GAO-24-106753, COVID-19 Relief: States’ and Localities’ Fiscal Recovery Funds Spending as of March 31, 2023

Report — GAO-24-106753, COVID-19 Relief: States’ and Localities’ Fiscal Recovery Funds Spending as of March 31, 2023, dated 2023-03-31, issued by Government Accountability Office.

Full text

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GAO-24-106753 Fiscal Recovery Funds

The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), established
under the American Rescue Plan Act of 2021 (ARPA) and administered by the
Department of the Treasury, allocated $350 billion to tribal governments, states,
the District of Columbia, local governments, and U.S. territories to help cover a
broad range of costs stemming from the health and economic effects of the
COVID-19 pandemic.1 SLFRF recipients must regularly submit reports to
Treasury on their use of the awards and the projects undertaken with them.2
The CARES Act includes a provision for us to monitor the use of federal funds to
respond to the COVID-19 pandemic.3 We were also asked to review Treasury’s
administration of the SLFRF program. This report examines the SLFRF funding
states (including the District of Columbia) and localities are required to report to
Treasury and Treasury’s actions when states or localities do not submit the
required reporting.4

•
As of March 31, 2023—the most recent data available at the time of this
report—states reported obligating 60 percent ($118.3 billion) and spending 45
percent ($88.2 billion) of the SLFRF awards they received. Localities reported
obligating 54 percent ($67.5 billion) and spending 38 percent ($47.9 billion) of
their awards during the same period.5
•
The states and localities reported spending the largest amount of their
awards to replace revenue lost due to the pandemic. Specifically, as of March
31, 2023, 45 percent ($39.5 billion) of states’ reported spending and 68
percent ($32.4 billion) of localities’ reported spending was used for this
purpose.
•
Approximately 14 percent of localities did not report to Treasury on their uses
of SLFRF awards through March 31, 2023, as required. Treasury officials told
us they have taken initial steps to address recipient non-compliance with
reporting requirements.
•
As a result of our analysis, Treasury updated its public web postings and
disclosed that SLFRF spending data do not include information from all
recipients that were required to submit a report.

Under ARPA, the SLFRF allocated $350 billion across six groups of recipients
(see fig. 1). Localities included counties, metropolitan cities (which we refer to as
cities throughout this report), and smaller local governments—those typically
serving populations of less than 50,000—referred to as non-entitlement units of
local government (NEU).6

U.S. Government Accountability Office
COVID-19 Relief: States’ and Localities’ Fiscal
Recovery Funds Spending as of March 31,
2023
GAO-24-106753
Report to Congressional Committees
October 11, 2023
Why This Matters
Key Takeaways
How much in SLFRF
awards did states and
localities receive?

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GAO-24-106753 Fiscal Recovery Funds
Figure 1: Coronavirus State and Local Fiscal Recovery Funds Allocations by Recipient Type

aA metropolitan city is defined as the central city within a metropolitan area (i.e., a standard metropolitan
statistical area as established by the Office of Management and Budget) or any other city within a metropolitan
area that has a population of 50,000 or more. 42 U.S.C. §§ 803(g)(4), 5302(a)(4). A metropolitan city includes
cities that relinquish or defer their status as a metropolitan city for purposes of receiving allocations under
section 5306 of Title 42, United States Code, for fiscal year 2021.
bNon-entitlement units of local government (NEU) are local governments typically serving populations of less
than 50,000. 42 U.S.C. §§ 803(g)(5), 5302(a)(5). NEUs include cities, villages, towns, townships, or other types
of local governments.

As part of its responsibility to administer the SLFRF, Treasury employed a
number of methodologies to determine how much funding states and localities
received, based on a range of factors, such as population size and
unemployment rates. States received SLFRF awards that ranged from a high of
over $27 billion in California to a low of $906 million in Montana. Similarly,
localities received SLFRF awards that ranged from a high of nearly $6 billion in
New York City to a low of $394 in Johnson, Oklahoma.7
Under ARPA, most states and all localities were required to receive their SLFRF
awards in two equal tranches approximately one year apart.8 ARPA required
Treasury to send direct payments to all SLFRF recipients except NEUs.9 ARPA
required that states receive NEU funds from Treasury, then allocate and
distribute payments to each NEU within their state.

