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Cities, Towns, Counties to Receive CARES Act Funds


May 19, 2020 by Toni Nelson
Category: Revenues , COVID-19

 Cities, Towns, Counties to Receive CARES Act Funds

Editor's note: Some information has changed since this article was originally published:

  • As of September 2, the state Department of Commerce is preparing contract amendments for the CARES Act Coronavirus Relief Fund extending the deadlines for cities, towns, and counties to incur expenses and file for reimbursement by one month. According to Tony Hanson, jurisdictions will be able to receive reimbursement for eligible expenses incurred through November 30 (previously October 31) and the final invoice must be submitted by December 15 (previously November 15).
  • On August 31, Governor Inslee announced that the total Coronavirus Relief Fund distributions to cities, towns, and counties would be increased to over $420 million, with each county receiving a minimum of $300,000 and each city/town receiving a minimum of $30,000. The Department of Commerce has released updated distribution amounts for each city, town, and county.
  • The U.S. Treasury Department has updated its Coronavirus Relief Fund Guidance for State, Territorial, Local, and Tribal Governments and Frequently Asked Questions several times.

The original blog post text is below.


The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides direct distribution to states and local government entities with populations of 500,000 or more. The State of Washington has now shared a portion of its distribution with the Washington cities and counties that fall below the 500,000-population threshold by providing a per capita distribution of $30.00, with a minimum distribution of $250,000 per county and $25,000 for cities and towns.

CARES Act Funds

These funds were made available through the U.S. Department of Housing and Urban Development (HUD) via federal legislation under Section 601(a) of the Social Security Act, as added by Sec. 5001 of the CARES Act. Here in Washington State, distribution and oversight of CARES Act funds is being managed by the state Department of Commerce (DOC). This is a rather lengthy explanation to say that these distributions are indirect federal grant funds available to local governments that will be subject to federal auditing standards of uniform guidance (2 CFR 200). More about that later.

The DOC’s Coronavirus Relief Fund (CRF) webpage was developed to help cities and counties prepare for the receipt of these funds. This webpage provides a general overview of the funds and links to the allocations projected for each eligible entity as well as two documents from the United States Department of the Treasury (US Treasury): guidance on the use of COVID-19 funds and an FAQ that details some of the eligible uses.

How do we begin the grant process?

An agency's first step will be the completion of contract documents and approval by management and the legislative body to enter into an agreement with the state DOC, which will serve as the grant award contract documents for these CARES Act monies. The DOC is sending award letters to all entities listed as eligible to receive CRF. These award letters will go directly to the mayors, city managers, and county commissioners via email on or before May 22, as well as copies to all city and county contacts on file with Association of Washington Cities (AWC) and Washington State Association of Counties (WSAC). The award email will contain three (3) attachments:

  • The DOC's working papers — soliciting key information that will help to prepare and manage the contract;  
  • A blank copy of the contract document; and
  • Program guidelines from the US Treasury.

The faster these documents are completed by your agency the quicker the DOC will be able to process your request and distribute funds for those expenditures that your entity has already incurred. Keep in mind that your entity will not be eligible to receive funds without a completed contract agreement between your entity and the DOC. Since the CARES Act award is a reimbursable grant, your district must have already paid for and/or incurred the obligation to pay in order to receive the reimbursement.

How will the funds be disbursed?

The DOC will utilize a direct deposit distribution that will require each entity to have access to Secure Access Washington (SAW). The majority of local government entities already have an account set up due to filing requirements with other state agencies such as Labor & Industries (L&I) or Employment Security Department (ESD). If you are unsure about your status with SAW, be sure to update and/or create an account. In the event that your entity does not have internet access, the DOC will work with you to develop a method of submittal and disbursement.

Once you have established the SAW account, you will additionally need to establish a statewide vendor number (SWV) through the Office of Financial Management (OFM). The direct links to establishing your SWV is available on the DOC's CRF webpage. The DOC has indicated that this process can take up to three weeks; so if you do not already have a SWV, you can start this process prior to receiving the agreement letter from the DOC in order to speed up the distribution process.

When your agency has both a SAW account and a SWV number, you will then be ready to complete and file invoice reimbursement requests through the DOC’s online invoicing process. All invoices will require a detailed breakdown of the costs incurred within each category, and the DOC will be utilizing state form A-19 for this process.

What is eligible for CARES Act reimbursement grant funds?

