Many governments received federal funding through the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), a grant program established by the American Rescue Plan Act of 2021 (ARPA). The amounts, timing, and methods of distribution of CSLFRF funds were unusual, and large grants went to some governments that had limited experience with federal awards. Even among governments that are frequent recipients of federal grants, there is some confusion because large tranches of CSLFRF cash were distributed to governments not only before the eligible expenditures were made, which is itself unusual, but even before the eligible expenditures were clearly identified! Unfortunately, because of this confusion, GFOA has begun to see cases in which governments have erroneously recognized CSLFRF advances as revenue in annual comprehensive financial reports submitted to our Certificate of Achievement for Excellence in Financial Reporting award program. So, in this article we’ll review some of the relevant generally accepted accounting principles (GAAP), CSLFRF Final Rule provisions,] and applicable portions of the Uniform] Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) with regard to grant revenue and expenditure recognition applicable to CSLFRF grants.

• Publication date: December 2022
• Authors: Michele Mark Levine and Susannah Filipovic