Recipients of SLFRF awards are required to meet reporting requirements
established by Treasury—and authorized under ARPA—to detail their uses of
funds. Specifically, Treasury requires recipients to submit “project and
expenditure” reports that provide information on their uses of the funding—
including obligation and spending amounts—and projects undertaken, among
other things.10 Treasury defines an obligation as an order placed for property and
services and entering into contracts, subawards, and similar transactions that
require payment. Treasury then publishes information from these reports on its
public website.
The SLFRF allows for a broad range of eligible uses to respond to the COVID-19
pandemic and its economic effects.11 SLFRF recipients are required to report on
What are SLFRF
recipients required to
report to Treasury
about their uses of
funds?

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their uses of funds across seven spending categories established by Treasury
(see fig. 2).12
Figure 2: Coronavirus State and Local Fiscal Recovery Funds Spending Categories in
Treasury Project and Expenditure Reports, as of Mar. 31, 2023

aTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.
bBased on Treasury guidance, recipients may not provide premium pay for work performed after April 10, 2023,
when the National Emergency concerning COVID-19 ended, but may award premium pay for work performed
prior to that date.

Of the seven spending categories, revenue replacement provides recipients with
the most flexibility in their use of SLFRF awards and streamlined reporting
requirements, according to Treasury guidance. Under this category, recipients
may use their funds to cover a broad range of government services (i.e.,
generally any service traditionally provided by a government) up to the amount of
revenue loss experienced during the pandemic.
Recipients have two options for calculating revenue loss. Accordingly, recipients
may calculate revenue loss using a formula that Treasury established, or they
may elect a $10 million “standard allowance,” which allows them to spend up to
$10 million or the maximum of their SLFRF awards, whichever is less, over the
course of the SLFRF program. Treasury officials said Treasury provided
recipients with the standard allowance option in response to comments Treasury
received on its 2021 interim final rule. Those comments, particularly from smaller
governments, reflected concerns over Treasury’s formula for calculating revenue
loss, according to Treasury. The Consolidated Appropriations Act, 2023, codified
the availability of the standard allowance provided in Treasury’s final rule.13
Treasury guidance has also stated that revenue replacement affords more
flexibility than Treasury’s other spending categories, in part because of the broad
scope of government services. Specifically, based on Frequently Asked
Questions for Treasury guidance, recipients may use SLFRF awards for revenue

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replacement for projects that are also eligible under the other spending
categories because those categories include services that governments
provide.14

Additionally, Treasury guidance states that (1) the SLFRF awards that recipients
spent to replace revenue can be reported in the project and expenditure reports
as a single project, even if the project description notes that funds are used for
more than one activity or purpose; and (2) unlike other spending categories,
Treasury is not collecting subaward data for projects categorized as revenue
replacement.15

Since January 2022, Treasury has required SLFRF recipients to submit project
and expenditure reports on a quarterly or annual basis, depending on the
recipient type and award size.16 All SLFRF recipients, including states and local
governments, were required to submit a report to Treasury by April 30, 2023,
based on their award spending as of March 31, 2023. Treasury has posted to its
public website information on the project and expenditure reports that states and
localities submitted on their spending as of March 31, 2023.17

Our analysis showed that all states and 26,410 localities submitted a project and
expenditure report with spending as of March 31, 2023. According to Treasury
data, 30,678 localities were each required to submit this report by April 30,
2023.18 Therefore, 4,268 localities (14 percent), with a collective $3 billion in
SLFRF awards, did not submit a required report to Treasury.19 Further, our
analysis showed that 2,155 of these 4,268 localities, with nearly $606 million in
combined SLFRF awards, also did not submit a report in the previous reporting
cycle (spending as of March 31, 2022). Further discussion of recipients that did
not submit project and expenditure reports appears later in this report.

In the aggregate, the states reported obligating 60 percent ($118.3 billion) and
spending 45 percent ($88.2 billion) of the $195.8 billion in SLFRF awards they
received from Treasury, as of March 31, 2023.20 The share of SLFRF awards
that each state obligated and spent varied.
Obligated
Figure 3 shows the share of SLFRF award amounts states reported obligating as
of March 31, 2023. Specifically, 11 states reported obligating 75 percent or more
of their respective SLFRF awards, while six states reported obligating less than
25 percent. Minnesota and North Dakota reported obligating the largest share of
their awards (98 percent and 94 percent, respectively), while Tennessee and
Mississippi reported obligating the smallest shares (11 percent and 19 percent,
respectively).
How often are SLFRF
recipients required to
report to Treasury on
their uses of funds?
How many states and
localities submitted
reports to Treasury on
their uses of funds?
How much of their
SLFRF awards have
states obligated and
spent?

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Figure 3: Range in Percentages of Coronavirus State and Local Fiscal Recovery Funds
(SLFRF) Obligations Reported by States and the District of Columbia, as of Mar. 31, 2023

Note: Treasury defines an obligation as an order placed for property and services and entering into contracts,
subawards, and similar transactions that require payment. 31 C.F.R. § 35.3.

Spent
Figure 4 shows the share of SLFRF award amounts states reported spending as
of March 31, 2023. Six states reported spending 75 percent or more of their
SLFRF awards, while 15 states reported spending less than 25 percent.
Minnesota and Alaska each reported spending the largest share of their awards
(95 percent and 91 percent, respectively) while Oklahoma and South Carolina
reported spending the smallest share (less than 1 percent and less than 2
percent, respectively).

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Figure 4: Range in Percentages of Coronavirus State and Local Fiscal Recovery Funds
(SLFRF) Spending Reported by the States and the District of Columbia, as of Mar. 31, 2023

In the aggregate, the majority of the $88.2 billion in SLFRF awards the states
reported spending was used to replace revenue and address the negative
economic impacts of COVID-19. Specifically, as shown in figure 5, 45 percent
($39.5 billion) of the amount states reported spending was for replacing revenue
and 43 percent ($37.9 billion) was for addressing the negative economic impacts
of COVID-19.
How have states used
their SLFRF awards?

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Figure 5: Breakdown of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) State
Reported Spending by Treasury Spending Category, as of Mar. 31, 2023

Note: Percentages may not add to 100 due to rounding.
aRecipients generally may use funds under the revenue replacement category to meet the non-federal cost-
share or matching requirements for other federal programs.
bBased on Treasury guidance, recipients may not provide premium pay for work performed after April 10, 2023,
when the National Emergency concerning COVID-19 ended, but may award premium pay for work performed
prior to that date.
cTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.
dOther includes funding for such purposes as assistance for education, healthy childhood environments, and
social determinants of health.
Replacing Revenue
Figure 5 also shows that spending on government services represented nearly all
(over 99 percent) the SLFRF awards states reported spending on replacing
revenue. As discussed earlier, recipients may use their funds to cover a broad
range of government services under this category up to the amount of revenue
loss experienced during the pandemic.
The extent to which the states used SLFRF awards on replacing revenue varied.
For example:
•
Thirteen states used 50 percent or more of the SLFRF awards they reported
spending to replace revenue.
•
Seven states did not report spending any funds to replace revenue.
•
North Dakota was the only state where all reported spending was used to
replace revenue.

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States’ reported spending on individual revenue replacement projects ranged
from a high of $16.7 billion in California (for restoring state employee pay cuts
and funding public programs, among other things) to a low of $61 in Colorado (as
part of the state’s larger effort to expand the behavioral health workforce).21
Additional examples of projects reported by states to replace revenue include:
•
Wisconsin reported spending $75 million on a back-to-school supplemental
aid program for school districts and independent charter schools.
•
Utah reported spending $333 million on essential government services
including corrections, public safety, and social services.
•
Louisiana reported spending $115 million to construct roads and bridges.
Addressing the Negative Economic Impacts of COVID-19
In addition, figure 5 shows that providing assistance to households accounted for
over 80 percent of the SLFRF funds that states reported spending to address the
negative economic impacts of COVID-19. Contributions to state unemployment
insurance trust funds represented the largest share of funds states reported
spending (58 percent) in providing assistance to households. Specifically, 24
states reported spending $22 billion of their awards on contributing to state
unemployment insurance trust funds.
Reported state spending on individual projects to address the negative economic
impacts of the pandemic ranged from a high of $7 billion in Texas (for
contributions to the state’s unemployment insurance trust funds) to a low of $26
in New Hampshire (for a commissioned study about a possible campground
expansion). Additional examples of projects reported by states in this category
include:
•
Michigan reported spending $25.6 million on a travel marketing and
promotional campaign to respond to the impacts of COVID-19 on tourism.
•
Florida reported spending about $33,000 on workforce training programs for
state colleges and technical centers.
•
New York reported spending $526.4 million on a small business recovery
grants program that included support for socially and economically
disadvantaged business owners.

A total of 26,410 localities—1,088 cities, 2,966 counties, and 22,356 NEUs—
submitted project and expenditure reports. Combined, these localities reported
obligating 54 percent ($67.5 billion) and spending 38 percent ($47.9 billion) of the
$124.9 billion in SLFRF awards they received, as of March 31, 2023.22
The share of total SLFRF awards that localities reported receiving, obligating,
and spending varied by locality type. For example, as shown in figure 6, of the
three types of localities—cities, counties, and NEUs—counties reported receiving
the largest amount of funding (47 percent) and accounted for the largest share of
reported obligations (45 percent). Cities accounted for the largest share of
reported spending (43 percent).
How much of their
SLFRF awards have
localities obligated and
spent?

