GAO-26-108587, COVID-19 Relief: States’ and Localities’ Fiscal Recovery Funds Spending Update for 2025

Report — GAO-26-108587, COVID-19 Relief: States’ and Localities’ Fiscal Recovery Funds Spending Update for 2025, dated 2024-12-31, issued by Government Accountability Office.

Full text

Page 1

GAO-26-108587 Fiscal Recovery Funds

The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program
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 was
established under the American Rescue Plan Act of 2021 (ARPA) and is
administered by the Department of the Treasury. SLFRF recipients must
regularly submit reports to Treasury on their use of the awards and the projects
undertaken with them.2 Generally, SLFRF recipients had until December 31,
2024, to obligate their SLFRF awards and have until December 31, 2026, to
spend their awards.
The CARES Act includes a provision for us to monitor the use of federal funds to
respond to the COVID-19 pandemic.3 This report updates our October 2023,
April 2024, and September 2024 reports on states’ and localities’ SLFRF
spending and uses of SLFRF.4

•
As of March 31, 2025—the most recent complete data available for all states
and localities at the time of our review—states reported obligating all but
$10.4 million of the $195.8 billion they received in SLFRF awards, and
localities reported obligating all but $101 million of the $127.8 billion they
received.
•
Funds that were not obligated by December 31, 2024, generally must be
returned to Treasury. Treasury has begun taking actions to recoup funds that
states and localities reported as unobligated. As of November 2025, states
and localities have returned $13.7 million in unobligated funds to Treasury.
•
States reported spending 80 percent ($156.3 billion) of the SLFRF awards
they received, and localities reported spending 84 percent ($107.2 billion) of
their awards as of March 31, 2025.5
•
States and localities reported spending most of their awards to replace
revenue lost due to the pandemic. As of March 31, 2025, 53 percent ($82.6
billion) of states’ reported spending and 67 percent ($71.9 billion) of localities’
reported spending was used for this purpose.

Under ARPA, the SLFRF allocated the $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 non-entitlement units of local
government (NEU), which are smaller local governments typically serving
populations of less than 50,000.6

U.S. Government Accountability Office
COVID-19 Relief: States’ and Localities’ Fiscal
Recovery Funds Spending Update for 2025
GAO-26-108587
Q&A
Report to Congressional Committees
February 12, 2026
Why This Matters
Key Takeaways
How much in SLFRF
awards did states and
localities receive?

Page 2

GAO-26-108587 Fiscal Recovery Funds
Figure 1: Allocations of Coronavirus State and Local Fiscal Recovery Funds by Recipient Type

aFor purposes of the Coronavirus State and Local Fiscal Recovery Funds, the American Rescue Plan Act
(ARPA) of 2021 establishes that the District of Columbia is considered to be a state. 42 U.S.C. §§ 802(g)(5),
803(g)(9). In accordance with ARPA, the District of Columbia also received funds allocated to metropolitan
cities and counties. As a result, the total amount states and the District of Columbia received was $195.8 billion.
bA 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.
cNon-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.
Treasury employed various methodologies to determine how much funding
states and localities received, based on such factors as population size and
unemployment rates. ARPA required Treasury to send direct payments to all
SLFRF recipients except NEUs.7 ARPA required that states receive NEU funds
from Treasury and then allocate and distribute payments to each NEU within
their state.

Treasury requires recipients to submit “project and expenditure” (P&E) reports
quarterly or annually, depending on the recipient type, population, and award
size.
•
Quarterly reporting is required of (1) states, metropolitan cities, and counties
with more than 250,000 residents or those that were allocated more than $10
million in SLFRF funds; and (2) NEUs that were allocated more than $10
million in SLFRF funds.
•
Annual reporting is required of (1) metropolitan cities and counties with fewer
than 250,000 residents that were allocated less than $10 million in SLFRF
funds, and (2) NEUs that were allocated less than $10 million in SLFRF
funds.
All SLFRF recipients, including states and local governments, were required to
submit a report to Treasury by April 30, 2025, based on their award spending as
of March 31, 2025.8 Treasury publishes information from these reports as public
data on its website.9
What information are
SLFRF recipients
required to report to
Treasury on their uses
of funds?

