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The Rebound Indiana: Indiana has yet to spend $700M in CARES Act money despite growing needs

Rep. Greg Porter says state should designate funds by Dec. 30
Big money-raisers tend to be big winners
Posted at 6:00 AM, Dec 11, 2020
and last updated 2020-12-11 08:20:53-05

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INDIANAPOLIS — The state of Indiana has received more than $2.4 billion in CARES Act dollars from the federal government— funding meant to help states offset costs from the pandemic and the financial impact on the economy.

But some are concerned the state still has not spent hundreds of millions of dollars that could help people in need in Indiana.

WRTV Investigates is looking into how an important deadline is approaching and what it could mean for our state.

At Saint Adrian Meats and Sausage in Lebanon, it’s a grind. They supply beef, pork chops, and brats to restaurants and also have a walk-in shop.

"Our business has almost tripled since last year,” said Garrett Kelly, one of the owners at Saint Adrian.

Saint Adrian Meats and Sausage is one of 41 meat processing businesses throughout the state of Indiana that received a chunk of $4 million in CARES Act dollars.

“That money helped us get some more product because it gave us some more cash flow,” Kelly said. “We've been one of the more fortunate businesses. It was greatly needed at the time. We've actually grown our business."

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Saint Adrian Meats and Sausage in Lebannon

Meat processors can use the CARES Act funding in a variety of ways as long as it improves Indiana’s food supply and increases meat processing capacity.

Many businesses are using it to purchase equipment or modify their facilities—like Pigs Tale Charcuterie in Indianapolis, which sells salami and hams online and at farmer’s markets.

They also received CARES Act money and plan to use it to create a retail space in the front of their building.

"That money is vitally important,” said Troy Reed, owner at Pig’s Tale. “Anything to keep the small businesses up and running."

The state of Indiana received $2.4 billion from the federal Coronavirus Relief Fund, which was established under the CARES Act.

The state has spent or committed to spending $1.7 billion of that, according to the state’s website which was updated on Nov. 30.

That leaves more than $700 million in unspent CARES Act money, records show.

"It's good to look at it, but it's even better to spend it for Hoosiers to take care of people that need it the most,” said state Rep. Greg Porter (D-Indianapolis). “People are hurting."

Porter is concerned because Dec. 30 is fast approaching, and he says the state needs to at least designate where the money goes by the end of this year.

"We should not bet on getting an extension from the federal government,” Porter said.

The state lawmaker also points out the Coronavirus Relief Fund dollars can only cover the March-Dec. 30, 2020 time frame, so the state can not use it for costs incurred next year.

Porter is also concerned because hundreds of millions of dollars that have been committed or allotted by the state, have still not been spent either.

"If we don't spend it, this money could revert to the federal government,” Porter said.

Porter said the unspent CARES Act money could be used to help people who are unemployed and help families with childcare, rent, and utilities.

“It’s people at the grassroots level that need those dollars,” Porter said.

WRTV Investigates continues to track how the state is spending federal coronavirus aid dollars.

Records show a good chunk has been spent to cover public health expenses and payroll for public health and safety employees.

We asked the Indiana Family and Social Services Administration’s Division of Aging how they’re spending the $8.4 million in CARES Act money they received.

FSSA says they have spent the money on the following:

  • Wellness check-in calls to homebound older adults
  • Technology to support virtual communications and services
  • Transitioning congregate meal services to takeout or home-delivered meals and to purchase shelf-stable meals
  • Cleaning supplies and protective equipment to maintain the health and safety of staff and clients
  • Caregiver support services such as respite, counseling and home personal emergency response systems

FSSA’s Office of Early Childhood and Out-of-School Learning used CARES Act funds to support child care programs, which allowed the programs to remain open and operational to support children of essential workers.

WRTV Investigates asked the state’s Office of Management and Budget director Cris Johnston to speak with us on camera about the spending of the CARES Act dollars, but he declined.

"Some of the money must be obligated by December 30. Some of the money has expiration dates that extend beyond 2021," Johnston said in an email to WRTV.

