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What CARES Act means to nonprofits, government and tribal organizations

Apr 01, 2020

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes funding that will affect nonprofit, governmental and tribal organizations.

Following is a brief summary of the funding that was provided in the CARES Act that will impact some nonprofit, governmental and tribal organizations’ programs. As with most legislation, there are many questions that arise that are not answered initially with the provisions of the Act. Federal agencies will need to provide guidance regarding eligibility, durations and compliance within the programs.

Here are a few of the funding streams impacted:

Community Services Block Grant (CSBG):

$1 billion has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. The funds will be distributed according to current CSBG funding formulas. Any funds not expended may be carried over in the next two fiscal years. In addition, these funds can be used to serve individuals and families with annual incomes up to 200% of federal poverty guidelines.

Head Start:

$750 million has been authorized for payments under the Head Start Act to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. These funds include federal administrative expenses and will be allocated to the proportion of the number of children enrolled in the grantee’s program as compared to the total number of children enrolled in all Head Start programs. These funds will not be included in the base grant in subsequent years. Up to $500 million of these funds shall be available for operating supplemental summer programs through non-competitive grants to existing grantees determined to be most ready to operate these programs as determined by the Office of Head Start.

Child Care and Development Block Grant (CCDBG):

$3.5 billion has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. These funds shall be used to supplement, not supplant state, territory and tribal general revenue funds for childcare assistance for low-income families. The funds provided may be used to provide continued payments and assistance to childcare providers in the case of decreased enrollment or closures related to coronavirus, and to assure they are able to remain open or reopen as appropriate. In addition, states, territories and tribes are encouraged to place conditions on payments to childcare providers that ensure that childcare providers use a portion of funds received to continue to pay the salaries and wages of staff. States, territories and tribes are authorized to use funds appropriated to provide childcare assistance to healthcare employees, emergency responders, sanitation workers and other workers deemed essential during the response to coronavirus by public officials, without regard to the income eligibility requirements. The funds appropriated shall be available to eligible childcare providers even if such providers were not receiving CCDBG assistance prior to the public health emergency, for the purposes of cleaning and sanitation and other activities necessary to maintain or resume the operation of programs. These funds may be obligated in this fiscal year or the succeeding two fiscal years.

Low Income Home Energy Assistance Program (LIHEAP):

$900 million has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021, to assist low-income households, particularly those with the lowest incomes, that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. The 10% carryover limit will not apply to these funds.

Domestic violence:

$2 million has been authorized for the National Domestic Violence Hotline. These funds may be available for providing remote hotline services. Also, there is $45 million for Family Violence Prevention and Services. These funds are available to grantees without regard to matching requirements. In addition, these funds may be available for providing temporary housing and assistance to victims of family, domestic and dating violence.

Homeless youth:

$25 million is available for carry out activities under the Runaway and Homeless Youth Act. These funds are to be used to supplement, not supplant, existing funds and are not subject to matching requirements.

Child and Adult Care Food Program (CACFP):

$8.8 billion has been authorized for Child Nutrition Programs to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021.

Supplemental Nutrition Assistance Program (SNAP):

$15.8 billion has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. Of the amount provided, $15.5 billion shall be placed in a contingency reserve to be allocated as the secretary deems necessary to support participation. Of the amount provided, $100 million shall be for the food distribution program on Indian reservations to prevent, prepare for and respond to coronavirus, of which $50 million shall be for facility improvements and equipment upgrades and $50 million shall be for the costs relating to food purchases.

Commodity Assistance Program:

$450 million has been authorized for the Emergency Food Assistance Program to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. Of the amount provided, $150 million may be used for costs associated with the distribution of commodities.

Employment and training:

$345 million has been authorized for necessary expenses for the dislocated workers assistance national reserve to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2022.

Aging and disability services programs:

$955 million has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. Of this amount, $820 million is designated for activities under the Older Americans Act to be used as follows: $200 million for supportive services, $480 million for nutrition services for title III, $20 million for nutrition services under title IV, $100 million for support services for caregivers, $20 million for elder rights protection activities, $50 million for aging and disability resource centers and $85 million for centers for independent living. Matching funds will not be required for these funds. Currently, states may transfer up to 40% of their allotment for Title III-C1 to Title III-C2, or vice versa; with the CARES Act funds, the amount is 100%.

Tenant-based rental assistance:

$1.250 billion has been authorized for tenant-based rental assistance to prevent, prepare for and respond to coronavirus, including to provide additional funds for public housing agencies to maintain normal operations and take other necessary actions. Of these funds, $850 million is to be made available for Section 8 programs for both administrative and other expenses that should be new eligible activities to be determined that include activities to support or maintain the health and safety of assisted individuals and families; $400 million of the funds are available for adjustment in the calendar year 2020 Section 8 renewal funding allocations.