Page 3

GAO-26-108587 Fiscal Recovery Funds
In the P&E reports, recipients are to detail their uses of SLFRF funds, including
obligations and spending amounts, and projects undertaken. Treasury defines an
obligation, in part, as an order placed for property and services and entering into
contracts, subawards, and similar transactions that require payment.
The SLFRF allows for a broad range of eligible uses to respond to the COVID-19
pandemic and its economic effects.10 SLFRF recipients are required to report on
their uses of funds across 10 spending categories (see fig. 2).
Figure 2: Coronavirus State and Local Fiscal Recovery Funds Spending Categories in Treasury Project and Expenditure Reports, as of March
31, 2025

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.
cRecipients may identify the extent of a reduction in revenue by calculating revenue loss using a formula that
Treasury established or by electing a $10 million “standard allowance,” which allows recipients to spend up to
$10 million or the maximum of the Coronavirus State and Local Fiscal Recovery Funds awards, whichever is
less, over the course of the program.
dSpending for Surface Transportation and Title I projects, combined, cannot exceed the greater of $10 million or
30 percent of a recipient’s SLFRF allocation.
Revenue replacement provides recipients with the most flexibility in using SLFRF
awards and streamlining reporting requirements, according to Treasury
guidance. Under this category, recipients may use these 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 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.11 Based on Treasury
FAQs, recipients may use SLFRF awards for revenue replacement for projects
that are also eligible under the other spending categories because those
categories include services that governments provide.12

Page 4

GAO-26-108587 Fiscal Recovery Funds

All 50 states and the District of Columbia submitted a P&E report to Treasury
with information on the $195.8 billion they received in awards as of March 31,
2025.13 Likewise, 30,507 localities submitted a report with information on the
$127.8 billion they received in SLFRF awards as of March 31, 2025, as shown in
table 1.14 An additional 135 localities, accounting for $6.1 million in SLFRF
awards, have never submitted a P&E report to Treasury.15
Table 1: Localities That Submitted a Project and Expenditure Report and Coronavirus State and Local
Fiscal Recovery Funds (SLFRF) Award Amounts Received, as of March 31, 2025

Number of
localities
reporting
Amount of SLFRF
received (in billions)
Citiesa
1,122
$48.0
Counties
3,033
$59.6
Non-entitlement units of local governmentb
26,352
$20.2
Total
30,507
$127.8
Source: GAO analysis of Department of the Treasury data.  |  GAO-26-108587
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).

States and localities reported obligating nearly 100 percent of their SLFRF
awards. In the aggregate, these states and localities reported about $111.4
million as not obligated.16
States
The states and the District of Columbia collectively reported obligating nearly all
of their $195.8 billion in SLFRF awards. Thirty-nine states and the District of
Columbia reported obligating their entire SLFRF awards as of March 31, 2025.
The remaining 11 states—Alabama, Alaska, California, Florida, Georgia, Maine,
Mississippi, New Hampshire, New Mexico, Texas, and Virginia—reported
obligating nearly all, but not their entire SLFRF awards. These states reported a
combined $10.4 million in SLFRF awards as unobligated, which ranged from a
low of $17,704 for New Mexico to a high of $9.2 million for Florida.
Localities
The 30,507 localities that submitted a P&E report to Treasury reported obligating
$127.7 billion of the $127.8 billion in SLFRF awards they received in the
aggregate. Of these localities, 28,110 (92 percent) reported obligating their entire
SLFRF award. The remaining 2,397 localities reported unobligated SLFRF
awards ranging from less than $1 to more than $7.6 million, totaling a combined
$101 million. Of those, 1,580 localities reported less than 1 percent of their
awards as unobligated.
The shares of SLFRF awards localities reported as obligated varied by locality
type. As shown in table 2, about 96 percent of cities and 97 percent of counties
reported obligating their entire award, compared to 91 percent of NEUs.

