Funding public health services under the Coronavirus Relief Fund (CRF)

Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, Congress established a new $150 billion CRF for states, and county and municipal governments with populations of over 500,000 people to address necessary expenditures incurred due to the COVID-19 public health emergency.

Public health agencies may use the CRF to pay for costs incurred for a “substantially different use.” This includes, but is not limited to, costs of personnel and services that were included in the public health agencies’ most recently approved budget but, due to the COVID-19 public health emergency, have been diverted to substantially different functions.

United States Treasury guidance
The United States Department of Treasury (the Treasury) provided the following examples of substantially different use:

• Redeploying corrections facility staff to enable compliance with COVID-19 public health precautions through work such as enhancing sanitation or enforcing social distancing measures 
• Redeploying police to support management and enforcement of stay-at-home orders
• Diverting educational support staff or faculty to develop online learning capabilities, e.g., providing information technology support that is not part of the staff’s or faculty’s ordinary responsibilities

The key question is how will the Treasury define “entirely”—for example, police officers do not spend their entire time managing and enforcing stay-at home orders; they also perform other policing activities. However, enforcing stay-at-home orders is entirely due to the impacts of the COVID-19 public health emergency. It can similarly be argued that redeploying public health staff to enforce health commission orders and other social distancing requirements is entirely due to the COVID-19 public health emergency. Public health agencies are now performing a wide variety of functions that they would not be performing if there was no COVID-19 public health emergency. Therefore, redeploying local public health agency staff to work on COVID-19 public health emergency related activities would represent the same substantially different use as described in the three examples provided by the Treasury.

Another CRF eligibility requirement is that the expenditures must not be accounted for in the most recently approved budget. However, the Treasury states if the expenditures meets the substantially different standard, then it meets this budget requirement as well.

The Treasury states that recipients may use CRF funds for any expenses eligible under Section 601(d) of the Social Security Act (i.e. the Coronavirus Relief Fund). CRF funds are not required to be used as sources of funding of last resort. However, recipients may not use payments from the Fund to cover expenditures for which they will receive reimbursement. Thus, we would not use CRF funds to reimburse costs that are claimed to the Children’s Health Insurance Program (CHIP) under the existing Health Services Initiatives.

The Treasury provides the following examples of expenses that are eligible for reimbursement under the CRF.

Medical expenses

• COVID-19 public health emergency related expenses of public hospitals, clinics, and similar facilities
• Expenses of establishing temporary public medical facilities and other measures to increase COVID-19 treatment capacity, including related construction costs
• Costs of providing COVID-19 testing, including serological testing

Public health expenses

• Expenses for communication and enforcement by state, territorial, local, and tribal governments of public health orders related to the COVID-19 public health emergency
• Expenses for acquisition and distribution of medical and protective supplies—including sanitizing products and personal protective equipment—for medical personnel, police officers, social workers, child protection services, child welfare officers, direct service providers for older adults and individuals with disabilities in community settings, 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 (e.g., nursing homes) in response to the COVID-19 public health emergency
• Expenses for technical assistance to local authorities or other entities on mitigation of COVID-19 related threats to public health and safety
• Expenses for public safety measures undertaken in response to the COVID-19 public health emergency

Payroll expenses

• Expenses for public safety, public health, healthcare, and human services employees, as well as similar employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency

It seems reasonable that many of the expenses that public health agencies have incurred since March 2020 would be reimbursable under the CRF. As such, public health agencies need to identify which expenditures since March 2020 are:

• Necessary expenditures incurred due to the COVID-19 public health emergency
• Not accounted for in the budget most recently approved as of March 27, 2020
• Incurred during the period that begins on March 1, 2020, and ends on December 30, 2020

Public health services and expenditures assessment 
BerryDunn can perform an assessment of the best practices your public health agency has implemented to respond to the COVID-19 public health emergency, including:

• What services public health agencies have provided in response to the public health emergency (e.g., develop, communicate, and enforce public health orders related to the COVID-19 public health emergency; provide COVID-19 testing and other related services)
• What supplies and materials public health agencies have purchased in response to the COVID-19 public health emergency (e.g., testing supplies; personal protective equipment; sanitizing products)
• What processes and procedures the public health agencies are using to identify, claim, and document costs and services eligible under the CRF 

Our team can then prepare a recommendations report that describes ways your public health agency can:

• Use CRF or other funds under the CARES Act
• Help ensure compliance with CRF eligibility and Uniform Guidance cost accounting requirements
• Help ensure costs and services are properly documented

Throughout the process, our public health experts will work with a variety of stakeholders to determine the best, most actionable recommendations for identifying, accounting for, and claiming eligible costs to appropriate federal grants under the CARES Act.