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Nebraska governments pay more than $10 million for help allocating federal COVID relief
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Nebraska governments pay more than $10 million for help allocating federal COVID relief

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Tasked with spending an unprecedented windfall of federal COVID-19 relief, some of Nebraska’s largest political jurisdictions, primarily the state, are on track to spend more than a combined $10 million of the federal dollars on consultants to help them allocate the money.

The use of coronavirus relief for guidance and oversight on spending the federal money is not unique to Nebraska, and local officials said the expenditures are necessary to ensure that their jurisdictions do not run afoul of extensive guidelines dictating how the money must be used.

The City of Omaha is one of the latest entities to contract with Deloitte after City Council approval of a contract in late October. Deloitte, a global consulting firm, will provide services related to the development, review and reporting of the city’s American Rescue Plan funds.

Congress passed the $1.9 trillion act in March with the goal of counteracting the economic damage caused by COVID-19. The package included $350 billion for eligible state, local, territorial and tribal governments.

Jurisdictions that accepted the money have until 2026 to spend it and are required to regularly report their spending to the Treasury Department. Jurisdictions that fail to spend the money according to the guidelines must return those dollars to the federal government.

About $56 million was allocated to the City of Omaha in May. Another $56 million is expected in early spring 2022. Deloitte’s payment from Omaha, which is not to exceed $250,000, will come out of the federal money.

The city’s decision to hire Deloitte was due, in part, to Douglas County’s previous work with the company, City Finance Director Steve Curtiss said.

The city looked only to national firms with relevant experience in Nebraska, he said.

Douglas County turned to Deloitte in summer 2020 after staring down the complexities that came with allocating $166 million from the Coronavirus Aid, Relief, and Economic Security Act, passed in March 2020. As of late September, Douglas County had paid the company $1.51 million in CARES Act money to help it spend some of the remaining dollars.

The state also contracted with Deloitte in 2020 for guidance on CARES Act money, including the design of a website to provide oversight of federal dollars received by the state. The state will spend about $9 million on contracts with the company through May.

The City of Lincoln took a different route, looking to resources from the Biden administration and national organizations for guidance.

“The City of Lincoln has dedicated appropriate policy, legal and financial staff members to ensuring appropriate compliance with the American Rescue Plan State and Local Fiscal Recovery Funds as well as drawing on technical assistance provided from the administration and national organizations,” said Kate Bolz, mayoral aide for economic development. “(The city) will develop additional resources if and when necessary.”

The state and Douglas County were the only two entities in Nebraska to receive CARES Act money. Each gave $30 million to Omaha in 2020 to help the city fill a budget hole attributed to the pandemic.

The amount of money distributed by the American Rescue Plan is unprecedented, said Michael Gleeson, legislative manager for finance, administration and intergovernmental relations with the National League of Cities.

“We have statistics that show that more than 6,000 cities nationally never received a dime from the CARES Act, so this is unprecedented in that now every city, town, village across the nation will receive these federal grants if they choose to accept it,” he said.

For cities still trying to understand the nuances of the new program, hiring a consultant like Deloitte “is worthwhile,” Gleeson said.

The daunting task of navigating those nuances led some smaller jurisdictions to decline federal money, according to reporting by Stateline, a Pew Charitable Trust news website covering state policy.

Other jurisdictions are relying on outside consultants.

About half of the municipalities in Pennsylvania have hired the accounting firm Zelenkofske Axelrod LLC, a partner at the firm told Stateline in September.

In Omaha, Curtiss sees the city’s contract as assurance that allocations are conducted correctly, which he said could save money in the long run.

“There’s just a lot of complexity, and (Deloitte) has good connections all the way back to the Treasury Department, so if we have questions, they have answers,” Curtiss said. “If there are missteps that could cost you millions, $250,000 would be a drop in the bucket.”

It’s a point that Douglas County Budget and Finance Director Joe Lorenz echoed.

Much of the $1.51 million that Douglas County has spent on Deloitte was for the county’s rental assistance program. Deloitte set up a call center, and five to 10 Deloitte employees worked full time on the program, Lorenz said.

“My goal as the finance director is to make sure this is all done appropriately and that we don’t spend any money that we find out was ineligible and have to write a check back to the federal government,” he said.

Besides ensuring that expenditures are within federal guidelines, Deloitte helps the county organize and store data that could be viewed by a federal auditor, Lorenz said.

Douglas County will receive two payments of $55.4 million from the American Rescue Plan, which Deloitte will help allocate as well.

State, county and city officials will ultimately have the final say in how money is allocated, Lorenz said. In Omaha, plans for how to spend the first round of American Rescue Plan funds are in the works.

“The State of Nebraska, Douglas County and City of Omaha all use Deloitte, and I don’t think that’s by accident,” Lorenz said. “I think everybody now in Nebraska is approaching this consistently.”

In addition to helping government agencies comply with requirements for the management, reporting and administration of federal money, Deloitte spokeswoman Karen Walsh said the company’s work has helped increase transparency of the distribution of resources.

“Deloitte was selected for this critical work because of our national capabilities in risk advisory, compliance monitoring and grants management,” she said.

The City of Omaha’s priorities for the millions in federal aid were established in a recovery plan that was created with public input over the summer.

The tourism and hospitality industry, community service programs, broadband expansion, affordable housing, violence intervention and prevention programs, and improvements to public spaces are among the city’s priorities, Curtiss said.

The first distribution of money from the city will likely begin in early 2022.

jwade@owh.com, 402-444-1067

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