Last updated: August 20, 2020

What Local Govs Should Know About CARES Act Funds For Digitization

Take a look at how local governments are moving quickly amidst the pandemic to employ digitization for a wide array of online services.
Posted by Karl Pawlewicz
Treasury Department
In the last six months, the COVID pandemic has forced local governments to dive headfirst into the digital deep end, and move quickly and creatively to stay afloat. Under normal circumstances this would have resulted in chaos and confusion for agencies weighed down by funding and procurement processes. But through Coronavirus Aid, Relief and Economic Security (CARES) Act funding, municipalities have been able to quickly acquire, or expand the usage of, applications—like Kofile—that can help ensure the well being of citizens and staff. We’ve now seen municipalities move quickly to employ Kofile for a wide array of online services:

What is CARES Act Funding

What is the CARES Act? It’s a small chunk of the broader $2T Coronavirus Relief Fund (CRF). Within CARES, there is a federal component—$376 billion, which is primarily for forgivable payroll loans, disaster grants, and debt relief for current borrowers—and a state/local component—$150 billion set aside for payments to State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak. CARES_ACT_-_Relief_Amounts (Image via Wikimedia Commons, published 3/27/20) How does this affect your government? Currently, The Treasury Department is overseeing and administering CRF payments to state and local governments. If a state or eligible unit of local government does not spend all CRF payments that are allocated by December 2020, The Treasury will recoup these funds. It’s worth noting that if a local government unit has fewer than 500,000 residents, it is not eligible to receive direct payments from the U.S. Treasury. However, states that receive a CRF payment are allowed to transfer funds to a local government unit. Deciding which expenditures are ‘necessary’ to maintain the health and safety of the public is up to the local governments. So far it has not been necessary to submit proposed expenditures to the Treasury Department. Counties that receive a payment may transfer funds to a city, town, or school district within the county. A city or county may transfer funds to its state, if that transfer is deemed a necessary expenditure incurred due to the public health emergency. (Refer to the criteria of section 601(d) of the Social Security Act outlined in the Guidance.)

Still reading? Great! Here’s where it gets interesting.

Because U.S. governments are experiencing revenue losses but no reduction in demand for services, FEMA has indicated that software purchases are reimbursable under the CARES Act. However, The Treasury has provided guidance that says payments from the Fund may only be used to cover costs that:
  • Are necessary expenditures incurred due to the public health emergency with COVID–19);
  • Were not accounted for in the budget most recently approved as of March 27, 2020; and
  • Were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
Within that same guidance, necessary expenditures are further described as: Expenditures must be used for actions taken to respond to the public health emergency. These may include expenditures incurred to allow the government to respond directly to the emergency, such as by addressing medical or public health needs, as well as expenditures incurred to respond to second-order effects of the emergency, such as by providing economic support to those suffering from employment or business interruptions.

Specific Form Examples

Providing economic support to those suffering from employment interruptions is a critical component. As the pandemic stretches on, and stimulus checks and/or packages come and go, many Americans are left wondering what will happen to the residence they either own or rent. Recently, the National Low Income Housing Coalition (NLIHC) estimated there is a need for more than $100 billion in emergency rental assistance to help citizens who face economic hardship. Municipalities are once again rising to the call by creating or expanding rental assistance programs to help individuals and families get access to vital funding. Most recently, the New Jersey Redevelopment Authority (NJRA) invested CARES Act funds to get started with Kofile to build a Small Business Commercial Lease application form. Within minutes of announcing that the form would be available, there were over 18K visitors on NJRA website. In 23 minutes the organization received applications totaling more than $6M. The total amount of claims is now more than $60M, and the NJRA has a much easier digital process of reviewing these applications, as opposed to a paper-based system that would have been employed before.
(A screen shot of the form created by the NJRA to distribute rental assistance funds to families in need.)

In Summation

While it’s encouraging to see the federal government acknowledge the immediate need for assistance, there is still much work to be done. In a new normal where the only constant is change, government agencies must continue to think like entrepreneurs and build new, innovative systems to guide citizens and staff in these uncertain times. For local governments looking for technology solutions covered under CARES Act funding, Kofile is an ideal solution. We can quickly and easily help you bring COVID-related forms and services online to ensure your citizens have the support they need, and that your employees have the tools they need to work effectively in a remote environment.
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