Managing federal resources in the COVID-19 disaster

On March 13, 2020, President Trump declared COVID-19 a nationwide emergency. This declaration triggered access to federal funds—allowing state and local communities to apply for much-needed relief in the midst of the COVID-19 pandemic.

Given the high public health and economic stakes of our current situation, what do state and local grantees need to know about available federal resources? And how can they set themselves up for success? Here’s a breakdown of the most important questions and considerations.

Who are the key players in the COVID-19 pandemic—and what are their roles?   

In a typical natural disaster, local units of government communicate their needs through their state Office of Emergency Management (OEM), and then FEMA provides federal resources. Because of the impact of COVID-19 across the entire country, FEMA has streamlined the process to enable local units of government to directly submit electronic funding requests. This allows the funding to move faster in response to local needs.

Even though the state OEMs are still the grantees for FEMA funds, they have the ability to designate to local municipalities the ability to submit claims directly into the portal to FEMA. This allows for simultaneous approval by both the state OEMs and FEMA. States are still responsible for managing the response to the crisis. This includes coordinating resources, providing guidance, and in some states, collecting and approving local government requests to FEMA. Likewise, the local government’s emergency management department is responsible for identifying local needs as well as developing and executing programs to address those needs.

What types of assistance were triggered by the COVID-19 major disaster declaration?

The major disaster declaration in response to COVID-19 provides a wide range of assistance programs for individuals and public infrastructure, including funds for both emergency and permanent work.

• Individual Assistance

This type of assistance includes cash aid paid directly to individuals and families for temporary home repairs, rent, utilities, medical, funeral, and other emergency needs. For COVID-19, Individual Assistance also includes payments to providers of services for shelter and crisis counseling. FEMA pays directly for these two programs. If there is a match, the state is required to pay a portion of the service cost.

• Public Assistance

There are seven categories under this FEMA program (labeled A through G). For COVID-19, assistance is being provided under Category B – Emergency Protective Measures. States or local units of government send FEMA a request for supplies and services to address needs related to COVID-19 with an estimate of cost. FEMA prepares and approves a project worksheet to fill the request. Once approved, the state or local government can either request an advance or submit documentation of costs for reimbursement. Currently there is a required 25% match for Category B.

• Hazard Mitigation Assistance

No hazard mitigation assistance is currently provided in response to COVID-19.

What federal funding is available for COVID-19 relief?

The CARES Act passed by Congress provides substantial resources to FEMA as well as the Department of Health and Human Services and the Small Business Administration. The Departments of Agriculture, Labor, Treasury, and the Economic Development Administration have also received other COVID-related allocations.

• FEMA 

State and local governments should look to FEMA first for payment and reimbursement because the emergency agency has the infrastructure and capacity to quickly get money to state and local governments.

• Health and Human Services 

Funding is available to reimburse health care providers for health care expenses and lost revenues attributable to COVID-19. It also provides childcare assistance to health care sector employees, emergency responders, sanitation workers, and others deemed essential during the response to COVID-19.

• Small Business Administration 

Assistance is available to small businesses through the Paycheck Protection Plan, Economic Injury Disaster Loans, and Small Business Debt Relief. Some of these programs have provisions to convert loans to grants.

• HUD 

Assistance is also available to states and entitlement communities. This includes counties and cities that get funding directly from HUD for Community Development Block Grant, Housing Opportunities for Persons with AIDS, and Emergency Solutions Grants. 

Can state and local governments use Community Development Block Grant – CV (CDBG-CV) to address gaps and unmet needs?

The HUD Community Development Block Grant funding is flexible and can be used for a variety of COVID-related needs not reimbursed from other federal, state, local, or nonprofit sources. Note that 70% of CDBG-CV allocation must meet the needs of low-moderate income areas or populations.

States and local governments should first consider using CDBG-CV to provide the local match for FEMA, which will reduce the need for municipalities and states to use general fund dollars. Then they can use CDBG-CV for programs and services not reimbursable by FEMA or covered by other funders. Examples of such programs and services include food banks, interim mortgage assistance, and support services to help businesses access SBA or other dollars.

Small business grant programs can support modifications that establishments will need to make to comply with social distancing requirements. Establishments can also use these programs to augment business income due to reduction in clientele mandated by social distancing, as long as the activity is CDBG-eligible.

How to maximize getting and using federal resources

There are two main steps that state and local emergency management officials should take to maximize their jurisdiction’s ability to identify and use federal resources.

Step #1 - Documentation:

• Track and document all expenses related to response and recovery from COVID-19.
• Create a cost center and charge codes for departments and divisions to facilitate documenting and categorizing expenses, making it easier to match expenditures to the appropriate funding source.
• Provide training to municipal officials and department heads on tracking, categorizing, documenting, and submitting reimbursement requests or advances.

Step #2 - Assessment of need:

• Identify and quantify local needs.
• Match unmet needs with available funding to identify gaps and insufficiencies.
• Evaluate what funding is available and avoid duplicating existing resources.
• Think about future needs in new operating environments.

In this unprecedented time, state and local governments can supplement operational budgets to maintain services for constituents using federal funding sources. Disaster response is most successful when it is federally supported, state managed, and locally executed. As the COVID-19 response and the recovery efforts are underway across the nation, these resources are here to help officials navigate the federal funding landscape to get needed relief.