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GAO-24-106753 Fiscal Recovery Funds
Figure 6: Share of Reported Coronavirus State and Local Fiscal Recovery Funds Received,
Obligated, and Spent by Locality Type, as of Mar. 31, 2023

Note: Treasury defines an obligation as an order placed for property and services and entering into contracts,
subawards, and similar transactions that require payment. 31 C.F.R. § 35.3. Percentages may not add to 100
due to rounding.
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).

Cities, counties, and NEUs varied widely in the median amount of SLFRF awards
that each reported receiving, obligating, and spending. Cities reported the
highest median amount of funding received, obligated, and spent while NEUs
reported the lowest median amounts (see fig. 7).

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Figure 7: Median Amount of Coronavirus State and Local Fiscal Recovery Funds Received,
Obligated, and Spent as Reported by Localities, as of Mar. 31, 2023

Note: Treasury defines an obligation as an order placed for property and services and entering into contracts,
subawards, and similar transactions that require payment. 31 C.F.R. § 35.3.
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).

Obligated
Within each locality type, the amount of SLFRF awards reported as obligated
varied. For example, as shown in figure 8:
•
Some cities (5 percent) and counties (7 percent) and nearly a quarter of
NEUs (24 percent) reported obligating none of their awards.
•
The largest proportion of cities (35 percent), counties (46 percent), and NEUs
(46 percent) reported obligating at least 75 percent of their awards.

Figure 8: Range in Amounts of Coronavirus State and Local Fiscal Recovery Funds
Reported as Obligated by Localities, as of Mar. 31, 2023

Note: Treasury defines an obligation as an order placed for property and services and entering into contracts,
subawards, and similar transactions that require payment. 31 C.F.R. § 35.3. Percentages may not add to 100
due to rounding.
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).

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bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).

Spent
The amount of SLFRF awards reported as spent within each locality type also
varied. For example, as shown in figure 9:
•
Some cities (6 percent) and counties (8 percent) and over a quarter of NEUs
(27 percent) reported spending none of their awards.
•
The largest proportion of cities (35 percent) and counties (32 percent) that
used funds reported spending less than 25 percent of their awards.
•
The largest proportion of NEUs (30 percent) reported spending at least 75
percent of their awards.
Figure 9: Range in Amounts of Coronavirus State and Local Fiscal Recovery Funds
Reported as Spent by Localities, as of Mar. 31, 2023

Note: Percentages may not add to 100 due to rounding.
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).

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In the aggregate, revenue replacement represented the largest spending
category across all localities, accounting for 68 percent ($32.4 billion) of total
SLFRF reported spending (see fig. 10).
Figure 10: Breakdown of Localities’ Coronavirus State and Local Fiscal Recovery Funds
Reported Spending by Treasury Spending Category, as of Mar. 31, 2023

aBased on Treasury guidance, recipients may not provide premium pay for work performed after April 10, 2023,
when the National Emergency concerning COVID-19 ended, but may award premium pay for work performed
prior to that date.
bTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.

Cities, counties, and NEUs varied in their uses of funds across the other
spending categories (see fig. 11). For example, cities and counties reported
spending the second largest share of their SLFRF awards on addressing the
negative economic impacts of COVID-19 (14 percent and 15 percent,
respectively). NEUs reported spending the second largest share of their SLFRF
awards on infrastructure (5 percent).
How have localities
used their SLFRF
awards?

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Figure 11: Breakdown of Coronavirus State and Local Fiscal Recovery Funds Reported
Spending by Locality Type, as of Mar. 31, 2023

Note: Percentages may not add to 100 due to rounding.
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).
cBased on Treasury guidance, recipients may not provide premium pay for work performed after April 10, 2023,
when the National Emergency concerning COVID-19 ended, but may award premium pay for work performed
prior to that date.
dTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.

Replacing Revenue
The majority (93 percent) of the 26,410 localities elected the standard allowance
for revenue replacement. Treasury encouraged localities that received less than
$10 million—the standard allowance cap—in SLFRF awards to use the standard
allowance to benefit from the revenue replacement category’s streamlined
reporting requirements. Nearly all of the 22,356 NEUs (99 percent) received less
than $10 million in SLFRF awards, and 95 percent of NEUs elected the standard
allowance.
The amounts, scope, and purpose that localities reported spending on revenue
replacement projects varied. Localities’ reported spending on projects to replace
revenue ranged from a high of $1.6 billion in New York City (for correction,
sanitation, and emergency medical services, among other things), to a low of
less than $50 in 65 localities. For example, the town of Boykins, Virginia (an
NEU) reported spending $42 on sandbags to mitigate the effects of stormwater
flooding on public and private property. Table 1 shows additional examples of
revenue replacement projects reported by cities, counties, and NEUs.

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Table 1: Examples of Reported Coronavirus State and Local Fiscal Recovery Funds (SLFRF)
Projects to Replace Revenue from Selected Localities, as of Mar. 31, 2023

Reported
Spending
Revenue Replacement Project
Descriptionc
Citiesa
Little Rock, AR
$115,905
Provide software upgrades for a city
department to improve transparency and
resident access to information and services
Vineland, NJ
$286,243
Offset budget shortfall due to increased
waste removal costs from periods of
quarantine during the pandemic
Counties
Wayne County, MI
 $275,000
Build a city center plaza to help generate
development in an urban downtown
community
Gooding County, ID
 $2,328,343
Expand heating, ventilation, and air
conditioning system for the county jail and
the county courthouse
Non-entitlement units of local governmentb
Riverdale Park Town, MD  $1,437,157
Purchase and distribute N95 masks, and
provide emergency rental and utility
assistance, among other things
Hamilton City, MT
 $300,166
Provide premium pay for city employees
and fire department volunteers
Source: GAO analysis of Department of the Treasury data. I GAO-24-106753
aCities refer to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government as defined in 42 U.S.C. § 803(g)(5).
cFunds categorized as revenue replacement may be used to pay for government services to the extent of a
reduction in the SLFRF recipient’s revenue due to the COVID-19 pandemic.

Treasury policy states that, if a recipient fails to submit a required project and
expenditure report, Treasury is to send up to three emails notifying the recipient
that the report is overdue and establishing a new reporting deadline. Treasury
officials also told us they may reach out to a recipient directly by phone to assist
the recipient in submitting a report. If, after this outreach, the recipient has not
submitted a report, Treasury is to issue a notice of non-compliance to the
recipient requesting that the report be submitted by a new deadline within a finite
amount of time. The notice states that Treasury may impose penalties, such as
returning funds to Treasury, for failure to submit the report by the new deadline.
Treasury officials told us that, on August 23, 2023, Treasury sent notices of non-
compliance to 3,544 of the 4,268 recipients that had not submitted a project and
expenditure report with data as of March 31, 2023. Officials said they did not
send notices to all 4,268 recipients for a number of reasons, including that
Treasury is working with some recipients that are experiencing technical issues
with submitting the reports or have limited administrative resources. Further,
Treasury officials told us that some recipients had submitted reports after we
completed our analysis.
Treasury officials also said that they had not issued notices of non-compliance
previously because Treasury was building out the capability to issue these
notices through its award management system. Officials said that, given the
system’s implementation, they plan to issue an automated notice of non-
What steps does
Treasury take when
recipients do not
submit reports on their
uses of funds?

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GAO-24-106753 Fiscal Recovery Funds
compliance to any recipient that fails to submit a report after receiving the third
email notification. We will continue to review Treasury’s efforts to address
recipient non-compliance with filing SLFRF project and expenditure reports.

At the time of our analysis, Treasury did not disclose on the public website where
it posts states’ and localities’ project and expenditure data that the data do not
include information from recipients that failed to submit a project and expenditure
report. Treasury officials told us that they did not post this information because
the majority of the recipients that did not submit a report are NEUs. They said
that as smaller governments, NEUs have limited capacity and other challenges
that affect their ability to report on time. Officials further told us that because
NEUs were often the “most nervous” to accept SLFRF awards (due to their
limited experience with receiving federal funds), Treasury had concerns over
creating “undue pressure” or a “chilling effect” on these recipients by publicly
sharing information about who did not submit a report.

As a result of our analysis and discussions with Treasury officials in August 2023,
Treasury subsequently disclosed on its public website that the project and
expenditure data as of March 31, 2023, do not include data from all SLFRF
recipients. Specifically, Treasury posted a statement that the spending data as of
March 31, 2023, include information from 98 percent of SLFRF recipients that
report quarterly and 85 percent of recipients that report annually. Treasury
officials told us they plan to include a similar statement in future postings on
project and expenditure report data. By disclosing that its public postings do not
include spending information for all SLFRF recipients, Treasury will help ensure
that Congress and the public have a more complete and accurate picture of how
much funding has been obligated and spent, and for what purposes.

