Purchasing EdTech Software With CARES Act Funding

Posted by Edward C. Clougherty, Esquire on Feb 9, 2021 11:12:06 AM

Congratulations, you’ve received your CARES Act funding through the Higher Education Emergency Relief Fund (HEERF). We’ve put together some critical information about the venues for allocation of the Institutional Portion (“IP”) of those funds and internal controls to ensure and demonstrate that funds were properly used (Please click here to see how SPOL facilitates internal controls via Planning and Budget).

Your institution has discretion in allocating the Institutional Portion of CARES ACT funds as long as you can demonstrate a reasoned basis that the funds were applied to costs that have a clear nexus to significant changes to the delivery of instruction due to the coronavirus. The expedited migration of instruction to online, video platforms is a significant change due to the coronavirus. Institutional responsibilities relating to online instruction, from credentialing and assessment to planning, budgeting, and accreditation, present a clear nexus. Identifying the nexus presents IP funding opportunities for institutions to acquire software that supports and facilitates these responsibilities. Using IP funds for software purchased pre-COVID is not addressed in this writing.

As of January, 2021, institutions have gained expanded flexibility in their use of supplemental Institutional Portion funds (CFDA 84.425F)[1]. Under section 18004(c) of the CARES Act, institutions were required to use their IP awards to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or for additional emergency financial aid grants, subject to certain limitations[2].

In contrast, allowable uses under the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) for Institutional Portion awards[3] include:

  1. Defraying expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll); and
  2. Carrying out student support activities authorized by the Higher Education Act of 1965, as amended (HEA), that address needs related to coronavirus; and
  3. Making additional financial aid grants to students.

As of December 27, 2020, the expanded use of funds authority under the CRRSAA can also be applied to unexpended CARES Act funds.

While Fifty percent (50%) of the funds received under CARES Act section 18004(a)(1) must be used for financial aid (emergency) grants to students, the remaining FIFTY (50%) PERCENT of funds may be used, as listed above, for “carrying out student support activities…that address needs related to coronavirus.” The agreement[4], which institutions receiving IP funds under the HEERF allocation must sign, states: "Recipient [institution] retains discretion in determining how to allocate and use the funds…, provided that funds will be spent only on those costs for which Recipient has a reasoned basis for concluding such costs have a clear nexus to significant changes to the delivery of instruction due to the coronavirus.”

The broadest interpretation on the use of IP funds appears in a cover letter[5] from the U.S. Secretary of Education regarding the overall process for distributing the institutional portion of the HEERF aid. "I encourage you to use the portion of your award for Recipient's Institutional Costs to expand your remote learning programs, build your IT capacity to support such programs, and train faculty and staff to operate effectively in a remote learning environment ….”

Arguably, software that assists public and non-profit schools in planning and budgeting in managing “lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll”[6] can be purchased with IP funds. Assessment software to assist in assessing new and upgraded distance learning programs also would qualify for IP funds. Keeping track of instructor qualifications for “operat[ing] effectively in a remote learning environment” would also qualify for IP funds for the purchase of Credentialing Software. As always, it is advisable to check with your Grant Office and Legal Counsel before making any final allocations or plans with IP funds.

For institutions that have been delaying EdTech software purchases because of the uncertain fiscal environment caused by COVID, IP funds can bring welcome relief. Collaborative, cloud-based software that conforms to your institution’s business operations can streamline processes and ameliorate challenges caused by reduced and remote working staff contending with significant changes to the delivery of instruction due to the coronavirus.

 

This information contained in this posting is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own institution’s situation.

 

[1] For history and updates on DFDA 84.425F, please see: https://govtribe.com/opportunity/federal-grant-opportunity/higher-education-emergency-relief-fund-iheinstitution-edgrants042120004

 

[2] For information relative to both HEERF I and HEERF II, please see: https://www2.ed.gov/about/offices/list/ope/caresact.html

 

[3] Similar to what was required for Institutional Portion awards under Section 18004 of the CARES Act and the Department’s Certification and Agreement for those funds, under section 314(d)(3) of the CRRSAA, no supplemental Institutional Portion awards or new Institutional Portion awards may be used to fund contractors for the provision of pre-enrollment recruitment activities; marketing or recruitment; endowments; capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship; senior administrator or executive salaries, benefits, bonuses, contracts, incentives; stock buybacks, shareholder dividends, capital distributions, and stock options; or any other cash or other benefit for a senior administrator or executive. See also: https://www.calfac.org/item/university-administration-misuses-14-million-emergency-funding-teaching-and-learning which alleges “CARES ACT money–$9 million–has instead been funneled into an auxiliary enterprise–Housing–that is designated as one of the university’s self-support programs.”

[4] US Department of Education, Higher Education Emergency Relief Fund: Frequently Asked Questions about the Institutional Portion of the Higher Education Emergency Relief Fund under Section 18004(a)(1) and 18004(c) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Office of Postsecondary Education, updated May 21, 2020

[5] Cover Letter HEERF Institutional Portion CLEAN 04.20.20.docx[32]-1

Pages from Cover Letter HEERF Institutional Portion CLEAN 04.20.20.docx[32]

 

 

[6] https://ifap.ed.gov/electronic-announcements/011421USDeptofEdQuicklyMakesAvailMoreThan21BillionTaxpayerFunds

 

Topics: Budgeting, Strategic Planning, COVID-19