The effects of the COVID-19 pandemic will be felt for months, if not years. As state and local governments look towards the future, the landscape is filled with uncertainty. Governmental entities are now looking to teams of experts to gather and communicate guidance and best practices as the “new normal” environment come into shape.

Overall, adopting a strategy of “Plan, Protect, Adapt, Overcome” will allow organizations to remain flexible and responsible for constituent and community needs. This strategy also allows for the development of a flexible, comprehensive, and robust action plan for continuing the provision of essential services and maximizing recovery, while minimizing personal, professional, and community disruption. There are several vital areas to address and monitor throughout the process.

First, it is essential to analyze operations and areas where cost-cutting will be most effective and least painful. You can look similarly at actions taken in response to the Great Recession of 2008 by one moderately-sized local government, with real-life examples and suggestions for cost-cutting and revenue-generating activities. You can check out more ideas for cutting costs and managing cash balances here.

Second, it’s crucial for state and local governments to seek out and take advantage of potential funding opportunities to maintain employment, services to businesses and individuals in the community, and care for the health and welfare of the population. Relief funding is an ever-changing area, as its authorization is directly in response to the health and economic crisis. Major sources of funding include the CARES Act, including the Coronavirus Relief fund, as well as funding from other agencies. While evaluating the potential funding sources, there are several concepts to consider:

Overlapping Funding – multiple funding sources may be available to state and local governments to cover costs related to the pandemic

  • Avoid “double-dipping” for reimbursement or recovery of costs. Under the Uniform Guidance, costs may only be included under one federal program. Costs charged to more than one program, or used to meet matching or cost-sharing requirements under a different program, are unallowable costs for federal programs.
  • Similarly, coverable costs through an insurance policy will be unallowable for federal reimbursement.

Restrictions on the Use of Specific Funding Sources

  • In general, funding with the least restrictive rules will be more adaptable and more valuable as the situation continues to develop. Governments that have limited a workforce and time to devote to administering and seeking new sources of funding may choose to pursue funding sources with fewer restrictions. This funding could include the Coronavirus Relief Fund, rather than choosing funding with narrow purpose restrictions, such as funding available through the Community Development Block Grant (CDBG) program.
  • Personnel responsible for spending and requesting reimbursement of federal funds must understand and monitor the purpose restrictions of those funding sources.

Administrative Burden

  • Federal agencies have been allowed the freedom to ease certain administrative burdens while the public health crisis runs its course. This includes easing of certain reporting deadlines, shortening the time between the posting of Notices of Funding Opportunities and the awarding of funding, and easing procurement requirements.
  • These can be confusing to navigate since each agency has a different approach. It may be necessary to reach out to each federal agency and department for guidance.

Future Developments

  • Congress is likely to pass additional legislation with stimulus funding.
  • Some proposals for legislation include additional funding for state and local governments.
  • Any current proposals will change as they move through Congress.

Finally, the current and future workforce and workspace has changed drastically from a mere few months ago. Some changes and adaptations may become a part of the “new normal,” and operations in other areas may revert as businesses and schools open back up. One area that is not likely to change is that many employees will need flexibility in work schedules and environments in the next few months. Having a partial or complete remote workforce means that policies, procedures, and controls need to be adaptable and flexible, while still safeguarding public funds.

As your organization adapts to the situation, check out a helpful analysis of remote work environments for governmental entities to assist with balancing the needs of employees, the needs of the organization, and a robust control environment. Cross-training of staff and maintaining open lines of communication may help encourage productivity.

The challenges facing your organization, and all state and local governments in this uncertain time, may seem unsurmountable. However, when you have a good accountant by your side, processes become just a little bit easier. For more information, reach out to a CRI government professional for assistance guiding your organization.