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American Rescue Plan Act: Coronavirus State & Local Fiscal Recovery Fund FAQs

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    American Rescue Plan Act: Coronavirus State & Local Fiscal Recovery Fund FAQs

    Quick Links

    • Access NACo's Full Analysis
    • Visit the NACo COVID-19 Recovery Clearinghouse

    On January 6, the U.S. Department of Treasury (Treasury) released the Final Rule and an Overview of the Final Rule document for the Coronavirus State and Local Fiscal Recovery Fund (Recovery Fund), a portion of the $362 billion Coronavirus State and Local Fiscal Recovery Fund, established under the American Rescue Plan Act (ARP) signed into law on March 11 by President Biden. 

    Key changes between the Final Rule and the Interim Final Rule included new flexibility to use Recovery Funds to invest in broadband infrastructure, services and programs to contain and mitigate the spread of COVID-19, including capital investments in public facilities, and investments in housing and neighborhoods, all of which counties advocated for. This specific interim rule and related guidance covers the $65.1 billion in direct federal aid to America’s counties. 

    Since the Recovery Fund was established, NACo has worked closely with Treasury to ensure county recommendations and priorities are included in the Final Rule.


    1. Do counties need to calculate or provide proof of their revenue loss to use funds for government services?

    Counties that take the $10 million standard allowance do not need to provide proof of revenue loss to use funds for government services. Counties that calculate their revenue loss using the Treasury formula will need to report more detailed information about their actual and projected revenue.

    2. If a project is eligible under another expenditure category, can counties list the project under revenue loss?

    All projects that would be eligible under another expenditure category are also eligible under the revenue loss category because those uses are also government services. The revenue loss category allows greater flexibility and more streamlined reporting requirements than other eligible use categories, so counties have broad leeway to determine how to spend funds under this category.

    3. Are counties expected to demonstrate that reduction in revenue is due to the COVID-19 public health emergency?

    The Final Rule presumes that any revenue loss a county experiences is a result of the COVID-19 pandemic. Neither counties that choose the standard allowance nor counties that calculate their revenue loss using the Treasury formula need to provide special data demonstrating that revenue loss was specifically caused by COVID-19.

    4. Do federal procurement requirements apply to SLFRF?

    The procurement standards under the Uniform Guidance (2 CFR 200.317-327) apply to procurement using Fiscal Recovery Funds. Procurement standards apply in any instance that a county uses Fiscal Recovery Funds to procure goods and services to carry out eligible uses, including under the revenue loss category.

    5. What is the threshold for competitive bidding for county governments?

    Counties must adhere to the competitive bidding thresholds set forth in 2 CFR 200.320. Procurement below the Micro-purchase Threshold, currently set at $10,000, does not need to be solicited competitively. Counties may increase their Micro-purchase Threshold pursuant to the protocols described in 2 CFR 200.320(a)(1)(iv). Procurement below the Simplified Acquisition Threshold, currently set at $250,000, may follow simplified procedures described in 2 CFR 200.1 and 2 CFR 200.320(a)(2). All other procurement must follow procedures described in 2 CFR 200.320(b).

    6. How is a contract different from a subaward?

    The Uniform Guidance defines a “contract” as a legal instrument by which a county or subrecipient purchases property or services needed to carry out a project under a federal award. A “subaward” is distinct because it is an award provided by a county to a subrecipient to carry out part of a federal award on behalf of a county government.


    7. What are the reporting requirements for the Fiscal Recovery Fund?

    Interim reports:  Counties will be required to submit one interim report, which will include the county’s expenditures by category at the summary level. The interim report will cover spending from the date the county receives Recovery Funds to July 31, 2021. Interim reports are due by August 31, 2021.

    Quarterly project and expenditure reports: Counties will be required to submit quarterly project and expenditure reports, which will include financial data, information on contracts and subawards over $50,000 and other information regarding utilization of funds. The first report will cover spending from the date the county receives Recovery Funds to December 31, 2021, and the first report is due by January 31, 2022. You can find a user guide for submitting the Project and Expenditure Report here.

    Recovery plan performance reports: Counties will be required to submit an annual recovery plan performance report, which will include descriptions of projects funded and information on performance indicators and objectives of each award. Initial recovery plan will cover activity from the date the county receives Recovery Funds to July 31, 2021. Local governments with less than 250,000 residents are not required to develop Recovery Plan Performance Report.  Recovery plan is due by August 31, 2021.

    8. Where can I find the user guide for the Project and Expenditure Report?

    You can find the Project and Expenditure Report User Guide here.

    9. Are counties required to remit interest earned on Recovery Fund payments made by Treasury?

    No. Recovery Fund payments made by Treasury to local governments and Tribes are not subject to the requirement of maintaining balances in an interest-bearing account and remit payments to Treasury. 

    10. What provisions of the Uniform Guidance for grants apply to these funds? Will the Single Audit requirements apply?

    Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program, including the Cost Principles and Single Audit Act requirements. Recipients should refer to the Assistance Listing for detail on the specific provisions of the Uniform Guidance that do not apply to this program. The Assistance Listing is available on Additional changes to compliance and reporting guidelines, including any clarifications on Uniform Guidance requirements, will be addressed in Compliance and Reporting Guidance and the User Guide.

    11. How will Treasury recoup Recovery Funds?

    Failure to comply with restriction on use of funds will be identified based on reporting provided by the county. The county will receive a written notice of violation, and within 60 calendar days of the notice, a county can seek reconsideration of the violation based on supplemental information. If the recipient does not submit a request for reconsideration, the initial notice of recoupment would be deemed a final notice. A recipient would then be required to repay any amounts subject to recoupment within 120 calendar days of the initial or final notice (which depends on if the recipient requested reconsideration or not).

