CARES Act – Higher Education Emergency Relief Fund (HEERF) I FAQs

Institutions can use unspent institutional HEERF I funds, as of December 27, 2020 (enactment date of CRRSAA), under the expanded and allowable uses of HEERF II.

1. What are the various allocations funded through CARES Act HEERF?

The CARES Act provided the following allocations under HEERF. See the US Department of Education (USDE) webpage for more details.

 HEERF by Allocation Type
USDE Effective Date  Allocations Type  Opportunity Number  CDFA  CARES ACT SECTION  Certification of Agreement Deadlines 
 4/9/2020 Student Aid  ED-GRANTS-041020-003  CFDA:84:425E  18004(a)(1)  9/30/2020
 4/21/2020 Institutional Portion  ED-GRANTS-042120-004  CFDA:84:425F  18004(a)(1)  9/30/2020
 4/30/2020 HBCU  ED-GRANTS-043020-001  CFDA:84:425J  18004(a)(2)  9/30/2020
 4/30/2020 TCCU  ED-GRANTS-043020-002  CFDA:84:425K  18004(a)(2)  9/30/2020
 4/30/2020 MSI  ED-GRANTS-043020-003  CFDA:84:425L  18004(a)(2)  9/30/2020
 4/30/2020 SIP  ED-GRANTS-043020-004  CFDA:84:425M  18004(a)(2)  9/30/2020
 4/30/2020 FIPSE  ED-GRANTS-043020-005  CFDA:84:425N  18004(a)(3)  9/30/2020
 8/19/2020 IREPO  ED-GRANTS-082120-001  CFDA:84:425P  18004(a)(3)  10/10/2020

2. Do I have to submit a separate Certification of Agreement for each type of allocation?

Yes. Each allocation listed above must have a separate certification of agreement because each provides distinct uses for the funds and reference the applicable sections of the CARES Act. In addition, each allocation type has a specific opportunity number and corresponding CFDA number. These two corresponding numbers are required in G5 to receive and drawdown the appropriate funds.

3. What are the reporting requirements for the Student Aid portion of the HEERF allocations?

HEERF Quarterly and Annual reports are required. There are several elements which are required to be reported each quarter on your institutions website for the CARES Act HEERF student portions, institutional, HBCU, TCCU, MSI, and SIP. For more information and details on what should be reported, please see the USDOE’s Reporting and Data Collections webpage. 

4. What data are institutions required to report for Institutional and Other HEERF (HBCU, TCCU, MSI, SIP, FIPSE, and IREPO?

The USDOE developed “Budget and Expenditure” form for quarterly reporting of HEERF Institutional, MSI, and SIP expenditures. See USDOE’s Reporting and Data Collections webpage for the form, which should be filled out and linked to your main website, similar to the student portion reported information.  

5. Will the HEERF allocations be audited by the federal government?

Yes. The HEERF allocations are subject to the federal single audit (district’s annual audit).

6. Are COVID-19 Expenditures Exempt from 50% Law?

Yes. Trailer Bill AB 94 – Postsecondary Education Trailer Bill exempts COVID-19 Expenditures from the 50% law and requires a community college district to exclude from that computation any expenditures incurred by that district during a state or local declared emergency related to the COVID-19 pandemic that are not otherwise normal expenditures that would have been incurred by that district. The exemption is in effect through July 1, 2021.

7. Are CARES Act emergency financial aid grants (under section 3504, 18004, or 18008) to Students required to be included as gross income and taxable?

No. Emergency financial aid grants under the CARES Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, such as unexpected expenses for food, housing, course materials, technology, health care, or childcare, are qualified disaster relief payments under section 139 of the Internal Revenue Code. This grant is not includible in your gross income.