All of the funds allocated to the Coronavirus Relief Fund will be obligated for expenses incurred through Dec. 30, Johnston said.

The funding can’t be used for expenses already in the state budget or to replace missing revenue.

Meat processors like Pigs Tale Charcuterie and Saint Adrian Meats and Sausage say they're proof federal funding can make a big difference, and they hope others throughout the state can “beef up” as well.

FULL RESPONSE FROM OFFICE OF MANAGEMENT AND BUDGET DIRECTOR:
“The short answer is the money does not have to be spent by December 30. Some of the money must be obligated by December 30. Some of the money has expiration dates that extend beyond 2021.

The breakdown is as follows:

Federal financial assistance that was authorized in 4 pieces of legislation can be thought of in 3 major categories.

1. Direct assistance to the recipient
2. Supplemental funding using existing grant programs (approximately $1 billion)
3. Coronavirus Relief Fund ($2.4 billion)

Programs within each of these categories have been called CARES Act funding in various contexts. The first category of assistance is not received nor does it “pass through” state government. The website to which you were directed documents categories 2 and 3. For Indiana, category 2 involves approximately a dozen state agencies and over 50 grants totaling about $1 billion. Those state agencies enter into grant agreements directly with the federal awarding agency with which they most likely have had a previous grantor-grantee relationship. The state agency administers the grant according to established guidelines. This could involve funding to established subrecipient partners or requests for proposals and related evaluations may be required. The competitive process can take some time. In addition, draws on these funds are conducted on a reimbursement basis upon the request and submission of documentation from the subrecipient. Many, but not all, of these grants have expiration dates of September 30, 2021 through which to obligate the grant funds. Other have expiration dates that extend beyond 2021.

An illustration of the process would be the transit grants which pass through the Indiana Department of Transportation. That grant is distributed by formula to existing non-urban transit systems that routinely receive federal assistance. The systems can seek reimbursement on a quarterly basis after they have incurred the operating costs and submit a report of such expenses. The first such iteration was in October for the period July through September.

One exception to this description is the FEMA Lost Wages Assistance program listed under the Dept. of Workforce Development, which was excluded from the $1 billion reference above. That program is related to unemployment insurance and would normally be classified as a program in category 1. Because the federal government changed funding sources in August from the Dept. of Labor to Federal Emergency Management Agency, it is reflected as a grant to the state to pay unemployment insurance.

The other major fund is the Coronavirus Relief Fund (CRF). That federal financial assistance was awarded to all states based on populations with some local governments (cities and counties) receiving their own funding if their population exceeded 500,000. Indiana’s state government allocation was $2.4 million. The focus of this funding program was for near-term financial assistance to fight the virus and cover costs of its impact. Contrary to the description above, this was a new program with guidance provided by the U.S. Treasury and its Inspector General which has been updated periodically and augmented by publishing of Frequently Asked Questions. There are three primary requirements. The CRF can be used to reimburse or pay for:

a. necessary expenditures directly incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); and
b. not being accounted for in the budget most recently approved as of March 27, 2020, for the Participant; and
c. having been incurred during the period that begins March 1, 2020 and ends on December 30, 2020.

Revenue replacement for the adverse fiscal impacts from the pandemic is prohibited.

Programs to address these matters are documented by memoranda of understanding between the state agency administering the program and the State Budget Agency. There are approximately a dozen state agencies participating. From the materials on the website you may have seen that the programs have included:

• Local Government Assistance
• Small business assistance
• Rent assistance
• Health and human services provider support payments
• Workforce programs
• Arts and cultural/community event support
• Direct costs for personal protective equipment and eligible payroll recovery
• Testing and contact tracing expenses

Unlike the supplemental programs described above, most of these programs did not have existing program structures and had to be created

An updated summary (for November) is being prepared and will be posted to the website soon. All of the funds allocated to the CRF will be obligated for expenses incurred through December 30.

In addition, reporting to the federal government starts mid-December for the period through September 30. Reporting through December 30 is due in the first half of January.”