Coronavirus threw a curveball at all of us, but thankfully, there was help from a few sources to provide aid to those who needed it most. Below are some upcoming notices.
I don’t think anyone imagined the challenges that we would face during 2020. Just six months ago we were all planning for spring break and heading into the last few months of the school year, yet little did we know, soon every day activities would come to a halt as individuals, businesses and local governments faced a landscape that had not been dealt with before.
In the world of local government accounting and auditing, budget and spending are a primary focus as each entity strives to provide services within the constraints of their resources. As auditors, we are constantly focused on the changes to laws, regulations and the economy in which our clients operate, in order to help them remain current and in compliance. Coronavirus threw a curveball at all of us, but thankfully, there was help from a few sources to provide aid to those who needed it most.
The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act established the $150 billion Coronavirus Relief Fund (CRF) for state, local and tribal governments. The amount allocated to Texas was $11,243,461,410. In Texas, there were 18 individual local governments, cities and counties, that were considered eligible for direct certification based on population. This left $8,038,314,291 remaining for the State to allocate to other entities. The Governor and State legislature approved a portion of the State’s CRF to be used for reimbursement to the school systems for COVID-19 expenditures incurred as of close of business May 20, 2020. The application deadline is September 30, 2020.
The Texas Department of Emergency Management (TDEM) received the funds for disbursement to the local education agencies (LEA). The Catalog of Federal Domestic Assistance (CFDA) number assigned to the CRF is 21.019. You won’t see this listed in the 2020 Office of Management and Budget (OMB) Compliance Supplement, but the TDEM has provided guidelines for LEA based on U.S. Treasury Department guidance. Below are a few key points to keep in mind related to CRF eligibility and processes as it relates specifically to LEA with links to useful information through the TDEM:
- Deadline for reimbursement requests for eligible expenditures will be September 30, 2020
- Eligible expenditures are defined as:
- Necessary expenditures incurred due to the COVID-19 pandemic
- Allowable costs that were not accounted for in the most recently approved budget as of March 27, 2020
- Allowable costs incurred March 1, 2020 – May 20, 2020
- Each LEA will be capped at a reimbursement amount equal to the greater of $50,000 or $250 per State Compensatory Education student in the LEA
- Specific allowable costs as listed in U.S. Treasury guidance includes:
- Costs to facilitate distance learning, including technologic improvements, in connection with school closings for compliance with State COVID-19 precautions
- Payroll and benefit costs of educational support staff or faculty responsible for developing online learning capabilities necessary to continue educational instruction during COVID-19 related school closures
- Reimbursement under CRF CANNOT be used for:
- Local match amount for FEMA funding related to COVID-19 (cleaning and sanitizing costs)
- Revenue replacement
- Expenditures for the State share of Medicaid
- Damages covered by insurance
- Payroll or benefits for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-19 emergency
- Expenditures that have been or will be reimbursed under any other federal program
- Reimbursement to donors for donated items or services
- Workforce bonuses other than hazard pay or overtime
- Severance pay
- Legal settlements
Another important reminder: If your LEA used a purchasing cooperative to purchase any of these allowable items, make sure that the purchasing cooperative was fully compliant with the 2 CFR 200.318 through 200.326. We suggest that you develop a checklist of these items.
- Promote full and open competition
- Use a procurement methodology that follows the allowable procurement methods listed at 2 C.F.R. § 200.320.
- Follow the applicable affirmative steps to involve small businesses, minority businesses, or women owned enterprises. (2 C.F.R. § 200.321)
- Not score bids or proposals higher based on geographic preferences. (2 C.F.R. § 200.319(b))
- Include the contract provisions required by the Uniform Guidance. (2 C.F.R. § 200.326)
There are some steps that must be completed by the end user of the purchasing cooperative, such as the independent cost/price analysis and independent estimate. Additionally, if the purchasing cooperative did not have procedures to verify whether a vendor is suspended or debarred, then the end user must have controls in place to verify a vendor’s status. An LEA can simply go to https://www.sam.gov/SAM/pages/public/searchRecords/search.jsf
Finally, make sure to visit TEA’s CARES Act Funding and COVID Expense Reimbursement FAQ at least weekly for updates related to this funding.