The Coronavirus Economic Relief for Transportation Services (CERTS) Program is providing eligible transportation service companies with resources to help to maintain payroll, hire back employees who may have been laid off, and cover applicable overhead and operational expenses.
CERTS Compliance and Reporting: First Reports due by Feb. 15
The Treasury Department has issued some guidance on Coronavirus Economic Relief for Transportation Services (CERTS) reporting. The first report for how you spent CERTS funds through Dec. 31, 2021, is due by Feb. 15, 2022.
Here is a recap of how funds should be spent:
Payroll costs are required to be at least 60% of total spending. Non-payroll costs should not be more than 40% of total spending.
Payroll costs include:
- Paid time off
- Health insurance
- Retirement benefits
- State or local payroll taxes
- Compensation to a sole proprietor
- Compensation to an independent contractor
Non-payroll costs include:
- Purchasing personal protective equipment (PPE) and other costs of protecting workers and customers from COVID-19.
- Costs to operate and maintain capital equipment/facilities, such as rents, leases, insurance and interest on regularly scheduled debt service (NOT the principal).
- Restored compensation, which is defined as lost pay and benefits.
There are items for which recipients may not use CERTS funds. These include:
- Payment/prepayment of principal debt
- Capital expenditures
- Delinquent taxes
- Compensation in excess of an annualized $100,000 salary ($8,333 per month)
- FICA taxes
- Compensation for an employee residing outside of the United States
- Any wages used for Families First Coronavirus Response Act (FFCRA) sick leave credit.
- Any wages used for qualified family leave credit.
- Any bonus in excess of inflation.
- Any expense used for any other federal programs.
Please note that, unlike forgiven Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loan (EIDL) advances, CERTS grants are taxable. Check with your accountant to find out how this may impact your income tax returns.
According to Treasury Department information, recipients will need to do the following when reporting each period:
- Verify CERTS grant information — report any discrepancies.
- Report total amount spent on eligible expenses.
- Report subsidiary and affiliate information.
- Report amount spent by eligible category and entity.
- Certify recalls and rehires.
- Certify additional items, including payroll priority.
- Specific certifications will be required if the recipient has not spent 60% on payroll costs.
- Report changes in control, if any.
- Reports bankruptcy updates, if applicable.
Each recipient must retain records to support how the CERTS grant funds were used. This is an important part of compliance reporting and for supporting reported amounts if audited.
UMA Member Tracy Fickett, CPA, operates BUSBooks, a specialty accounting firm dedicated to the motorcoach industry. If you have a question, you can reach her at email@example.com.
CERTS grantees can expect remainder of funding within days
October 8, 2021
Washington, DC – The U.S. Treasury Department is advising they have completed reviewing the remaining CERTS applicant pool and have determined the amount of additional funds available for making the second payment to approved grantees. Notice will arrive via email.
Treasury initiated the second payments by ACH Direct Deposit and the payment amounts should be available in 1 or 2 business days. The combined value of the first and second grant payments represents the total amount of the grant award.
We are also advised that grantees who had not received their agreements in time for this round of payments, will receive one payment for the full grant award, rather than two, upon receipt of their signed agreements.
The payment schedule will also differ for grantees requiring a bankruptcy addendum to their agreements.
While this completes the final distribution of the original $2 billion, the United Motorcoach Association, along with the original coalition, is seeking additional funds for the bus and motorcoach industry to assist Members continue to recover from the effects of the pandemic.
Continue to monitor progress in the daily UMA NewsFLASH, Bus & Motorcoach News, weekly UMA Town Halls.
What you need to know after your CERTS grant is approved.
Tracy Fickett of BusBooks, a CPA and MBA who works extensively in our industry, appeared on UMA’s Town Hall today with a presentation that spelled out what operators can expect moving forward once they receive notice that they are approved for a CERTS grant. She also prepared an article for Bus & Motorcoach News to coincide with today’s presentation. To view Tracy’s slides from today or to watch the video presentation, use the links above.
Bus & Motorcoach News | August 12, 2021 | by Tracy Fickett, CPA
Many of you may have already received notice that your company’s CERTS grant application has been approved. Some of your applications may still be in “Application Signed and Submitted — Under Review” status, which means that the U.S. Treasury Department is still reviewing the application.
Still others may find the status reading “Action Needed.” If that is your situation, look for an email from firstname.lastname@example.org to find out what is missing or needs to be addressed. Or call the helpline at 877-398-5862. Respond to the Treasury as soon as possible to get them what they need.
So, what’s next after the approved status? We wait until the Treasury has completed vetting all applications for all four eligible industries. Then the Treasury can develop the distribution formulas. At that point, an approved application status should be updated to “Application Approved — Grant Amount Pending.” Treasury will then post the industry allocation methodology and the grant sizing formula.