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CITY COUNCIL <br />AGENDA ITEM 2C <br /> <br /> <br />STAFF ORIGINATOR: Hannah Lynch, Finance Director <br /> <br />MEETING DATE: December 14, 2020 <br /> <br />TOPIC: Coronavirus Relief Funds <br /> <br />VOTE REQUIRED: 3/5 <br /> <br /> <br />BACKGROUND <br /> <br />The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed on March 27th <br />provided over $2 trillion in federal economic relief. Section 5001 of the CARES Act <br />established the $150 billion Coronavirus Relief Fund (CRF), providing payments to State, <br />Local, and Tribal governments navigating the impact of the COVID-19 pandemic. <br /> <br />The CARES Act provided that payments from the Fund could only be used to cover costs that: <br /> <br />1. were necessary expenditures incurred due to the public health emergency with <br />respect to COVID-19; <br />2. were not accounted for in the budget most recently approved for the government; <br />and <br />3. were incurred during the period that begins on March 1, 2020, and ends on <br />November 15, 2020. <br /> <br />The Minnesota Department of Revenue distributed a share of federal aid Minnesota received <br />from the CRF to eligible local governments that applied for the aid. <br /> <br />The City applied for and received $1,608,289 of CRF aid in July. Staff spent a considerable <br />amount of time reviewing State and Federal Guidance to identify eligible expenditures and <br />understand audit and reporting requirements. Expenditures were discussed at Council work <br />sessions and large contracts were approved by resolution. <br /> <br />The City incurred expenses for the entire amount of CRF aid as of November 15, 2020. Final <br />reporting has been submitted to the state and a Final Spending Plan is attached for Council <br />approval. <br /> <br />Additional auditing procedures are required in years where total federal dollars expended <br />exceed $750,000 ("single audit"). Single audit refers to the centralization of financial reporting <br />on federal projects to one federal agency, not to each agency awarding the grants. A single <br />audit provides assurance to the federal government as to the proper management and use of <br />federal funds. <br /> <br />A single audit will be required in 2020 due to CRF aid. Updated grant guidance requires <br />several policies and procedures to be in written form. Staff has worked with the City's Auditors