Treasury Updates Coronavirus Relief Fund FAQs
The Treasury issued updated Coronavirus Relief Fund (CRF) FAQs (see revised questions 34 and 38 and updated questions 53 – 56). These new and modified FAQs clarify:- CRF recipients may impose restrictions on transfers of funds to local governments, provided that the State’s restrictions facilitate its compliance with the requirements for use of Coronavirus Relief Funds set forth in statute (Section 601(d) of the Social Security Act, as added by Section 4001 of the CARES Act). Other restrictions that do not directly concern use of the funds–specifically including restrictions related to reopening–are not permissible.
– CRF payments may not be used to cover “across-the-board” hazard pay for employees working during a state of emergency. CRF payments may be used for “additional pay for performing hazardous duty or work involving physical hardship, in each case that is related to COVID-19.”
– CRF payments may be used to cover costs associated with providing distance learning (e.g., the cost of laptops to provide to students) or for in-person learning (e.g., the cost of PPE for students attending schools in-person). The Treasury will presume expenses of up to $500 per elementary and secondary school student to be eligible expenditures, such that schools do not need to document the specific use of funds up to that amount.
– CRF payments may be used to upgrade public health infrastructure in rural or tribal areas, such as providing access to running water to help reduce the further spread of the virus.
– The way in which CRF recipients should determine whether expenses are indeed new and therefore permissible expenses if the government entered a new budget year on July 1, 2020 or October 1, 2020 (the CARES Act requires that CRF funding is used for expenses not accounted for in the most recently-approved budget as of March 27, 2020). Treasury indicates that the budget most recently approved as of March 27, 2020 provides the spending baseline against which all expenditures–regardless of whether they are made in FY 2020 or FY 2021–should be compared for purposes of determining whether they may be covered using payments from the CRF. The spending baseline may be carried forward without adjustment for inflation.
In parallel, the Treasury issued revised guidance for recipients, providing greater detail on the eligible use of funds to cover payroll, benefits of public employees, and administrative costs.