See the IRS FAQs page for more details https://www.irs.gov/newsroom/faqs-higher-education-emergency-relief-fund-and-emergency-financial-aid-grants-under-the-cares-act

8. How did the Federal Government determine the total amount of CARES Act funding each college would receive?

The CARES Act stipulates a funding formula to divide these funds among institutions. The formula has two distinct parts:

  • 75% of the funds will be awarded based on the institution’s fulltime in-person Pell grant recipients as a share of the national total.
  • 25% of the funds will be awarded based on the institution’s fulltime in-person enrollment who are not Pell Grant recipients as a share of the national total. 

The CARES Act then divides the Formula Funds into two categories based on conditions for their use:

Emergency Student Financial Aid

At least 50% of funds must go to emergency financial aid for students. Also referred to as the Advanced Funds, Emergency Financial Aid Grants to Students, Section 18004 Student Funds, or CARES Act Student Aid Funds)

Institutional Funds 

The remaining balance can be used at the institution’s discretion to cover costs associated with the interruption of instruction and significant changes to the delivery of instruction due to the coronavirus. Institutions may also use the funds to make additional emergency financial aid grants to students, provided that such emergency financial aid grants are for expenses related to the disruption of campus operations due to coronavirus. (Also referred to as Recipient’s Institutional Costs Funds, Institutional Portion of the Higher Education Emergency Relief Fund, and Section 18004 Institutional Funds).

9. How can Emergency Student Financial Aid funds be used?  

On October 14,  2020, the U.S. Department of Education (USDE ) issued a HEERF FAQ Rollup document which combines several other guiding documents and provides further guidance and clarification on the emergency student aid funds.

 

At least 50% of the funds each institution receives must go towards emergency student financial aid for expenses related to the disruption of campus operations due to coronavirus, including eligible expenses under a student’s cost of attendance (e.g., food, housing, course materials, technology, healthcare, and child care).

 

The U.S. Department of Education guidelines for emergency CARES Act grants that stipulates:

 

  • The funds can only be used to provide direct grant assistance to students 
  • Colleges must make these funds available to students as soon as possible
  • Institutions cannot use these funds to reimburse themselves on any incurred costs or expense, including refunds or aid previously issued to students
  • Institutions cannot use these funds to pay outstanding or overdue student bills to institutions
  • Institutions have discretion over how to award aid with a few provided guidelines instead of mandates 
    • Institutions should prioritize students with the greatest need and factor in student socioeconomic status
    • Institutions can elect to award aid to all their students aid or award aid only to those who have demonstrated need
    • USDE recommends, but does not require, using the maximum Federal Pell grant (for the 2019-2020 academic year, $6,195) as the maximum amount of aid awarded to each student 
  • Financial aid administrators should exercise “professional judgement” on a case-by-case basis to exclude this emergency aid from a student’s cost of attendance 
  • Emergency aid will not be counted as Title IV financial aid 
  • Students exclusively enrolled in online programs before March 13th are not eligible

10. How can Institutional Funds be used?  

On October 14, 2020, the U.S. Department of Education (USDE) provided a HEERF FAQ rollup document on Institutional Fund uses. This document combines several guidelines and conditions that apply to the institutional use allocation:

  • Institutions need to have first signed the student aid funding certificate to access these funds
  • Should institutions choose, they can convert their institutional use funds to provide additional emergency financial aid to students under the same rules as the already issued agreement
  • USDE urges institutions, especially well-resourced schools and universities with substantial endowments, to “devote the maximum amount of funds possible to emergency financial aid grants to students, including some or all of the funds earmarked for Recipient’s Institutional Costs” (Section 3 of the Funding Agreement)
  • Institutions may not use these funds to provide emergency grants to students who were enrolled exclusively in online or distance education programs prior to March 13th
  • Institutions have reasonable discretion on how they use the money as long as they can demonstrate a valid connection between the eligible expense and “significant changes to the delivery of instruction due to the coronavirus” (Section 4 (b) of the Funding Agreement)
  • Institutions can use the funds to reimburse themselves for student refunds (e.g., room and board, tuition, and other fees) or technology (e.g., laptops, hotspots) they purchased for students, if done so on or after March 13th
  • Institutions cannot use the funds for executive salaries or benefits or for the provision of pre-enrollment recruitment activities such as marketing and advertising
  • NEW DIRECTION – Loss of Revenue: Institutions cannot use the funds to defray losses of revenue.
  • Institutions that accept funds are required to continue to pay employees and contractors to the greatest extent practicable based on the unique financial circumstances at each institution will need to submit quarterly reports to USDE to demonstrate that they used the funds for qualified purposes and to account for how much of the funds were used to reimburse refunds
  • Institutions should spend the funds within one year of the date of the certificate of agreement.

