Analysis of State Use of Federal COVID Funds

Design credit: Atlantic Cape Community College

By Dick Hall-Sizemore

(Note:  All of the data presented in this post is based on the author’s analysis of raw expenditure data from the state’s accounting system (CARDINAL) for FY 2020 and FY 2021 through 2/22/2021.)

As of February 22, state agencies had spent or disbursed $11.9 billion in federal COVID funds.

Two major categories of expenditures accounted for about 86 percent of that total.  The Virginia Employment Commission had paid out $8.8 billion in unemployment claims.  Secondly, in accordance with federal law, the state had transferred $1.4 billion to local governments.  The remaining $1.7 billion was spent directly by state agencies or disbursed by them as grants to local or regional government agencies or to private entities.

Contrary to what one would expect from the listings in the budget bill and the presentation by the Secretary of Finance to the money committees (see my earlier post here), almost all state agencies got some federal funding to offset their costs incurred due to the pandemic.  Of course, many received relatively small amounts.  For example, the Department of Taxation has received about $22,500 for custodial services.

The table below lists the fifteen agencies with the largest expenditures, excluding unemployment benefits and pass-through grants to localities.  The budget subagency within the Department of Education established for the appropriation and distribution of state aid to local school districts has, by far, spent the largest amount.  Of the $435 million disbursed, about $267 million was for schools generally and about $163 million was for child nutrition programs (school breakfast and lunch programs).  For several of the other agencies on the list, one activity accounted for the vast preponderance of the amount spent:  DMAS–$159 million for nursing home services (hazard pay for personal care aides and assistants and funding for day support providers and residential support providers); DSBSD—developing and administering a grant program for small businesses (see description here); and SCHEV—grants to private institutions of higher education.

Attached (here) is another table that shows details on how the $11.9 billion was used.  Some explanation of the table’s organization is needed.  The state’s chart of accounts includes a level of detail for budget development and recording of expenditures that goes beyond the program and service area numbers that are shown in the Appropriation Act.  These codes are assigned for expenditure categories that are common across agencies, such as classified salaries, electricity, gasoline, office furniture, etc.  The attached table lists the statewide totals for these categories, called subobjects.  (I took the liberty of consolidating a few subobjects, primarily for the sake of clarity.)

The broad grouping of subobjects for which there were the most expenditures was “Transfer Payments”.  This category includes money provided to individuals or grants to governmental or nongovernmental entities.  It does not include money an agency used to pay its own employees or to pay for functions it performed directly.

The total in the Transfer Payments category was $11.2 billion.  Included in that total are the already-mentioned $8.8 billion in unemployment claims, $1.4 billion in pass-through payments to local governments, $435 million for K-12, and $114 million in grants to small businesses.  Expenditures for the following program areas also exceeded $100 million:

  • Housing services–$114.1 million
  • At-risk child care services—$113.4 million

As illuminating as the subobject detail is, it does have limitations.  It tells us how much was spent in a category that is common to all agencies, but not specifically what it was spent for by a given agency.  For example, the data shows a total of $90.9 million spent on lab supplies and $89.0 million spent for medical and dental supplies.  But, it is not possible to know from those numbers how much was spent on PPE.  Similarly, $5.1 million was spent on wages (temporary or part-time employees), but we cannot discern from that data what those employees were actually doing or working on.

The state’s accounting system does provide additional fields that agencies could use to provide more detail about expenditures, such as specific activities or projects.  These fields are optional for agencies to use, and many do so.  That detail could provide a crosswalk between the subobject data and the specific activities and purposes outlined by the Secretary of Finance.  However, that additional level of detail is not readily available.  Nevertheless, future posts are planned that will provide more detail on the expenditures of some specific agencies.

Some Perspective and the Future

$11.9 billion is a lot of money from any perspective.  However, it is not the total of federal COVID funding that has flowed into the Commonwealth.  There were the stimulus checks sent to individuals, the PPP loans/grants to businesses, and the $200 million sent directly to Fairfax County, in addition to any other grants that individual organizations were able to obtain.  Somebody somewhere may be keeping a running grand total, but, if so, I do not know how to find it.

As for the future, more money is coming.  The U.S. Senate just passed its version of the next stimulus package, said to total $1.9 trillion.  The Biden administration has signaled its approval and the House will very likely go along in short order.  There have been preliminary estimates that Virginia will get $3.8 billion from this package.