We provided a draft of this report to Treasury for review and comment. Treasury
provided technical comments, which we incorporated as appropriate.

To inform all of our work, we reviewed laws and regulations governing the
SLFRF program and Treasury SLFRF program guidance, policies, and
procedures. We also interviewed Treasury officials.

To determine how much SLFRF funding states and localities reported obligating
and spending, we analyzed data from project and expenditure reports that states
and localities submitted to Treasury that reflected SLFRF spending as of March
31, 2023. Treasury made these data publicly available on July 14, 2023, which
were the most recent at the time of our review. In addition, we analyzed
Treasury’s data on recipients that were required to submit project and
expenditure reports by April 30, 2022, and April 30, 2023, to determine how
many localities did not submit reports.

To identify each locality as a city, county, or NEU, we analyzed Treasury data
and consulted with Treasury officials. We identified which recipients requested
their SLFRF awards directly from Treasury because cities and counties were to
receive funds directly from Treasury and NEUs were to receive their funds from
the states. For localities that received their funds from Treasury, we categorized
localities with “county,” “parish,” or “borough” in their name as a “county” and the
remaining localities as a “city.” For localities that did not receive funds directly
from Treasury, we categorized them as a “NEU.” In addition, Treasury officials
identified which localities were consolidated jurisdictions (i.e., local governments
that received funds from a combination of city, county, or NEU allocations). To
categorize the consolidated jurisdictions, we determined the composition of their
What information does
Treasury disclose
about recipients that
have not submitted a
report?
Agency Comments
How GAO Did This
Study

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funding and categorized them as the locality type that comprised the majority of
their SLFRF award total.

To assess the reliability of Treasury data, we reviewed Treasury’s technical
documentation for project and expenditure reports and discussed the data with
Treasury officials. We determined the data were sufficiently reliable for reporting
the amount of SLFRF awards states and localities received, obligated, and spent.
To describe Treasury’s actions when SLFRF recipients do not submit required
reports, we reviewed Treasury’s Award Management Policy for Financial
Assistance Recovery Programs and Data Validation, Compliance Testing, and
Noncompliance Remediation Procedures. We also reviewed Treasury’s draft
notice of non-compliance.
We conducted this performance audit from April 2023 to October 2023 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.

The Honorable Patty Murray
Chair
The Honorable Susan Collins
Vice Chair
Committee on Appropriations
United States Senate

The Honorable Ron Wyden
Chairman
The Honorable Mike Crapo
Ranking Member
Committee on Finance
United States Senate

The Honorable Bernard Sanders
Chair
The Honorable Bill Cassidy
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable Gary C. Peters
Chairman
The Honorable Rand Paul, M.D.
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate

The Honorable Kay Granger
Chairwoman
The Honorable Rosa L. DeLauro
Ranking Member
Committee on Appropriations
House of Representatives

List of Addressees

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The Honorable Cathy McMorris Rodgers
Chair
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives

The Honorable Mark E. Green, M.D.
Chairman
The Honorable Bennie G. Thompson
Ranking Member
Committee on Homeland Security
House of Representatives

The Honorable James Comer
Chairman
The Honorable Jamie Raskin
Ranking Member
Committee on Oversight and Accountability
House of Representatives

The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Ranking Member
Committee on Ways and Means
House of Representatives

The Honorable John A. Barrasso, M.D.
United States Senate

The Honorable John Cornyn
United States Senate

The Honorable Steve Daines
United States Senate

The Honorable Charles E. Grassley
United States Senate

The Honorable James Lankford
United States Senate

The Honorable Tim Scott
United States Senate

The Honorable John Thune
United States Senate

The Honorable Todd Young
United States Senate

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GAO-24-106753 Fiscal Recovery Funds
Chuck Young, Managing Director, Public Affairs, YoungC1@gao.gov, (202) 512-
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1Pub. L. No. 117-2, tit. IX, subtit. M, § 9901, 135 Stat. 4, 223 (2021), codified at 42 U.S.C. §§ 802-
803 (ARPA). Sections 602 and 603 of the Social Security Act as added by section 9901 of ARPA
appropriated $350 billion in total funding for two funds—the Coronavirus State Fiscal Recovery
Fund and the Coronavirus Local Fiscal Recovery Fund. For purposes of this report, we discuss
these two funds as one—the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). See 42
U.S.C. §§ 802-803. For purposes of the SLFRF, ARPA establishes that the District of Columbia is
considered to be a state. 42 U.S.C. §§ 802(g)(5), 803(g)(9).

