How can a municipality maximize its recovery across multiple federal funding sources?

Municipalities may be able to improve their chances to maximize multiple funding sources by prioritizing more restrictive funding to be used first, before tapping into more flexible funding sources. For example, utilizing Federal Emergency Management Agency Public Assistance (“FEMA PA”) program funding for all eligible activities first, and then using Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) funding for the expenditures that are ineligible for FEMA reimbursement, may result in a more efficient and effective use of federal funding. Additionally, FEMA PA funding should not be capped or competitive, as it is based on actual project costs incurred.[1] Therefore, prioritizing FEMA PA funding may help maximize overall federal funding by saving the finite funding programs for use after FEMA PA.

Many subrecipients across the country have experience with reallocating funding across various programs in the wake of the extended timeline of the Coronavirus Relief Fund (“CRF”) from March 1, 2020, through December 31, 2021,[2] the period of performance permitting obligations through December 31, 2024, for CSLFRF,[3] and the retroactive increase of FEMA’s federal cost share from 75% to 100% for eligible work performed from January 20, 2020 through July 1, 2022.[4]

For example, a municipality may have decided to use CRF funding to cover its 25% non-federal FEMA PA cost share. Now that the federal cost share has been increased to 100%, the remaining 25% of CRF funding can be re-allocated to address other challenges caused or exacerbated by the COVID-19 public health emergency. Pursuant to the U.S. Department of the Treasury’s (“Treasury”) Final Rule, a municipality could also consider the use of CSLFRF funds to satisfy the non-federal match or cost-share requirements for a federal grant program.[5] For example, CSLFRF funds may be used to meet the non-federal match requirements of a broadband infrastructure program authorized under the Infrastructure Investment and Jobs Act of 2021.[6]

It is also important to understand the specific documentation and eligibility requirements of every program being used, as they may differ. Each program will likely require municipalities to demonstrate compliance and validate that they meet its rules and requirements, which is often one of the most challenging aspects of disaster cost recovery. Failure to meet documentation requirements, or documentation that does not adequately support a municipality’s claim under any given funding source, could result in having to forgo eligible funding. Municipalities may be able to improve their ability to meet program requirements by recording and saving all documentation, invoices, proofs of payment, procurement methodologies, etc. Below are some procedures municipalities can follow which may help to minimize duplication of benefits and maximize additional funding:

• Maintain detailed documentation;
• Store documentation centrally and electronically; and
• Organize documentation logically.

Leveraging federal funding programs can be complex. Detailed tracking of costs may improve a municipality’s chances of avoiding duplication of benefits, where two funding sources are misallocated to provide funding for the same item or service.[7] In some cases, multiple funding sources can provide funding for the same item, and municipalities will have to identify which funding source will best meet their needs. For example, many COVID-19 specific funding sources may cover the cost of purchasing Personal Protective Equipment (“PPE”), such as masks, gloves, and face shields, but municipalities will have to ensure that they will not have two or more funding sources reimbursing the purchase of the same PPE, including donations.

Municipalities may wish to establish dedicated codes in their financial management or reporting systems to track different COVID-19 related costs. For example, a municipality could track vaccination-related costs separately from other COVID-19 response and planning costs.

Last Revised: April 1, 2022