Can cities re-use ARP funds if a program expense is reimbursed by FEMA?

If the Federal Emergency Management Agency (“FEMA”) reimburses an expense, a municipality may not use Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) for those same expenses. The municipality must use that portion of their CSLFRF allocation for another eligible purpose to be able to retain those funds. Recipients and subrecipients are ultimately responsible for ensuring that they do not accept payment for the same item of work twice. FEMA applicants must certify in the Public Assistance (“PA”) application process that assistance is not being duplicated. FEMA explicitly states that, when discussing Eligible Emergency Protective Measures for COVID-19, they will not duplicate assistance provided by other federal agencies.[1]

If a recipient has already entered information into the U.S. Department of the Treasury (“Treasury”) portal that needs to be edited due to changes in FEMA reimbursements, the recipient should report changes according to the protocol specified by Treasury:

• for Project and Expenditure Reports, “[r]ecipients will have an opportunity to reopen and provide edits to their submitted Project and Expenditure Reports any time before the reporting deadline. Recipients will then be required to re-certify and submit the report again to properly reflect any edits made;”
• for Recovery Plans, “[r]ecipients will be allowed to reopen and provide an update of their submitted Recovery Plan report record any time before the reporting deadline. They should also provide concurrent updates to the publicly posted version;” and
• “[r]ecipients will then be required to re-certify and submit the report again to properly reflect any edits made.”[2]

It is important for any municipality receiving federal funding to address the COVID-19 public health emergency to perform its due diligence to avoid any duplications of benefits. FEMA has published a fact sheet entitled “Coronavirus Disease 2019 (COVID-19) Public Health Emergency: Coordinating Public Assistance and Other Sources of Federal Funding,” which acknowledges that federal agencies’ funding eligibility for COVID-19 response programs may overlap with FEMA PA eligibility for emergency protective measures.[3]

FEMA applicants should consider which eligible sources of funding are the most appropriate to meet their needs in response to the COVID-19 pandemic. It is important to note that FEMA will not deny a PA-eligible cost under a COVID-19 declaration solely because that cost may be eligible under another federal agency’s authority.[4]

If an applicant applies to FEMA for PA funding and then determines it no longer wants to seek FEMA reimbursement and will instead seek funding from another federal agency, the applicant should notify FEMA as soon as possible.[5] Applicants should withdraw or amend their PA project application if funding has not yet been awarded, or request an updated version to amend their PA project if some funding has been awarded.[6] All federal agencies are prohibited by Section 312 of the Stafford Act from paying state, local, tribal, and territorial entities for the same work twice, and all recipients and subrecipients are responsible for ensuring this.[7]

In addition, the Final Rule states CSLFRF awards can be used for the non-federal match portion of FEMA-reimbursed projects[8] for eligible work performed after July 1, 2022, once the federal cost share for COVID-19 is no longer 100 percent.[9]

Last Revised: April 1, 2022