The US Treasury has provided two helpful tools that the DOC included on their website and we share in this blog post and on our COVID-19 Local Government Fiscal Impacts webpage. Additionally, the DOC has established a five-point eligibility cost test that they will be distributing with the award letter packet. An expense is considered eligible if you are able to answer ‘true’ to these five statements:

  • The expense is COVID related.
  • The expense is necessary.
  • The expense being submitted is not filling a shortfall in revenue that was intended to cover expenditures that would otherwise not qualify.
  • The expense is for a substantially different purpose than originally intended due to the COVID-19 pandemic.
  • The expense was not in the budget approved as of March 27, 2020.

The intent of CARES Act grant funding is to cover direct costs incurred by local governments and their communities as a result of the unprecedent circumstances associated with the COVID-19 pandemic.

While there are numerous scenarios within the US Treasury's FAQ that speak to allowed use of funds, it will be important to carefully support all expenditures that are submitted for reimbursement. For example, if public safety personnel are shifted to cover COVID-related public health and safety issues, the local government must establish a tracking method to support the time devoted to this function. The development of separate time codes or the completion of time sheets indicating time devoted to this function will be required support documentation both for the submittal of the A-19 invoice as well as the audit that will follow. The same requirements would apply to all personnel who are directly involved in the support and mitigation of the COVID-19 public health emergency.

Some additional examples of reimbursable expenses are those costs associated with an agency maintaining essential services while employees are working from home: For example, technology costs, such as software and hardware that allow entities to provide essential services and communications remotely, will be an eligible cost.

Many entities are wondering how they can support their small businesses and local residents during this crisis. Guidance in the US Treasury’s FAQ indicates that grants could be made to small business to reimburse the costs of business interruption caused by required or voluntary closures to promote social distancing measures. Additionally, the FAQ indicates that grant assistance could be an eligible expense if provided to individuals facing economic hardship to allow them to continue to receive essential services, such as utilities. In both of these examples it will be important to establish a grant application process and documentation procedures that demonstrate eligibility for CARES Act funds reimbursement.

What is the timeframe for submitting reimbursement requests?

While the CARES Act grant funds are available to the states up until December 31, 2020, Washington State’s distributions to counties, cities, and towns (subrecipients of these federal funds) will have a shorter eligibility timeline. The DOC has announced that only COVID-related expenses incurred from March 1, 2020 to October 31, 2020 are eligible for reimbursement. The frequency of submission to the DOC for reimbursement has not been limited, as of the writing of this blog post, but all agencies must submit their final request by November 15, 2020. Keeping in mind that the CARES Act monies are reimbursable grant funds, any expenses incurred after October 31, 2020 will not be eligible for reimbursement.

Are CARES Act grant funds subject to federal audit standards?

As mentioned earlier, CARES Act reimbursement monies are federal funds subject to audit under 2 CFR 200, also known as “Uniform Guidance.” The threshold in which a federal single audit must occur is $750,000. If you receive reimbursement for COVID-related expenses in excess of $750,000 or if you receive CARES Act monies coupled with other federal grant assistance dollars in excess of $750,000, you will be required to have a federal single audit. For those entities that are not familiar with the requirements of 2 CFR 200, our office wrote two blog posts that speak to the various requirements:

In closing, the CARES Act grant funds are available for all counties, cities, and towns that have incurred expenditures associated with the COVID-19 pandemic. We have all incurred costs to respond to this pandemic; Now it is important to take the time to look back on what you have expended to date, document accordingly, and look to the next five months for those programs and/or costs that may also be eligible for reimbursement (up to October 31). Documentation will be critically important, both for the submission of invoices to the DOC but additionally for the audit that will most certainly occur next year as a result of exceeding the federal single audit threshold.

MRSC can assist with your questions, but the DOC can answer specific questions about eligible expenses and the reimbursement process: Contact Tony Hanson, Deputy Assistance Director, at tony.hanson@commerce.wa.gov or (360) 725-3005.


MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

About Toni Nelson

Toni Nelson joined MRSC in 2014 as the finance consultant. She has worked in local government finance since 1990 and was previously the “Small Cities Specialist” with the State Auditor’s Office (SAO), Clerk Treasurer for the Town of Twisp, as well as an independent financial consultant working with small local government across the state. Toni's area of expertise is "Cash Basis" accounting and reporting, budgeting, and the financial responsibilities and challenges of smaller local government.

Toni is a board member of the Washington Finance Officers Association (WFOA) and longtime member of the WFOA Education committee. While with SAO, Toni wrote the Small Cities handbook and she annually prepares the MRSC - Budget Suggestions publication. Most recently Toni co-authored the comprehensive update of the Revenue Guides for WA Cities, Towns and Counties, in 2019.

Toni conducts workshops on local government financial reporting, budgeting, and the essential duties of finance staff in smaller jurisdictions, with an emphasis on cash basis accounting and the challenges of small local government.

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