Institutional Portion of the CARES Act – ED Webinar Guidance

By Michael T. Wherry, CPA | June 24, 2020

On June 23, 2020, the U.S. Department of Education’s Office of Postsecondary Education provided a technical assistance webinar related to the Higher Education Emergency Relief Funding (HEERF) provided by the Coronavirus Aid, Relief and Economic Security (CARES) Act. This webinar provided guidance to institutions which mainly focused on the institutional portion of the emergency relief funds. A brief overview occurred and then the ED officials answered a handful of questions. The purpose of the webinar, in our opinion, was to provide general guidance to institutions to supplement the Q&As already provided by ED. As a result, the ED officials involved reminded institutions of these three points:

  • The intent of the CARES Act was to provide emergency relief to students and institutions. One of the objectives of the institutional HEERF grant was to enable the retention of faculty, administrators, and staff.
  • The institutional HEERF grant is to be used to replenish sources expended as a result of the disruption caused by the coronavirus.
  • The importance to “Document, document, document” how the institutional HEERF grants utilized related to expenditures which had a nexus to the disruption caused by the coronavirus.

ED is certainly unable to provide enough specific guidance which would be able to foresee every expenditure which could possibly occur. As such, the ED officials continually reminded institutions to be sensible and ensure the funds aren’t used for the items specifically prohibited as noted in ED’s previously released guidance.

We believe the webinar was invaluable as the guidance discussed provides greater latitude of possible expenditures which, until this webinar occurred, seemed reasonable but uncertainty existed. Allowable reimbursements included personal protective equipment, technology training, learning management systems, and audio / visual technology. This reinforced the general industry consensus that these expenditures are allowable reimbursements. The most important information communicated is that expenditures such as payroll for instructors and staff, reimbursements of services not provided, and lost revenue may be allowable as long as the link is made to the disruption of education caused by the virus. The ED officials implied these all seemed to be reasonable expenditures and the onus is on the institution to make the link to the disruption.

ED didn’t indicate if any future guidance will be forthcoming. A link to the webinar can be found here.

We recommend that each institution listen to the webinar and consult with your advisors regarding the utilization of the institutional HEERF grants. We remind institutions that expenditures can only be covered by one source of relief funds and you can’t “double dip”. For example, payroll costs covered by the Paycheck Protection Program loan funds can’t be also claimed using the institutional HEERF grants. Institutions need to be cognizant of this and track funds closely especially if further stimulus funding is released.

As always, McClintock & Associates is available to provide guidance and address your questions.