The Coronavirus Aid, Relief, and Economic Security (CARES) Act
On March 27, Congress passed and the President signed the CARES Act, which, among many things, provides local governments funding to meet the immediate needs of residents, households, and small businesses on the economic margins. The Coronavirus Relief Fund, established under the CARES Act, provides $150 billion for state, local and tribal governments to use to cover any costs related to COVID-19 that had not been previously budgeted for and were incurred between March 1 and December 30, 2020.
The CARES Act requires that the payments from the Coronavirus Relief Fund only be used to cover expenses that are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. Guidance on eligible uses of Fund disbursements by governments is available here.
On May 1, Governor Holcomb announced that $300M of Indiana’s share of funds from the Coronavirus Relief Fund would be earmarked for local governments to submit applications for reimbursement for eligible expenses related to COVID-19 response. The U.S. Treasury has issued guidance and a frequently asked questions document on what expenditures are reimbursable under the CARES Act.
On October 19, the Treasury issued an updated Frequently Asked Questions (FAQ) related to guidance issued on April 22 on the use of monies from the Coronavirus Relief Fund allowing flexibility to state and local governments to pay firefighters and other first responders.
Items Eligible for Reimbursement
The Office of Management and Budget (OMB) has officially announced that the state will be loosening the restrictions for reimbursement to local governments through the CARES Act Coronavirus Relief Fund (CRF). Since the roll out of the $300 million CRF program for local governments, Aim has been working with the administration to make sure the restrictions on the use of the funds align better with the fiscal needs of Indiana’s cities and towns. After considering Aim’s recommendations, the OMB is changing the guidelines to allow reimbursement for the following expenditures:
- All payroll costs for first responder public safety employees and their supervisors (i.e. police officers, firefighters, EMTs, and those who directly support these employees such as dispatchers and supervisory personnel).
- Expenses incurred due to the mandatory paid family and sick leave policies required under the Families First Coronavirus Relief Act (FFCRA).
- Providing grants to small businesses to assist with the costs of business interruption caused by required closures.
- Interest and administrative costs associated with tax anticipation notes.
Other expenses also opened up for reimbursement include:
- Public health employee payroll expenses.
- Costs associated with the administration of COVID-19 related programs and/or the reimbursement of COVID-19 related expenses.
- Unemployment insurance expenses incurred as a reimbursing employer that are not otherwise reimbursed by the federal government.
- Expenses incurred to remarket convention facilities and local tourism.
All expenses in these categories dating back as far as March 1 of this year may now be submitted for reimbursement to the IFA.
With regard to public safety payroll, the only thing you will need to submit to receive reimbursement is payroll, time, or human resources records. These records must also demonstrate that the positions submitted for reimbursement are eligible (see list above). The eligible employee’s entire payroll cost is presumed eligible for costs incurred between March 1 – December 30, 2020. The first reimbursement request for payroll expenses should be for costs incurred beginning March 1, 2020 through September 30, 2020, with subsequent requests submitted monthly if there are still funds available within your allocation.
The IFA is highly encouraging local units to maximize reimbursement for eligible public safety and public health expenses first, and will be prioritizing payroll expenses for review over the other designated expenses categories.