2SLFRF recipients have until December 31, 2024, to obligate their SLFRF awards and until
December 31, 2026, to liquidate those obligations, in accordance with allowable uses established
in ARPA. The Consolidated Appropriations Act, 2023, authorized SLFRF funding for emergency
relief from natural disasters or the negative economic impacts of natural disasters, and certain
infrastructure and community development projects that meet existing eligibility criteria. Pub. L. No.
117-328, div. LL, § 102, 136 Stat. 4459, 6097 (2022). Funds for certain infrastructure and
community development projects must be obligated by December 31, 2024, and liquidated by
September 30, 2026. For example, this includes funds for the Bridge Investment Program, National
Highway Performance Program, and Surface Transportation Block Grant Program, among other
programs, and activities under Title I of the Housing and Community Development Act of 1974. 42
U.S.C. § 802(c)(5)(A)-(E).

3Pub. L. No. 116-136, § 19010(b), 134 Stat. 281, 580 (2020). All of our reports related to the
COVID-19 pandemic are available at https://www.gao.gov/coronavirus.

4We excluded tribal governments, U.S. territories, and local governments in the territories from our
analysis. We reported on federal agencies’ distribution of COVID-19 relief funds, including the
SLFRF, to tribal recipients in December 2022. See GAO, COVID-19 Relief Funds: Lessons
Learned Could Improve Future Distribution of Federal Emergency Relief to Tribal Recipients, GAO-
23-105473 (Washington, D.C.: Dec. 15, 2022). We reported on the U.S. territories’ use of COVID-
19 relief funds, including the SLFRF, in September 2023. See GAO, COVID-19: U.S. Territory
Experiences Could Inform Future Federal Relief, GAO-23-106050 (Washington, D.C.: Sept. 19,
2023).

5Treasury officials told us they make data from project and expenditure reports publicly available
after revisions and quality control processes are complete. Treasury will generally allow revisions or
edits to submitted reports within a designated revision period, such as 60 days following the official
submission due date, according to Treasury policy. Within this period, the submitted report is
considered final unless Treasury identifies a material mistake or problem in the report and requests
that the recipient make a revision. The next project and expenditure report that all SLFRF recipients
are required to submit is due to Treasury on April 30, 2024.

642 U.S.C. §§ 803(g)(5), 5302(a)(5). Non-entitlement units of local government (NEU) include
cities, villages, towns, townships, or other types of local governments.

7The total amount of SLFRF awards New York City received includes $4.3 billion in metropolitan
city funds and $1.6 billion in county funds for the five New York City boroughs (i.e., Bronx, Kings,
New York, Queens, and Richmond Counties).

Endnotes

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GAO-24-106753 Fiscal Recovery Funds

8According to Treasury, states that had experienced a net increase of more than 2 percentage
points in their unemployment rate from February 2020 to the date of the latest available data at the
time the state certified for their payment received their full award in a single payment. Under ARPA,
to the extent practicable, states receive award funds not later than 60 days after certifying that the
state requires the payment to carry out the activities specified in statute and will use the funds in
compliance with the eligible uses. 42 U.S.C. § 802(b)(6), (d)(1). Metropolitan cities, states (for
distribution to NEUs), and counties received award funds in two equal tranches, providing the first
payment 60 days after March 11, 2021, to the extent practicable, and the second payment no
earlier than 12 months after the first. After receiving award funds for distribution to NEUs, states
had 30 days to make those distributions, unless Treasury granted an extension.

9As of March 31, 2023, SLFRF awards had not yet been disbursed to some counties, metropolitan
cities, and Tribes because those recipients had not requested their funds, according to Treasury.
Specifically, this included $90.6 million for counties, $25.2 million for cities, and $29.2 million for
Tribes. According to Treasury, as of August 15, 2023, remaining funds across recipients included
$10.5 million for counties and $22.5 million for Tribes.

10In addition to the project and expenditure report, Treasury requires an interim report and a
recovery plan performance report from certain recipients. The interim report was a one-time
requirement due in 2021 that provided an initial overview of recipients’ status and uses of funding.
The recovery plan performance report is an annual report that provides information on the projects
large recipients are undertaking, including how they plan to ensure program outcomes are
achieved in an effective, efficient, and equitable manner. NEUs were not required to submit an
interim report. Only states, the District of Columbia, U.S. territories, and metropolitan cities and
counties with a population that exceeds 250,000 residents are required to submit recovery plan
performance reports.

