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COVID-19 Federal Assistance e311

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Timing of Funds

Are payroll costs for public health, safety, and other public sector staff responding to COVID-19 incurred prior to March 3, 2021, eligible for reimbursement through the CSLFR grant?

The U.S. Department of the Treasury ("Treasury") Coronavirus State and Local Fiscal Recovery Funds ("CSLFRF") Final Rule specifies that Fiscal Recovery Funds cannot be used for expenses incurred prior to March 3, 2021.[1] This includes payroll costs for public health, safety, and other public sector staff responding to the COVID-19 public health emergency.

According to the Final Rule:

Treasury is maintaining March 3, 2021 as the date when recipients may begin to incur costs using [CSLFRF] funds. As described in the interim final rule, use of [CSLFRF] funds is forward looking and the eligible use categories provided by statute are all prospective in nature. While recipients may identify and respond to negative economic impacts that occurred during 2020, the costs incurred to respond to these impacts remain prospective.[2]

The Final Rule further explains that March 3, 2021, is maintained as the beginning of the covered period in order to determine compliance and provide flexibility for those recipients who began incurring costs in anticipation of ARP. Treasury states that an earlier date would leave recipients vulnerable to spending funds on uses other than what is eligible for CSLFRF.[3]

It may therefore be helpful for municipalities to explore other funding sources to reimburse relevant costs incurred prior to March 3, 2021. Other funding sources may include Federal Emergency Management Agency (“FEMA”) Public Assistance[4] or funding through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Coronavirus Relief Fund (“CRF”),[5] which impose less restrictive timelines on eligible expense.

Last Revised: February 16, 2022

[1] Treas. Reg. 31 CFR 35 at 11, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf.

[2] Id., at 356.

[3] Id., at 356-357.

[4] Public Assistance Disaster-Specific Guidance - COVID-19 Declarations | FEMA.gov, available at https://www.fema.gov/media-collection/public-assistance-disaster-specific-guidance-covid-19-declarations.