    12. May counties use funds to cover the costs of consultants to assist with managing and administering the funds?

    Yes. Counties may use funds for administering the CSFRF/CLFRF program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements. Recipients should refer to Treasury’s Compliance and Reporting Guidance for more details on permissible direct and indirect administrative costs.

    13. What is the Assistance Listing and Catalog of Federal Domestic Assistance (CFDA) number for the program?​
    The Assistance Listing for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) was published May 28, 2021 on This includes the final CFDA Number for the program, 21.027.

    The assistance listing includes helpful information including program purpose, statutory authority, eligibility requirements, and compliance requirements for recipients. The CFDA number is the unique 5-digit code for each type of federal assistance, and can be used to search for program information, including funding opportunities, spending on, or audit results through the Federal Audit Clearinghouse.

    To expedite payments and meet statutory timelines, Treasury issued initial payments under an existing CFDA number. If you have already received funds or captured the initial CFDA number in your records, please update your systems and reporting to reflect the final CFDA number 21.027. Recipients must use the final CFDA number for all financial accounting, audits, subawards, and associated program reporting requirements.

    To ensure public trust, Treasury expects all recipients to serve as strong stewards of these funds. This includes ensuring funds are used for intended purposes and recipients have in place effective financial management, internal controls, and reporting for transparency and accountability.
    14. Does the $5 million threshold apply to funds received or the total allocation?

    The reporting threshold is based on the total allocation expected under the SLFRF program, not the funds received by the recipient as of the time of reporting. Recipient reporting tiers will be displayed in the reporting portal. If you believe there is an error with the reporting tier or application of the $5 million threshold, please email

    15. How should a recipient report funds if funds were received as multiple entity types (e.g., a county and an NEU, or county and a city)? 

    When receiving funds as multiple entity types, a recipient’s reporting tier is determined by their total allocation across both recipient types and the highest tier for which they qualify. For example, if a recipient receives funding as an NEU and a county with population under $250,000 and their total allocation across both entity types is over $5M, the recipient should report as a county with population under 250,000 and over $5M in total SLFRF funding. A recipient’s reporting tier will be available for review in the Treasury’s Portal. If you believe there is an error in consolidating or not consolidating your governmental entities for the purposes of reporting, please email

    16. What reporting is required if no SLFRF funding was used for the activities covered by the Required Performance Indicators noted in Part 2 C.2. of the Reporting Guidance related to the Recovery Plan? 

    A recipient only needs to report on mandatory performance indicators if funds were used for that purpose / Expenditure Category. 

    17. Do jurisdictions need to have committed or dedicated funding received by the August 31, 2021 deadline for the initial Recovery Plan? 

    No. Funding does not need to be committed or dedicated by the time the initial Recovery Plan is submitted. The Recovery Plan should include planned uses of funds and projects to the extent known at the time the Recovery Plan is submitted. Updates can be provided in subsequent project and expenditure reports.

    18. Can records be edited or updated after submission? How do I report changes?

    Interim Report: No changes will be allowed after the initial submission. Any updates will be captured when the first Project and Expenditure Report is submitted.

    Quarterly Project and Expenditure Reports: Updates should be provided in the next quarterly Project and Expenditure Report.

    Annual Project and Expenditure Report: Recipients will have an opportunity to provide updates with next quarterly submission date, when the portal opens for quarterly submitters. Additional information will be included in the forthcoming User Guide for the Project and Expenditure Report.

    Recovery Plan: Recipients will be allowed to submit updates of their Recovery Plan reflecting any significant changes. They should also provide concurrent updates to the publicly posted version.

    19. How do recipients correct or edit pre-populated information or project information in Treasury’s Portal?

    In the event that information presented in Treasury’s Portal requires correction, recipients should email and provide the necessary edits.

    20. Is there any possibility of extension for the reporting deadlines for individual recipients?

    Generally, No. The data submitted by recipients will be used internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. Late submissions undermine the efficiency and timeliness of these processes. Recipient submissions after the reporting deadline will be considered as late, and recipients will be asked to provide a date by which the delayed reporting will be submitted so that Treasury can plan for incorporating the data. Treasury’s own reporting will highlight those recipients whose reports were not received by the deadline. If there are any changes to the overall reporting deadlines, they will be communicated to the relevant impacted recipients. 

    21. Is there a penalty for not submitting timely reports?

    A record of late reporting could lead to a finding of non-compliance, which could result in development of a corrective action plan, or other consequences.

    22. Will the data recipients submit be made publicly available?

    Yes, Treasury will make the data submitted by recipients publicly available. The content and timing of release is still under development. Treasury encourages recipients to make their data directly available through their own websites. States and territories are reminded that they need to post the Recovery Plan in their public website by the date the report is transmitted to Treasury.

    23. What is meant by Date of Award?

    The Date of Award is the day the recipient certifies the funding.

    24. When are recipients subject to the quarterly reporting?

    Recipients are required to provide quarterly reporting starting in the period funds were received and certified. Quarterly reporting is required for all quarters thereafter.

    25. In the event that something is funded/purchased using the Recovery Funds and reported, and then subsequently it is realized that the funding/purchase does not qualify for use of the Recovery Funds, can that report be amended and a correction be made?