11. What is the deadline (project period or period of performance) for institutions to spend HEERF funds received under the CARES Act? 

All institutions were given 1 calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant.1 Therefore, for example, if a grantee received a GAN on April 7, 2020, the one calendar year period of performance for their HEERF grant would be through April 6, 2021. Please note that after the end of the year-long period of performance, grantees have an additional 90 calendar days to liquidate their obligations made during their year-long period of performance as part of the grant closeout procedures (2 CFR § 200.343(b)).

12. Is it possible for institutions to request an extension of time to expend HEERF funds?

The Department understands that some grantees, even given the emergency nature of the HEERF grant, may be unable to obligate funds by this time. Consequently, no-cost extensions (NCEs) of up to 12 months are available as provided for in 2 CFR § 200.308(d)(2). NCEs may not be exercised merely for the purpose of using unobligated balances. Given the emergency nature of HEERF grants, the Department does not intend an NCE to extend longer than 12 months. HEERF grantees are encouraged to discuss any need for an NCE with their respective program officer well in advance of the end of their grant period of performance.

 


HEERF II General FAQs

1. Is the HEERF II funding new funding or does this allocation also include the CARES Act HEERF I funding?

The Higher Education Emergency Relief Fund II (HEERF II) is authorized by the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), Public Law 116-260, signed into law by President Donald J. Trump on Dec. 27, 2020. This funding is an additional amount of funding to the HEERF I funds authorized on March 27, 2020.

2. When can we expect to receive HEERF II funds?

The funds became available January 14, 2021; the day the US Department of Education (USDOE) announced and posted the information on their website. 

3. Why does the initial Federal Grant Award Notice have the prior budget dates? 

The USDOE will reissue GANs. The initial GANs have the wrong budget term. 

4. What is the deadline (project period or period of performance) for institutions to spend HEERF funds received under the CARES Act?

The HEERF II require funds be spent within one-year. For HEERF I, the start date is based on the certification and agreement date, and the HEERF II start date is based on the GAN date. All institutions were given 1 calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant.1 Therefore, for example, if a grantee received a GAN on April 7, 2020, the one calendar year period of performance for their HEERF grant would be through April 6, 2021. Please note that after the end of the year-long period of performance, grantees have an additional 90 calendar days to liquidate their obligations made during their year-long period of performance as part of the grant closeout procedures (2 CFR § 200.343(b)).

HEERF II Student Portion FAQs

5. What amount of HEERF II funds must my institution devote to financial aid grants to students?

The CRRSAA requires that institutions receiving HEERF II funding provide the “same amount” of funding in financial aid grants to students that it was required to provide under its original Student Aid Portion (CFDA 84.425E) allocation amount, as listed on the CARES Act Section18004(a)(1) allocation table (HEERF II). See the allocation columns in green for your respective allocation amounts.

HEERF II Institutional Portion FAQs

6. How has the use of funds changed for institutional uses? 

Institutions have expanded flexibility in their use of supplemental Institutional Portion funds (CFDA 84.425F). Under section 18004(c) of the CARES Act, institutions were required to use their Institutional Portion awards to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or for additional emergency financial aid grants, subject to certain limitations. 

