The CARES Act was passed on March 27, 2020, to provide coronavirus aid, relief and economic security during the COVID-19 pandemic. Under Title VI – Coronavirus Relief Fund, Congress appropriated $150 billion to states, tribal governments and units of local government.
If your government receives CARES Act funds either directly from the federal government or passed down from the state government, make note of the following:
Subsection (d) Use of funds
- To be allowable:
- These funds should be used for necessary expenditures incurred due to the public health emergency with respect to COVID-19.
- The funds needed cannot be accounted for in the budget most recently approved as of the date of enactment of this section for the State or government (can’t supplant already budgeted activity).
- Period of performance: Funds received under this act must cover costs incurred between March 1, 2020 and December 31, 2020.
Subsection (e) Certification
In order to receive payment under this act, the Chief Executive for the unit of local government must certify that the government’s proposed use of the funds will be consistent with subsection (d).
Subsection (f) Oversight
This act extends oversight responsibility to the Inspector General of the Department of the Treasury to monitor that the use of the funds is in accordance with subsection (d). Local governments will be required to repay any funds used for unallowed purposes, similar to other federal grant funding.
What does this mean for you
Specific guidance related to audits of these funds is yet to be provided, but as of now, we would expect similar auditing requirements to be required for these funds as is already required for use of other federally funded grant programs. We recommend any expenditures incurred that will be funded by proceeds from the CARES Act be appropriately tracked for future reporting/auditing purposes and ensure the expenditures are in compliance with subsection (d) noted above.
If you want to review the relevant section of the full bill, Title VI begins on page 221.
For more information
Contact Mike Lowry with questions using the contact information below.
Information in this document has been obtained by Allen, Gibbs & Houlik, L.C. from sources believed to be reliable. However, AGH does not guarantee the accuracy nor completeness of any information. This communication does not and is not intended to provide legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly, AGH assumes no liability whatsoever in connection with its use. Nothing in this communication can be used to avoid penalties that may be imposed by a governmental taxing authority or agency.
Senior Vice President
Government, Not-For-Profit Industry Team Leader
Mike Lowry specializes in governmental and not-for-profit clients, leading the firm's industry team for these areas. Prior to joining AGH, Mike’s experience included nearly 20 years of financial and technology leadership positions in hospitality management and software companies.
Mike is a certified public accountant who has earned the designation of Certified Government Financial Manager from the Association of Government Accountants, and he is also a member of the American Institute of Certified Public Accountants, the Kansas Society of Certified Public Accountants, and the Association of Government Accountants. He is a frequent presenter and member of the Kansas, Missouri and Great Plains Financial Officers Association, and serves as a Annual Report reviewer for the GFOA.