How many states and
localities submitted
reports to Treasury on
their uses of funds?
How much of their
SLFRF awards have
states and localities
obligated?

Page 5

GAO-26-108587 Fiscal Recovery Funds
Table 2: Obligations of Coronavirus State and Local Fiscal Recovery Funds Reported by Localities, as
of March 31, 2025
Locality
0%
Greater than
0%, less than
50%
50% to less
than 99%
99% to less
than 100%
100%

Citiesa

0%

0%

0%

3%

96%

Counties

0%

0%

1%

2%

97%
Non-entitlement
units of local
governmentb

1%

0%

1%

6%

91%
Source: GAO analysis of Department of the Treasury data.  |  GAO-26-108587
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).

SLFRF funds that were not obligated by December 31, 2024, generally must be
returned to Treasury.17 In March 2025, Treasury issued a notice to all SLFRF
recipients informing them that Treasury intended to monitor recipients' methods
of obligating funds by the December 31, 2024, deadline. The notice described
actions Treasury planned to take to recoup funds, including sending “Financial
Instructions to Return Unobligated Funds” to recipients that did not fully obligate
their awards by the deadline, based on the latest data recipients reported to
Treasury. The instructions request that recipients return the funds within 60 days
of the date of the notice and state that failure to do so will result in a formal notice
of recoupment and possible debt collection.
Between March and October 2025 Treasury sent instructions on returning
unobligated funds to 1,041 recipients, accounting for $59.5 million in reported
unobligated funds. As of November 2025, Treasury officials told us that recipients
had returned $13.7 million in unobligated award amounts. According to Treasury
officials, Treasury plans to initiate recoupment of any remaining unobligated
funds, including recipients that failed to submit a report following the obligation
deadline, but had previously reported an unobligated balance.

In the aggregate, the 50 states and the District of Columbia, reported spending
$156.3 billion (80 percent) of their SLFRF awards, as of March 31, 2025. In
comparison, as of March 31, 2024, states reported spending 60 percent of their
SLFRF awards, in the aggregate.
Figure 3 shows the share of SLFRF award amounts that states reported
spending as of March 31, 2025. Twenty-three states and the District of Columbia
reported spending 75 percent or more of their SLFRF awards. Four of those 24
states—California, the District of Columbia, Massachusetts, and New York—
reported spending their entire award. Six states—Mississippi, New Jersey,
Oklahoma, South Carolina, Tennessee, and West Virginia—reported spending
less than half of their total awards, ranging from 27 percent to 48 percent.

What actions has
Treasury taken to
recoup unobligated
funds?
How much of their
SLFRF awards have
states spent as of
March 31, 2025?

Page 6

GAO-26-108587 Fiscal Recovery Funds
Figure 3: Reported Spending of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) by States and the District of Columbia, as of
March 31, 2025

In the aggregate, the majority of the $156.3 billion in SLFRF awards the states
reported spending was used for two purposes: (1) replacing revenue and (2)
addressing the negative economic impacts of COVID-19. Figure 4 shows that
states reported spending 53 percent ($82.6 billion) of their SLFRF awards to
replace revenue and 31 percent ($47.9 billion) of their awards to address the
negative economic impacts of COVID-19.

How have states used
their SLFRF awards?

