Governments, take note: COVID-19 is causing massive disruption, but measures are being introduced to ease your financial burden. The CARES Act will provide additional funding, and GASB deadlines may be extended. GFOA is also accepting requests to extend deadlines.
As the world reckons with the COVID-19 pandemic, relief programs are being introduced and implemented to mitigate damages to the economy. The most significant in the United States, currently, is the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020. The bill provides a historic $2 trillion of relief funding for individuals and organizations alike.
Similar to funding under the American Recovery and Reinvestment Act of 2009 (ARRA) during the Great Recession, the CARES Act provides significant federal dollars to governments, nonprofit organizations, public and businesses of all types by providing $330 billion in new funding. This funding is in addition to the $150 billion Coronavirus Relief Fund included in the Keeping Workers Paid Act that will provide state, local, and tribal governments with additional resources to address the pandemic.
Various deadline extensions are also being considered, including for certain GASB standards, and GFOA Certificate of Excellence in Financial Reporting deadline extensions are being provided as needed.
What governments are eligible?
Federal, state, local and tribal governments are eligible for funding through the CARES Act. The Act’s provisions are largely through additional funding to already-existing grant programs throughout the federal government, including nutrition assistance programs, Byrne-Justice Assistance Grants, Assistance to Firefighter Grants, Homeland Security, FEMA, Head Start, Community Development Block Grant (CDBG), Emergency Solutions Grants (ESG), etc. The bill also provides $400 million for states to help prepare for the 2020 elections to help make voting safer for individuals.
The Keeping Workers Paid Act separately provides $150 billion to states, territories, and tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.
Are there any new programs being funded?
It appears most of the funding runs through programs already established.
Will there be additional compliance requirements related to funding?
The Act doesn’t include this information, however, to the extent a government receives additional dollars, these dollars may trigger the single audit threshold of $750,000. Recipients of funds will need to understand compliance requirements associated with the additional funding and determine if any additional systems for accumulating and tracking data need to be stood up.
Possible postponement of certain GASB standards
The GASB issued a press release about a potential delay of certain GASB standards due to the impacts of the COVID-19 pandemic. A fast-tracked project, which was just approved, will consider the postponement of all Statement and Implementation Guide provisions with an effective date that begins on or after reporting periods beginning after June 15, 2018. This would include both Statement 84, Fiduciary Activities, and Statement 87, Leases, along with the related Implementation Guides. The project, if approved, is expected to result in an exposure draft in April 2020, with a final standard to be issued in June 2020.
Many Dec. 31, 2019 year-ends are well on the path to implementation of Statement 84. Depending upon the facts and circumstances, it may still make sense for your organization to continue toward implementation, particularly if you don’t want to delay the issuance of your financial statements until this new standard is issued.
If your organization participates in the GFOA certificate program, the deadlines for submission of financial statements under the GFOA Certificate of Excellence in Financial Reporting haven’t been automatically extended. That said, the GFOA will be granting extensions on an as-needed basis. Extension requests can be applied for at: gfoa.org/request-extension.