How to Compile the "Interim" Report Due July 17 on Expenditures Related to COVID-19
- Coronavirus Relief Fund (CRF) recipients are required to email an "interim" report to the U.S. Department of the Treasury by July 17, 2020.
- The "interim" report appears to ask for the total dollars spent on broad categories of CRF-eligible costs incurred from March 1 to June 30, 2020.
- A much more detailed "quarterly" report will be due Sept. 21, 2020, and will focus on the specific amount of CRF money applied to each project or activity for the same March 1 to June 30 period.
The U.S. Department of the Treasury's Office of Inspector General (OIG) released a memorandum on July 2, 2020, that lays out the reporting and document retention requirements that the OIG intends to apply to recipients of Coronavirus Relief Fund (CRF) money under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The requirements apply to tribal governments, state governments and all other entities who have received CRF allocations. Given the diverse scale and scope of tribal governments, the OIG's requirements may prove to be especially burdensome.
"Interim" Report Due July 17
The "interim" report is due July 17, 2020, by email to CARES@oig.treas.gov. Each entity that has received CRF funds (CRF recipient) must report the total amount of costs it incurred for services or performance delivered between March 1 and June 30, 2020, that it has concluded were for costs eligible to be funded with CRF money. Notably, it appears that OIG expects a CRF recipient to use its "interim" report to reveal all expenditures and obligations for COVID-19 related costs it incurred during the March 1 through June 30 period, and not just those expenditures it made using CRF funds. The OIG memorandum appears to make this distinction between the "interim" and "quarterly" reports. Otherwise, it would be illogical for the Treasury Department to ask CRF recipients to report on July 17 how much of their CRF allocations they spent during the four-month period beginning March 1, 2020, because:
- the CARES Act enacted the CRF authority on March 27, well after March 1
- the CARES Act required the CRF money to be distributed by April 27
- tribal recipients did not learn how much CRF money they would receive until mid-June, merely two weeks before the end of the four-month "interim" reporting period
Although some observers have interpreted the OIG memorandum to mean the "interim" report should display only the total CRF money actually applied because the wording of the OIG memorandum is not entirely clear, a July 17 report that is over-inclusive of all CRF-eligible in broad categories of costs incurred creates less risk of harm than being under-inclusive. An over-inclusive July 17 report will preserve a tribal recipient's latitude as to how much of its CRF money it specifically applies to the specific CRF-eligible costs it must identify in its quarterly report due Sept. 21 (see next section). And an over-inclusive July 17 report will keep open the possibility that a tribal recipient may choose to cover some of its CRF-eligible costs with other funds such as Bureau of Indian Affairs (BIA) or Indian Health Service (IHS) distributions under the CARES Act, which are outside the scope of the Treasury OIG authority.
For purposes of the July 17 "interim" report, the total amount of COVID-19 related expenditures and obligations is to be broken down into subtotals that fit within broad, general cost categories. The OIG categories include "amounts spent on":
- payroll for public health and safety employees
- budgeted personnel and services diverted to a substantially different use than budgeted
- improving telework capabilities of public employees
- medical expenses
- public health expenses
- facilitating distance learning
- providing economic support
- issuing tax anticipation notes
- other categories of items not listed above
- amounts transferred to other governments
The OIG letter gives no additional information on which costs are to be placed in which categories. Due to the lack of clarity, the "other" category is likely to be the most robustly reported.
First "Quarterly" Report Due Sept. 21
Each CRF recipient must file a "quarterly" report, the first of which is due Sept. 21, 2020. This "quarterly" report covers the same reporting period as the "interim" report, March 1 through June 30.
In contrast to the "interim" report, however, the first "quarterly" report will require a detailed description, project by project and activity by activity, of the specific amounts of CRF money that a CRF recipient has applied to cover some or all of the COVID-19 related incurred costs reported in the "interim" report. The "quarterly" report is supposed to include detailed descriptions of each project or activity as well as detailed information on loans issued, contracts and grants awarded, transfers made to other government entities and direct payment amounts greater than $50,000.
Conclusion and Considerations
For purposes of the "interim" report due July 17, it is likely in the interest of each CRF recipient to include every expenditure it made during the four-month period ending June 30 that was for a cost incurred that it believes was COVID-19 related. In other words, a CRF recipient should consider reporting all COVID-19 related expenditures it actually made without regard to what funds the CRF recipient temporarily used to cover those expenditures, beginning with costs incurred March 1, 2020, long before it ever received any CRF money. Otherwise, a CRF recipient could find itself in the position of saying in its Sept. 21 "quarterly" report that it applied CRF funds to cover CRF-eligible incurred costs it did not report in its July 17 "interim" report for the same period — an inconsistency in reporting that would likely invite the attention of the OIG. It will be far easier to explain to the OIG why a "quarterly" report includes a total amount that is lower than amounts included in an "interim" report than it will be to explain why the total CRF money applied in the "quarterly" report is higher than the total costs reported in the "interim" report.
Finally, in contrast to the work required to prepare its "interim" report due July 17, each CRF recipient will have to devote a far greater amount of time to carefully developing its "quarterly" report due Sept. 21. The "quarterly" report will require descriptions of each project or activity funded with CRF money, as well as justifications for the amount of CRF money that the CRF recipient decided to apply to cover each such project or activity cost.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.