The CARES Act: Strategies and Guidance for Tribal Nations

Many tribal nations have applied for CARES Act funds due to COVID-19’s economic impacts on Indian Country. Here are some common themes, strategies, and tips to consider.

COVID Financial Management

The CARES Act: Strategies and Guidance for Tribal Nations

  • Samuel Owl
  • 6/16/2020

Key insights

  • Since the CARES Act was signed into law, there have been numerous questions from Indian Country about the allocation and allowable use of funds.
  • Tribal finance and administrative staff joined our CLA tribal services team roundtable to share their experiences, plans, programs, and questions.
  • Two rounds of Treasury FAQs fail to meet the needs of Tribal Nations exercising sovereignty in determining what is best for their citizens.
  • Since the release of this article, Treasury provided FAQ updates that loosened some of the initial restrictions on allowable expenditures. Read our latest article for more information.

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As Indian Country and the rest of the United States faced the growing pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. Since then, there have been numerous questions from tribal governments about the allocation and use of the $8 billion appropriation.

The Department of Treasury initially held consultations in coordination with the Department of Interior to obtain tribal leaders’ input from across  Indian Country. Following the consultations, the departments requested information from each tribal government that applied for assistance.

Amid lawsuits and growing pressure to disburse funds, after more than 30 days, Treasury finally released $4.8 billion. Along with round one of disbursements, Treasury provided guidance, the allocation method, and an FAQ document for the funding. Treasury later issued a second request for information, with a submission deadline that passed on June 6, 2020.

Treasury has also recently released FAQs on tribal population, after receiving criticism for its approach to the first allocation. In addition, Treasury released an update of the FAQs on the funds on May 28, 2020, that did little to recognize the distinct needs of tribal nations. The highlights of that update are below.

Treasury FAQ highlights

  • The Catalog of Federal Domestic Assistance (CFDA) number assigned to the funding is 21.019
  • Fund payments made by Treasury to tribal governments are considered federal financial assistance subject to the Single Audit Act
  • The following provisions are applicable to the fund payments:
    • Uniform Guidance
    • Code of Federal Regulations (CFR), Title 2, Section 200.303 (internal controls)
    • CFR, Title 2, Sections 200.330 through 200.332 (subrecipient monitoring and management)
    • CFR, Title 2, Part 200, Subpart F (audit requirements)

Even with the CARES Act relief and guidance provided by Treasury, tribal nations still have unmet needs and unanswered questions on funding usage. After the release of the tribal government funds and additional guidance, our CLA tribal services team held a roundtable with tribal finance and administrative staff from around Indian Country.

Common roundtable themes

Held on May 13, 2020, the roundtable provided a forum for tribes to discuss their experiences, plans, programs, and questions with others. Below you’ll find common themes and programs that emerged during our discussion.

  • Tribes, lacking a significant tax base, need a legislative fix to help cover the lost general fund revenue that is normally used to provide services to the community.
  • Many tribes and their enterprises paid employees through the initial wave of the pandemic, only to see the current guidance exclude a large percentage of those employees from the funding.
  • It’s challenging for tribes to identify allowable expenses and they need clearer guidance.
  • Tribes would like the current December 31, 2020 deadline to use funds to be extended.
  • Tribes are concerned about a possible cut in 2021 appropriations.

Examples of programs and fund use plans

Here’s a list of the strategies that tribes are leveraging to address the needs of their citizens during this pandemic:

  • Purchasing personal protective equipment (PPE)
  • Purchasing thermal imaging equipment
  • Retrofitting existing facilities with protective equipment and sanitation stations
  • Preparing additional program and administrative space to allow social distancing
  • Expanding telecommunications infrastructure and purchasing computer hardware for individuals to allow telework, telehealth, and at-home education
  • Providing additional meals programs for the elderly and vulnerable
  • Developing reopening plans
  • Providing first aid kits to community members
  • Offering individual assistance based on the needs of tribal citizens
  • Levying refunds for companies with tribal business licenses
  • Extending economic assistance grants for businesses in Indian Country

Tips for fiscal oversight

Until clearer guidance is available, we believe a conservative approach is appropriate. Stick to the fundamentals for fiscal oversight with the following strategies:

  • Segregate the COVID-19 funds from other funding sources
  • Clearly identify and document the purpose of the expenditure to highlight the COVID-19 response
  • Seek clarification on allowable program costs from agency offices and program managers
  • Document the need for each expenditure
  • Refer to Treasury’s FAQs for the funds

The intent of the CARES Act is to help address and relieve the strain of COVID-19 on tribal nations and their members. With little guidance on spending, many questions arise about whether the use of certain funds qualify as eligible expenses.

When using the CARES Act funds, it’s critical to determine whether the funds are being used to provide current relief. For example, retrofitting a building with dividers and other equipment to socially distance employees would be reasonable, while the construction of a new building to create socially distant work spaces may not provide current relief, given the length of construction. There may be better alternatives that are easier to justify.

Ultimately, consult with legal counsel to provide your tribal nation guidance as it moves forward with decisions to disburse CARES Act funds. CLA will continue to monitor guidance from Treasury and will share significant updates with you

    How we can help

    Though the CARES Act has provided some relief to Indian Country, it is important for tribal nations to employ the proper strategies and institute effective oversight for use of the funds. Our CLA tribal services team can help. Get in touch if you have any questions on funding usage or additional needs.

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