cares act funding - internal lcc

CARES Act Funding

Lisa Mazure, Controller, Lansing Community CollegeStephanie Bogard Trapp, Senior Director of Financial Aid & Title IV Compliance, Lansing Community College

Disclaimers:

• The information presented within this session is based on current guidance and interpretation. Items have not been audited or approved by DOE. Guidance and requirements continues to evolve and change.

• The CARES Act Higher Education Emergency Relief Fund (HEERF) Timeline was created by the National Association of Student Financial Aid Administrators (NASFAA) and is used by aid administrators to document the changes in guidance that could possibly put the institution retroactively out of compliance or require(d) the institution to undo previously completed work.

CARES Act• Three sources of Funding to Community Colleges:

• Higher Education Emergency Relief Fund (HEERF) – Student Grants• HEERF – Institutional Grants• Department of Treasury Coronavirus Relief Fund – Sub Award from the

State of Michigan

• Passed March 2020

• CFDA Numbers:• HEERF – 84.425E• Treasury Coronavirus Relief Fund – 21.019

• Expenditure of Funds:• HEERF – September 30, 2021• Treasury Coronavirus Relief Fund – December 31, 2020

CARES Act HEERF – Timeline

• March 5: ED issued first COVID-19 related guidance, covering interruptions of study due to COVID-19. • Broad approval to offer distance education. • Institutional authority to continue paying Federal Work-Study (FWS) to students who are

unable to work. • Leave of Absence (LOA), Professional Judgment (PJ), Satisfactory Academic Progress (SAP),

& Return of Title IV funds (R2T4).

• March 13: President Trump issued proclamation declaring a national emergency.

• MARCH 20: ED provided FAQ to March 5 guidance and issued new guidance.• Treatment of Institutional Charge Refunds• Clock-Hour Programs• Administration of Title IV for shortened academic years.

• March 27: President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, which includes $14 billion in funding for higher education through the Higher Education Emergency Relief Fund (HEERF).


• April 3: ED issued updated guidance related to paying FWS funds to students who were unable to work and extend applicable dates from the March 5 guidance. Also, waiver of in-person/notary requirements for verification of identity for Title IV Aid were issued.

• April 9: ED issued certification agreement and letter from Secretary of Education for student portion of CARES Act HEERF funds.• CARES Act provides institutions with significant discretion on how to award

this emergency assistance to students. … The only statutory requirement is that the funds be used to cover expenses related to the disruption of campus operations due to coronavirus.”

• Reporting requirements released for schools to submit a report to ED on HEERF student emergency grant spending within 30 days from the date the agreement was signed.


• April 21: ED issued certification agreement, press release, and FAQ for institutional portion of CARES Act HEERF Funds and student fund FAQ document change previous guidance to requiring student to meet Title IV eligibility requirements to receive CARES Act funds.

• April 23: Waiver of 7% Community Service requirement for FWS program for both 2019-20 and 2020-21 award years and extended the cohort default rate appeal deadine.

• April 30: Certification Agreement and letter from Secretary DeVosissued to Minority Serving Institutions (MSI) for CARES Act HEERF Funds and new guidance issued by ED stating students can self-attest that they meet all of the HEA Section 484 Title IV eligibility requirements for the MSI portion of CARES Act HEERF funds.


• May 6: Interim guidance issued for HEERF student share disclosures to be available on Website until ED develops the reporting process required by the CARES Act.

• May 15: ED issued updated guidance related to the interruptions of study due to COVID-19.• Extended applicable dates of broad approval to offer distance education.• Waiver of Leave of Absence (LOA) requirement that students in term-based

programs resume at the same point in the academic program that they began the LOA.

• Granted institutional authority to accept a signed and dated statement from the student attesting completion of secondary school or the equivalent.

• Granted authority of exclude from SAP quantitative component attempted credits that a student was unable to complete due to COVID-19.

• Effective dates for eligibility for waiver requirement to return funds for Return of Title IV defined.


• May 21: ED updated HEERF “informational page” to change previous guidance that ED will not enforce the portion of the guidance that says students must be, or could be, Title IV eligible in order to receive HEERF student emergency grant funds.

• May 25: ED responded to legal challenges brought forth by the California Community College system regarding Title IV eligibility requirements imposed on CARES Act HEERF student emergency grant stating HEERF guidance is “preliminary” and reiterates that ED will not enforce the Title IV eligibility requirements.

• May 27: ED published two notices in the Federal Register seeking comments on the Funding Certification Agreement forms for both the student and institutional aid included in the CARES Act.• Despite the CARES Act requiring schools to submit reports to the Secretary

describing their use of funds, ED’s notice only reiterates the May 6 guidance on web-based disclosure guidance and does not include requirements on reporting directly to ED.


• June 16: The March 5 and May 15 guidance updated to change previous guidance to:• Expand flexibilities for standard term programs and extends the timeframe

for these flexibilities.• Extends the timeframe to relief from R2T4 requirements and clarifies how

the R2T4 relief provisions may or may not be applied.

• June 17: Interim final rule from ED declaring the distribution of coronavirus emergency relief grants to students can only go to those who meet Title IV eligibility requirements is published in the Federal Register. The rule is now effective and is open for a 30 day comment period.

CARES Act HEERF – Student Aid

• Fifty percent of the $14 billion in emergency funds must go directly to students in the form of emergency financial aid grants for expenses related to the disruption of campus operations due to the coronavirus.

• Institutions must sign the Recipient’s Funding Certification and Agreement for the Emergency Financial Aid Grants to Students under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to receive funds.


• Key Components of Recipient’s Funding Certification and Agreement• The funds are for expenses related to the disruption of campus operations due to

coronavirus (including eligible expenses under a student' cost of attendance such as food, housing, course materials, technology, health care and child care).

• The funds should be given through direct payment and are for the sole and exclusive purpose of providing emergency financial aid grants to students for their expenses related to the disruption of campus operations due to coronavirus, such as food, housing, course materials, technology, health care and child-care expenses.

• The College shall not use the advanced funds to reimburse itself for any costs or expenses, including but not limited to any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or any refunds or other benefits that Recipient previously issued to students.

• The College has the discretion to determine the amount of each individual emergency financial aid grant consistent with all applicable laws including non-discrimination laws and must use these funds within one year from the date of the Certification and Agreement.

• The Secretary does not consider these individual emergency financial aid grants to constitute Federal financial aid under Title IV of the HEA.

• The College must report to the Secretary 30 days from date of this Certification & every 45 days thereafter


• Students must meet the Title IV eligibility criteria in Section 484 of the HEA.• Be enrolled or accepted for enrollment in a degree, certificate or other recognized

educational credential.• Not be enrolled in elementary or secondary school and have a high school diploma or its

recognized equivalent.• Be making satisfactory academic progress.• Not owe an overpayment on Title IV grants or be in default on a Title IV loan.• File "as part of the original financial aid application process" a certification that includes

a statement of educational purpose and the student's Social Security Number (SSN).• Be a U.S. citizen or national, permanent resident, or other eligible noncitizen.• Have returned fraudulently obtained Title IV funds, if convicted of or pled guilty or no

contest to charges.• Not have fraudulently received Title IV loans in excess of annual or aggregate limits.• Have repaid Title IV loan amounts in excess of annual or aggregate limits, if obtained

inadvertently.• Have Selective Service registration verified.• Have a valid SSN, except for residents of the Federated States of Micronesia, Republic

of the Marshall Islands, or the Republic of Palau.• Not have a federal or state conviction for drug possession or sale, with certain time

limitations.


• Based on interim final rules issued in June, students must be enrolled or accepted for enrollment in an aid eligible degree, certificate, or other recognized educational credential.

• Students who were enrolled exclusively in an online program on March 13, 2020 are not eligible for emergency grant funds.

• Interim final rules do not address students who withdrew or graduated.

• 2019-20 or 2020-21 FAFSA can be used to determine if student meets eligibility requirements.

• Students who choose not to fill out a FAFSA but otherwise meet the Title IV eligibility criteria may verify their eligibility by completing an application designed by the institution in which the student attests under the penalty of perjury to meeting the requirements of Section 484 of the HEA.


• Reporting requirements issued on May 6 to provide the following data within 30 days from when the institution received its allocation for emergency financial aid grants to students. The data must appear on the institution’s Website in a format and location that is easily accessible to the public and must be updated every 45 days thereafter.

CARES Act – Student AidReporting Requirements

• An acknowledgement that the institution signed and returned to the Department the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds received under Section 18004(a)(1) of the CARES Act to provide Emergency Financial Aid Grants to students.

• The total amount of funds that the institution will receive or has received from the Department pursuant to the institution’s Certification and Agreement [for] Emergency Financial Aid Grants to Students.

• The total amount of Emergency Financial Aid Grants distributed to students under Section 18004(a)(1) of the CARES Act as of the date of submission (i.e., as of the 30-day Report and every 45 days thereafter).

• The estimated total number of students at the institution eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965 and thus eligible to receive Emergency Financial Aid Grants to students under Section 18004(a)(1) of the CARES Act.

• The total number of students who have received an Emergency Financial Aid Grant to students under Section 18004(a)(1) of the CARES Act.