Who will make the decisions on how to spend that additional money is somewhat up in the air right now.  For the previous pots of money, despite “guidance” provided in the Appropriation Act, Governor Northam has had the discretion to allocate the funds in the manner he felt best suited the needs of the state.  The General Assembly apparently got miffed at his ignoring their recommendations.  Language included in the budget amendments recently adopted by the legislature directs that all new federal COVID-related money provided to the Commonwealth be placed in a special fund.  Furthermore, “no expenditure of funds from the…Fund shall be made unless specifically appropriated in a general appropriation act….”  There is already some talk of another special session dedicated to determining how to spend this money, along with electing new judges.  It will be interesting to see if the Governor vetoes this language.

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30 responses to “Analysis of State Use of Federal COVID Funds”

  1. Dick, thanks for digging up this information… which, of course, has been reported nowhere else.

    I’m struck by the large sums given to Virginia universities. Just from the figures on the chart, it appears that higher-ed received $200 million or more. VCU — $81.5 million! What did the universities use this money for? To administer tests? Set up quarantine housing? Switch to online learning?

    1. LarrytheG Avatar

      I’d not be surprised that these funds have strings on them and useable only for certain things. But also curious how the money is actually appropriated or WHO has to appropriate?

      1. Nancy Naive Avatar
        Nancy Naive

        World Health?

        1. LarrytheG Avatar

          …. “who” in State will appropriate or is it Federal since it’s Fed money? I bet Dick knows…

          so anyhow, whoever appropriates would be responsible (I think) for gatekeeping what the funds could actually be spent on (or not).

          The budget folks will, no doubt, look over what they are currently spending on stuff and decide if any of it is eligible for the stimulus money and move the supplanted funds to some other more general use.

          Even budget money is “fungible” depending on the funds and how clever they are…

          1. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            The CARE funds were put in a big pot and the Governor then administratively appropriated it to agencies based on the priority uses he had established and the requests of agencies, although some of the federal money was targeted. I assume that DPB scrutinized the agency requests, but I don’t know the level of scrutiny they were allowed to exercise. The administration has only limited authority to move supplanted general fund appropriations to other agencies; therefore, agencies are free to use freed up money in any manner they wise, but, preferably, for one-time expenses.

    2. Nancy Naive Avatar
      Nancy Naive

      Pay for 500,000 adjuncts.

    3. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      I will do some digging. Meanwhile, one surprise I had–a total of almost $60 million in student financial aid

  2. LarrytheG Avatar

    Good and appreciated information, Dick! re: ” The General Assembly apparently got miffed at his ignoring their recommendations. Language included in the budget amendments recently adopted by the legislature directs that all new federal COVID-related money provided to the Commonwealth be placed in a special fund. Furthermore, “no expenditure of funds from the…Fund shall be made unless specifically appropriated in a general appropriation act…”

    Is this provision something Northam can change language of when he signs?

    What does it take to override a Northam veto or language change?

    1. Stephen Haner Avatar
      Stephen Haner

      Yes, almost $12 B to and through the state is real money. Then add the $12 B that Virginia employers received in the Paycheck Protection Program (another wave on the way). Then the uncounted billions in personal stimulus payments to all lower, middle and even upper middle households ($150K AGI!) in two tranches (#3 on the way.) No mystery why the recession was so sharp and reversed so quickly. Now we wait for the other shoe to drop. Were all those warnings about massive deficits baseless? This will be the best test in a long time.

      And the third shoe: The reaction when the tap turns off, if it ever does. At some point do the rental subsidies, utility subsides, enhanced UI and enhanced SNAP (to name just a few) actually end? My guess is no, not with the current Washington majority.

      Larry, it takes a vote of 2/3 in both chambers to override a governor’s veto. It takes a majority vote in both chambers to adopt a proposed governor’s amendment.

      1. Nancy Naive Avatar
        Nancy Naive

        Well, with an up to $3T infrastructure bill as the next item on the list, the tap ain’t shutting down any time soon.

        But, it might be nice to drive over a bridge to the other side without it suddenly becoming a “bridge to nowhere”.

        Who knows, maybe you and the Cap’n will get a shiny new pipeline?

        1. Matt Adams Avatar
          Matt Adams

          If the $800 Billion in 2013 didn’t repair those bridges, I highly doubt the additional $3 Trillion will do anything.

