County Hires Consulting Firm To Decide How To Spend COVID-19 Funds

By Gordon Hopkins The Jefferson County Board of Commissioners has struggled recently in determining how best to use federal COVID-19 funds due to a lack of guidance from the federal government.In order to ensure those funds are not used for ineligible purposes, the County has decided to hire a consulting firm that will help to decide what uses are appropriate for the funds.The American Rescue Plan Act of 2021 (ARPA), also called the COVID-19 Stimulus Package or American Rescue Plan, is a $1.9 trillion economic stimulus bill passed by the United States Congress and signed into law by President Joe Biden on March 11, 2021. The purpose of ARPA is to mitigate the economic and health care impact of the COVID-19 pandemic and encourage an economic recovery.While the funds are available for “COVID-19 related” needs, the final rules for the use of ARPA funds, specifically what qualifies as “COVID-19 related,” has yet to be established by the federal government. Commissioners have expressed reluctance to allocate any of those funds until the final rules are set. The fear is, without hard and fast rules, government officials could come back at a later date, declare a particular use inappropriate and demand the money be returned.In August, commissioners indicated they felt secure using ARPA funds for premium pay for those county workers who, by the nature of their jobs, were at greater risk for COVID-19 exposure and infection but stayed on the job anyway. That would include employees who have direct contact with the public as well as those whose employment was needed to keep the county functioning. This includes departments such as law enforcement, ambulance service, IT (Information Technology), janitorial service and others.At that time, County Commissioner Michael Dux said, “I want to emphasize that this is federal dollars to the public. This is federal dollars that we must spend (on) something that is COVID related. And if we don't spend it, we eventually will lose it.”Commissioner Mark Schoenrock said, “This is American Rescue Plan Act funds. So this does not affect our county budget whatsoever.”At a meeting on Tuesday, October 12, commissioners spoke via videoconferencing with Mark DeDiana, an Account Manager at Lutz & Company, PC, a Nebraska-based firm that provides various financial and consulting services, including compliance procedures with regards to the Coronavirus State and Local Fiscal Recovery Funds or “SLFRF” as part of ARPA.ARPA funding is subject to the requirements specified in the SLFRF Interim Final Rule, adopted by the Treasury on May 10, 2021.Lutz is a preferred vendor of the Nebraska Association of County Officials (NACO).Schoenrock said to DeDiana, “I think the main thing that we're interested in is, we're looking at you and your company to perform services for us we may not necessarily have the expertise here within our own county resources.”According to DeDiana, the primary service he has been providing regarding ARPA funds is research. He said, “I've been contacted by a lot of counties your size, I've been contacted by 37 counties. I have not done work for all those counties, I've done work for maybe a dozen counties. But of those dozen, it's all been research.”According to an engagement letter from Lutz, “Additionally, the use of such funds should fall under one of the four statutory categories: (1) response to the COVID-19 public health emergency or its negative economic impacts; (2) respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to such eligible workers of the recipient, or by providing grants to eligible employers that have eligible workers who performed essential work; (3) for the provision of government services, to the extent of the reduction in revenue of such recipient due to the COVID-19 public health emergency, relative to revenues collected in the most recent full fiscal year of the recipient prior to the emergency; and (4) to make necessary investments in water, sewer, or broadband infrastructure.”Some of the consulting services offered by Lutz and fees are as follows:• Set up processes and internal controls for best practices for receipt of funds - $175 per hour• Consulting and identification of eligible uses of funds - $175 per hour• Consulting, monitoring and reporting of eligible programs - $195 per hour• Compliance, documentation and reporting of all necessary report filings - $230 per hour.• Assist with grant/contracts pre-approval process, monitoring and reporting of approved applications - $330 per hour• Assistance on strategic planning including collaboration efforts with state and other local governments on how best utilize the funds - $330 per hourThe government may want an audit, depending on how much money is spent. DeDiana told commissioners, “If you've spent over $750,000 of your operating funds in one particular year, chances are pretty good you're going to have what's called a single audit, and the state auditor is going to (want) detail, audit expenditures, your ARPA expenditures. If they find something wrong, then they're going to write you up. And I don't know what's going to happen after that. The Department of Treasury is going to get that report.”“We have a lot of experience working with governments and particularly compliance audits. And so, because of that background, we have a deep familiarity with federal regulations,” said DeDiana. “How Jefferson County, and really all the counties in the US, decide to spend their money is going to be subject to a compliance audit. Really, one of the main reasons why you'd want to hire me is to help pass your audit. Because if you fail your audit, there's a chance you might need to send that money back.”The fees for the auditing services are:• Assistance for the county with preparing for a newly required Single Audit (where another accounting firm is doing the Single Audit) - $175 per hour• Lutz performing the Single Audit as an agent for the accounting firm that performs the county audit.This would be in a situation where the auditor is not qualified or experienced in performing Single Audits - $200 per hourA separate engagement letter will be prepared for each audit.DeDiane also noted that, because Lutz charges by the hour, the county will only pay for the services it uses. If the County does not utilize Lutz, then it pays nothing.County commissioners voted unanimously to sign the contract for services with Lutz & Company, PC.

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