    Yes. Recipients can make corrections to reporting to adjust for ineligible uses, and must pay for that expense using non-SLFRF funding.

    26. How should recipients report use of funds when the expense is not listed or does not fit one of the Expenditure Categories designations?

    Recipients should align the project to the best fit of Expenditure Category and use the project description to further describe the project as needed. 

    27. Should expenditures be reported on an accrual or cash basis? 

    Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles.

    28. Are there targets for the amount of funds that must be spent on evidence based interventions?

    Treasury’s Reporting Guidance requires recipients to report in their Recovery Plan on “the dollar amount of the total project spending that is allocated towards evidence-based interventions for each project” in certain Expenditure Categories (see list of Expenditure Categories in the Reporting Guidance appendix for details). While Treasury encourages all SLFRF recipients to invest funds in evidence-based interventions whenever possible and to increase these amounts over time, there are no targets or requirement to spend a specific amount of money on evidence-based interventions. Recipients are exempt from this requirement in cases where a program evaluation is being conducted. 

    29. What expenses should be counted as evidence-based for the purposes of reporting?

    As outlined in the Reporting Guidance, evidence-based refers to interventions with strong or moderate evidence for the purposes of SLFRF reporting. Appendix 2 of the Reporting Guidance contains additional information on the definition of strong and moderate evidence. In addition to spending funds on evidence-based interventions, Treasury also encourages all recipients to conduct evaluations to build evidence about new or innovative programs or services they are providing with SLFRF. As a reminder, SLFRF may be used by recipients to perform evaluations, build their internal evaluation capacity, or to contract with external organizations for evaluation related activities.

    30. How should evidence be considered when disbursing funds through contracts or grants?

    When sub-granting SLFR funds to third parties, recipients are encouraged to include provisions related to evidence in relevant project areas. Specifically, recipients may include provisions that ask third party recipients (or prospective recipients) of SLFR funds about the level of evidence for the programs or services that they are providing. This could consist of a requirement or preference in grant or contract solicitations that ask third party sub-grantees about whether their programs or services are evidence-based according to the definition in Appendix 2 of the Reporting Guidance. Requiring third party recipients to report on whether their programs or services are evidence-based will facilitate reporting for the Recovery Plan. 


    31. What are the areas that counties can spend Recovery Funds?

    There are five primary ways that Recovery Funds can be spent:

    1. Support public health response: Fund COVID-19 mitigation efforts, medical expenses, behavioral healthcare and certain public health and safety staff
    2. Address negative economic impacts: Respond to economic harms to workers, families, small businesses, and nonprofits, or impacted industries and re-hiring of public sector workers
    3. Replace public sector revenue loss: Use funds to provide government services to the extend of the reduction in revenue experienced due to the pandemic
    4. Premium pay for essential workers: Offer additional support to those who have and will bear the greatest health risks because of their service in critical infrastructure. Funds can be used retroactively back to January 27, 2020.
    5. Water, sewer and broadband infrastructure: Make necessary investments to improve access to clean drinking water, invest in wastewater and stormwater infrastructure and provide unserved or underserved locations with new or expanded broadband access


    32. How do I know if a specific use is eligible? 

    Fiscal Recovery Funds must be used in one of the four eligible use categories specified in the American Rescue Plan Act:

    1. To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality; 
    2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers; 
    3. For the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency OR up to a standard allowance of $10 million; and
    4. To make necessary investments in water, sewer, or broadband infrastructure
    33. Are expenses that were allowed under the CARES Act Coronavirus Relief Fund also allowable under the Recovery Fund?

    Yes. However, there are three exceptions – certain restrictions on payroll costs for public health and safety employees, expenses related to issuing tax-anticipation notes are not eligible and non-federal matching requirements.

    34. What is the difference in payroll expense coverage in the CARES Act Coronavirus Relief Fund and the American Rescue Plan State and Local Fiscal Recovery Fund?

    The difference in payroll expense coverage is that the American Rescue Plan recognizes that the response to the COVID-19 public health emergency has changed and will continue to change over time. In particular, funds may be used for payroll and covered benefits expenses for public safety, public health, health care, human services, and similar employees, including first responders, to the extent that the employee’s time that is dedicated to responding to the COVID-19 public health emergency. 

    The recipient may consider a public health and safety employee to be entirely devoted to mitigating or responding to the COVID-19 public health emergency if the employee, or their operating unit or division, is primarily dedicated (e.g., more than half of the employee’s time is dedicated) to responding to the COVID-19 public health emergency.

    35. What staff are included in “public safety, public health, health care, human services and similar employees”?

    Public safety employees would include police officers (including state police officers), sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and detention officers, and those who directly support such employees such as dispatchers and supervisory personnel.

    Public health employees would include employees involved in providing medical and other health services to patients and supervisory personnel, including medical staff assigned to schools, prisons, and other such institutions, and other support services essential for patient care (e.g., laboratory technicians, medical examiner or morgue staff) as well as employees of public health departments directly engaged in matters related to public health and related supervisory personnel.

    Human services staff include employees providing or administering social services; public benefits; child welfare services; and child, elder, or family care as well as others.

    36. Can counties use Recovery Funds to pay "back to work incentives"?

    Yes. This assistance can include job training or other efforts to accelerate rehiring and thus reduce unemployment, such as childcare assistance, assistance with transportation to and from a jobsite or interview, and incentives for newly employed workers as well as assistance to unemployed workers seeking to start small businesses.

