James Russell-Field, Vice Chair and Assistant Finance Director for the City of Benicia

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and established the Coronavirus Relief Fund (CRF). The CRF provides $150 billion to state, local, tribal, and territorial governments to assist with expenditures incurred due to the public health emergency and response to COVID-19.

Per US Treasury guidance, the funds are for relief of higher costs related to COVID-19, but not revenue losses. There are three overarching requirements for CRF eligible expenditures:

  1. Costs are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
  2. Costs 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
  3. Costs were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.

Local agencies are expected to submit CRF justification plans to the State of California Department of Finance by September 4, 2020. The justification should cover expenditures incurred from March 1, 2020 through June 30, 2020, as well as additional obligated, expended, or anticipated expenses after July 1, 2020 through December 31, 2020. A detailed report on the same expenditures is required by the State for federal reporting by September 21, 2020. A second report is due to the State from agencies on October 7, 2020 and a third on January 11, 2021.

CRF reporting requirements assume that the majority of CRF eligible expenditures have already occurred or will occur before December 30, 2020. Although delivery of goods or performance of services needs to occur before December 30, US Treasury guidance references a 90-day period from an incurred expenditure to the related payment. Additionally, the guidance allows for use of bulk purchases beyond December 30 if a portion of the purchase occurred during the covered period.

The table at the end of the article provides a summary of the six expenditure categories for CRF eligible expenditures. Agencies should keep in mind that CRF funds are subject to the Single Audit Act and should keep detailed records that follow the Uniform Guidance. The League of California Cities recommended the following documentation to support that the eligible expenditures were necessary, not in the recent budget, and incurred between March 1, 2020 through December 30, 2020:

  • General ledger, subsidiary ledger
  • Budget records 2019 and 2020
  • Payroll and time keeping records
  • Receipts of purchases
  • Contracts and subcontracts, including any performance outcomes
  • Documentation of reports, audits, monitoring of recipients
  • All CRF internal and external e-mail/electronic communications

No. Expenditure Category Examples

1. Medical Expenses • Treatment of COVID-19 and related expenses in hospitals or clinics

  • Temporary medical facilities
  • Testing
  • Emergency medical response and establishing telemedicine procedures

2. Public Health Expenses • Communication / enforcement of public health orders

  • Acquisition of PPE and cleaning supplies for public health and safety staff
  • Disinfection of public areas and facilities
  • Public safety measures in response to COVID-19
  • Quarantining individuals

3. Substantially Dedicated Payroll Expenses • For public safety, public health, health care, etc.

  • Public health and safety are presumed to be “substantially dedicated.”

4. Comply with Public Health Measures and Mitigate Effects of COVID-19 • Food delivery for seniors and vulnerable populations

  • Telework capabilities for public employees
  • Providing paid sick, paid family and medical leave to public employees
  • Maintaining sanitation and social distancing at local jails
  • Care for homeless

5. Economic Support • Grants to small businesses

  • Grant or financial assistance for payment of overdue rent and/or mortgage to prevent eviction
  • Payroll support program
  • Unemployment Insurance (if not reimbursed by federal government)

6. Other • COVID-19 expenses “reasonably necessary” to the function of government. Could include hazard pay or overtime for substantially dedicated, increases in worker’s compensation costs, leases renewed due to COVID-19, etc.

Guidance is evolving and the Department of Finance continues to provide updates. Agencies are encouraged to visit the following helpful resources available online.

Coronavirus Relief Fund Frequently Asked Questions

Coronavirus Relief Fund Guidance for State Territorial Local and Tribal Governments

League of California Cities – CARES Act Dollars – Guidance by CA Dept. of Finance on Eligible Expenses and Reporting

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James Russell-Field, Vice Chair and Assistant Finance Director for the City of Benicia. James has served on various committees and roles supporting CSMFO and is the Communication Committee Vice Chair. Prior to Benicia, he worked with the Department of Interior and the City of Thousand Oaks. On weekends, you can find James mountain biking through Northern California.

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