In contrast, allowable uses under the CRRSAA for Institutional Portion awards include: 

  • Defraying expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll); 
  • Carrying out student support activities authorized by the Higher Education Act of 1965, as amended (HEA), that address needs related to coronavirus; and 
  • Making additional financial aid grants to students (as described in Question 8). 

Similar to what was required for Institutional Portion awards under Section 18004 of the CARES Act and the Department’s Certification and Agreement for those funds, under section 314(d)(3) of the CRRSAA, no supplemental Institutional Portion awards or new Institutional Portion awards may be used to fund contractors for the provision of pre-enrollment recruitment activities; marketing or recruitment; endowments; capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship; senior administrator or executive salaries, benefits, bonuses, contracts, incentives; stock buybacks, shareholder dividends, capital distributions, and stock options; or any other cash or other benefit for a senior administrator or executive.

7. Can institutions charge indirect costs against the HEERF I institutional portion?

It depends. If institutions have remaining HEERF I funds, as of 12/27/2020, those funds can cover indirect cost at the federally approved indirect cost rate, or at the 10 percent di minimus, if an institutions does not have a federally approved indirect cost rate. 

8. Can institutions charge HEERF I Institutional portion for lost revenues?

It depends. If institutions have remaining HEERF I funds, as of 12/27/2020, those funds can cover lost revenues.

General Information and FAQs

Per new direction from the U.S. Department of Education, issued on March 22, 2021, the HEERF I/II/III expenditures do not have to be directly related to changes in the delivery of instruction. The notification states that the HEERF funds may be used more broadly to defray the following costs:

  • Defraying expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll); 
  • Carrying out student support activities authorized by the Higher Education Act of 1965, as amended (HEA), that address needs related to coronavirus; and
  • Making additional financial aid grants to students.

As a general guidance, to support institutional decisions on allowable expenditures and identifying students with exceptional need, each district or institution should document internal policies on interpretations of the various USDE guidance and FAQs, at any point in time, and maintain for audit purposes. 

Note: Please continue to discuss and obtain guidance from your legal counsel and auditors on all HEERF questions.

1. What is the allowable time-period for which institutions may charge costs and lost revenue to the HEERF grant?

On March 22, 2021, the U.S. Department of Education (USDE) issued a notice that all HEERF grants can cover COVID-19 related costs and lost revenues, as of March 13, 2020 onward.

 2. What students qualify to receive HEERF Emergency Financial Aid Grants? (See Legal Advisory 2020-07 and ML Update on Student eligibility for HEERF II and III)

Based on our court injunction, all students are eligible to receive HEERF Emergency Financial Aid Grants; however, for HEERF II, the USDE requires that institutions prioritize students with exceptional need and maintain documentation of determination.

Student Outstanding Account Balances (See Updated FAQs for HEERF II, Question #8)

3. Can institutions use the HEERF grants to satisfy a student’s outstanding account balance?

Students may consent to apply their HEERF financial aid grant or a portion thereof, to pay off their student accounts, if desired; however, the institution must retain the student’s written or electronic consent and ensure student’s discretion to determine what costs should be covered with his or her financial aid grant funds.

HEERF II and III can also cover lost revenues associated with the COVID-19, such as enrollment fees and charges (including unpaid student accounts receivable or other student account debts). 

Payroll

4. What payroll costs can HEERF grants cover? (See Updated FAQs for HEERF II, Question #25)

Payroll and benefit costs associated with Coronavirus if (1) such costs are newly associated with coronavirus; and (2) costs incurred on or after March 13, 2020. This includes covering the costs of salaries and benefits for employees in dining halls and dorms who did not receive salaries and benefits from student housing fees due to COVID-19, disrupting campus operations. 

Lost Revenues (See USDE Lost Revenue FAQs

5. What is Lost Revenue?

Lost revenue refers to revenues an institution expected to receive but reduced or eliminated due to COVID-19. As such, lost revenue estimates are acceptable.

