Program

COVID-19 Federal Assistance e311

Topics

Compliance & Reporting, Fund Planning & Allocation

Under the American Rescue Plan Act (“ARP”), what factors will be utilized to determine the amount of funds available to pay public sector staff in its response to COVID-19? What documentation will be required?

According to the U.S. Department of the Treasury’s (“Treasury”) Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Interim Final Rule (the “Rule”), eligible uses include “payroll and covered benefit expenses for public safety, public health, health care, human services, and similar employees to the extent that the employee’s time is spent mitigating or responding to the COVID-19 public health emergency.”[1] After March 3, 2021,[2] the municipality may use CSLFRF funds for the payroll and benefits expenses incurred “for the portion of the time spent responding to the COVID-19 public health emergency.”[3] As an alternative, municipalities may consider pursuing the Federal Emergency Management Agency (“FEMA”) Public Assistance (“PA”) program for overtime costs incurred to respond to the COVID-19 pandemic from January 20, 2021 through December 31, 2021.[4]

Treasury’s CSLFRF Frequently Asked Questions (“FAQ”) address the issue of payroll documentation requirements for public safety, public health, health care, human services, and similar employees:

For administrative convenience, the recipient may consider a public health and safety employee to be entirely devoted to mitigating or responding to the COVID-19 public health emergency, and therefore fully covered, if the employee, or his or her operating unit or division, is primarily dedicated (e.g., more than half of the employee’s time is dedicated) to responding to the COVID-19 public health emergency. Recipients may use presumptions for assessing whether an employee, division, or operating unit is primarily dedicated to COVID-19 response. The recipient should maintain records to support its assessment, such as payroll records, attestations from supervisors or staff, or regular work product or correspondence demonstrating work on the COVID-19 response. Recipients need not routinely track staff hours. Recipients should periodically reassess their determinations.[5]

As of August 23, 2021, recipients must also report the number of full-time municipal or other employees responding to COVID-19.[6] Where employees’ time is not entirely dedicated to COVID-19 response, it is likely advisable to follow program requirements for FEMA PA and other similar federal programs. Along those lines, such programs have used payroll and benefits policies to determine the proper reimbursement of funds.[7] 

Last Revised: August 26, 2021

[2] Id., at 99.

[3] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of July 19, 2021) – FAQ #2.15, at 9, available at: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.

[5] Id., at FAQ #2.14, at 8–9 (emphasis added).

[6] U.S. Department of the Treasury, Compliance and Reporting Guidance (as of June 24, 2021) – at 19, available at: SLFRF-Compliance-and-Reporting-Guidance.pdf (treasury.gov).

[7] FEMA, Public Assistance Program and Policy Guide (Version 4, Effective June 1, 2020) – Applicant (Force Account) Labor, at 68-72, available at: https://www.fema.gov/sites/default/files/documents/fema_pappg-v4-updated-links_policy_6-1-2020.pdf.