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The CARES Act and GASB changes amid COVID-19: What higher ed institutions need to know

March 27, 2020 / 3 min read

COVID-19 has forced sweeping operational changes for higher education institutions. To help institutions adjust, the CARES Act will provide significant federal funding, and GASB deadline extensions may also help ease the burden.

As much of the world self-quarantines to slow the spread of COVID-19, educational institutions have been forced to adjust quickly to ensure students are still engaged in the learning process. To reduce the financial burden and help maintain operations for schools, businesses, and other organizations, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was signed into law on March 27, 2020. The bill provides a historic $2 trillion of relief funding, including more than $14 billion earmarked for the Higher Education Emergency Relief Fund.

Which higher education institutions are eligible for CARES Act funding?

The CARES Act provides funding and relief to higher education institutions that participate in student financial aid, National Service Corps, Workforce Innovation & Opportunity Act, TRIO, GEARUP, and Title III programs.

Some of the key highlights are:

How will CARES Act funds be distributed to higher education institutions?

Under the Higher Education Emergency Relief Fund portion of the bill, approximately $14.3 billion will be distributed as follows:

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, but continued monitoring of communication from the Department of Education will be required.

Possible postponement of certain GASB standards

The GASB issued a press release about a potential delay of certain GASB standards. A fast-tracked project will consider postponing 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 Statement 84, Fiduciary Activities, Statement 87, Leases, and 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. 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.

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