11ARPA established that recipients can use their SLFRF awards to cover costs incurred by
December 31, 2024, to (1) respond to the coronavirus public health emergency or its negative
economic impacts; (2) provide premium pay to essential workers, or grants to employers with
essential workers; (3) provide government services up to the amount of the reduction in revenue or
$10,000,000; and (4) make necessary investments in water, sewer, or broadband infrastructure.
42 U.S.C. §§ 802(c), 803(c). Based on Treasury guidance, recipients may not provide premium pay
for work performed after April 10, 2023, when the National Emergency concerning COVID-19
ended, but may award premium pay for work performed prior to that date. There are several
restrictions on recipients’ uses of SLFRF awards. Recipients other than tribal governments may not
deposit SLFRF awards into a pension fund. 42 U.S.C. §§ 802(c)(2)(A), 803(c)(2). Also, recipients
that are states or territories may not use SLFRF awards to offset a reduction in net tax revenue
resulting from the recipient’s change in law, regulation, or administrative interpretation. 42 U.S.C. §
802(c)(2)(A). The constitutionality of the offset provision is currently being litigated in several courts.
In addition, recipients may not use SLFRF awards directly to service debt, satisfy a judgment or
settlement, or contribute to a “rainy day” fund. 87 Fed. Reg. 4338, 4394 (Jan. 27, 2022).

12Treasury published an interim final rule implementing the expanded eligible uses that resulted
from the Consolidated Appropriations Act, 2023. 88 Fed. Reg. 64986 (Sept. 20, 2023); Pub. L. No.
117-328, 136 Stat. 4459 (2022). Treasury officials told us they expect to finalize changes to the
reporting portal, reflecting the expanded eligible uses available in the interim final rule, and issue
relevant guidance before the October 2023 project and expenditure reports are due.
13Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, div. LL, § 102(a), 136 Stat. 4459
(2022).

14Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Final Rule:
Frequently Asked Questions (as of July 2023), accessed August 29, 2023,
https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-FAQ.pdf.

15Treasury has determined that there are no subawards under the revenue replacement category,
based on the definition of “subrecipient” in the Uniform Guidance. See 2 C.F.R. § 200.1.
Specifically, the definition of a subrecipient in the Uniform Guidance provides that a subaward is
provided to “carry out” a portion of a federal award. According to Treasury, recipients’ use of funds
for replacing revenue does not give rise to subrecipient relationships given that there is no federal
program or purpose to carry out in the case of the revenue replacement portion of the award. See
Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Final Rule:
Frequently Asked Questions (as of July 2023), 13.14.

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GAO-24-106753 Fiscal Recovery Funds

16See 87 Fed. Reg. 4338, 4437 (Jan. 27, 2022). The following recipients are required to submit
quarterly project and expenditure reports: (1) tribal governments that are allocated more than $30
million in funding; (2) states, the District of Columbia, U.S. territories, metropolitan cities and
counties with a population that exceeds 250,000 residents; (3) metropolitan cities and counties with
a population below 250,000 residents that are allocated more than $10 million in funding; and (4)
NEUs that are allocated more than $10 million in funding. The following recipients are required to
submit annual reports: (1) tribal governments that are allocated less than $30 million in funding, (2)
metropolitan cities and counties with a population below 250,000 residents that are allocated less
than $10 million in funding, and (3) NEUs that are allocated less than $10 million in funding.

17Treasury publicly releases reporting data along with an analysis of the data on its website
quarterly: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-
governments/state-and-local-fiscal-recovery-funds/recipient-compliance-and-reporting-
responsibilities.

18According to Treasury officials, two of the 30,678 local recipients no longer exist and will not be
required to submit a project and expenditure report in April 2024.

19Treasury officials told us one locality experienced technical difficulties when submitting its project
and expenditure report. As a result, this recipient’s data were not included in Treasury’s public
posting of project and expenditure information based on spending data as of March 31, 2023.

20ARPA allocated $195.3 billion to the 50 states and the District of Columbia. The District of
Columbia also received funding from the allocations for metropolitan cities and counties. As a
result, the District of Columbia received approximately $510 million from the funds ARPA allocated
to metropolitan cities and counties.

21Colorado reported a budget of $17.8 million for this project and spent $61 as of March 31, 2023,
according to Treasury data.

22ARPA allocated $130.2 billion to metropolitan cities, counties, and non-entitlement units of local
government. According to Treasury data, this amount included $510 million for the District of
Columbia, which is accounted for in our analysis of state spending, and $1.7 billion for local
governments in the territories, which are excluded from our analysis. According to Treasury data,
4,268 local governments in our scope that received a collective $3 billion in SLFRF awards did not
submit a project and expenditure report during the reporting period. As a result, they were excluded
from Treasury’s public posting and our analysis.

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