This blog is an excerpt from our free guide, “Top Trends in CARES Act Funding for Federal Grants Management.” Download the full guide here.
COVID-19 has accelerated the modernization of grants management. As a result of the pandemic, grant managers and professionals have had to rethink the way they accomplish work by moving their teams and activities to virtual environments. By now, the Department of Treasury has already distributed 99.6 percent of the $150 billion Coronavirus Relief Fund package for state and local governments (approximately $149,463,000,000). The $8 billion allocated to tribal governments has been distributed, with the exception of Alaskan Native Corporations (due to pending litigation).
With the pressures of addressing COVID-19 in communities, innovation may seem like the last priority. This doesn’t have to be the case, especially when digital transformation can be crucial to successfully addressing disruptions like mass telework and supporting increasingly distributed government workforces.
Overview of the Latest in CARES Act Funding
To start, here is a general overview of what’s been happening in COVID-19 funding and relief since March of 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. Title V, the Coronavirus Relief Fund (CRF), sets forth the direct payment amounts for states, local units of government, tribes and US territories.
What Title V doesn’t list out is reporting requirements or methods of determining eligibility for distribution of funds from these governments to smaller governments. These requirements have been left to the discretion of direct funded governments, generating much confusion.
On May 27, 2020, the Department of Treasury issued a memo on Interim Audit Update – Coronavirus Relief Fund Recipient Reporting. This memo included Treasury counsel and OIG review statements. These reviews stated Title V does not fall under the same reporting requirements as other funding in the CARES Act. Additionally, it is stated by counsel and OIG and understood, Title V funds will fall under the same transparency and accountability as other CARES Act funding.
As of May 28, 2020, Title V Coronavirus Relief Funds have been assigned a CFDA number of 21.019 and will be subject to the Single Audit Act. These two facts alone answer the question; do we have to report? The answer is, yes.
Determining Eligibility of Expenses, Administration of Funds, and Reporting Requirements
Still, one of the most frequently asked questions is: How will reporting be accomplished? Below is a set of four recommendations and practical examples which can be used to help determine eligibility of expenses, administration of funds, and reporting requirements. As always, any outstanding questions regarding allowability and/or eligible expenses can be addressed to the funder (direct funded government) or Department of Treasury. The agency frequently updates their COVID-19 FAQ page here.
1. Create checklist of requirements set forth by the CARES Act
Based on the Department of Treasury’s Guidance, each jurisdiction is charged with determining whether or not an expense is eligible as provided in their contract scope of work with Commerce. To help jurisdictions with this determination, the State of Washington’s Department of Commerce has put together a Coronavirus Relief Funds for Local Governments Eligible Cost Test. This test gives each jurisdiction full authority to make appropriate calls for each circumstance.
If all responses for the specific incurred cost are “true” for all five statements, then a jurisdiction can reasonably determine the cost is eligible.
*Note: Eligible expenditures include but are not limited to payment for:
- Medical expenses, such as COVID-19-related expenses of public hospitals, clinics, testing etc.
- Public health expenses such as communication and enforcement, public health orders, acquisition and distribution of medical and protective supplies, expenses for technical assistance to local authorities, etc.
- Payroll expenses for public health, healthcare, human services, etc.
- Expenses of actions to facilitate compliance with COVID-19-related public health measures, such as expenses for food delivery to residence or technology improvements for distance learning, etc.
- Expenses associated with the provision of economic support in connection with the COVID-19 public health emergency, i.e. expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by required closures.
- Any other COVID-19 related expenses reasonably necessary to the function of government that satisfy the Fund’s eligibility criteria.
2. Establish standard terms and conditions to align with fund requirements set forth by CARES Act, OMB guidance and Treasury guidance
The state of Texas has created a document called the Coronavirus Relief Fund Terms and Conditions. For grantees (applicants and recipients), the document provides terms and conditions applicable to payments distributed in the form of grants to local units of governments from the Coronavirus Relief Fund established within section 601 of the Social Security Act, as added by section 5001 of the CARES Act. Such documents help provide effective guidance for grantees and a single point of reference to navigate any FAQs they encounter throughout the grants management process.3. Establish a central place for CRF information required by direct funded governments to smaller governments
Arizona’s Office of Grants and Federal Resources has put together a COVID-19 Grant Resources page meant to serve as a “clearinghouse of COVID-19 grants-related information” and tools. This central repository allows grantees in the state to view key state priorities and resources available to revive Arizona’s economy including related grants and funding opportunities, Treasury Guidance, and tools to help grantees streamline their grants management process.4. Establish a CRF team or council
Through its Department of Commerce, the state of Montana established a Coronavirus Relief Fund Advisory Council. The council is an advisory team made up of experts from several facets of the economy to “help the state determine where these funds can best serve Montanans, businesses, and our health care system – and where we can fill unmet needs not addressed in the overall CARES Act package.” The council recently put forth a Recommendation Report that summarizes Treasury Guidance, methods of distribution, and priorities for funding recommendations including immediate safety needs and business stabilization.
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