COVID-19 Federal Assistance e311


Compliance & Reporting

Funding Source

American Rescue Plan Act, CSLFRF

Like direct award recipients, are sub-recipients under ARPA (SLFRF) required to obligate their funds, by contract or other means, by the end of 2024?

While direct recipients of a Coronavirus State and Local Fiscal Recovery Fund (“CSLFRF”) award are required to obligate funds by the end of 2024, subrecipients of CSLFRF funds are likely not subject to the same requirement.

The U.S. Department of Treasury (“Treasury”) guidance related to the award term period refers to recipients only.

Per 2 CFR 200.1, a recipient is “an entity, usually but not limited to non-Federal entities that receives a Federal award directly from a Federal awarding agency. The term recipient does not include subrecipients or individuals that are beneficiaries of the award.”[1]

The CSLFRF Compliance and Reporting Guidance states:

Your organization, as a recipient of an SLFRF award, may use SLFRF funds to cover eligible costs that your organization incurred during the period that begins on March 3, 2021 and ends on December 31, 2024, as long as the award funds for the obligations incurred by December 31, 2024 are expended by December 31, 2026.[2]

Treasury is using the Code of Federal Regulation (“CFR”) definition of obligation for incurred expenses which is “an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.”[3]

Treasury FAQ 13.17 expands on the concept of “similar transaction” which provides direct recipients additional flexibility in meeting their obligation requirement:

Treasury recognizes that recipients may obligate funds through means other than contracts or subawards… [i]n these circumstances, recipients must follow state or local law and their own established practices and policies regarding when they are considered to have incurred an obligation and how those obligations are documented.[4]

Treasury’s Project and Expenditure Report User Guide also states that each “recipient is required to report the obligations and expenditures by project according to the corresponding Expenditure Category (EC)”[5] and that for each project, recipients “will need to track obligations and expenditures, as well as any subawards made.”[6]

Finally, in the Subaward Template, Treasury defines the subaward amount (obligation) as the “[t]otal amount of SLFRF funds obligated by the [r]ecipient to a [s]ubrecipient under a given [s]ubaward.”[7]

Given the absence of guidance related to subrecipient obligation requirements, and Treasury’s definition of subaward amounts as obligations, it is likely that the requirement to obligate CSLFRF funds by the end of 2024 is incumbent on direct recipients only and is met when the direct recipient issues a subaward to a subrecipient.[8] Due to the lack of guidance, subrecipients should carefully consider any risks associated with not obligating their funds by the end of 2024.

Unlike the Treasury’s Coronavirus Relief Fund that was a part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act which had aligned obligation and expenditure dates so direct recipients could make last minute adjustments to fully capture their allocations, CSLFRF direct recipients cannot re-obligate funds after December 31, 2024 and should carefully consider planning for contingencies. This could include, but is not limited to, over-obligating certain projects or managing general funded projects to federal standards to accommodate ledger transfers down the road if, given the differing obligation and expenditure dates, any obligations do not completely materialize and fully expend their budgeted amounts after December 31, 2024. By doing this, direct recipients may be positioned to fully expend their allocations and not be required to return any of their CSLFRF allocations to the Treasury. Recipients should carefully consider the underlying guidance.

Last Updated: July 7, 2023

[1] Code of Federal Regulations eCFR :: 2 CFR 200.1 – Definitions (emphasis added).

[2] SLFRF Compliance and Reporting Guidance (as of September 2022): Department of Treasury, Compliance and Reporting Guidance: State and Local Fiscal Recovery Funds, (as of September 20, 2022), at 6, available at:

[3] Code of Federal Regulations eCFR :: 2 CFR 200.1 – Definitions.

[4] CSLFRF FAQs: Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of July 27, 2022) – FAQ #13.17, at 57, available at:

[5] SLFRF PE Report User Guide (as of January 2022): Department of Treasury, Project and Expenditure Report User Guide, (as of January 24, 2022), at 9, available at:

[6] Id., at 11.

[7] Id., at 59.

[8] Id., at 16.