Agenda - Council Work Session - 03/08/2022

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4380 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations leading to a changing financial operating in QCTs, operated by Tribal beneficiaries,the organization becomes landscape for nonprofits. governments or on Tribal Lands,or a subrecipient. In this case, a nonprofit Treasury Response:Eligible operating in the U.S.territories were need not have experienced a negative Assistance to Impacted and disproportionately impacted by the economic impact in order to serve as a Disproportionately Impacted pandemic. subrecipient. Nonprofits:The interim final rule To summarize, a recipient may In the context of SLFRF,nonprofits of provided for,and the final rule determine that certain nonprofits were all types may be subrecipients. Treasury maintains,the ability for recipients to impacted by the pandemic or were is not restricting the types of nonprofits provide direct assistance to nonprofits disproportionately impacted by the that can operate as subrecipients,rather that experienced public health or pandemic and provide responsive allowing recipients to decide what form negative economic impacts of the services. best meets the needs of their pandemic. Specifically,recipients may Public Comment:Beneficiaries and community. Therefore,a"nonprofit" provide direct assistance to nonprofits if Subrecipients:As noted elsewhere in that is acting as subrecipient could the nonprofit has experienced a public this final rule,Treasury received include,but is not limited to,a health or negative economic impact as multiple comments expressing nonprofit as that term is defined in a result of the pandemic. For example, uncertainty on how to categorize a paragraph(17) of section 401 of the if a nonprofit organization experienced particular activity in the eligible use McKinney-Vento Homeless impacts like decreased revenues Or categories.For instance,some Assistance.232 See section increased costs (e.g.,through reduced commenters requested that recipients be Distinguishing Subrecipients versus contributions or uncompensated able to use SLFRF funds for certain Beneficiaries for further information. increases in service need), and a expenses incurred by nonprofits (e.g., Additional guidance on determining recipient provides funds to address that unemployment charges) as a response to subrecipient status may be found in the impact,then it is providing direct a public health or negative economic Uniform Guidance.233 assistance to the nonprofit as a impact to that nonprofit; others asked if Recipients may transfer funds to beneficiary under Subsection(c)(1) of nonprofits providing certain services subrecipients in several ways,including Sections 602 and 603.Direct assistance (e.g., social services)made them eligible advance payments and on a may take the form of loans,grants,in- for direct assistance. Commenters also reimbursement basis. Ultimately, kind assistance,technical assistance,or requested that Treasury acknowledge recipients must comply with the eligible other services that respond to the that engagement directly with nonprofit use requirements and any other negative economic impacts of the organizations in low-income applicable laws Or requirements and are COVID-19 public health emergency. communities and communities of color responsible for the actions of their A recipient may identify a negative may allow the recipient to better assess subrecipients or beneficiaries. economic impact experienced by a economic harms in these areas. As part of accepting the Award Terms nonprofit,or class of nonprofits, and Treasury Response:Beneficiaries and and Conditions for SLFRF, each design and implement a response to that Subrecipients:Treasury recognizes that recipient agreed to maintain a conflict- negative economic impact,see section many nonprofits play important roles in of-interest policy consistent with 2 CFR Standards:Designating a Negative their communities,and some may have 200.318(c)that is applicable to all Economic Impact. The final rule experienced public health or negative provides anon-exhaustive list of economic impacts during the pandemic. activities funded with the SLFRF award. Pursuant to this requirement, decisions enumerated eligible uses for assistance As such,under the interim final rule to nonprofits that are impacted or and the final rule,nonprofits may be concerning SLFRF funds must be free of undisclosed personal Or organizational disproportionately impacted by the impacted by the pandemic and receive pandemic. assistance as a beneficiary, as described conflicts of interest,both in fact and in A recipient may also identify a class above,and/or be a subrecipient appearance. Recipients may avoid of nonprofits that have been providing services on behalf of a conflicts of interest in providing disproportionately impacted by the recipient.231 assistance to nonprofits or making public health emergency and design and Specifically,the interim final rule subrecipient awards by,inter alia, implement a program that responds to also allowed for, and the final rule making aid available to nonprofits on the source of that disproportionate maintains,the ability for the recipient to generally applicable terms or utilizing a impact. For example,a recipient may transfer, e.g.,via grant or contract,funds competitive grant process,respectively. determine that nonprofits offering after- to nonprofit entities to carry out an A recipient may not use control over school programs within its jurisdiction eligible use on behalf of the recipient. SLFRF funds for their own private gain. were disproportionately impacted by Treasury notes that recipients may Furthermore,no employee,officer, or the pandemic due to the previous in- award SLFRF funds to many different agent may participate in the selection, person,indoors nature of the work and types of organizations to carry out award, or administration of a contract the nonprofits'reliance on fees received eligible uses of funds and serve supported by a federal award if he Or for services (e.g., attendance fees). The beneficiaries on behalf of a recipient she has a real or apparent conflict of recipient might then design an government(e.g.,assisting in a interest. intervention to assist those nonprofits in vaccination campaign, operating a job Public Comment:Definition of adapting their programming(e.g.,to training program, developing affordable Nonprofit:Treasury also received outdoor or online venues),their revenue housing).When a recipient provides several requests to expand the definition structure (e.g.,adapting the fee for funds to an organization to carry out of nonprofits so that other tax-exempt service structure or developing expertise eligible uses Of funds and serve entities (e.g., 501(c)(7)s, 501(c)(9)s, in digital donation campaigns), or both. 501(c)(19)s,nonprofits with"historical Additional information about this L31 Note,this response is meant to clarify the framework is included in General difference between nonprofits as beneficiaries and 232 See sections 602(c)(3)and 603(c)(3)of the Provisions: Structure and Standards.In nonprofits as subrecipients.It is not meant to limit Social Security Act.See also Section 401 of the the types of relationships that a recipient may enter McKinney-Vento Homeless Assistance Act(42 order to ease administrative burden,the into with a nonprofit as permitted under the U.S.C.11360(17),which defines a"private final rule presumes that nonprofits Uniform Guidance. nonprofit organization."