Program

COVID-19 Federal Assistance e311

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Community Engagement & Local Partnerships

What are the rules on subgrants to community partners?

While the rules do not provide a specific definition of “community partners”, in terms of the transfer of CSFRF/CLFRF to other entities, the Rule states the following:

“The statute authorizes State, territorial, and Tribal governments; counties; metropolitan cities; and nonentitlement units of local government to transfer amounts paid from the Fiscal Recovery Funds to a number of specified entities. By permitting these transfers, Congress recognized the importance of providing flexibility to governments seeking to achieve the greatest impact with their funds, including by working with other levels or units of government or private entities to assist recipient governments in carrying out their programs.”

Eligible uses within the category of negative economic impact include assistance to households, small businesses, and nonprofits. As such, potential recipients might include schools and healthcare facilities.[1]

In addition, while the tourism, travel, and hospitality industries are specifically enumerated in the statute as eligible for CSFRF/ CLFRF, recipients may sub-grant funding to other industries that experienced negative economic impacts due to the COVID-19 pandemic, as opposed to longer-term economic or industrial trends unrelated to the pandemic. Treasury advises that Recipients should assess, and be able to justify, the connection between the economic harm and the COVID-19 public health emergency, and how sub-grant of this funding to other industries would address such harm.[2] General economic development or workforce development that are not directly addressing an economic impact of COVID-19 would not be eligible under this funding.[3]

Last Revised: June 7, 2021

[1] Coronavirus State and Local Fiscal Recovery Funds Frequently Asked Questions, Question 9, page 3, available at https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf

[2] Department of the Treasury 31 CFR Part 35 RIN 1505-AC77, available at https://home.treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf, page 10 and Coronavirus State and Local Fiscal Recovery Funds Frequently Asked Questions, Question 14, page 5, available at https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf

[3] Coronavirus State and Local Fiscal Recovery Funds Frequently Asked Questions, Question 12, page 4, available at https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf