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New guidance on paid administrative leave for tribal government employees

Jul 16, 2020
By: Grant Eve

Many Tribes have been grappling with whether coronavirus relief funds (CRF) may be used to cover the cost of paying employees who must stay at home and can’t work remotely. Now there’s some good news: On July 8, the Treasury provided additional guidance on the use of CRF in their Frequently Asked Questions (FAQ) document.

The updated document added a new question to specifically address increased administrative leave costs for government employees who were paid but could not work from home because of a stay-home order or a case of COVID-19 in the workplace. The new guidance now clearly says this expense is allowed to be covered with CRF if the cost of administrative leave was more than what was expected in the previously approved budget.

If you document your decision to pay administrative leave to employees who can’t work remotely, and justify why costs are considered to be greater than expected (i.e., COVID-19 was unexpected and historically, employees have not taken more than a certain amount of leave during a defined time period). We recommend that Tribes consider and classify those salary costs as “administrative leave” instead of “salaries and wages” in the accounting system, as this demonstrates that those costs now have a substantially different use than originally budgeted for.

If you have questions about how to document your CRF expenditures, contact us.

See additional resources:

CARES Act funding allocation support for tribal governments

4 strategies to help tribes track expenses during COVID-19

Author(s)

Grant Eve, CPA, CFE
Partner
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