Page 7

GAO-26-108587 Fiscal Recovery Funds
Figure 4: States’ Reported Spending of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) by
Treasury Spending Category, as of March 31, 2025

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.
bOther includes funding for such purposes as assistance for education, healthy childhood environments, and
social determinants of health.
cTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.
dBased 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.
Revenue Replacement and Negative Economic Impacts Spending
In 20 states and the District of Columbia, revenue replacement accounted for
over half of reported spending. North Dakota (100 percent), California (83
percent), and Indiana (79 percent) reported the largest shares, while Idaho and
Oklahoma reported not spending any funds to replace revenue.
Of the funds spent on replacing revenue, nearly all (over 99 percent) were spent
on government services. As described earlier, states may use their funds to
cover a broad range of government services under this spending category, up to
the amount of revenue loss experienced during the pandemic.
Addressing the negative economic impacts of COVID-19 accounted for the
largest shares of reported spending for Minnesota (83 percent), Maine (64
percent), and Georgia and Illinois (62 percent each), while North Dakota and
South Carolina reported spending no funds for this purpose.
Most (79 percent) of the funds spent on addressing the negative economic
impacts of COVID-19 were used to provide assistance to households.
Contributions to state unemployment insurance trust funds accounted for 47
percent ($22.4 billion) of the spending on assistance to households.18 Texas

Page 8

GAO-26-108587 Fiscal Recovery Funds
($6.2 billion), Illinois ($4.1 billion), and Minnesota ($2.3 billion) reported spending
the most on these trust funds.
Examples of states’ reported spending on individual projects to replace revenue
and address the negative economic impacts of COVID-19 are shown in figure 5.
Figure 5: Examples of States’ Reported Spending on Coronavirus State and Local Fiscal Recovery Funds Projects to Replace
Revenue and Address the Negative Economic Impacts of COVID-19

Localities reported spending $107.2 billion (84 percent) of the $127.8 billion in
SLFRF awards they received in the aggregate, as of March 31, 2025. In
comparison, localities that submitted a report as of March 31, 2024, reported
spending 60 percent of their awards, in the aggregate.
Localities’ reported spending amounts varied by locality type. As shown in figure
6, cities, counties, and NEUs reported spending between 80 and 88 percent of
their awards as of March 31, 2025.

How much of their
SLFRF awards have
localities spent?

Page 9

GAO-26-108587 Fiscal Recovery Funds
Figure 6: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Reported Spending by Locality
Type, as of March 31, 2025

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).
The shares of SLFRF awards localities reported spending varied by locality type.
For example, table 3 shows that 75 percent of cities, 79 percent of counties, and
88 percent of NEUs each reported spending between 75 percent and 100
percent of their SLFRF awards. Three percent of NEUs reported spending none
of their SLFRF awards.
Table 3: Shares of Coronavirus State and Local Fiscal Recovery Funds Reported Spending by Locality
Type, as of March 31, 2025

Locality

0%
Greater than
0%, less than
50%

50% to less
than 75%

75% to less
than 100%

100%
Citiesa
0%
5%
20%
37%
38%
Counties
0%
6%
14%
35%
44%
Non-entitlement
units of local
governmentb

3%

5%

5%

15%

73%
Source: GAO analysis of Department of the Treasury data.  |  GAO-26-108587
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).

Similar to states, replacing revenue and addressing the negative economic
impacts of COVID-19 accounted for most of the localities’ $107.2 billion in
SLFRF spending. Figure 7 shows that localities collectively reported spending 67
percent ($71.9 billion) of their SLFRF awards to replace revenue and 13 percent
($13.5 billion) to address the negative economic impacts of COVID-19.

How have localities
used their SLFRF
awards?

Page 10

GAO-26-108587 Fiscal Recovery Funds
Figure 7: Localities’ Coronavirus State and Local Fiscal Recovery Funds Reported Spending by
Treasury Spending Category, as of March 31, 2025

aRecipients generally may use funds under the revenue replacement category to meet the non-federal cost-
share or matching requirements for other federal programs.
bOther includes funding for such purposes as assistance for education, healthy childhood environments, and
social determinants of health.
cTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.
dBased 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.
eOther includes the following spending categories: Administrative, Natural Disasters, Surface Transportation,
and Title I projects.
About 78 percent of localities (23,749) reported spending their entire SLFRF
awards to replace revenue.
Of the $13.5 billion that localities reported spending to address the negative
economic impacts of COVID-19, localities used the majority (65 percent) for
assistance to households. That amount included spending on housing and
services for unhoused individuals and foster youths, as well as neighborhood
projects promoting health and safety.
Spending by Locality Type and Treasury Spending Category
As shown in figure 8, cities (70 percent), counties (56 percent), and NEUs (88
percent) each collectively spent the largest share of funds on replacing revenue.
Cities and counties (15 percent each) spent the second largest share of funds on
addressing the negative economic impacts of the pandemic, while NEUs spent
the second largest share on infrastructure (7 percent).

