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A look into where Alabama’s $3.7 billion coronavirus relief money went

By CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – About $1.9 billion in federal coronavirus relief money for Alabama received a lot of attention in May as lawmakers and Gov. Kay Ivey grappled for control of it. But that was only about half the total federal COVID-19 money flowing into the state under the federal CARES Act.

The rest of the funds were mostly made available directly to state agencies through existing programs in order to address pressing needs at the beginning of the pandemic.

“Those funds were able to get allocated out more quickly because the apparatus behind those grant processes was already in place, so it was a sort of a supplement,” State Finance Director Kelly Butler told Alabama Daily News.

The Ivey administration is still in the process of distributing the state’s $1.9 billion COVID-19 relief fund. Here is a look at where those direct allocations went.

Health Care

The largest chunk of federal funds was the Provider Relief Funds from the U.S. Department of Health and Human Services, totaling about $449.4 million for Alabama health care providers.

On April 10, HHS immediately began distributing that money based on facilities and providers that received Medicare fee-for-service reimbursements in 2019. HHS says the $449.4 million was given out to 4,652 different health providers or health systems in the state.

The Alabama Hospital Association told Alabama Daily News that only a third of that allocation reached its members and that state hospitals lost about $739 million in revenue through the months of March and April.

HHS over the past weeks has announced where new batches of funds are going, including hospitals or other facilities like clinics or nursing homes.

HHS also distributed $70 million to five different providers as a part of their high-impact allocation funds, which went to hospitals that provided in-patient care for 100 or more COVID-19 patients through April 10.

UAB Hospital in Birmingham received the largest of the high-impact funds at $27 million.

Based off of Alabama’s proportion of low-income and uninsured patients, the state received an extra $24 million to provide hospitals with additional support. Alabama’s portion of this funding was the 15th highest in the nation.

Alabama received $191 million for 175 rural health care providers which include rural hospitals, rural health clinics and rural community health centers.

The Alabama Department of Public Health submitted plans to the Alabama Department of Finance for its plans on reimbursement of expenditures related to COVID-19 on a monthly basis, the Assistant State Health Officer Dr. Karen Landers told ADN.

She said in an email that the department plans on using the funds to reimburse the following efforts:

  • Contact tracing, including working with UAB and potential contact tracing services;
  • Hiring professional public health staff to augment COVID-19 disease control in Alabama’s public health districts;
  • Equipment for the Bureau of Clinical Laboratories  to provide testing and related services;
  • Information technology infrastructure support;
  • COVID-19 response personnel costs to public health;
  • Bureau of Communicable Disease Infectious Disease and Outbreaks infrastructure support;
  • Personal protective equipment;
  • Public outreach.

Alabama is also set to receive $115 million from the Centers for Disease Control and Prevention for a cooperative agreement with the Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases.

Landers says ADPH has been the recipient of this kind of funding since 2000 and has been used through the years to build the necessary infrastructure, capacity and skills to carry out critical laboratory and epidemiologic functions to strengthen the state’s ability to respond to infections diseases.

“This same funding mechanism was used to provide additional monies to states for ebola and zika response,” Landers said in an email.

Education, child care

Another large chunk of federal dollars went to the Alabama State Department of Education, which has received $216.9 million for K-12 schools.

Most of those funds are to be distributed to local schools or based on their proportional allocations of the Every Student Succeeds Act title I-A funds, which provides funding based on the percentage of low-income families in a school system. State education agencies can reserve up to 10% of the federal funds for emergency needs.

Another fund going toward education is the $48 million pot labeled the “Governor’s Emergency Education Relief Fund.” These funds can be used at the governor’s discretion for grants to local agencies, institutions of higher education or any other education-related entities deemed essential.

Susan Wilhelm, the deputy finance director, told ADN that educational institutions are submitting their suggested uses of the funds to Ivey in the coming weeks.

The Alabama Department of Human Resources has received $64.9 million for Child Care and Development Block Grant, which can be used for continued payments and assistance to child care providers in the case of decreased enrollment or closures related to the pandemic so they can remain open.

About $1 million in child care subsidies for health care workers and first responders have also been given out, DHR spokesman Daniel Sparkman said.

Another about $275 million went directly to Alabama universities, colleges and some trade schools. 

Pass-thru Grants

The Alabama Department of Economic and Community Affairs will be getting around $83 million to pass through funds for various programs to help Alabamians who are struggling because of the pandemic.

Those funds will go toward programs like community development block grants, low-income energy assistance programs, family violence prevention programs, emergency housing assistance or rental and utility assistance.

Department spokesperson Mike Presley told ADN that these additional funds will be made available as soon as they receive full guidance from federal agencies on the rules and regulations for the funds.

Ivey announced $17 million of the Community Services Block Grants to 20 community action agencies across the state last week. The largest of these grants is going to the Jefferson County Committee for Economic Opportunity for $2.19 million.

Those funds are being used toward a range of needs like social and emergency services for senior citizens, people with disabilities and low-income families, including those who have suffered financial loss during the pandemic.

COVID-19 Relief Fund

On June 7, Ivey said she wanted the public to submit suggestions via an online request form of where they think Alabama’s portion of the CARES Act funding should go. This is part of the state’s COVID-19 Relief Fund, which amounts to around $1.9 billion.

In an executive amendment passed by the Legislature in early May, Ivey laid out where specific “buckets” of this money would go, including $250 million for health care, $250 million to reimburse counties and cities, $300 million for technology and infrastructure and $200 million for the Department of Corrections.

Those who wish to submit their request form have to fall under one of the acceptable reasons for reimbursement under strict federal guidelines.

If these funds go unspent by December 30, those dollars have to go back to the U.S. Treasury, so Ivey is encouraging any Alabamian to submit their ideas of how it should be spent.

“As your governor, input from Alabama citizens is something I value and take into consideration each and every day,” Ivey said in an email to ADN. “I encourage anyone to submit your ideas on how our portion of the federal Coronavirus Relief Fund monies should be spent – anything that falls within the guidelines will be considered. Together, with the partnership of the people of our state, I am committed to making sure that Alabama is made as whole as possible from responding to this virus.”

There is no deadline on when these request forms are to be sent in but the Coronavirus Relief Funds have to be spent by Dec. 30, 2020.


How the state ultimately decides to spend the $1.9 billion fund will be accounted for by the state’s Finance Department, Butler said.

Butler told ADN that agencies that get specific grants are responsible for answering to the federal government and reporting how they spend that money, but the Coronavirus Relief Fund money is the responsibility of the Finance Department.

“We would be the ultimate agency responsible for administering that and part of that is anytime you get federal funds, the federal auditors will come and ask you, you know, how have you spent this and have you complied and of course? We have to be ready for that,” Butler said.

He also wants to make sure that the spending is within the scope of the federal government’s guidance because anything found to be outside of that scope will have to be repaid.

“That’s why we’re very careful about getting the money out on the front end because there is that penalty,” Butler said.

Butler has been in ongoing communication with the U.S. Treasury Department in discussing the ever-changing guidance on where the relief funds can be spent.

“That’s just the nature of federal funds, and particularly when they’re trying to do this in a seven or eight-month window that they created,” Butler said.

The relief funds can’t go toward replacing state or local revenue that’s been lost because of the pandemic, but Butler says he hopes these funds can go toward uplifting the existing programs already in the state’s budget that are designed to help communities in these dire situations.

“When you think about things like the unemployment at the Department of Labor and Medicaid and (the Department of Human Resources) and mental health, you can go on down the line, that’s what’s funded in our state budgets and so the best way for them to help state and local government is to keep those budgets going,” Butler said.

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