          Most of the reason your bridges aren’t getting repaired is because of EPA restrictions and protections for the waterways below them that didn’t exist when they were built.

          1. energyNOW_Fan Avatar

            Forget the bridges we need to put about 95% of the money into high power charging stations for electric vehicles in preparation for the Democrat mandates.

          2. LarrytheG Avatar

            Here’s a 1941 bridge being re-done in Fredericksburg over the Rappahannock River:

          3. LarrytheG Avatar

            Very cool – James. – somewhere along the line between then and 1941 – the steel superstructure went away and it looked like this:


            The bridge deck itself and beams under were weather damaged and had to be replaced. Big project for Fred.

          4. James Wyatt Whitehead Avatar
            James Wyatt Whitehead

            You enjoy this video on the 1942 flood. The current bridge withstood that flood.

          5. LarrytheG Avatar

            Both the Route 1 and Chatham and RF&P (back then) survived the floods because they basically went around the bridges through town…. via the old Vepco Canal that was fed from the Embrey Dam.

            The black shows the canal


            The dam was taken down about 10 years ago and the canal no longer connects to the river upstream.

          6. James Wyatt Whitehead Avatar
            James Wyatt Whitehead

            That video had great footage of old downtown. I had no idea Safeway and Leggetts occupied one of those skinny narrow store front’s on Caroline Street. Goolricks has always been there but I don’t believe any other old fashioned retail has survived.

          7. LarrytheG Avatar

            Yep. Downtown Fburg was THE economic center of the region until the Mall came and Leggetst and Sears and others left. Some guy I know actually worked in the Shoe department in downtown Leggetts and got a GOOD education about how folks buy shoes… 😉

            Downtown Fburg has not gone to seed like so many downtowns have but it’s very different business-wise than before.

          8. James Wyatt Whitehead Avatar
            James Wyatt Whitehead

            I miss all of the old Americana lights, signs, and ads painted on buildings. Downtown Fredericksburg looks like old town Alexandria. That new park Sophia Street is modeled after this one in Key West.

          9. Nancy Naive Avatar
            Nancy Naive

            In Texas so they can plug ’em in as reserves.

          10. Nancy Naive Avatar
            Nancy Naive

            Well, that and repairing ain’t sexy. No politician gets to make a dedication speech.

          11. Matt Adams Avatar
            Matt Adams

            Bridges aren’t “sexy” in general. I did two summer internships while in college where I was a bridge inspector.

            One resulted in me putting on hip-waders and slogging through creeks and what not to smack concrete abutments with hammers to see if it was delaminating.

            The other was watching the construction of a pre-cast box culvert in a mud hole of shale and clay or watching a multi-million dollar bridge being constructed on a dirt road (because the county had money) in a farmers field.

            While they were insightful and a job, they weren’t glamorous (that’s for certain). Also, Union Carpenters aren’t allowed to work in the rain but will get paid 4 hours for a show.

          12. Nancy Naive Avatar
            Nancy Naive

            There is always an “engineering solution” in civil engineering.


            What’s the difference between a mechanical and a civil engineer? MEs build missiles. CEs build targets.

          13. Matt Adams Avatar
            Matt Adams

            Funny story about one of those internships. The first one where I was doing the inspection (besides doing computer generated modeling to determined the watershed impacted by the construction taking 4 hours to run with so much GIS importation it wasn’t funny).

            Obviously, bridge construction is a CE job. There was an ME who convinced the state he could do the job and was hired as a bridge engineer.

          14. Nancy Naive Avatar
            Nancy Naive

            Smartest guy I knew in high school became an ME who jumped into designing water tanks about 4 years out of college. Spent the next 10 or 15 years building tanks all over Australia.

          15. Matt Adams Avatar
            Matt Adams

            Can’t beat a job like that, although some parts of the bush aren’t fun.

          16. Nancy Naive Avatar
            Nancy Naive

            No desire to go there. 200 poisonous species and two that eat you whole.

          17. You make an excellent point. Every politician wants in on the ribbon-cutting for the new [fill-in-the-blank] but then they forget about it. They don’t put enough money in the budget for maintenance and repairs, and they don’t budget anything for the inevitable, eventual rehabilitation/replacement.

            It’s an old story and it ain’t changing any time soon.

          18. LarrytheG Avatar

            Relatively common and basic human condition though! It’s what engineers know and advocate for but sometimes to little avail.

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