When is staff time associated with implementing the ARP eligible for reimbursement?

On January 6, 2022, the U.S. Department of the Treasury ("Treasury") clarified under its Coronavirus State and Local Fiscal Recovery Funds ("CSLFRF") Final Rule that municipalities will be permitted to fund the payroll and covered benefits of public health and safety staff primarily dedicated to COVID-19 response throughout the period of performance under the CSLFRF program.[1] The period of performance is the time period beginning March 3, 2021, the date of the signing of the American Rescue Plan Act of 2021 (“ARP”), with all funds obligated by December 31, 2024, and all funds spent by December 31, 2026.[2]

In determining whether employees are “primarily dedicated” to responding to COVID-19, Treasury advises that:

recipients may assess the extent to which staff are dedicated to responding to COVID-19 through a variety of means, including establishing presumptions or assessing public health and safety staff at the division or operating unit level. For example, a recipient could consider the amount of time spent by employees in its public health department’s epidemiology division in responding to COVID-19 and, if a majority of its employees are dedicated to responding to COVID-19, determine that the entire division is primarily dedicated to responding to COVID-19. Treasury also clarifies that recipients may use reasonable estimates to establish administrable presumptions; for example, a recipient could estimate, based on discussions with staff, the general share of time that employees in a specific role or type of position spend on COVID-19 related tasks and apply that share of time to all employees in that position.[3]

Municipalities are responsible for continually reevaluating their determination of primarily dedicated staff, including as the public health emergency and response to it evolves.[4] Because technical assistance is generally considered an eligible use under the Final Rule, staff time and technical assistance became eligible on March 3, 2021.[5]

Treasury’s Frequently Asked Questions (“FAQ”) document further clarifies that recipients may use funds to address economic harm experienced by households, businesses, and individuals prior to March 3, 2021, so long as the cost of providing such assistance was not incurred by the recipient prior to March 3, 2021.[6] The Final Rule maintains March 3, 2021, as the date from which costs are first eligible, rather than the date of their actual receipt of CSLFRF funds, in order to allow recipients to begin incurring costs in anticipation of receiving funds.[7] Finally, Treasury’s interpretation of “incurred” is “equivalent to the definition of ‘obligation,’ based on the definition used for purposes of the Uniform Guidance. Treasury is also maintaining the period of performance, which will run through December 31, 2026, and provides the deadline by which recipients must expend obligated funds.”[8]

Last Revised: March 4, 2022