6. When may an institutions charge lost revenue to its HEERF grant award?

An institution may charge lost revenue to its grant at the end of the period that it is using to estimate lost revenue. If using the fiscal year period, then at the end of that period.

7. What are potential sources of lost revenue that may or may not be reimbursable under the HEERF grant programs?

Reimbursable Sources of Lost Revenue for Academic Sources REIMBURSABLE SOURCES OF LOST REVENUE FOR Auxiliary Services SOURCES Non-reimbursable Sources of Lost Revenue 
  • Enrollment (Tuition), fees, and institutional charges (including unpaid student accounts receivable or other student account debts)
  • Room and board
  • Enrollment declines, including reduced tuition, fees, and institutional charges
  • Supported research 
  • Summer terms and camps

 

  • Cancelled ancillary events
  • Disruption of food service
  • Dormitory services
  • Childcare services
  • Use of facilities or venues, including external events such as weddings, receptions, or conferences
  • Bookstore revenue
  • Parking revenue
  • Lease revenue
  • Royalties
  • Other operating revenue

 

  • Capital outlays associated with facilities related to athletics (including fees assessed for capital athletic facility construction)
  • Acquisition of real property (including bond revenue)
  • Contributions or donations to the institution
  • Marketing or recruitment activities
  • Revenue related to sectarian instruction or religious worship
  • Alcohol sales
  • Investment income (including endowment and quasi-endowment revenue)

8. How may an institution calculate its estimated lost revenue? (See table on page 6 and Question 9)

The CRRSAA does not specify how institutions may calculate their lost revenue. Accordingly, institutions have flexibility to calculate a reasonable estimated lost revenue. For example, an institution may use a year-over-year comparison using the prior year or a comparison using 3- or 5- year combined average as baseline revenue.

9. How will the effects of HEERF be reflected in SEFA and what year? (See Question 8)

HEERF II expenditures and lost revenue charged in fiscal year 2021 should be in the fiscal year 2021 SEFA because the award permitting the estimated lost revenue and expenses back to March 13, 2020, did not occur until fiscal year 2021.

Reimbursement of Indirect Costs (See USDE HEERF II FAQs #8)

An indirect cost rate allows an institution to recover a portion of administrative costs incurred to implement the federal grant programs. This rate is specified in an institution’s negotiated indirect cost rate agreement. If an institution does not have a current negotiated rate with its cognizant agency, for indirect costs, it may appropriately charge the de minimis rate of 10% percent of Modified Total Direct Costs (MTDC). If an institution has or had a negotiated rate, they cannot use the 10% de minimus. 

10. Can an institution claim indirect costs to the HEERF grants?

Yes, The HEERF II and III grants allow institutions to claim indirect costs and a reasonable amount of administrative costs.

11. Is there any guidance available for charging indirect costs to HEERF grants?

  1. If your district has a federally approved negotiated rate, you need to use the base (salary and wage or MTDC) in your agreement for indirect costs.
  2. If your district does not have a federally approved negotiated rate, use can use the 10% de minimus, which is based on the MTDC method (2 CFR 200.68) for indirect costs. (See example below).

a) Identify budgeted indirect costs allowable for inclusion or exclusion:

Indirect Expenses that qualify for inclusion    Indirect Expenses that are excluded  

  • Equipment
  • Capital expenditures
  • Rental costs (i.e., real property)
  • Tuition remission
  • Scholarships & fellowships
  • Participants support
  • Portion of subawards & subcontracts in excess of $25,000
  • Equipment
  • Capital expenditures
  • Rental costs (i.e., real property)
  • Tuition remission
  • Scholarships & fellowships
  • Participants support
  • Portion of subawards & subcontracts in excess of $25,000

b) Calculate total cost: Allowable indirect x 10% de minimis + total direct. 

Expense Category Annual Expense  Amount of Indirect (10%) 
Total Personnel  $190,000  $19,000
Fringe @ 20%  $38,000  $3,800
Travel  $10,000  $1,000
Supplies  $15,000  $1,500
Contractual1  -  -
 Project Evaluator  $30,000 $2,500
 Website Design  $75,000  $2,500
 Communications Materials  $10,000  $1,000
Total Contractual  $115,000  $6,000
Other  $1,000  $100
Total Direct  $369,000  -
Indirect (10%)  $31,400  $31,400
Total Costs  $400,400  -

Expenses must be charged consistently

  • Direct or indirect, but may not be charged as both
  • De minimis rate must be used for all federal awards
  • De minimis rate can be used indefinitely or until a negotiated rate is established.
1. Contract line items are maxed at $25,000 x 10%, not total contractual cost. 

HEERF Quarterly Reporting Requirements for CARES Act section 18004(a)(1) Institutional Share, (a)(2), and (a)(3) awards

Community College Districts are required to report on the CARES act funds for section 18004(a)(1) Institutional Share, (a)(2), and (a)(3) awards each quarter. Institutions are required to publicly post the first reports on their website by October 30, 2020, covering the period from the date of the first HEERF grant award through September 30, 2020. A draft of the Quarterly Budget and Expenditure Reporting form and instructions and the below HEERF Reporting Requirement table are available for further details on the U.S. Department of Educations (USDE) webpage.

The following FAQs were prepared to help understand the reporting requirements:

  1. Who is required to report on the HEERF expenditures?

    All HEERF grantees that received a Section 18004(a)(1), (a)(2) or (a)(3) award.

  2. What do I do if I have expended all my HEERF grant funds?

For student portion, indicate on the main webpage that the report is final and covers all remaining HEERF fund expenditures. For institutional portion, check the box on the form that it is the "final report" that covers all remaining HEERF fund expenditures. All institutions that received any HEERF award will still have to submit an annual report in early 2021 to the Department regardless if at that time they still have HEERF funds or not.

 

 HEERF Reporting Requirement Table
Reporting Requirement Method of Reporting   Due Dates  Report Frequency Substance of Report 
Section 18004(a)(1) Student Portion Public Reporting Publicly post on institution’s primary website   Update no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) Quarterly, (October 10, January 10, April 10, July 10). Information specified in our May 6, 2020 Electronic Announcement, which was updated in a Federal Register notice published on August 31, 2020.
Section 18004(a)(1) Institutional Portion, (a)(2), and (a)(3) Public Reporting Publicly post on institution’s primary website, where student portion is reported  First report due October 30, 2020 covering the period from first award through September 30, 2020. Quarterly, (January 10, April 10, July 10, October 10). Not yet finalized, but please see our draft form available here. See also our Federal Register notice here inviting public comment on the form.
Annual Reporting  Report submitted to the Department via a portal system currently in development. Intended first annual report due in early 2021. Yearly. Submission is required of all HEERF grantees.  Not yet finalized, but draft form is in public comment period. See our Federal Register Notice here and Form and Instructions and Supporting Statement here.

On Monday, March 8, the US Department of Education issued a HEERF Audit Letter which provides an overview of the Higher Education Emergency Relief Fund (HEERF) grant program auditing requirements. This letter applies to HEERF grant funds provided under the CARES Act (HEERF I), the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) (HEERF II), and any HEERF grant funds that may be provided under the American Rescue Plan (ARP) (HEERF III).

 

Recipients of the CARES Act should report the following elements on their main webpage every quarter:

(1) 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.

(2) 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.

(3) 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 initial report and every calendar quarter thereafter).

(4) 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.[1]

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

(6) 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.

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

Footnotes
1. For the purposes of this report, institutions may determine the number of eligible students based on the number of students for whom the institution has received an Institutional Student Information Record (ISIR) plus the number of students who completed an alternative application form developed by the institution for this purpose. The institution may then apply this number to its own methodological framework for disbursal of funds to produce a final total of eligible students at the institution. The institution is not asked to make assumptions about the potential eligibility of students for whom the institution has not received an ISIR or an alternative application.
 