    37. Can counties use Recovery Funds to cover administrative costs?

    Yes. Counties can use Recovery Funds to cover the portion of employee payroll and benefit costs corresponding to time spent on administrative work due to COVID-19 and its economic impacts. Eligible uses include, but are not limited to, costs related to distributing Recovery Funds and managing new grant programs established with the funds.

    38. May a county retain a purchased asset if bought with Recovery Funds?

    Yes, if the purchase was an eligible use of funds.

    39. Can Recovery Funds be used for non-federal matching requirements such as FEMA disaster assistance or Medicaid?

    Non-federal match requirements have different rules depending on the method in which funds are used.

    Specifically, Recovery Funds used under the Revenue Loss eligible use category may generally be used to meet the non-federal cost share or matching requirements. Federal funds that constitute revenue sharing to state and local governments may generally be used to meet non-federal match requirements. This includes non-federal match requirements of the DWSRF and CWSRF programs. However, note that SLFRF funds may not be used as the non-federal share for purposes of a state's Medicaid and CHIP programs, as the Office of Management and Budget has approved a waiver as requested by the Centers for Medicare & Medicaid Services. Recipients will need to ensure that the relevant agency in which they are using Recovery Funds to provide their non-federal match does not have a waiver in place which would bar federal funds from being used as a non-federal match.

    Outside of the revenue loss eligible use category, generally funds cannot be used to meet the non-federal match or cost-share requirements of other federal programs, other than as specifically provided for in the statute. For example, funds cannot be used to match funds for FEMA programs, unless specifically made so. Under a February 3, 2021 presidential directive, FEMA is authorized to provide 100 percent federal funding for the cost of COVID-related activities previously determined as eligible, from the beginning of the pandemic (January 27, 2020) to September 30, 2021.  In addition, the directive allows FEMA to expand activities eligible for reimbursement from January 21, 2021 until September 30, 2021.  Specifically, costs to support the safe opening and operation of eligible schools, child care facilities, health care facilities, non-congregate shelters, domestic violence shelters, and transit systems are now eligible.

    Notably, the Infrastructure Investment and Jobs Act (IIJA) specifies that an entity using funding under Section 60102 for broadband deployment, "may include funds provided to an eligible entity or subgrantee under ARPA for the purpose of deployment of broadband service, which includes funds provided under the Fiscal Recovery Funds when dealing with the non-federal match requirement. The Final Rule also permits that Recovery Funds may be used for purposes of satisfying non-federal matching requirements required for an authorized Bureau of Reclamation project.

    40. Can funds be used towards general infrastructure projects, such as roads and bridges?

    Counties are generally not allowed to use funds for general infrastructure spending outside of water, sewer and broadband investments or above the amount allocated under the revenue loss provision, unless the infrastructure project can specifically be tied back to a specific public health need or negative economic impact.

    41. How flexible are Categories 1 and 2 – public health response and negative economic impacts – when it comes to eligible uses?

    Counties have broad flexibility so long as they can demonstrate that these activities support the public health response or that recipients of the Recovery Funds have experienced economic harm from the pandemic. Recipients also have broad flexibility to (1) identify and respond to other pandemic impacts and (2) serve other populations that experienced pandemic impacts, beyond the enumerated uses and presumed eligible populations in Treasury’s Final Rule. Please see page 13 of Treasury’sOverview of the Final Rule document for more information.

    42. May counties use funds to establish a public jobs program?

    Yes. The Final Rule permits a broad range of services to unemployed or underemployed workers and other individuals that suffered negative economic impacts from the pandemic. That can include public jobs programs, subsidized employment, combined education and on-the-job training programs, or job training to accelerate rehiring or address negative economic or public health impacts experienced due to a worker’s occupation or level of training. The broad range of permitted services can also include other employment supports, such as childcare assistance or assistance with transportation to and from a jobsite or interview. The Interim Final Rule includes as an eligible use re-hiring public sector staff up to the government’s level of pre-pandemic employment. “Public sector staff” would not include individuals participating in a job training or subsidized employment program administered by the recipient.

    43. How can I use CSFRF/CLFRF funds to prevent and respond to crime, and support public safety in my community?

    The enumerated eligible uses in this area should respond to an identified impact of the COVID-19 public health emergency in a reasonably proportional manner to the extent and type of harm experienced.

    Below are some examples of how Fiscal Recovery Funds can be used to address public safety:

    • Many enumerated eligible uses – such as behavioral health services, services to improve employment opportunities, and services to address educational disparities in disproportionately impacted communities – that respond to the public health and negative economic impacts of the pandemic may also have benefits for reducing crime or aiding victims of crime.
    • The Final Rule includes an enumerated eligible use for community violence intervention programs in all communities, not just the disproportionately impacted communities eligible under the interim final rule. Specific types of service include:
      • Evidence-based practices like focused deterrence, street outreach, violence interrupters, and hospital-based violence intervention models, complete with wraparound services such as behavioral therapy, trauma recovery, job training, education, housing and relocation services, and financial assistance; and
      • Capacity-building efforts at community violence intervention programs like funding more intervention workers, increasing their pay, providing training and professional development for intervention workers, and hiring and training workers to administer the programs.
    • Enumerated eligible uses that respond to an increase in gun violence may be pursued in communities experiencing an increase in gun violence associated with the pandemic, specifically: 1) hiring law enforcement officials – even above pre-pandemic levels – or paying overtime where the funds are directly focused on advancing community policing strategies for gun violence, 2) additional law enforcement efforts to reduce gun violence exacerbated by the pandemic, including prosecuting gun traffickers, dealers, and other parties contributing to the supply of crime guns, as well as collaborative federal, state, and local efforts to identify and address gun trafficking channels, and 3) investing in technology and equipment to allow law enforcement to more efficiently and effectively respond to the rise in gun violence resulting from the pandemic, for example technology to assist in the identification of guns whose serial numbers have been damaged.
    • In all communities, recipients may use resources to rehire police officers and other public servants to restore law enforcement and courts to their pre-pandemic levels. Additionally, Funds can be used for expenses to address COVID-related court backlogs, including hiring above pre-pandemic levels, as a response to the public health emergency.
    44. In order to receive and use Fiscal Recovery Funds, must a recipient government maintain a declaration of emergency relating to COVID-19?

