Full text
U.S. Government Accountability Office
COVID-19 Relief: Treasury Could Improve
Compliance Procedures and Guidance for
State and Local Fiscal Recovery Funds
GAO-25-107909
Q&A
Report to Congressional Committees
July 22, 2025
Why This Matters The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program,
established under the American Rescue Plan Act of 2021 (ARPA), provided $350
billion to tribal governments, states, the District of Columbia, U.S. territories, and
more than 30,000 local governments to help cover a broad range of costs
stemming from the health and economic effects of the COVID-19 pandemic. 1
The Department of the Treasury is responsible for overseeing and monitoring
recipients’ use of funds. To ensure these funds are used for allowable purposes,
Treasury developed reporting requirements for recipients to detail their uses of
funds. Since 2022, Treasury has required recipients to submit project and
expenditure (P&E) reports to provide information on how they used their awards,
including obligations and spending amounts.
The CARES Act includes a provision for us to monitor the use of federal funds to
respond to the COVID-19 pandemic. 2 This report, part of a series of reports we
have issued on recipients’ spending and Treasury’s oversight of SLFRF funds,
examines the reporting requirements that SLFRF recipients are to meet and the
extent to which Treasury ensures compliance with these reporting requirements. 3
Key Takeaways
• In each year from 2022 to 2024, thousands of SLFRF recipients did not meet
the reporting deadline for P&E reports. For example, 4,272 recipients—
accounting for $2 billion in SLFRF awards—missed the deadline in 2024.
• Treasury has issued notices of noncompliance and conducted targeted
outreach, but reporting remained inconsistent. As of January 2025, 1,012
recipients—mostly smaller localities—had never submitted a P&E report.
These recipients accounted for about $139 million in combined awards.
• While Treasury’s procedures allow Treasury to initiate recoupment with
noncompliant recipients, the procedures do not require recoupment at any
point and time and recoupment efforts have been inconsistent. Treasury
started sending initial notices of recoupment in January 2025 to 988 of the
1,012 recipients that had never submitted a P&E report. Of those, 339 (34
percent) subsequently submitted a report between January and March 2025.
• We recommend that Treasury develop and document procedures and
guidance for recipients that identify the timing and circumstances under which
it will initiate recoupment. Treasury agreed with our recommendation.
Page 1 GAO-25-107909 Fiscal Recovery Funds Compliance
How much did states
and localities receive in Under ARPA, the SLFRF allocated the $350 billion across six groups of
SLFRF awards? recipients (see fig. 1). Localities included counties, metropolitan cities, and non-
entitlement units of local government (NEU), which are smaller local
governments typically serving populations of less than 50,000. 4 Nearly all those
funds—$325.5 billion—were allocated to state and local governments (for
purposes of this report, we use the terms “local governments” and “localities”
interchangeably).
Figure 1: Allocations of Coronavirus State and Local Fiscal Recovery Funds 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.
Under ARPA, Treasury was required to provide SLFRF awards to most states
and all localities in two equal tranches approximately 1 year apart. Consistent
with ARPA, Treasury issued the first tranche in 2021 and the second in 2022.
ARPA required Treasury to send direct payments to all SLFRF recipients except
NEUs. ARPA required that states receive NEU funds from Treasury, then
allocate and distribute payments to each NEU within their respective states. 5 For
purposes of the SLFRF, all recipients, including NEUs, are direct recipients, and
thus solely responsible for meeting reporting requirements.
The SLFRF program provided substantial flexibility to recipients by allowing for a
broad range of allowable uses. SLFRF recipients had until December 31, 2024,
to obligate their SLFRF awards and generally have until December 31, 2026, to
spend their awards. 6
Page 2 GAO-25-107909 Fiscal Recovery Funds Compliance
What are SLFRF
recipients required to SLFRF award recipients are required to meet reporting requirements established
report to Treasury by Treasury—and authorized under ARPA—to detail their uses of funds. 7
Further, as a condition to receiving SLFRF funds, each recipient was required to
about their uses of
sign an agreement that laid out the terms and conditions of the award, including
funds? adhering to Treasury’s reporting requirements. 8 Specifically, since January 2022,
Treasury has required that recipients submit P&E reports detailing information on
their uses of the funding. These reports are to include descriptions of each
project the recipient has undertaken, as well as the amounts obligated and spent
across a range of allowable use categories established by Treasury.
Treasury also publishes information from these P&E reports on its public website.
Treasury has stated on its public website that the P&E report data “provides
transparency and accountability for communities, local leaders, and the public
about how recipients are using SLFRF resources.” We have previously reported
on states’ and localities’ SLFRF obligations, spending, and uses of funds, based
largely on these reporting submissions. 9
As part of its responsibilities to review recipient reporting and oversee recipients’
uses of awards, Treasury issued regulations and guidance to help recipients
comply with program requirements related to allowable uses of funds and
reporting requirements. 10 For example, Treasury’s 2022 Final Rule implementing
the SLFRF includes information on allowable uses of SLFRF awards and its
Compliance and Reporting Guidance details when recipients are to submit a P&E
report and the information they are required to include in these reports. 11 In
addition, Treasury has issued periodic user guides that provide detailed
instructions on submitting P&E reports to Treasury.
How often are SLFRF
recipients required to Treasury requires that recipients submit P&E reports quarterly or annually,
report to Treasury on depending on the type of recipient and the award size.
their uses of funds? • 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. 12
• 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. 13
Treasury has established a reporting portal where recipients are to submit P&E
reports.
• Treasury opens the portal to accept P&E reports approximately 30 days
before the official reporting deadline. For example, Treasury opens the portal
on or about April 1 for reports that are due on April 30.
• Following the official reporting deadline, Treasury allows revisions or edits to
reports within a period of up to 60 days. 14 Reports submitted within this 60-
day period are included in Treasury’s publicly reported P&E data. 15
• For recipients submitting annually, Treasury also continues to accept P&E
reports through the portal after the 60-day period, for up to 11 months after
the official reporting deadline. Thus, the portal is open until about March 31 of
Page 3 GAO-25-107909 Fiscal Recovery Funds Compliance
the following year, which is when the next annual reporting cycle begins.
Treasury officials told us that allowing recipients to submit reports after the
deadline is consistent with Treasury’s goal of bringing recipients into
compliance with reporting requirements, and that closing the reporting portal
would diminish the rate of compliance, particularly for recipients submitting
annually.
How many recipients
missed Treasury’s Thousands of recipients—all localities—missed Treasury’s reporting deadline for
reporting deadlines? submitting a P&E report across multiple reporting cycles. 16 For example, table 1
shows that 4,272 recipients (14 percent) with a collective $2 billion in SLFRF
awards, did not submit a P&E report to Treasury by April 30, 2024. Based on our
analysis, 2,539 of these localities, with nearly $789 million in combined SLFRF
awards, also did not submit a report by the April 30, 2023, deadline in the
previous reporting cycle. A reporting cycle generally includes the period between
April 1 (when the reporting portal opens), through the April 30 deadline, until
about March 31 of the following year (when the reporting portal closes).
We focused our analysis on Treasury’s April 30 reporting deadline because all
SLFRF recipients—whether submitting quarterly or annually—were required to
submit a P&E report to Treasury on April 30 of each year from 2022 to 2024. 17
Table 1: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Recipients That Did
Not Meet Project and Expenditure Reporting Requirements by the April 30 Deadline, 2022-
2024
Total award Total award
amounts received amounts received
by recipients Number of by recipients that
Number of required to submit recipients that missed reporting
recipients required a report missed reporting deadlines
Year to submit a reporta (in billions) deadlines (in billions)
2022 30,734 $220.7b 3,479 $0.9b
2023 30,729 323.7 4,268 3.0
2024 30,721 323.7 4,272 2.0
Source: GAO analysis of Department of the Treasury data. | GAO-25-107909
a
According to Treasury officials, the number of recipients that were required to submit a report has varied
slightly each year because some recipients returned their awards, declined funds, or no longer exist (e.g., local
governments that were dissolved).
bThese award amounts include the first tranche of SLFRF funding only, which Treasury distributed in 2021.
Recipients received another tranche of funding in 2022 after the April 30, 2022, reporting deadline.
Our analysis also showed that, for each reporting cycle, most recipients that did
not submit reports by the April 30 deadline were small localities. More than half of
these recipients received less than $100,000 in SLFRF awards. Treasury officials
told us that these smaller localities may not have prior experience with federal
funds and reporting requirements typically associated with those funds. The
officials also said that smaller localities have limited capacity and may manage
the SLFRF funds with temporary and volunteer staff and experience high
turnover.
What does Treasury do
when recipients miss Based on its procedures, Treasury is to issue a notice of noncompliance to
reporting deadlines? recipients that did not meet a reporting requirement. The notice includes a new
reporting deadline and describes penalties for noncompliance, which could
include having to return SLFRF awards to Treasury.
Page 4 GAO-25-107909 Fiscal Recovery Funds Compliance
We previously reported that, in August 2023, Treasury began sending notices of
noncompliance to over 3,000 recipients that failed to submit a P&E report by the
April 30, 2023, reporting deadline. 18 Treasury officials told us they did not send
notices to all recipients that did not meet the reporting requirement because, for
example, Treasury was already working with some recipients to address
technical issues in submitting the report. More recently, beginning in June 2024,
Treasury sent notices of noncompliance to over 4,000 SLFRF recipients that had
not submitted a report by the April 30, 2024, reporting deadline.
In addition to notices of noncompliance, Treasury has conducted outreach
through newsletters, webinars, office hours, and collaboration with associations
representing local governments, such as the National Association of Counties
and the National League of Cities. Treasury officials told us they conducted
additional outreach efforts to those recipients with the highest award amounts
that have not submitted a P&E report. In addition, officials told us that Treasury
staff have made hundreds of phone calls to the localities that have not submitted
reports.
Treasury officials told us they continued these efforts throughout the year for
each reporting cycle.
What is the status of
recipients that missed Based in part on its outreach efforts, compliance with Treasury’s reporting
Treasury’s reporting requirements increased throughout each reporting cycle through recipients
submitting reports after the deadline. For example, 2,259 reporters that missed
deadlines?
the April 30, 2024, reporting deadline submitted a P&E report before the next
reporting cycle. These 2,259 recipients accounted for $1.3 billion in SLFRF
awards received. Table 2 provides the report submission status as of the outset
of the subsequent reporting cycle for recipients that missed the reporting
deadline.
Table 2: Status of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Recipients
That Missed the April 30 Project and Expenditure Reporting Deadline, 2022-2024
Submission Status 2022 2023 2024
Number of recipients that did not meet the April
30 reporting deadline 3,479 4,268 4,272
Submitted a report after the April 30
reporting deadline 692 1,239 2,259a
Did not submit a report during the reporting
cycleb 2,787 3,029 2,013
Source: GAO analysis of Department of the Treasury data. | GAO-25-107909
Note: We focused our analysis on Treasury’s April 30 reporting deadline because all SLFRF recipients—
whether submitting quarterly or annually—were required to submit a project and expenditure report to Treasury
on April 30 of each year from 2022 to 2024.
a
The data do not include a report submission from one recipient because Treasury erroneously excluded the
recipient from the publicly reported data. The recipient submitted a report after the April 30, 2024, reporting
deadline, which is not captured in these data.
b
A reporting cycle generally includes the period between April 1 (when the reporting portal opens for reports due
April 30) and March 31 of the following year (when the reporting portal closes).
However, reporting has remained inconsistent, with thousands of recipients not
submitting a P&E report in each reporting cycle. For example, as table 2 shows,
2,013 recipients did not submit a report in the 2024 reporting cycle. These 2,013
recipients received a combined $632 million in SLFRF awards.
Page 5 GAO-25-107909 Fiscal Recovery Funds Compliance
How many recipients
had never submitted Our analysis showed that between January 2022 and January 2025, 1,012
any reports, as of SLFRF recipients—all required to report annually—had never submitted a P&E
January 2025? report. Except for one county, all 1,012 recipients were NEUs. Award amounts
for these recipients totaled $139 million, with individual awards ranging from less
than $1,000 to a high of $7.8 million. Just over half of the recipients (520)
received awards of less than $50,000. The average award amount for these 520
recipients was about $23,000 (see fig. 2).
Figure 2: Range in Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Awards
Received by Recipients That Never Submitted a Project & Expenditure Report, 2022-2024
Note: Treasury SLFRF data are as of January 2025.
How has Treasury
addressed recipients Treasury has initiated recoupment with some SLFRF recipients that had not met
that remain out of any of the reporting requirements. However, Treasury first initiated recoupment 3
years after reporting began in 2022.
compliance with
reporting In August 2023, during our prior review of the SLFRF program, we asked
requirements? Treasury officials about plans for remediation in instances when recipients fail to
submit a P&E report after receiving a notice of noncompliance. At that time,
officials told us that Treasury’s next step would be to initiate remediation efforts,
including recouping awards. However, during follow-up discussions with Treasury
officials in May 2024—after the subsequent April 30 reporting deadline had
passed—officials said that Treasury had not initiated recoupment. These officials
also told us that Treasury was focused on encouraging recipients to submit
required reports by conducting outreach and sending notices of noncompliance
for the reports due on April 30, 2024.
Between January 2025 and April 2025, Treasury, for the first time, initiated
recoupment for 988 of the 1,012 SLFRF recipients that had not submitted a P&E
report across any reporting cycle between 2022 and 2024. The total amount of
SLFRF awards subject to recoupment was about $139 million for all 988
recipients. Treasury officials said that without these reports, Treasury is not able
to determine whether the recipients obligated and spent funds for allowable uses.
Treasury officials told us that the remaining 24 of the 1,012 SLFRF recipients
submitted a P&E report before Treasury initiated recoupment.
As outlined in its Final Rule, Treasury first sent initial notices of recoupment,
which identify the required reports the recipient has not submitted, the prior
notifications Treasury has sent the recipient, and the award amounts subject to
recoupment. 19 Treasury officials said they took this action, in part, in response to
our ongoing reviews of the SLFRF program and discussions with Treasury
Page 6 GAO-25-107909 Fiscal Recovery Funds Compliance
officials about planned actions for recipients that have repeatedly not submitted
P&E reports. Of these 988 recipients, 339 (34 percent) subsequently submitted a
P&E report between January and March 2025 for the first time in 3 years.
Treasury’s Recipient Noncompliance and Remediation Procedures do not require
Treasury to recoup awards at any specific time or under any specific
circumstances in Treasury’s noncompliance process. 20 The procedures, updated
in October 2024, provide Treasury with the option to recoup awards when
recipients fail to submit two or more required reports. Previously, the procedures
provided Treasury with the option to recoup awards when recipients failed to
submit three or more required reports.
While Treasury has initiated recoupment with recipients that had never submitted
a P&E report, Treasury has opted not to initiate recoupment with recipients that
have not submitted reports consistently. For example, Treasury has not initiated
recoupment with recipients that submitted one required report but did not submit
at least two other P&E reports—an approach presented in its current procedures.
Treasury officials told us that Treasury’s procedures are designed to provide it
discretion to determine the circumstances under which it seeks recoupment from
SLFRF recipients. Treasury officials also told us that, as part of this discretion,
they consider multiple compliance priorities and the limited staff available within
Treasury’s Office of Capital Access when deciding whether to recoup SLFRF
funding. 21 For example, the officials told us that Treasury incurs costs (both
actual and in personnel hours) when recouping funds, which involves
individualized mailings, tracking of return receipts, and evaluation of and
responses to requests for reconsideration.
However, P&E reports are Treasury’s primary means for overseeing recipients’
uses of SLFRF funds, according to Treasury officials. Treasury’s reporting
guidance states that Treasury will use the information submitted in P&E reports
for oversight purposes and to fulfill Treasury’s transparency and legal obligations.
The guidance also states that late and unsubmitted P&E reports undermine
Treasury’s ability to provide oversight over the funds.
According to Standards for Internal Control in the Federal Government,
management should design control activities to achieve objectives and respond
to risks and implement control activities through policies. 22 In Treasury’s case,
such control activities include procedures outlining the timing and circumstances
under which it expects to initiate recoupment efforts, which could help Treasury
achieve its oversight objectives and ensure proper use of taxpayer funds.
Developing and documenting procedures that specify the timing and
circumstances for initiating future recoupment could help position Treasury to
consistently take appropriate and timely action, when necessary, for recipients
that do not meet reporting requirements. Some of the 988 recipients to which
Treasury sent initial notices of recoupment between January and March in 2025
subsequently submitted a P&E report for the first time. However, ensuring that all
recipients submit the reports consistently—as these recipients agreed to before
receiving the SLFRF funding—is necessary to determine whether recipients are
spending funds allowably.
Additionally, internal control standards call for management to externally
communicate the necessary quality information to achieve its objectives. 23 While
Treasury’s user guides note that a record of submitting a late report could result
in a finding of noncompliance, Treasury’s guidance to SLFRF recipients does not
include information about the consequences of not submitting a P&E report.
Page 7 GAO-25-107909 Fiscal Recovery Funds Compliance
Communicating to recipients, by documenting in guidance the circumstances in
which Treasury will initiate recoupment, may increase recipients’ compliance
through enhancing their understanding of the consequences of not submitting a
timely report. For example, Treasury notified all recipients in March 2025 that it is
committed to recouping funds that recipients obligated or spent impermissibly, or
that were not obligated by the December 31, 2024, deadline. 24 Treasury officials
told us that since issuing the notice, they have seen an increase in recipient
reporting.
Conclusions
The SLFRF program provided an unprecedented amount of funds to states and
tens of thousands of localities to help them respond to and recover from the
COVID-19 pandemic. Treasury has required recipients to submit at least three
reports to meet reporting requirements on their uses of funds. Treasury has
taken some steps to facilitate compliance with those reporting requirements and
allowed recipients years to comply with reporting requirements. However,
reporting has remained inconsistent during this period, limiting Treasury’s ability
to determine whether recipients are spending SLFRF funds on allowable uses.
Given the volume of SLFRF funds and the number of entities that receive these
distributions, developing and documenting in procedures and recipient guidance
the timing and circumstances in which Treasury will advance its compliance
process to recoupment could better position all recipients to meet reporting
requirements consistently and Treasury to provide oversight of the use of federal
funds.
Recommendation for
Executive Action The Secretary of the Treasury should develop and document, in Treasury’s
internal procedures and guidance for recipients, the timing and circumstances
under which Treasury will initiate recoupment of awards for recipients that have
not met SLFRF reporting requirements. (Recommendation 1)
Agency Comments
We provided a draft of this report to Treasury for review and comment. Treasury
generally agreed with our recommendation, stating that the recommendation is
consistent with Treasury’s goal to monitor the use of funds and its remediation
and compliance efforts to date. Treasury also said it will consider incorporating
into its procedures and guidance the timing and circumstances under which
Treasury will initiate recoupment of awards for recipients that have not met
SLFRF reporting requirements. According to Treasury, this effort will support
compliance priorities, including other ongoing compliance efforts, for the
remainder of the program. Treasury also provided technical comments, which we
incorporated as appropriate.
How GAO Did This
Study To inform our work, we reviewed laws and regulations governing the SLFRF
program and Treasury SLFRF program guidance, policies, and procedures. We
also interviewed Treasury officials in the Office of Capital Access who are
responsible for overseeing the program.
To identify SLFRF recipients that did not submit required reports by the April 30
reporting deadline in 2022-2024, we compared Treasury’s data on recipients that
were required to submit P&E reports by April 30, 2022, 2023, and 2024,
respectively, and the publicly available P&E reports that states and localities
submitted to Treasury for the reporting cycle ending March 31 for each of those 3
years. In addition, we analyzed Treasury data through March 2025 to identify
Page 8 GAO-25-107909 Fiscal Recovery Funds Compliance
recipients that submitted reports after the reporting deadline. The scope of our
review did not include tribal governments or U.S. territories.
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 number of
SLFRF recipients that did not submit P&E reports by the reporting deadline, after
the reporting deadline, or at all.
To describe Treasury’s actions when SLFRF recipients do not submit required
reports, we reviewed Treasury’s Award Management Policy, Data and Reporting
Procedures, Recipient Submitted Data Testing Procedures, and Recipient
Noncompliance and Remediation Procedures. We also reviewed Treasury’s
Compliance and Reporting Guidance and its user guides for each annual
reporting cycle. Finally, we reviewed Treasury’s notice of noncompliance, initial
notice of recoupment, and the Compliance Reviews and Related Recoupment
Efforts notice.
We conducted this performance audit from October 2024 to July 2025 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.
List of Addressees
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
The Honorable Bill Cassidy, M.D.
Chair
Page 9 GAO-25-107909 Fiscal Recovery Funds Compliance
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 Michael T. McCaul
Acting 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.
GAO Contact
Information For more information, contact: Jeff Arkin, Director, Strategic Issues,
ArkinJ@gao.gov.
Public Affairs: Sarah Kaczmarek, Managing Director, Media@gao.gov.
Congressional Relations: A. Nicole Clowers, Managing Director,
CongRel@gao.gov.
Page 10 GAO-25-107909 Fiscal Recovery Funds Compliance
Staff Acknowledgments: Brenda Rabinowitz (Assistant Director), Colleen
Corcoran (Analyst-in-Charge), Michael Bechetti, McLeod Brown, Robert Gebhart,
Mike Maciag, and Peter Verchinski.
Connect with GAO on Facebook, X, LinkedIn, Instagram, and YouTube.
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Appendix I: Comments
from the Department of
the Treasury
Page 11 GAO-25-107909 Fiscal Recovery Funds Compliance
Page 12 GAO-25-107909 Fiscal Recovery Funds Compliance
Endnotes
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).
2Pub. 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.
3See 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), COVID-19 Relief: Treasury Could Improve Its Administration and Oversight of State and
Local Fiscal Recovery Funds, GAO-24-106027 (Washington, D.C.: Dec. 14, 2023), 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).
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).
5NEUs 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.
6SLFRF recipients had until December 31, 2024, to obligate their SLFRF awards and generally
have 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 had to be obligated by December 31, 2024, and must be
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).
7In addition to the P&E report, Treasury required an interim report and requires a periodic 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. NEUs were not
required to submit an interim report. The recovery plan performance report is an annual report that
provides information on the projects certain recipients are undertaking, including how they plan to
ensure program outcomes are achieved effectively, efficiently, and equitably. 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.
8See Office of Management and Budget, U.S. Department of the Treasury Coronavirus State and
Local Fiscal Recovery Fund Award Terms and Conditions, Approved No. 1505-0271.
9For the most recent report we have issued on SLFRF recipients’ obligations and spending, see
GAO-24-107301.
10Treasury also reviews recipients’ uses of awards through recipients’ Single Audit submissions.
See GAO-24-106027 for additional information on Treasury’s reviews. The Single Audit Act
establishes requirements for nonfederal entities that receive federal awards to undergo single
audits (or, in limited circumstances, program-specific audits) of those awards annually (unless a
specific exception applies) when they spend at least $1 million in federal awards in their fiscal year.
31 U.S.C. §§ 7501-06.
Page 13 GAO-25-107909 Fiscal Recovery Funds Compliance
1187 Fed. Reg. 4338, 4340 (Jan. 27, 2022).
12Treasury requires quarterly reporters to submit P&E reports by January 31, April 30, July 31, and
October 31 of each year.
13Treasury requires annual reporters to submit P&E reports by April 30 of each year.
14Treasury officials told us they make data from P&E reports publicly available after revisions and
quality control processes are complete. Treasury generally will allow revisions or edits to submitted
reports or submissions of 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.
15Treasury previously published P&E data submitted by annual reporters by the end of the 60-day
period once per year. Treasury began including P&E data submitted by annual reporters after the
reporting deadline and the 60 days in quarterly updates to Treasury’s website beginning with the
quarterly reporters’ data that were due October 31, 2024.
16All states and the District of Columbia submitted P&E reports by the April 30 deadline each year.
17We considered reports submitted within the 60-day period following the official reporting deadline
as submitted by the deadline because Treasury includes them in the publicly available P&E data.
18For additional information, see GAO-24-106753.
19Recipients have 60 days from receipt of the initial notice of recoupment to submit the required
P&E report or request reconsideration. If recipients fail to take either of these steps, the recipients
are required to return their SLFRF awards to Treasury within 120 days of receipt of the initial notice
of recoupment.
20The other remediation options named in Treasury’s Recipient Noncompliance and Remediation
Procedures are withholding Treasury’s award funding or taking action to prevent the recipient from
receiving future federal government contracts, grants, and loans. In this report, we focus on
recoupment because, of the remediation tools identified in the guidance, it is the one Treasury has
used or plans to use most frequently.
21We have previously reported on the limited staff of the Office of Capital Access—formerly known
as the Office of Recovery Programs—to manage and administer the SLFRF program. For
additional information, see GAO-24-106027.
22GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington,
D.C.: Sept. 10, 2014).
23GAO-14-704G.
24See U.S. Department of the Treasury, Compliance Reviews and Related Recoupment Efforts,
Mar. 25, 2025.
Page 14 GAO-25-107909 Fiscal Recovery Funds Compliance