LGC staff are receiving many questions about the CARES fund accounting and reporting and want to provide updates on a few topics.
Special Revenue Fund vs. General Fund Accounting for CARES Funds:
LGC staff are encouraging local governments to use a special revenue fund to account for and report CARES funding which is consistent with NCGS 159-26(b)(2). The intent of this statute is that units be able to track and report revenues, expenditures, and any unspent cash balances. Using a special revenue fund may be more transparent to granting agencies than accounting for these funds in the General Fund and can also be budgeted multi-year. If units instead use the General Fund to account for these funds, they will need to be able to allocate interest to unspent balances per the FAQ document that is on the US Treasury website. If a local government can meet the reporting requirements using the General Fund, we will accept that presentation. (Please note that the FAQ document is updated as of July 8, 2020. Additional updates may be made by the US Treasury; please refer to its website for the latest guidance).
GASB Published TB 2020-1 and Revises Emergency Toolbox:
GASB issued Technical Bulletin 2020-1, Accounting and Financial Reporting Issues Related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Coronavirus Diseases, in June 2020. The document comprises six questions that GASB clarified based on consistent questions they were receiving from governments. The State and Local Government Finance Division will be updating its Local Government COVID Resources webpage with specific reporting guidance for the 2020 fiscal year end in the near future that reflects the GASB’s guidance in TB 2020-1.
As it was developing TB 2020-1, the GASB realized that there were several additional issues it wanted to provide input on that were not addressed in the document. It revised its Emergency Toolbox with some additional information that was already provided in existing guidance.