    No. Neither the statute establishing the CSFRF/CLFRF nor the Final Rule requires recipients to maintain a local declaration of emergency relating to COVID-19

    45. The Interim Final Rule states that “assistance or aid to individuals or businesses that did not experience a negative economic impact from the public health emergency would not be an eligible use under this category.” Are recipients required to demonstrate that each individual or business experienced a negative economic impact for that individual or business to receive assistance?

    Not necessarily. The Final Rule provides an expanded set of households and communities that are presumed to be “impacted” and “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis. “Impacted” classes experienced the general, broad-based impacts of the pandemic, while “disproportionately impacted” classes faced meaningfully more severe impacts, often due to preexisting disparities.

    The Final Rule further provides a broader set of uses available for these communities as part of COVID-19 public health and economic response, including making affordable housing, childcare, early learning, and services to address learning loss during the pandemic eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities.

    46. Would investments in improving outdoor spaces (e.g. parks) be an eligible use of funds as a response to the public health emergency and/or its negative economic impacts?

    The Final Rule indicates that investments in parks and other public outdoor recreation spaces are enumerated eligible uses for disproportionately impacted communities in order to promote healthier living environments. Spending on outdoor and recreational purposes may also be eligible under the assistance to small businesses eligible use category under Negative Economic Impacts.

    There are multiple ways that investments in improving outdoor spaces could qualify as eligible uses within disproportionately impacted communities:

    1. Development of neighborhood features that promote improved health and safety outcomes, such as parks, green spaces, recreational facilities, sidewalks, pedestrian safety like crosswalks, projects that increase access to health foods, streetlights, neighborhood cleanup, and other projects to revitalize public spaces.
    2. Recipients may provide assistance to small businesses in all communities. Assistance to small businesses could include support to enhance outdoor spaces for COVID-19 mitigation (e.g., restaurant patios) or to improve the built environment of the neighborhood (e.g., façade improvements).
    3. Many governments saw significantly increased use of parks during the pandemic that resulted in damage or increased maintenance needs. The Interim Final Rule recognizes that “decrease[s to] a state or local government’s ability to effectively administer services” can constitute a negative economic impact of the pandemic

    Recipients may also utilize lost revenue as a means to provide any traditional government service, which may include maintaining and upgrading public parks.

    47. Would expenses to address a COVID-related backlog in court cases be an eligible use of funds as a response to the public health emergency?

    The Final Rule recognizes that “decrease[s to] a state or local government’s ability to effectively administer services,” such as cuts to public sector staffing levels, can constitute a negative economic impact of the pandemic. During the COVID-19 public health emergency, many courts were unable to operate safely during the pandemic and, as a result, now face significant backlogs. Court backlogs resulting from inability of courts to safely operate during the COVID-19 pandemic decreased the government’s ability to administer services. Therefore, steps to reduce these backlogs, such as implementing COVID-19 safety measures to facilitate court operations, hiring additional court staff or attorneys to increase speed of case resolution, and other expenses to expedite case resolution are eligible uses.

    48. Can funds be used to assist small business startups as a response to the negative economic impact of COVID-19?

    As discussed in the Final Rule, recipients may provide assistance to small businesses that responds to the negative economic impacts of COVID-19. Treasury acknowledges a range of potential circumstances in which assisting small business startups could be responsive to the negative economic impacts of COVID-19, including for small businesses and individuals seeking to start small businesses after the start of the COVID-19 public health emergency. For example:

    • A recipient could assist small business startups with additional costs associated with COVID-19 mitigation tactics (e.g., barriers or partitions; enhanced cleaning; or physical plant changes to enable greater use of outdoor space).
    • A recipient could identify and respond to a negative economic impact of COVID19 on new small business startups; for example, if it could be shown that small business startups in a locality were facing greater difficult accessing credit than prior to the pandemic, faced increased costs to starting the business due to the pandemic, or that the small business had lost expected startup capital due to the pandemic.
    • The Final Rule also discusses eligible uses that provide support for individuals who have experienced a negative economic impact from the COVID-19 public health emergency, including uses that provide job training for unemployed individuals. These initiatives also may support small business startups and individuals seeking to start small businesses. 


    49. How is revenue loss defined?

    Recovery Funds may be used to pay for “government services” in an amount equal to the revenue loss experienced by the recipient due to the COVID-19 pandemic. Recipients have two options for how to determine their amount of revenue loss:

    1. Recipients may elect a "standard allowance" of up to $10 million to spend on government services through the period of performance.
    2. Recipients may calculate their actual revenue loss according to the formula articulated in the Final Rule. The formula can be found below.
    50. How do I know if a certain type of revenue should be counted for the purpose of computing revenue loss?