Page 11

GAO-26-108587 Fiscal Recovery Funds

Figure 8: Coronavirus State and Local Fiscal Recovery Funds Reported Spending by Treasury
Spending Category, as of March 31, 2025

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).
cOther includes the following spending categories: Administrative, Natural Disasters, Surface Transportation,
and Title I projects.
dBased 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.
eTreasury guidance refers to this category as Public health-Negative economic impact: Public sector capacity.
Cities’, counties’, and NEUs’ spending to replace revenue, address the negative
economic impacts of the pandemic, and invest in infrastructure varied in size,
scope, and purpose. Figure 9 provides examples of projects localities reported in
these areas.

Page 12

GAO-26-108587 Fiscal Recovery Funds
Figure 9: Examples of Localities’ Reported Spending on Coronavirus State and Local Fiscal Recovery Funds Projects by City,
County, and Non-entitlement Unit of Local Government

aCity refers to metropolitan cities as defined in 42 U.S.C. § 803(g)(4).
bNon-entitlement units of local government (NEU) as defined in 42 U.S.C. § 803(g)(5).

As with the states, cities’ and counties’ largest area of spending to address the
negative economic impacts of the pandemic was providing assistance to
households. Cities spent most of this assistance on investments in outdoor public
spaces, such as parks and public plazas. Counties spent most of these funds on
affordable housing, including addressing housing insecurity and lack of
affordable housing.
NEUs used most of their infrastructure spending on water-related projects, such
as sewer infrastructure and wastewater collection, conveyance, and treatment.

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

Page 13

GAO-26-108587 Fiscal Recovery Funds

To inform our work, we reviewed relevant federal 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 (P&E) reports that
states and localities submitted to Treasury that reflected SLFRF obligations and
spending as of March 31, 2025. These data included information from 688
localities that did not submit a report with information as of March 31, 2025, but
had previously submitted a required report for a prior reporting cycle (e.g., as of
March 31, 2024). We included these recipients’ data in our analysis of the
amounts obligated and spent. Treasury made these data publicly available in
August 2025 for recipients that report quarterly and in November 2025 for
recipients that report annually. These data were the most recently complete data
available for all states and localities at the time of our review.
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 while NEUs were to receive their funds
through 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 an “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 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 P&E 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.
We conducted this performance audit from June 2025 to February 2026 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 Susan Collins
Chair
The Honorable Patty Murray
Vice Chair
Committee on Appropriations
United States Senate
The Honorable Mike Crapo
Chairman
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate
How GAO Did This
Study
List of Addressees

Page 14

GAO-26-108587 Fiscal Recovery Funds
The Honorable Bill Cassidy, M.D.
Chair
The Honorable Bernard Sanders
Ranking Member
Committee on Health, Education, Labor and Pensions
United States Senate
The Honorable Rand Paul, M.D.
Chairman
The Honorable Gary C. Peters
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Tom Cole
Chairman
The Honorable Rosa L. DeLauro
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Brett Guthrie
Chairman
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives
The Honorable Andrew Garbarino
Chairman
The Honorable Bennie G. Thompson
Ranking Member
Committee on Homeland Security
House of Representatives
The Honorable James Comer
Chairman
The Honorable Robert Garcia
Ranking Member
Committee on Oversight and Government Reform
House of Representatives
The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Ranking Member
Committee on Ways and Means
House of Representatives
We are sending copies of this report to the appropriate congressional
committees, the Secretary of the Department of the Treasury, and other
interested parties. In addition, this report is available at no charge on the GAO
website at https://www.gao.gov.

