Coronavirus State and Local Fiscal Recovery Fund FAQ
1. What should we be doing now to prepare to receive funds?
Treasury just released its guidance on pre-award requirements that outline immediate steps recipients need to take in order to receive Recovery Funds. This information may be especially important to smaller governments or government that have not received federal funding, so please distribute to your networks.
Submission instructions to the US Treasury will very likely follow soon, but as of now those instructions are not yet available. We would suggest, though, that as a part of this preparation process, your executive or authorized officer is prepared to certify the submission.
As outlined in Treasury’s guidance, eligible recipients should take the below steps as soon as possible:
- Ensure the entity has a valid DUNS number. A DUNS number is a unique nine-character number used to identify an organization and is issued by Dun & Bradstreet. The federal government uses the DUNS number to track how federal money is allocated. A DUNS number is required prior to registering with the SAM database, which is outlined below. Registering for a DUNS number is free of charge. If an entity does not have a valid DUNS number, please visit https://fedgov.dnb.com/webform/ or call 1-866-705-5711 to begin the registration process.
- Ensure the entity has an active SAM registration. SAM is the official government-wide database to register with in order to do business with the U.S. government. All Federal financial assistance recipients must register on SAM.gov and renew their SAM registration annually to maintain an active status to be eligible to receive Federal financial assistance. There is no charge to register or maintain your entity SAM registration. If an entity does not have an active SAM registration, please visit, SAM.gov to begin the entity registration or renewal process. Please note that SAM registration can take up to three weeks; delay in registering in SAM could impact timely payment of funds. Click here for a quick overview for SAM registration
- Gather the entity’s payment information, including: Entity Identification Number (EIN), name, and contact information; Name and title of an authorized representative of the entity; Financial institution information (e.g., routing and account number, financial institution name and contact information)
If you are a non-entitlement city or town - eligible Non-entitlement Units of Local Government will receive a distribution of funds from their respective state government. “Non-entitlement units of local government” are defined in 42 U.S.C. 5302(a)(5) that are not metropolitan cities. For these Non-entitlement units of local government, Treasury will allocate and pay funds to state governments, and the state will distribute funds to non-entitlement units of local government in proportion to population. Non-entitlement units must have a valid DUNS number to meet reporting the requirements under the program. If an entity does not have a valid DUNS number, please visit https://fedgov.dnb.com/webform/ or call 1-866-705-5711 to begin the registration process.
2. What are the eligible uses of the funds? Are there any restrictions?
Eligible uses of these funds include:
- Revenue replacement for the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency, relative to revenues collected in the most recent fiscal year prior to the emergency,
- COVID-19 expenditures or negative economic impacts of COVID-19, including assistance to small businesses, households, and hard-hit industries, and economic recovery,
- Premium pay for essential workers,
- Investments in water, sewer, and broadband infrastructure.
Restrictions on the uses of these funds include:
- Funds allocated to states cannot be used to directly or indirectly to offset tax reductions or delay a tax or tax increase;
- Funds cannot be deposited into any pension fund.
3. How will funds be administered and audited?
The general guidelines are:
- Funds must be spend by the end of calendar year 2024.
- The Treasury Department will pay the first tranche to local governments no later than 60 days after enactment, and the second payment no earlier than 12 months after the first payment.
- Both the U.S. Government Accountability Office and the Pandemic Response and Accountability Committee received funding in the law for oversight and to promote transparency and accountability.
4. Are there reporting requirements for the use of funds?
Key takeaways from the language in the law are:
- Local governments will be required to submit "periodic reports" that provide a detailed accounting of the use of funds.
- State governments will be required to submit "periodic reports" that provide a detailed accounting of the use of funds and any modifications to the State's tax revenue sources during the covered period.
- Failure to use the funds in accordance with provisions in the law requires the State or local government to repay the U.S. Treasury an amount equal to the funds used in violation.
5. Can a local government transfer funds to another entity?
According to the language, a local government receiving a payment from funds made available under the law may transfer funds to a private nonprofit organization, a public benefit corporation involved in the transportation of passengers or cargo, or a special-purpose unit of State or local government.
6. What is the definition of essential or eligible workers in the American Rescue Plan?
The law classifies eligible workers as "those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each chief executive officer of a metropolitan city, nonentitlement unit of local government, or county may designate as critical to protect the health and well-being of the residents of their metropolitan city, nonentitlement unit of local government, or county."