacement agency for the state’s Office of Refugee Resettlement since October 2021. Texas withdrew from the nation’s refugee resettlement program in 2016, effectively leaving nonprofits to administer federal refugee funds.
The Texas Office for Refugees oversees the administration of the Cash and Medical Assistance and Refugee Support Services programs, which includes disbursing funding to local resettlement agencies and refugee service providers across the state.
The government says it selected Catholic Charities for a “program integrity review” following a Feb. 3 directive instructing Health and Human Services staff to pause funds and review federal grants, according to court documents.
In a March 7 filing, the government said it flagged organizations for an integrity review based on whether the organizations “billed for activities that were outside the scope” of its grants and whether the grants were structured to pay for activities that exceeded the requirements of the Refugee Act of 1980.
Government lawyers say the pause — and subsequent review of Catholic Charities — was inspired by a March 2023 Florida grand jury report that explored abuse and fraud in an unaccompanied migrant program unrelated to refugee resettlement services.
In court filings, Catholic Charities Fort Worth lawyers say they were never notified of the review and argued that it made repeated requests for information regarding the status of the charity’s requests for funds, alleging that “defendants offered no information or explanation prior to CCFW bringing this case.”
The government said its review of Catholic Charities was complete as of March 14, allowing payments to continue.
Lawyers for both the government and Catholic Charities Fort Worth are expected to file a joint status report, updating the court on the status of the nonprofit’s funding requests, by 6:30 p.m. March 17 as well as a joint status report on the next steps by March 19.
Marissa Greene is a Report for America corps member, covering faith for the Fort Worth Report. You can contact her at marissa.greene@fortworthreport.org.