Page 15

GAO-26-108587 Fiscal Recovery Funds

For more information, contact: Jeff Arkin, Director, Strategic Issues,
ArkinJ@gao.gov.
Public Affairs: Sarah Kaczmarek, Managing Director, Media@gao.gov.
Congressional Relations: Dave Powner, Managing Director, CongRel@gao.gov.
Staff Acknowledgments: Brenda Rabinowitz (Assistant Director), Colleen
Corcoran (Analyst-in-Charge), Michael Bechetti, McLeod Brown, Mike Maciag,
Peter Verchinski, and Crystal Wesco.
Connect with GAO on Facebook, X, LinkedIn, Instagram, and YouTube.
Subscribe to our Email Updates. Listen to our Podcasts.
Visit GAO on the web at https://www.gao.gov.
This is a work of the U.S. government but may include copyrighted material. For
details, see https://www.gao.gov/copyright.

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 the
American Rescue Plan Act of 2021 (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).
2The 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 have been obligated by December 31, 2024, and spent 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.
4See GAO, COVID-19 Relief: States' and Localities' Fiscal Recovery Funds Spending as of March
31, 2024, GAO-24-107301 (Washington, D.C.: Sept. 26, 2024); COVID-19 Relief: State and Local
Recovery Funds Spending as of September 30, 2023, GAO-24-107472 (Washington, D.C.: Apr. 10,
2024); and COVID-19 Relief: States’ and Localities’ Fiscal Recovery Funds Spending as of March
31, 2023, GAO-24-106753 (Washington, D.C.: Oct. 11, 2023)and. We 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).
5All five U.S. territories (i.e., American Samoa, the Commonwealth of the Northern Mariana Islands,
Guam, Puerto Rico, and the U.S. Virgin Islands) each reported obligating the entirety of their
SLFRF awards. In the aggregate, the territories reported spending about 84 percent of their SLFRF
awards as of March 31, 2025, which varied by territory. Of the SLFRF awards they received,
American Samoa reported spending 20 percent (about $99 million); the Commonwealth of the
Northern Mariana Islands reported spending 95 percent (about $460 million); Guam reported
spending 75 percent (about $453 million); Puerto Rico reported spending 95 percent ($2.3 billion);
and the U.S. Virgin Islands reported spending 93 percent ($508 million). Treasury’s publicly
available project and expenditure (P&E) report data did not include information from tribal
governments.
GAO Contact
Information
Endnotes

