Tribes that receive money will need to spend it by the end of December this year, or else pay back any remaining funds and expenses that are not considered “allowable” under the limited guidance of the U.S. Department of the Treasury.
As a certified public accountant, business owner, and former economic development director, I have seen firsthand the problems tribes have had with accounting and compliance concerning federal stimulus and emergency aid funds.
For this reason, McCabe CPA Group LLC and McCabe Consulting have written a position paper to provide some guidance to tribes concerning accounting and compliance and economic development using the COVID-19 relief funding. This editorial provides a brief overview and summary.
First and foremost, the tribal nations need to lookout for the health and protection of their residents, especially the elderly, and implement measures to slow the spread of the virus through new safety policies and protocols including:
- Enhanced epidemiological systems and reporting structures.
- Developing a coordination protocol health crisis response.
- Development of a “FEMA” type response team.
- Culturally sensitive communication protocols.
- Developing a budget for the ‘Return to Work Protocol.’
- Developing a uniform reopening policy.
In addressing these points, Nations need to revisit their policies and procedures for proper documentation of all CARES Act funds transactions. Updating procurement policies can improve delivery time of goods and services and account for all money like with any federal grant.
Nations should look at revising chart of accounts, specifically designed to account for the CARES funding. It should be developed and transferred to all divisions, departments, and chapters who will administer the funds.
Nations should identify areas for improvement in technology infrastructure including reporting and procurement upgrades as well upgrades to enhanced security, network, software, and hardware infrastructure to support healthcare workers.
Nations should expedite the development of a comprehensive master spending plan and budget, covering the next seven months, and monthly reporting; given that funds must be spent by the end of this calendar year or else returned to treasury.
Nations should coordinate all divisions, enterprises, health care facilities, small business leadership, housing, schools, and agencies to ensure the most efficient use of funds allocation under newly developed policies and procedures and the master spending plan.
The spending plan should consider the following points:
- Reaping Tax Benefit: Keeping the money on tribal land will have an ancillary tax benefit.
- Developing Business Infrastructure: Develop the technological infrastructure to assist with COVID-19 and boosting small business development and housing capabilities.
- Developing Traditional Infrastructure: Lack of infrastructure like water and roads inhibits crisis response and economic development.
- Securing Supplemental Funds: In addition to other appropriations in the legislation specific to Tribal governments, the Secretary of Commerce published Notice of Funding Opportunity, to deploy CARES Act funding in a quick, effective, and efficient manner, tailored to community needs.
For a more in-depth look at this perspective, the position paper that can be accessed, shared and downloaded at https://mccabe.consulting/press-releases/mccabe-cpa-group-llc-tribal-cares-act-white-paper/. We would appreciate your questions and feedback concerning the document.
Sean McCabe, CPA
Managing Member, Rainmaker Media Group, LLC