• The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under Section 18004(a)(1) of the CARES Act.

• Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants.

CARES Act HEERF – Institutional Aid

• Eligibility• Department of Education used funding formula and provided institutions

of higher learning the amount of HEERF Student and Institutional award amount.

• Required signature and submission of Certification and Agreement Form to DOE.


• Allowable Expenses:• Tuition and Fees

• Reimbursement to institution for tuition and fee refunds necessitate by the transition to virtual and/or cancellation of classes.

• Reimbursement to institutions for tuition and fee waiver provided to students to retake the same class in a future semester.

• Reimbursement to institutions for room and board as a result of significant changes to the delivery of instruction.

• Student Support• Additional student aid under the Student CARES Act monies.• Reimbursement for costs incurred for hardware, software, or internet

connectivity purchased on behalf of students or provided to students.• Expansion of remote learning programs including the cost to build additional IT

capacity to support those programs and training of faculty and staff to operate effectively in a remote learning environment.


• Allowable Expenses (cont.):• Institutional Costs

• Costs associated with the significant changes to the delivery of instruction. This is defined by NACUBO as, a clear nexus to instruction delivery changes due to the coronavirus. This may include:• Cost of salaries and benefits incurred for academic areas to switch F2F courses to

virtual including instructor time paid for transition of materials and curriculum, program meetings and planning, etc. *Note: This area has the least guidance and clear direction and allowability may be still be questioned.

• Costs incurred by Information Technology to provide instructors with the appropriate technology to teach in a remote environment. Items such as hotspots/jetpacks, internet access, laptops, etc.

• Costs of salaries and benefits to keep employees on payroll that were unable to work as a result of COVID-19. If an Institution of Higher Education receives a grant under the Fund, then the Institution of Higher Education “shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to coronavirus.”


• Reporting Requirement – (No additional guidance on the mechanism to report such information has been provided to date).

• Not later than 10 days after the end of each calendar quarter, each covered recipient shall submit to the agency and the Committee a report that contains—• (A) the total amount of large covered funds received from the agency; • (B) the amount of large covered funds received that were expended or obligated for

each project or activity; • (C) a detailed list of all projects or activities for which large covered funds were

expended or obligated, including—• (i) the name of the project or activity; • (ii) a description of the project or activity; and • (iii) the estimated number of jobs created or retained by the project or activity, where

applicable; and • (D) detailed information on any level of subcontracts or subgrants awarded by the

covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note) allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.


• Guidance• Department of Education - https://www.ed.gov/coronavirus?src=feature• NACUBO -

CARES Act Treasury – Coronavirus Relief Fund

• Eligibility• State Legislature used the CARES Act funding to fill the 11% cut in State

Appropriations all Community Colleges received. • There will be an application for the replacement funding. The State is

anticipating that it will be released some time later this week.• Payments are planned to be made to Community Colleges with the normal

State Aid payment in August.


• Allowable Expenses:• Necessary Expenditures Incurred Due to the Public Health Emergency

• Expenditures must be used for actions taken to respond to the public health emergency. These may include expenditures incurred to allow the State, territorial, local, or Tribal 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 due to COVID-19 related business closures. It does not appear that CCs will have this type of expense.

• Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments. Lost revenue from State Appropriations or declined enrollment is not allowable.

• The statute also specifies that expenditures using Fund payments must be “necessary.” The Department of the Treasury understands this term broadly to mean that the expenditure is reasonably necessary for its intended use in the reasonable judgment of the government officials responsible for spending Fund payments.


• Allowable Expenses (cont.):• Costs Not Accounted for in the Budget Most Recently Approved as of March

27, 2020• A cost meets this requirement if either

• (a) the cost cannot lawfully be funded using a line item allotment, or allocation within that budget, or

• (b) the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation.

• The most recently approved budget refers to the enacted budget for the relevant fiscal peiod for the particular government. This would be the budget in place for CCs Fiscal 2019-20 ending June 30, 2020.

• Costs Incurred During the Period that Begins on March 1, 2020 and ends on December 30, 2020• Payments from the Fund may only be used to cover costs that were incurred

during the period that begins on March 1, 2020, and ends on December 30, 2020 (the “covered period”).


• Nonexclusive examples of eligible expenditures Eligible expenditures include, but are not limited to, payment for: 1. Medical expenses (most CCs would not have these)2. Public health expenses such as:

• Expenses for communication and enforcement by State, territorial, local, and Tribal governments of public health orders related to COVID-19. • Expenses for acquisition and distribution of medical and protective supplies, including sanitizing products and personal protective equipment, for

police officers and other public health or safety workers in connection with the COVID-19 public health emergency.• Expenses for disinfection of public areas and other facilities, • Expenses for technical assistance to local authorities or other entities on mitigation of COVID-19-related threats to public health and safety.

3. Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID19 public health emergency.

4. Expenses of actions to facilitate compliance with COVID-19-related public health measures, such as: • Expenses to facilitate distance learning, including technological improvements, in connection with school closings to enable compliance with COVID-

19 precautions.• Expenses to improve telework capabilities for public employees to enable compliance with COVID-19 public health precautions.• Expenses of providing paid sick and paid family and medical leave to public employees to enable compliance with COVID-19 public health

precautions. 5. Unemployment insurance costs related to the COVID-19 public health emergency if such costs will not be reimbursed by the

federal government pursuant to the CARES Act or otherwise. 6. Any other COVID-19-related expenses reasonably necessary to the function of government that satisfy the Fund’s eligibility

criteria.


Nonexclusive examples of ineligible expenditures. The following is a list of examples of costs that would not be eligible expenditures of payments from the Fund. 1. Expenses for the State share of Medicaid. 2. Damages covered by insurance. 3. Payroll or benefits expenses for employees whose work duties are not substantially

dedicated to mitigating or responding to the COVID-19 public health emergency. 4. Expenses that have been or will be reimbursed under any federal program, such as the

reimbursement by the federal government pursuant to the CARES Act of contributions by States to State unemployment funds.

5. Reimbursement to donors for donated items or services.6. Workforce bonuses other than hazard pay or overtime.7. Severance pay.8. Legal settlements.


• Items of note in the FAQ:• How does a government determine whether payroll expenses for a given

employee satisfy the “substantially dedicated” condition? • The Fund is designed to provide ready funding to address unforeseen financial

needs and risks created by the COVID-19 public health emergency. For this reason, and as a matter of administrative convenience in light of the emergency nature of this program, a State, territorial, local, or Tribal government may presume that payroll costs for public health and public safety employees are payments for services substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the chief executive (or equivalent) of the relevant government determines that specific circumstances indicate otherwise.


• Items of note in the FAQ (cont):• The Guidance says that a cost was not accounted for in the most recently

approved budget if the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation. What would qualify as a “substantially different use” for purposes of the Fund eligibility?• Costs incurred for a “substantially different use” include, but are not necessarily

limited to, costs of personnel and services that were budgeted for in the most recently approved budget but which, due entirely to the COVID-19 public health emergency, have been diverted to substantially different functions. This would include, for example, the costs of redeploying corrections facility staff to enable compliance with COVID-19 public health precautions through work such as enhanced sanitation or enforcing social distancing measures; the costs of redeploying police to support management and enforcement of stay-at-home orders; or the costs of diverting educational support staff or faculty to develop online learning capabilities, such as through providing information technology support that is not part of the staff or faculty’s ordinary responsibilities.

Note that a public function does not become a “substantially different use” merely because it is provided from a different location or through a different manner. For example, although developing online instruction capabilities may be a substantially different use of funds, online instruction itself is not a substantially different use of public funds than classroom instruction.


• Items of note in the FAQ:• Are recipients permitted to use Fund payments to pay for unemployment

insurance costs incurred by the recipient as an employer? • Yes, Fund payments may be used for unemployment insurance costs incurred by

the recipient as an employer (for example, as a reimbursing employer) related to the COVID-19 public health emergency if such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.

• May Fund payments be used to cover increased administrative leave costs of public employees who could not telework in the event of a stay at home order or a case of COVID-19 in the workplace? • The statute requires that payments be used only to cover costs that were not

accounted for in the budget most recently approved as of March 27, 2020. As stated in the Guidance, a cost meets this requirement if either (a) the cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation. If the cost of an employee was allocated to administrative leave to a greater extent than was expected, the cost of such administrative leave may be covered using payments from the Fund.


• Reporting Requirement –At this point, reporting requirements to the State are not known and are expected when the State releases compliance and guidance documents schedule for release some time this week.


• Guidance• Guidance and FAQ’s published by the US Treasury. The State is working on

compliance and guidance documents and targeting this week for publishing them. • https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-

Guidance-for-State-Territorial-Local-and-Tribal-Governments.pdf• https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-

Frequently-Asked-Questions.pdf

• **SIDE NOTE** The state is hearing that DC legislators currently negotiating for the next CARES stimulus package are working on including relaxation measures on many of the regulations and timelines prescribed in the current CARES packages. They anticipate any decision on the relaxation of restrictions to occur mid to late August.

?QUESTIONS?

cares act funding - internal lcc

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