Page 16

GAO-26-108587 Fiscal Recovery Funds

642 U.S.C. §§ 803(g)(5), 5302(a)(5). NEUs include cities, villages, towns, townships, or other types
of local governments.
7As of January 1, 2025, SLFRF awards had not been disbursed to some Tribes and counties
because those recipients had not requested their funds, according to Treasury officials.
Specifically, this amount included $3.4 million for Tribes and $9.7 million for counties. Treasury
officials told us that following the December 31, 2024, deadline to obligate SLFRF funds, Treasury
has deobligated these funds and will not disburse them.
8Treasury officials told us they historically accepted new data submissions and revisions to
submissions from recipients for 60 days following the submission deadline. For the data Treasury
made publicly available with information as of March 31, 2025, Treasury included the submissions
received as of September 30, 2025.
9Treasury publishes data reported by states and localities on its website at Public Data | U.S.
Department of the Treasury.
10ARPA 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
due to the COVID-19 pandemic; and (4) make necessary investments in water, sewer, or
broadband infrastructure. 42 U.S.C. §§ 802(c), 803(c). Subsequently, the Consolidated
Appropriations Act, 2023, established that recipients may also use their awards to provide
emergency relief from natural disasters or the negative impacts of natural disasters and to invest in
certain infrastructure projects. Pub. L. No. 117-328, div. LL, § 102, 136 Stat. 4459, 6098 (2022),
which is codified at 42 U.S.C. §§ 802(c)(1)(E), 803(c)(1)(E), 802(c)(5), 803(c)(6). 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)(B), 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). However, this offset provision
has been found to be unconstitutional by some courts. See West Virginia v. Dept. of Treasury, 59
F.4th 1124 (11th Cir. 2023); Texas v. Yellen, 105 F.4th 755 (5th Cir. 2024). In addition, recipients
may not use SLFRF awards to service debt, satisfy a judgment or settlement, or contribute to a
“rainy day” fund. 87 Fed. Reg. 4338, 4394 (Jan. 27, 2022).
11The Consolidated Appropriations Act, 2023, codified the availability of the standard allowance
provided in Treasury’s final rule. Pub. L. No. 117-328, div. LL, § 102(a), 136 Stat. 4459 (2022).
12Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: Frequently
Asked Questions (as of April 29, 2025), accessed September 26, 2025,
https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-FAQ.pdf.
13ARPA allocated $195.3 billion to states and the District of Columbia. The District of Columbia also
received funds allocated to metropolitan cities and counties, in accordance with ARPA. As a result,
the total amount of SLFRF awards states and localities received was $195.8 billion.
14Treasury’s public data included information for 688 localities that did not submit a report with
information as of March 31, 2025, but had previously submitted a required report for a prior
reporting cycle. These recipients account for $369.1 million in SLFRF awards received.
15We reported on SLFRF recipients’ compliance with Treasury’s P&E reporting requirements and
Treasury’s efforts to ensure compliance. These efforts have included initiating recoupment of
awards from these 135 recipients for failure to submit the required reports. We recommended that
Treasury develop and document procedures and guidance for recipients that identify the timing and
circumstances under which Treasury will initiate future recoupment for recipients that have not met
SLFRF reporting requirements. See GAO, COVID-19 Relief: Treasury Could Improve Compliance
Procedures and Guidance for State and Local Fiscal Recovery Funds, GAO-25-107909
(Washington, D.C.: July 22, 2025).
16For purposes of this report, the $111.4 million does not include the $6.1 million in unobligated
SLFRF awards from localities that have never submitted a report to Treasury. As discussed earlier,
135 localities, accounting for $6.1 million in SLFRF awards, have never submitted a P&E report to
Treasury.

Page 17

GAO-26-108587 Fiscal Recovery Funds

17Specifically, 31 C.F.R. § 35.5 states, “A recipient must return any funds that have not been
obligated by December 31, 2024, pursuant to orders placed for property and services or entry into
contracts, subawards, and similar transactions that require payment other than funds in the amount
reported to Treasury by April 30, 2024, as the estimate of funds that the recipient will expend to
comply with a requirement under federal law or regulation or provision of the award terms and
conditions to which a recipient becomes subject as a result of receiving or expending funds.”
18According to the Department of Labor, each state maintains its own Unemployment Insurance
(UI) trust fund reserve built from state taxes, primarily on employers, and used only to pay for state
UI benefits. According to Treasury’s guidance, under the public health and negative economic
impacts spending category, recipients may use SLFRF funds for contributions to unemployment
insurance trust funds and repayment of the principal amount due on advances received under Title
XII of the Social Security Act up to an amount equal to (1) the difference between the balance in
the recipient’s unemployment insurance trust fund as of January 27, 2020, and the balance of such
account as of May 17, 2021; plus (2) the principal amount outstanding as of May 17, 2021, on any
advances received under Title XII of the Social Security Act between January 27, 2020, and May
17, 2021.

File and source

File

26-108587-covid-19-relief-states-and-localities-fiscal.pdf

Size

2,952,922 bytes

SHA-256

59c91fcee5816464a041fa38c902e27e815f7b76f030b9a99b8ccef3ffcf35ba

Our copy

26-108587-covid-19-relief-states-and-localities-fiscal.pdf

Original

www.gao.gov