    Recipients should refer to the definition of “General Revenue” included in the Final Rule, which is derived from the components reported under “General Revenue from Own Sources” in the Census Bureau’s Annual Survey of State and Local Government Finances. If a recipient is unsure whether a particular revenue source is included in the Interim Final Rule’s definition of “General Revenue,” the recipient may consider the classification and instructions used to complete the .

    In the Final Rule, there are two additional exceptions that have been made in defining general revenue. First, Treasury has adjusted the definition to allow recipients that operate utilities that are part of their own government to choose whether to include revenue from these utilities in their revenue loss calculation. Secondly, Treasury has also added liquor store revenue to the definition of general revenue.

    51. How do counties calculate revenue loss?
    1. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e. last full fiscal year before january 27, 2020), called the base year revenue
    2. Estimated counterfactual revenue, which is equal to base year revenue:

    Base year revenue x [(1 + growth adjustment)^(n/12)], where n is the number of months elapsed since the end of the base year to the calculation date, and growth adjustment is the greater of 5.2 percent and the recipient’s average annual revenue growth in the three full fiscal years prior to the COVID-19 public health emergency

    1. Identify actual revenue, which equals revenues collected over the past 12 months of the calculation date
    2. Revenue loss for the calculation data is equal to counterfactual revenue inus actual revenue (adjusted for ta changes) for the twelve-month period. If actual revenue exceeds counterfactual revenue, the loss is set to zero for that twelve-month period. Revenue loss for the period of performance is the sum of the revenue loss for each calculation date.
    52. What can a county do with its funding from revenue loss (I.e. what does “government services” mean)?

    Counties can spend revenue loss funding on any traditional government service. Government services can include, but are not limited to, maintenance or pay-go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; construction of schools and hospitals; and the provision of police, fire, and other public safety services. This list is not exclusive, and Treasury clarifies that services provided by the recipient governments are generally considered “government services” under the Final Rule, unless Treasury has states otherwise.

    In terms of restricted uses, expenses associated with obligations under instruments evidencing financial indebtedness for borrowed money would not be considered the provision of government services, as these financing expenses do not directly provide services or aid to citizens. Specifically, government services would not include interest or principal on any outstanding debt instrument, including, for example, short-term revenue or tax anticipation notes, or fees or issuance costs associated with the issuance of new debt.

    Government services would not include satisfaction of any obligation arising under or pursuant to a settlement agreement, judgment, consent decree, or judicially confirmed debt restructuring in a judicial, administrative, or regulatory proceeding, except if the judgment or settlement required the provision of government services. That is, satisfaction of a settlement or judgment itself is not a government service, unless the settlement required the provision of government services. In addition, replenishing financial reserves (e.g., rainy day or other reserve funds) would not be considered provision of a government service, since such expenses do not directly relate to the provision of government services.

    53. In calculating revenue loss, are counties required to use audited financials? Should recipients calculate revenue loss on a calendar year basis or fiscal year basis?

    Where audited data is not available, recipients are not required to obtain audited data. Treasury expects all information submitted to be complete and accurate. See 31 CFR 35.4(c).

    Treasury further clarifies that recipients have the flexibility with respect to calculation dates and to clarify certain elements. Specifically, the Final Rule provides recipients the option to choose whether to calculate revenue loss on a fiscal year or calendar year basis, though they must choose a consistent basis for loss calculations throughout the period of performance.

    54. In calculating revenue loss, should counties use their own data, or Census data?

    Recipients should use their own data sources to calculate general revenue, and do not need to rely on published revenue data from the Census Bureau. Treasury acknowledges that due to differences in timing, data sources, and definitions, recipients’ self-reported general revenue figures may differ somewhat from those published by the Census Bureau.

    55. Should counties calculate revenue loss on a cash basis or an accrual basis?

    Counties may provide data on a cash, accrual, or modified accrual basis, provided that recipients are consistent in their choice of methodology throughout the covered period and until reporting is no longer required.

    56. Once a county has identified a reduction in revenue, how will Treasury track use of funds for the provision of government services?
    Recipients can use SLFRF funds on government services up to the revenue loss amount, whether that be the standard allowance amount or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Government services is the most flexible eligible use category under the SLFRF program, and funds are subject to streamlined reporting and compliance requirements. Recipients should be mindful that certain restrictions, which are detailed further in the Restrictions on Use section and apply to all uses of funds, apply to government services as well.
    57. In identifying intergovernmental revenue for the purpose of calculating General Revenue, should recipients exclude all federal funding, or just federal funding related to the COVID-19 response? How should local governments treat federal funds that are passed through states or other entities, or federal funds that are intermingled with other funds? 

    In calculating General Revenue, recipients should exclude all intergovernmental transfers from the federal government. This includes, but is not limited to, federal transfers made via a state to a locality pursuant to the Coronavirus Relief Fund or Fiscal Recovery Funds. To the extent federal funds are passed through states or other entities or intermingled with other funds, recipients should attempt to identify and exclude the federal portion of those funds from the calculation of General Revenue on a best-efforts basis.


    58. Who is eligible for premium pay?

    Workers that are eligible for premium pay include:

    • Any work performed by an employee of the state, local or tribal government
    • Staff at nursing homes, hospitals, and home care settings
    • Workers at farms, food production facilities, grocery stores, and restaurants
    • Janitors and sanitation workers
    • Truck drivers, transit staff and warehouse workers
    • Public health and safety staff
    • Childcare workers, educators and other school staff
    • Social service and human services staff
    59. How is essential work defined?

    Essential work is work involving regular in-person interactions or regular physical handling of items that are also handled by others. An individual who teleworked from a residence may not receive premium pay.