Public housing agencies:

$685 million has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021, to provide additional funds for public housing agencies to maintain normal operations and take other necessary actions and will be distributed to all public housing agencies pursuant to the operating fund formula. The funds provided shall be combined with the amounts already appropriated for the same purpose under the same Public Law 116–94, and will be for the period from the enactment of this Act through Dec. 31, 2020, the combined total amount may be used for eligible activities and for other expenses related to the coronavirus, including activities to support or maintain the health and safety of assisted individuals and families, and activities to support education and child care for impacted families.

Project-based rental assistance:

$1 billion has been authorized to be available until expended to prevent, prepare for and respond to coronavirus, to maintain normal operations and take other necessary actions for assistance to owners or sponsors of properties receiving project-based Section 8 assistance.

Housing for the elderly:

$50 million has been authorized to be available until Sept. 30, 2023, to prevent, prepare for and respond to coronavirus, to maintain normal operations and take other necessary actions for assistance to owners or sponsors of properties receiving project-based elderly assistance; $10 million of the funding is to be used for service coordinators and the continuation of existing congregate service grants for residents of assisted housing projects.

Housing for persons with disabilities:

$15 million has been authorized to be available until Sept. 30, 2023, to prevent, prepare for and respond to coronavirus, to maintain normal operations and take other necessary actions for assistance to owners or sponsors of properties receiving project-based supportive housing for persons with disabilities assistance.

Homeless assistance grants:

$4 billion has been authorized to prevent, prepare for and respond to coronavirus, available until Sept. 30, 2022, among individuals and families who are homeless or receiving homeless assistance and to support additional homeless assistance and homelessness prevention activities due to the coronavirus. $2 billion of these funds shall be distributed to grantees that received allocations pursuant to the same formula in fiscal year 2020; the allocations will be made within 30 days of the Act. The remaining funds will be allocated to states or local government within 90 days of the Act using a formula that will allocate funds to the geographical areas with the greatest need. Individuals and families whose income does not exceed the very low-income limit of the area shall be considered ‘‘at risk of homelessness’’ and shall be eligible for homelessness prevention if they meet certain criteria. The funding provided may be used for training on infectious disease prevention and mitigation and to provide hazard pay, including for time worked prior to the date of enactment of this Act, for staff working directly to prevent, prepare for, and respond to coronavirus among persons who are homeless or at risk of homelessness. These activities are not considered administrative costs for purposes of the 10 percent cap.

Operation of Indian programs:

$4.535 million has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. These funds are to be used for, but not limited to, funds for public safety and justice programs, executive direction to carry out deep cleaning of facilities, purchase of personal protective equipment, purchase of information technology to improve teleworking capability, welfare assistance and social services programs (including assistance to individuals), and assistance to tribal governments, including tribal governments who participate in the ‘‘Small and Needy’’ program. The amounts received from the Act for welfare assistance programs shall not be included in the statutory maximum for welfare assistance funds. Also, the funds received from the Act shall not be included in the calculation of funds received by those tribal governments who participate in the ‘‘Small and Needy’’ program. Of the funds provided, not less than $400 million shall be made available to meet the direct needs of tribes. The funds may be made available for distribution through tribal priority allocations for tribal response and capacity building activities. The funds provided, if transferred to tribes and tribal organizations under the Indian Self-Determination and Education Assistance Act, will be transferred on a one-time basis and that these nonrecurring funds are not part of the amount required by 25 U.S.C. § 5325.

Operation of Indian education programs:

$69 million has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. These funds are to be used for, but not limited to, funding for tribal colleges and universities, salaries, transportation and information technology. Of these funds, $20 million shall be for tribal colleges and universities.

Indian health services:

$1.032 billion has been authorized to prevent, prepare for and respond to coronavirus, domestically or internationally, available until Sept. 30, 2021. These funds are to be used for public health support, electronic health record modernization, telehealth and other information technology upgrades, Purchased/Referred Care, Catastrophic Health Emergency Fund, Urban Indian Organizations, Tribal Epidemiology Centers, Community Health Representatives, and other activities to protect the safety of patients and staff. Of the funds provided under the Act, up to $65 million is for electronic health record stabilization and support, including for planning and tribal consultation. In addition, $450 million of the funds provided under the Act shall be distributed through IHS directly operated programs and to tribes and tribal organizations under the Indian Self-Determination and Education Assistance Act and through contracts or grants with urban Indian organizations under title V of the Indian Health Care Improvement Act. Any amounts provided that are not allocated shall be allocated at the discretion of the Director of the Indian Health Service. $125 million of the funds provided may be transferred to and merged with the ‘‘Indian Health Service, Indian Health Facilities’’ appropriation at the discretion of the Director for the purposes specified in this Act. Amounts provided, if transferred to tribes and tribal organizations under the Indian Self-Determination and Education Assistance Act, will be transferred on a one-time basis and that these nonrecurring funds are not part of the amount required by 25 U.S.C. § 5325.

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Author(s)

Denes Tobie, CPA
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