CARES Act Sec 18004(a)(1) Funds Accounting Guidance

Audit Requirements and Allowable Uses
CARES Act funds are subject to audit. Districts must be able to provide reports to demonstrate that funds were used for allowable purposes. Expenditures of CARES Act funds will be included in the districts’ audit reports on the Schedule of Expenditures of Federal Awards (SEFA) using CFDA number 84:425E.

The disbursement provided for by Sec. 18004(a)(1) of the CARES Act requires that, of the amount allocated to each institution, no less than 50 percent must be used to provide students with emergency financial aid grants to help cover expenses related to the disruption of campus operations due to coronavirus.  The remaining 50 percent of funds may be used to cover any costs associated with converting courses to distance education.

Institutions may use the funds to provide student refunds and reimburse themselves for costs, on or after March 13, 2020, the date of the President’s Proclamation, resulting from significant changes to the delivery of instruction, including interruption in instruction, due to the coronavirus, including:

  • Recipient’s institutional costs to provide refunds for room and board, tuition, other fees
  • To make additional emergency financial aid grants to students for food, housing, course materials, technology, health care, and child care
  • To award scholarships to provide payment for future academic terms
  • Purchase equipment or software, pay for online licensing fees, or pay for internet service to enable students to transition to distance learning
  • Purchase computers or other equipment to donate or provide to students

Some expenditures of CARES Act funds are strictly disallowed, including payment to contractors for pre-enrollment recruitment activities; endowments; or capital outlay for athletic facilities, sectarian instruction, or religious worship.

The CARES Act also provides for the Secretary of Education to allocate an additional award or grant under Sec. 18004(a)(2) for minority serving institutions or Sec. 18004(a)(3) for smaller institutions particularly impacted by coronavirus, as determined by the Secretary.  If your college receives these funds, those additional funds may be used to defray expenses (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll). 

Additional federal guidance, including the Recipient’s Funding Certification and Agreement and a CARES Act Frequently Asked Questions about the Emergency Financial Aid Grants to Students, is available on the U.S. Department of Education’s CARES Act webpage.  

Accounting Requirements for CARES Act Funds
CARES Act Revenue:

CARES Act Expenditures:

  • Each institution may develop its own system and process for how to allocate CARES Act funds to students.
  • Funds are restricted in nature and should be accounted for separately using a unique COVID19 program code/identifier to easily pull COVID19 cost reports.
  • All expenditures should follow the existing BAM classifications. Expenditure classification is dependent on the nature of the expenditure.
  • Direct aid to students should be accounted for in other outgo (7xxx) object code.
 

Example Journal Entry - Student Aid Portion
Each institution may determine how to account for and distribute the CARES Act funds, as long as the requirements noted above are met.  As an example, the first disbursement for direct aid to students could be recorded as follows:

  • Revenue
    • Fund Code – 74 Student Financial Aid
    • Object (Account) Code – Distinct 81xx for CARES Act funds

  • Expenditures
    • Object (Account) Code – 75xx for cash grants/aid
    • Activity (Program) Code – 7320xx Student Aid

Example Journal Entry - institutional Portion
Each institution may determine how to account for and distribute the CARES Act funds, as long as the requirements noted above are met.  As an example, COVID19 related expenditures could be recorded as follows:

  • Revenue
    • Fund Code – 12 General Fund – Restricted
    • Object (Account) Code – Distinct 81xx for CARES Act Funds
  • Expenditures
    • Object (Account) Code – 4000 Supplies and Materials
    • Activity (Program) Code – 65xx COVID19-Facilties Disinfecting

If you have any additional questions, please contact the Fiscal Standards Unit at fiscalstandards@cccco.edu or Lorena Romero, CCCCO Specialist at lromero@cccco.edu.