    60. Can counties provide grants to third-party employers?

    Yes. Third-party employers of essential workers are eligible. Third-party contractors who employ essential workers are also eligible for grants to provide premium pay. These decisions are at the discretion of the county. If a county does provide a grant to a third-party employer, additional reporting requirements are required.

    61. Can premium pay be made retroactively?

    Yes. Premium pay may be provided retroactively for work performed at any time since the start of the covid-19 public health emergency (January 27, 2020), where those workers have yet to be compensated adequately for work previously performed.


    62. What are eligible water and sewer projects?

    The Final Rule aligns eligible water and sewer projects with those that are eligible to receive financial assistance from the Environmental Protection Agency’s (EPA) Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF), as well as expands the criteria for project eligibility. Outlined projects under CWSRF and DWSRF are included below, as well as the expanded criteria that projects can cover in order to be eligible.

    The types of projects eligible for CWSRF include:

    • Projects to construct, improve, and repair wastewater treatment plants
    • Control non-point sources of pollution
    • Improve resilience of infrastructure to severe weather events
    • Create green infrastructure, and
    • Protect waterbodies from pollution.

    The types of DWSRF projects that are eligible:

    • Assist communities in making water infrastructure capital improvements, including the installation and replacement of failing treatment and distribution systems. In administering these programs, States must give priority to projects that:
      • Ensure compliance with applicable health and environmental safety requirements
      • Address the most serious risks to human health, and
      • Assist systems most in need on a per household basis according to State affordability criteria.

    In addition to the CWSRF and DWSRF offering criteria for project eligibility, the Final Rule clarifies that necessary investments in water and sewer infrastructure are included if they are 1) responsive to an identified need to achieve or maintain an adequate minimum level of service, which for some eligible project categories may include a reasonable projection of increased need, whether due to population growth or otherwise and 2) a cost-effective means for meeting that need, taking into account available alternatives.

    63. What type of broadband projects are eligible?

    The Final Rule expands eligible areas for investment in broadband infrastructure by requiring recipients to invest in projects designed to provide service to households and businesses with an identified need for additional broadband infrastructure investment, which would include but not be limited to a lack of broadband service reliably delivering certain speeds, a lack of affordable broadband service, and a lack of reliable service.

    Treasury now encourages recipients to prioritize projects that are designed to provide service to locations not currently served by a wireline connection that reliably delivers at least 100 Mbps of download speed and 20 Mbps of upload speed. Treasury continues to require eligible projects be designed to, upon completion, reliably meet or exceed symmetrical 100 Mbps download and upload speeds.

    In addition, the Final Rule further supports the expansion of affordable access to broadband service for households by requiring that recipients use a provider that participates in a qualifying affordability plan.

    Eligible projects are expected to meet or exceed symmetrical upload and download speeds of 100 Mbps. However, in instances where required speeds cannot be achieved (due of the geography, topography, or excessive costs), the affected project would be expected to meet or exceed 100 Mbps download with a minimum of 20 Mbps upload with scalability to a symmetrical minimum of 100 Mbps.

    64. For broadband infrastructure investments, what does the requirement that infrastructure “be designed to” provide service to unserved or underserved households and businesses mean?

    Recipients have flexibility to identify a need for additional broadband infrastructure investment: examples of need include lack of access to a connection that reliably meets or exceeds symmetrical 100 Mbps download and upload speeds, lack of affordable access to broadband service, or lack of reliable broadband service. Recipients are encouraged to prioritize projects that are designed to provide service to locations not currently served by a wireline connection that reliably delivers at least 100 Mbps of download speed and 20 Mbps of upload speed.

    65. For broadband infrastructure to provide service to “unserved or underserved households or businesses,” must every house or business in the service area be unserved or underserved?

    Households and businesses with an identified need for additional broadband infrastructure investment do not have to be the only ones in the service area served by an eligible broadband infrastructure project. Indeed, serving these households and businesses may require a holistic approach that provides service to a wider area, for example, in order to make ongoing service of certain households or businesses within the service area economical.

    Consistent with further guidance issued by Treasury, in determining areas for investment, recipients may choose to consider any available data, including but not limited to documentation of existing broadband internet service performance, federal and/or state collected broadband data, user speed test results, interviews with community members and business owners, reports from community organizations, and any other information they deem relevant.

    66. May counties use payments from the Funds for “middle mile” broadband projects?

    Yes. Under the Final Rule, counties may use payments from the Funds for “middle-mile projects,” but Treasury encourages counties to focus on projects that will achieve last-mile connections—whether by focusing directly on funding last-mile projects or by ensuring that funded middle-mile projects have commitments in place to support new and/or improved last-mile service.

    67. How do I know if a water, sewer, or broadband project is an eligibile use of funds? Do I need pre-approval?

    Counties do not need approval from Treasury to determine whether an investment in a water, sewer, or broadband project is eligible under CSFRF/CLFRF. Each county should review the Final Rule in order to make its own assessment of whether its intended project meets the eligibility criteria. For projects that are being pursued under the eligibility categories provided through the DWSRF or CWSRF programs, project eligibilities are based on federal project categories and definitions for the programs and not on each state's eligibility or definitions. While reference in the final rule to the DWSRF, CWSRF, or other federal water programs is provided to assist recipients in understanding the types of water and sewer infrastructure projects eligible to be funded with SLFRF, recipients do not need to apply for funding from the applicable state programs or through any federal water program. Similarly, besides eligible project categories, the final rule does not incorporate other program requirements or guidance that attach to the DWSRF, CWSRF, or other federal water programs. However, as noted above, recipients should be aware of other federal or state laws or regulations that may apply to construction projects or water and sewer projects, independent of SLFRF funding conditions, and that may require pre-approval from another federal or state agency.

