Treasury proposes new privacy act records system for SLFRF and other federal assistance program data

On February 4 the U.S. Department of the Treasury (Treasury) published a new Privacy Act System of Records Notice (SORN) in the federal register, establishing a new government database for the American Rescue Plan Act’s (ARPA) State and Local Fiscal Recovery Funds (SLFRF). NACo urges counties to submit comments by March 6, 2026.

See NACo's Letter

Background and New System of Records

Under the Privacy Act of 1974, federal agencies are required to issue a SORN when establishing a new system of records. The new system will store and use information Treasury already receives through existing programs reporting for compliance, oversight and efforts to identify potential waste, fraud and abuse. It will aggregate data across Treasury-administered programs and include information on funding recipients and subrecipients – including eligibility of documentation, contact and demographic information, financial and household data, program activity and performance reporting, and payment and award records.

County Concerns

Counties have significant concerns about how this new system could be operationalized – particularly the risk of retroactive compliance consequences if Treasury uses cross-program data aggregations to support determinations or corrective actions that were not contemplated under the guidance in effect when programs were originally administered. Specifically, counties are urging Treasury to ensure the new system:  

• Does not create new administrative burdens or duplicate of pre-existing reporting requirements
• Does not impose new reporting requirements or alter compliance expectations for awards that have already been obligated and administered
• Prohibits any new data collection efforts that could impose unfunded mandates on jurisdictions that no longer have dedicated program funds available
• Uses aggregated data consistently with prior guidance and does not reassess previously compliant actions under revised interpretations  

What Programs are Covered  

In addition to SLFRF, the notice applies to other Treasury Department Offices financial  assistance programs, including Capital Projects Fund program, Emergency Rental Assistance programs, Homeowner Assistance Fund program, Local Assistance and Tribal Consistency Fund , RESTORE Act programs (the Direct Component and Centers of Excellence Research Grants Program), Social Impact Partnership to Pay for Results Act program, State Small Business Credit Initiative and other similar programs Treasury may administer.