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The 2020 compliance supplement addendum is finally here

The Compliance Supplement Addendum was finally released at the end of December 2020. With the addendum, there was a total of five new Catalog of Federal Domestic Assistance (CFDA) numbers issued as they relate to COVID-19 funding. These cross over Department of Agriculture, Department of Education, Treasury, Federal Communications Commission (FCC) and Department of Health and Human Services (HHS). As there are extensive changes for each program, this blog will focus on the Treasury and Department of Education.

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21.019 – Coronavirus Relief Fund (Treasury)

This grant is the major source of funding to government agencies to assist in COVID-19 related expenses. Most government agencies received this funding in June 2020. Government agencies were required to submit an application and estimate how the funds would be expended. There were various requirements that have now been confirmed through the compliance supplement.

  1. Activities Allowed and Allowable Costs – the main costs that are not allowed include expenses for State share of Medicaid, damages covered by insurance, payroll or benefits for employees whose work is not substantially dedicated to mitigating or responding to COVID, reimbursements for donated items/services, workforce bonuses, severance pay and legal settlements.
  2. Period of Performance – allowable expenses for the period between March 13, 2020 to December 30, 2020. Although with the legislation passed in late December by congress and signed by the president (CARES Act Part II), this period has been extended to December 31, 2021.
  3. Reporting – there is the initial application process and once the funds have been fully expended, there is a final submission through the reporting agency that needs to be certified.
  4. Special Reporting – funding used toward allowable expenses should be properly documented. If the funds are passed down to a subrecipient, the government recipient needs to assess the eligibility of the subrecipient and perform monitoring over those expenditures.

84.425 – ESF: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act

This is the main COVID-19 funding that has been passed to public schools. There are four different parts to the grant as it relates to K-12 education – A, C, D, H. When preparing your SEFA, the total for all subparts should be included as one grant when determining major programs. Part A is for State Educational Agencies. Part C is for Governor’s Emergency Education Relief Fund (GEER). Part D is Elementary and Secondary School Emergency Relief Fund (ESSER). Part H is Education Stabilization Fund -Governors (Outlying Areas). Part B, G, P are discretionary grants that may or may not apply to K-12 schools.

The main areas applicable are Activities Allowed, Allowable Costs, Cash Management, Equip/Real Property, Reporting and Subrecipient monitoring.

Most of these applicable areas relate to Title I requirements and the Compliance Supplement refers to the general Costs Principles requirements for expenditure guidelines. Schools can allocate funding toward areas of need as they related to COVID-19. Any funding used for construction projects should receive prior approval from the Education Department.

As a basic guideline when using these grant funds, make sure to maintain support for your expenditures, proper approvals, and document time and effort reporting as it relates to employees being charged to this program.

This is a general outline, and more detail can be found at https://www.whitehouse.gov/omb/office-federal-financial-management/. If you need further information regarding COVID-19 expenses, please reach out to one of our governmental auditors and we can help you out. For more information and resources on COVID-19, see our coronavirus page.

Noemi Barter, Supervisor

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