Program

COVID-19 Federal Assistance e311

Topics

Community Engagement & Local Partnerships, Housing & Rental Assistance

If a city wants to act as a pass-through entity to grant funds to a non-profit to purchase and operate a campground/affordable housing, in which entity will the property vest? Must the property be disposed of in accordance with 2 CFR §§ 200.311, 313?

Municipalities may likely be eligible to procure real property with Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) to benefit programs that address the public health emergency caused by COVID-19 and its negative economic impacts.[1]

According to 2 CFR § 200.311,[2] any property acquired using CSLFRF vests in the non-federal entity (here either the municipality or non-profit entity) that purchases the property. Whether the property vests with the municipality or non-profit depends on the terms of the agreement between these parties. The municipality should create a written agreement that identifies which entity (i.e., the non-profit or municipality) has ownership and is responsible for maintenance both during and after the grant period.

Regardless of whether the property vests with the municipality or non-profit, both parties are subject to the CSLFRF rules applicable to real property. Real property must be purchased, maintained, and disposed of in accordance with Uniform Administrative Requirement, Cost Principles and Audit Requirements for Federal Awards (“Uniform Guidance”), specifically § 200.313 and §§ 200.317 – 200.327, and Treasury’s Compliance and Reporting Guidance, which states:

Any purchase of equipment or real property with [CSLFRF] funds must be consistent with the Uniform Guidance at 2 CFR Part 200, Subpart D. Equipment and real property acquired under this program must be used for the originally authorized purpose. Consistent with 2 CFR 200.311 and 2 CFR 200.313, any equipment or real property acquired using [CSLFRF] funds shall vest in the non-Federal entity. Any acquisition and maintenance of equipment or real property must also be in compliance with relevant laws and regulations.[3]

In addition, the municipality or non-profit in which the property vests must hold the property in trust for the beneficiary of the project or program, under 2 CFR § 200.316.[4]

Ultimately, the municipality will be responsible for monitoring the use of CSLFRF. As a good practice, the municipality should monitor the projects and funds that the municipality awards to any non-profits or other subrecipients.[5] The municipality should also report the non-profit’s (or other subrecipient’s) use of funds on a quarterly and annual basis, as required by Treasury’s Compliance and Reporting Guidance.[6]

Last Updated: April 21, 2022

[3] Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance (as of February 28, 2022), Version: 3.0, at 8, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf.

[5] Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance (as of February 28, 2022), Version: 3.0, at 5, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf.

[6] Id., at 7.