‘Shock and Devastation’: Ohio MEP in Jeopardy as Feds, State Freeze Funds ‘Effective Immediately’

On Dec. 5, Rebecca Singer learned that the Toledo manufacturing incubator she had spent years building would have to close within days. That same day, Ethan Karp went from leading a thriving Northeast Ohio manufacturing nonprofit to contemplating what projects and services to eliminate with only half of his current staff by month’s end.

The news: Federal and state agencies were cutting off all funding to Ohio’s Manufacturing Extension Partnerships (MEPs), effective immediately. Singer and Karp each lead one of the six MEP offices in Ohio, nonprofits that assist small and medium-sized manufacturers with process improvement, workforce outreach and training, technology adoption, business growth and innovation.

U.S. Department of Commerce officials say the freeze in federal and state funds to Ohio’s programs is due to reporting errors discovered in an audit, a claim that prompted Ohio Gov. Mike DeWine respond on Friday.

“I fully support your efforts to ensure federal programs administered by the (Department of Commerce) are properly handled by grantees, but a protracted suspension of Ohio’s MEP could have long-term adverse effects if not resolved quickly,” DeWine said in a letter to Commerce Secretary Howard Lutnick.

Several MEP supporters said the errors discovered in the audits were just that, technical errors that Ohio’s Department of Development could correct by investigating discrepancies with NIST.

As of Friday, Ohio’s MEP program had been deleted from the MEP map on the federal website.

Singer, the CEO of CIFT—the Toledo, Ohio, MEP office that focuses on food processing—had  to immediately lay off 13 of her 15-person staff and is trying to find homes for the 22 companies housed in the business incubator.

“The shock, the devastation, the lack of due process,” she said . “We haven’t been able to understand what is even driving this.”

Audit Reporting Errors

Nagesh Rao, acting director of the National Institute of Standards and Technology (NIST) that administers the MEP program for the Commerce Department, announced the decision in a Notice of Suspension to the Ohio Department of Development. Rao said that the Ohio MEP was being placed on agency review immediately due to five errors in reporting or duplicated entries in a financial assistance audit:

• A $324,000 duplication error in cost-sharing from the state Department of Development
• A mistake in categorizing $4 million of revenue and expenses as cost-sharing funds at Dayton’s FastTech MEP
• An error in categorizing $2.3 million in income at CIFT
• $232,000 in income miscategorized at the Columbus MEP
• $647,000 in administrative fees miscategorized at FastTech

NIST would not comment on the audit or their findings, only saying that “the decision was made after careful consideration of serious issues brought to our attention” and that they are “unable to share specifics at this time, however, our justifications for the suspension were communicated to the Ohio MEPs.”

Trump Administration Has Long Had MEPs in Crosshairs

The Trump administration has tried to eliminate funding for all MEPs since Trump first took office in 2016, despite Congress’s allocation of the funds. It has cut and restored MEP funding several times this year to programs across the country. It has delayed payments to MEPs in numerous states since July.

The earliest the suspension could be lifted and funds released is May 2026.

Ned Hill, a professor emeritus from the Ohio State University who has served on the boards of both the federal MEP program and MAGNET, said that without MEPs, small and medium-sized manufacturers lack the resources to effectively update their technology.

“The minimum contract that the system integrators will take often require projects that are up in the high six, low seven figures,” he said. “Small manufacturers aren’t doing that. They don’t have the market [size]. So, this really is an American pro-competitive way of investing in our manufacturing base at a time when we want to beat China. And it’s also for rural areas. It really is the base of the economy. It’s mind-boggling that the faucet gets turned off without any information as to what the issue is.”

He said the Ohio MEP is in a situation where it’s “trying to wrestle with Big Brother.”

“This an audit. It’s not an investigation. That distinction is important. Audits are things you respond to. MAGNET has been through state audits. It does annual audits. The other centers have different levels of audits. You can’t respond to an issue when you don’t know what the issue is.”

He’s unsure why the Ohio MEP was targeted. Being in the midst of a review cycle and going through an audit, “they may just have been the fish in the bucket. I’ve yet to see an audit that didn’t find an issue.”

MAGNET stands to lose $5.9 million in combined federal and state funding for 2026, putting the jobs of roughly 40 specialized engineers, trainers and outreach workers and development personnel at risk of a staff of 80.

“It’s going to decimate us,” Karp said. “We’ll be able to hang on for some amount of time. But it’s going to be nothing like it was before.”

Manufacturing Leaders Criticize Cuts

Jack Schron, a MAGNET board member and the CEO of Jergen’s Inc., was up in arms about the news. His company has partnered with MAGNET for 25 years. Projects have included building a second-chance workforce pipeline, which has placed 400 ex-offenders into good-paying manufacturing roles with a 1% recidivism rate, and developing and testing a set of robotic grippers that have opened up new markets for the company.

“I wouldn’t treat my worst customer the way [Ohio’s MEP] got treated last Friday,” Schron said of NIST.

Michael Canty, CEO of Alloy Precision Technologies in Mentor, Ohio who also serves on the MAGNET board, has three contracts in progress with Ohio’s MEP, and three more lined up.

“We design a lot of our own equipment,” he said. “We have a great deal of IP here, and so we bring [MAGNET’s] talent in with ours.”

Alloy Precision recently partnered with MAGNET on development and testing of a proprietary machine monitoring system that the company will license and sell as well as use in-house, and a laser inspection system that locates, measures and inspects parts in three to four seconds. They also have used MAGNET for lean training and training on auditing and non-destructive testing. And they’ve developed their workforce pipeline through MAGNET programs that brings in 400-500 high school students each year, along with nontraditional and second-chance trainees.

“The MEP funding helps support 10%, sometimes up to 25% of project costs, which allows us to do more than we ordinarily have done,” Canty said. 

Trump administration officials who believe that MEPs are outdated, “need to get out in the real world and understand what really takes place in America,” Canty added. “We use AI throughout our operation. The bulk of the jobs and innovation in America is all done in smaller and middle-market manufacturing operations. They don’t have to worry about quarterly stock reports and earnings. They can take more risk. Two-thirds of Americans are hired by small businesses, and manufacturing represents a very significant part of it.

“They read the headlines and say, ‘Ah we’re moving into quantum computing.’ That’s great, we need to as America, bet they’re not talking about the companies that drive American. They’re good intentions, I’m sure. But very, very short-sighted.”

What’s Next for Ohio Offices

While Karp is figuring out exactly what to do next, Singer, who has spent 24 years at CIFT, is just trying to mitigate the damage to the businesses she serves as her organization closes its doors. She’s been seeking guidance from ODOD on what to do with CIFT’s equipment.

Two CIFT employees will remain for at least a few weeks to ease the transition for the incubator companies.

“Our kitchen is very uniquely positioned to help them make a product for retail, and that requires certain licensing,” she said. “So it’s not as simple as going to another kitchen and resume operations. There’s not another one of these facilities in our area. Those companies are just drowning without having a lot of lifeline.”