    68. May recipients use Funds for pre-project development for eligible water, sewer, and broadband projects?

    Yes. As with other infrastructure projects and capital expenditure projects that are permitted as responses to the public health emergency and its negative economic impacts, costs for planning and design and associated pre-project costs are eligible uses of SLFRF funds. Costs for the acquisition of land are also eligible, but only if needed for the purposes of locating eligible project components. Recipients should ensure that they have the technical, financial, and managerial capability to ensure compliance with the requirements of the SDWA, or that the assistance will ensure compliance and the owners or operators of the systems will undertake feasible and appropriate changes in operations to ensure compliance over the long-term.

    Similarly, pre-project development uses and costs for broadband projects should be tied to an eligible broadband project or reasonably expected to lead to such a project. For example, pre-project costs associated with planning and engineering for an eligible broadband infrastructure build-out is considered an eligible use of funds, as well as technical assistance and evaluations that would reasonably be expected to lead to commencement of an eligible project (e.g., broadband mapping for the purposes of finding an eligible area for investment).

    All funds must be obligated within the statutory period between March 3, 2021 and December 31, 2024, and expended to cover such obligations by December 31, 2026.


    69. Are there any specific ways that counties cannot use the funds?

    Yes. There are two specific restrictions outlined in the Final Rule:

    • Pension funds: Recipients are not allowed to make an extraordinary deposit to a pension fund. However, recipients may use funds for routine payroll contributions to pensions of employees whose wages and salaries are an eligible use.
    • Reduce net tax revenue (states and territories): States and territories are not allowed to use funding to reduce net tax revenue due to a change in law from March 3, 2021, through the last day of the fiscal year in which the funds provided have been spent.

    Other restrictions include:

    • Deposits into rainy day funds and reserves
    • General infrastructure spending outside of water, sewer and broadband investments or above the amount allocated under the revenue loss provision
    • Legal settlements or judgements
    • Funding debt services
    • Using funds for non-federal match including CWSRF, DWSRF and Medicaid
    • Using funds in a manner that conflicts with the overall statutory purpose of the ARPA to reduce the spread of COVID-19
    • Recipients must also adopt and abide by policies to prevent conflicts of interest
    • Federal laws continue to apply to uses of funds, including environmental and civil rights laws among others.
    70. Do restrictions on using Coronavirus State and Local Fiscal Recovery Funds to cover costs incurred beginning on March 3, 2021 apply to costs incurred by the recipient (e.g., a State, local, territorial, or Tribal government) or to costs incurred by households, businesses, and individuals benefiting from assistance provided using Coronavirus State and Local Fiscal Recovery Funds?

    The Final Rule permits funds to be used to cover costs incurred beginning on March 3, 2021 and through December 31, 2026, in what is referred to as the period of performance. This limitation applies to costs incurred by the recipient (i.e., the state, local, territorial, or Tribal government receiving funds), as the use of funds is clarified to be forward looking and the eligible use categories provided by statute are all prospective in nature.

    However, recipients may use Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households, businesses, and individuals within the eligible use categories described in the Interim Final Rule for economic harms experienced during 2020. For example,

    • Public Health/Negative Economic Impacts – Recipients may use Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households – such as rent, mortgage, or utility assistance – for economic harms experienced or costs incurred by the household prior to March 3, 2021 (e.g., rental arrears from preceding months), provided that the cost of providing assistance to the household was not incurred by the recipient prior to March 3, 2021.
    • Premium Pay – Recipients may provide premium pay retrospectively for work performed at any time since the start of the COVID-19 public health emergency. Such premium pay must be “in addition to” wages and remuneration already received and the obligation to provide such pay must not have been incurred by the recipient prior to March 3, 2021.
    • Revenue Loss – The Final Rule gives recipients broad latitude to use funds for the provision of any traditional government service to the extent of reduction in revenue. The calculation of lost revenue begins with the recipient’s revenue in the last full fiscal year prior to the COVID-19 public health emergency and includes the 12-month period ending December 31, 2020 (unless the recipient is utilizing the standard allowance for revenue loss calculation). However, use of funds for government services must be forward looking and only include costs incurred by the recipient after March 3, 2021.
    • Investments in Water, Sewer, and Broadband – Recipients may use Coronavirus State and Local Fiscal Recovery Funds to make necessary investments in water, sewer, and broadband. Recipients may use Coronavirus State and Local Fiscal Recovery Funds to cover costs incurred for eligible projects planned or started prior to March 3, 2021, provided that the project costs covered by the Coronavirus State and Local Fiscal Recovery Funds were incurred after March 3, 2021.
    71. May counties use Fiscal Recovery Funds to fund Other Post-Employment Benefits (OPEB)?

    OPEB refers to benefits other than pensions (see, e.g., Governmental Accounting Standards Board, “Other Post-Employment Benefits”). Treasury has determined that Sections 602(c)(2)(B) and 603(c)(2), which refer only to pensions, do not prohibit CSFRF/CLFRF recipients from funding OPEB. Recipients of either the CSFRF/CLFRF may use funds for eligible uses, and a recipient seeking to use CSFRF/CLFRF funds for OPEB contributions would need to justify those contributions under one of the four eligible use categories.



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