COVID-19 Federal Assistance e311


Timing of Funds

Funding Source

American Rescue Plan Act

When must ARP funds be spent and are there exceptions for long term projects?

The U.S. Department of the Treasury’s (“Treasury”) Final Rule provides guidance for municipalities regarding the timeline for using Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”). The Final Rule does not include exceptions for the expenditures of CSLFRF funding past the final date of December 31, 2026. The Final Rule outlines both the obligation and expenditure period of CSLFRF funding:

[A] recipient may only use funds to cover costs incurred during the period beginning March 3, 2021 and ending December 31, 2024. …the period of performance will run until December 31, 2026, which will provide recipients an additional two years during which they may expend funds for costs incurred (i.e., obligated).[1]

Treasury has included language in the Final Rule to clarify that it is “finalizing its interpretation of incurred to be equivalent to the definition of obligation, based on the definition used for purposes of the Uniform Guidance.”[2] Additionally, Treasury is maintaining that the period of performance extends two years past the obligation deadline for projects, which will allow for longer-term construction on eligible water, sewer, or broadband infrastructure projects to continue until that later date. Treasury states in the Final Rule that “[a] recipient must return any funds not obligated by December 31, 2024. A recipient must also return funds obligated by December 31, 2024, but not expended by December 31, 2026.”[3]

Recipients are advised to consult Treasury’s Reporting and Compliance Guidance for additional information on program administration processes and requirements, including the applicability of the Uniform Guidance.[4] Treasury is currently updating its Frequently Asked Questions (“FAQs”) to reflect the Final Rule. Recipients may also consult Treasury’s Overview of the Final Rule.[5], [6]

Last Revised: March 15, 2022

[1] Treas. Reg. 31 CFR 35 at 354-355, available at:

[2] Id., at 357.

[3] Id., at 414.

[4] Id., at 11.

[5] Coronavirus State and Local Fiscal Recovery Funds: Frequently Asked Questions (updated January 2022) at 1, available at:

[6] Department of Treasury, Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule at 43, available at: