Reclassification How To Guide for the SLFRF Program — U.S. Department of the Treasury
Summary
U.S. Department of the Treasury Reclassification How To Guide for the SLFRF Program. It explains that if a recipient has excess funds that were obligated as of the December 31, 2024 deadline but not expended on an eligible activity, the recipient may reclassify the funds to another project eligible under the SLFRF rules, including the requirement that the obligation was incurred by December 31, 2024. In Treasury's portal a recipient edits the first project to reduce the reported obligated amount and the latter project to increase it, attesting that the obligation date was documented. The guide says reclassification is not intended to remedy fraud, waste or abuse, and covers key terms, portal steps and common scenarios. No date is printed.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Reclassification How To Guide for the SLFRF Program — U.S. Department of the Treasury.”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-the-treasury-reclassification-how-to-guide-home-treasury-92feb936d9/
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1
Reclassification How To Guide for the
SLFRF Program
2
SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
3
SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Key Terms: What is Reclassification?
If a recipient has excess funds that were obligated as of the December 31, 2024 deadline but ultimately not
expended on an eligible activity, a recipient may reclassify the SLFRF funds from the original activity to another
project that would be eligible under the SLFRF program rules, including the requirement that the recipient
incurred an obligation by December 31, 2024, as described in FAQ 17.19.
To re-classify funds in Treasury's portal, a recipient must edit the first project to reduce the amount reported as
obligated and edit the latter project to increase the amount reported as obligated. For all such projects,
recipients are required to attest that the applicable obligation for the project was incurred by December 31,
2024 and that they have maintained proper documentation of the obligation date.
Obligations must be incurred between March 3, 2021 and December 31, 2024 for most eligible uses and
between December 29, 2022 and December 31, 2024 for the eligible uses added in the 2023 IFR (Emergency
Relief from Natural Disasters, Surface Transportation projects, and Title I projects, per FAQ 4.5). Other useful
guidance is in the Compliance and Reporting Guidance:
• Estimated Personnel costs (pages 24-25)
• Estimated Contract Change Orders and Contingency Costs (page 26)
• Revenue loss (page 39)
• Estimated Legal and Admin costs (page 43)
and in Section 17 of the SLFRF Frequently Asked Questions (FAQs):
• Estimated Personnel costs (FAQ 17.7, 17.8, 17.9)
• Estimated Contract Change Orders and Contingency Costs (FAQ 17.16, 17.17)
• Estimated Legal and Admin costs (FAQ 17.10, 17.11, 17.12, 17.13)
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Key Terms: What is Reclassification?
Reclassification may be allowed to address certain
ineligible uses identified by a recipient, auditor, or
Treasury.
Reclassification is not intended to remedy
instances of fraud, waste, or abuse (FWA), which
may be subject to additional compliance or
recovery actions
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Timeline for Obligation and Use of Funds
IMPORTANT: For all reclassified funds, recipients must attest that they incurred the
applicable obligation for the project by December 31, 2024.
March 3, 2021 and December 29,
2022: Funds may be used for
costs incurred beginning
September 30, 2026: Funds for
on March 3, 2021, for the eligible
Title I projects and Funds not expended by applicable
use categories described in
Surface Transportation projects deadline must be returned to
the 2022 Final
must be expended by September Treasury.
Rule, and December 29, 2022, for
30, 2026.
the additional eligible use
categories described in the 2023
Interim Final Rule.
December 31, 2024: Funds must
December 31, 2026: Funds for
have been obligated by December
most eligible
31, 2024. Funds not obligated by
uses must be expended by
the deadline must be returned to
December 31, 2026.
Treasury.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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IMPORTANT:
If you are reclassifying funds in a reporting period, do
not decrease an obligation entry until you are ready to
reclassify those funds to another project entry in that
same reporting period.
10
Portal Steps to Reclassify Funds - Overview
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was
satisfied for those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
1. Click on the project status icon for original project that will be reduced on the Project Overview screen.
2. Project Overview Section: 1) reduce the amount in “Total Cumulative Obligations” by the amount to be reclassified
(enter "0" if canceling/eliminating the project entirely or enter the resulting total after subtracting the reclassified
funds from the original project), then 2) enter the amount to be reclassified as a negative entry (include a "-" sign) in
the “Current Period Obligations.” Click Save Project. Once the Project Status has been updated, associated entries for
the projects will need to be updated.
3. If the amount to be reclassified is associated with a project reported under EC 6.1 Provision of Government Services,
under which subawards and expenditures are not reported, proceed to step 5.
4. If the original project is not reported under EC 6.1, determine if the amount of funds to be reclassified is less than, or
equal to/greater than $50,000.
If the amount to be reclassified is less than $50,000, navigate to Expenditure Section, then:
- If any funds will continue with original project: 1. Create a new expenditure entry associated with the original
project (or reduce a current expenditure entry by the amount to be reclassified) and then 2) enter the amount to be
reclassified/reduced as a negative entry (include a "-" sign) under "Total Period Obligation Amount".
– If eliminating the original project entirely: 1) Create a new expenditure entry associated with the original project
(or reduce the current expenditure entry to $0) and then 2) enter the amount to be reclassified as a negative entry
(include a "-" minus sign) under "Total Period Obligation Amount" to result in a net zero obligation amount for the
original project.
If the amount is equal to or greater than $50,000, navigate to Subaward/Direct Payments Section, then:
– 1) Select “View/Edit” for the existing subaward associated with original project. 2) Reduce the subaward by the
amount to be reclassified. 3) If necessary, make sure that the subrecipient is added in the “Subrecipients,
beneficiaries, or contractors” section.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds - Overview (continued)
4. (Continued)
If the amount is equal to or greater than $50,000, navigate to Subaward/Direct Payments Section, then:
(see steps 1-3 on previous slide) 4) If, following the reclassification, the resulting amount associated with
the subaward is less than $50,000, eliminate the subaward and create a new expenditure entry for the
original project for the new amount.
– For reducing estimates for personnel costs, contract changes orders and contingency costs, or legal
and administrative costs, reduce the amount in “Total reported obligation pursuant to the estimate.”
5. Click on the project status icon for the project receiving reclassified funds on the Project Overview screen
OR add a new project following the instructions in the P&E User Guide under "Add a new project
manually." Increase "Total Cumulative Obligations" AND "Current Period Obligations" by the amount of
reclassified funds. Ensure that the amount added to the existing or new project is less than or equal to
the amount reduced in original project.
6. Click Save Project.
7. Attest that the applicable obligation for the project was incurred by December 31, 2024 and that
recipient has maintained proper documentation to support that funds were obligated no later than
December 31, 2024. (Funds must be obligated between March 3, 2021 and December 31, 2024 for most
eligible uses and between December 29, 2022 and December 31, 2024 for the eligible uses added in the
2023 interim final rule (Emergency Relief from Natural Disasters, Surface Transportation projects, and
Title I projects)).
8. Next determine:
– If the obligated amount after reclassification is equal to or greater than $50,000, navigate to the
Subaward/Direct Payments section, then: 1) increase a current subaward OR create a new subaward
for the full amount of the reclassified funds associated with the project receiving reclassified funds.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds - Overview (continued)
8. (Continued)
– If the obligated amount after reclassification is less than $50,000, navigate to Expenditure Section,
then: 1) increase the current subaward OR select project receiving reclassified funds in the drop-
down menu, 2) enter the amount to be reclassified in "Total period obligation amount," and 3) click
"Create Expenditure" to save.
9. Once the obligation on project receiving reclassified funds is increased, recipients will be able to enter
in expenditures up to the new amount obligated.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
1. Click on the project status icon for original project that will be reduced on the Project Overview screen.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
2. Project Overview Section: 1) reduce the amount in “Total Cumulative Obligations” by the amount to be reclassified (enter "0"
if canceling/eliminating the project entirely or enter the resulting total after subtracting the reclassified funds from the original
project), then 2) enter the amount to be reclassified as a negative entry (include a "-" sign) in the “Current Period
Obligations.” Click Save Project. Once the Project Status has been updated, associated entries for the projects will need to be
updated.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
3. If the amount to be reclassified is associated with a project reported under EC 6.1 Provision of Government Services, under
which subawards and expenditures are not reported, proceed to step 5. Otherwise: Click Save Project. Once the Project Status
has been updated, associated entries for the projects will need to be updated.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
4. If the original project is not reported under EC 6.1, determine if the amount of funds to be reclassified is less than, or equal
to/greater than $50,000.
If the amount to be reclassified is less than $50,000, navigate to Expenditure Section, then:
- If any funds will continue with original project: 1. Create a new expenditure entry associated with the original project (or
reduce a current expenditure entry by the amount to be reclassified) and then 2) enter the amount to be reclassified/reduced as
a negative entry (include a "-" sign) under "Total Period Obligation Amount".
- If eliminating the original project entirely: 1) Create a new expenditure entry associated with the original project (or reduce
the current expenditure entry to $0) and then 2) enter the amount to be reclassified as a negative entry (include a "-" minus
sign) under "Total Period Obligation Amount" to result in a net zero obligation amount for the original project.
If the amount is equal to or greater than $50,000, navigate to Subaward/Direct Payments Section, then: 1) Select “View/Edit”
for the existing subaward associated with original project. 2) Reduce the subaward by the amount to be reclassified. 3) If
necessary, make sure that the subrecipient is added in the “Subrecipients, beneficiaries, or contractors” section. 4) If, following
the reclassification, the resulting amount associated with the subaward is less than $50,000, eliminate the subaward
and create a new expenditure entry for the original project for the new amount.
For reducing estimates for personnel costs, contract changes orders and contingency costs, or legal and administrative
costs, reduce the amount in “Total reported obligation pursuant to the estimate.”
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through (<$50,000 example)
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
4. If the original project is not reported under EC 6.1, determine if the amount of funds to be reclassified is less than, or equal
to/greater than $50,000.
If the amount to be reclassified is less than $50,000, navigate to Expenditure Section, then:
- If any funds will continue with original project: 1. Create a new expenditure entry associated with the original project (or
reduce a current expenditure entry by the amount to be reclassified) and then 2) enter the amount to be reclassified/reduced as
a negative entry (include a "-" sign) under "Total Period Obligation Amount".
- If eliminating the original project entirely: 1) Create a new expenditure entry associated with the original project (or
reduce the current expenditure entry to $0) and then 2) enter the amount to be reclassified as a negative entry (include a "-"
minus sign) under "Total Period Obligation Amount" to result in a net zero obligation amount for the original project.
NOTE: This
negative amount
should be the
same negative
amount as step 2.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through (>$50,000 example)
4. If the amount is equal to or greater than $50,000, navigate to Subaward/Direct Payments Section, then: 1) Select
“View/Edit” for the existing subaward associated with original project. 2) Reduce the subaward by the amount to be
reclassified. 3) If necessary, make sure that the subrecipient is added in the “Subrecipients, beneficiaries, or
contractors” section. 4) If, following the reclassification, the resulting amount associated with the subaward is less
than $50,000, eliminate the subaward and create a new expenditure entry for the original project for the new
amount.
For reducing estimates for personnel costs, contract changes orders and contingency costs, or legal
and administrative costs, reduce the amount in “Total reported obligation pursuant to the estimate.”
NOTE: This reduction should be the same taken previously.
On the previous slide, we reduced a project that started as $100,000 and
reduced to $70,000. For the purposes of showing a project greater than
$50,000, we are showing the same $100,000 project that is reduced to $0.
Imagine that the recipient reduced this project by $100,000 amount in the edit
project screens.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
5. Click on the project status icon for the project receiving reclassified funds on the Project Overview screen OR add a new
project following the instructions in the User Guide under "Add a new project manually." Increase "Total Cumulative
Obligations" AND "Current Period Obligations" by the amount of reclassified funds. Ensure that the amount added to the
existing or new project is less than or equal to the amount reduced in original project.
NOTE: You may need to edit
the adopted budget, which
cannot be exceeded by total
obligations and total
expenditures.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
5. Click on the project status icon for the project receiving reclassified funds on the Project Overview screen OR add a new
project following the instructions in the User Guide under "Add a new project manually." Increase "Total Cumulative
Obligations" AND "Current Period Obligations" by the amount of reclassified funds. Ensure that the amount added to the
existing or new project is less than or equal to the amount reduced in original project.
NOTE: You may need to edit
the adopted budget, which
cannot be exceeded by total
obligations and total
expenditures.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
6. Click Save Project.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
7. Attest that the applicable obligation for the project was incurred by December 31, 2024 and that recipient has
maintained proper documentation to support that funds were obligated no later than December 31, 2024. (Funds
must be obligated between March 3, 2021 and December 31, 2024 for most eligible uses and between December
29, 2022 and December 31, 2024 for the eligible uses added in the 2023 interim final rule (Emergency Relief from
Natural Disasters, Surface Transportation projects, and Title I projects)).
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
8. Next determine:
If the obligated amount after reclassification is equal to or greater than $50,000, navigate to the Subaward/Direct
Payments section, then: 1) increase a current subaward OR create a new subaward for the full amount of the
reclassified funds associated with the project receiving reclassified funds.
If the obligated amount after reclassification is less than $50,000, navigate to Expenditure Section, then: 1) increase the
current subaward OR select project receiving reclassified funds in the drop-down menu, 2) enter the amount to be
reclassified in "Total period obligation amount," and 3) click "Create Expenditure" to save.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
8. If the obligated amount after reclassification is less than $50,000, navigate to Expenditure Section, then: 1) increase
the current subaward OR select project receiving reclassified funds in the drop-down menu, 2) enter the amount to
be reclassified in "Total period obligation amount," and 3) click "Create Expenditure" to save.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
25
Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
8. If the obligated amount after reclassification is equal to or greater than $50,000, navigate to
the Subaward/Direct Payments section, then: 1) increase a current subaward OR create a new subaward for the full
amount of the reclassified funds associated with the project receiving reclassified funds.
NOTE: This reduction should be the same taken previously.
On the previous slide, we reduced a project that started as $100,000 and
increased to $130,000. For the purposes of showing a project greater than
$50,000, we are showing the same $100,000 project that is increased to
$200,000. Imagine that the recipient increased this project by $200,000 amount
in the edit project screens.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Portal Steps to Reclassify Funds – Walk Through
Recipients seeking to reclassify funds from one project to another must ensure the obligation deadline was satisfied for
those reclassified funds (per FAQ 17.19) and should do the following in Treasury’s portal:
9. Once the obligation on project receiving reclassified funds is increased, recipients will be able to enter in expenditures up to
the new amount obligated.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, Coronavirus State & Local Fiscal Recovery Funds
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Reclassifying funds from a project to an existing project
• Project A related to Community Broadband Expansion (under EC 5.19 Last Mile Projects)
completed under budget, leaving $250,000 unused.
• Funds are reclassified to Project B related to Public Wi-Fi Access Points, an existing project
reported under EC 5.21 (Broadband: Other Projects).
$250,000 - $250,000 $550,000 $250,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds from a project to a new project
• A recipient initially obligated $1M for a community center renovation under EC 2.31
Rehabilitation of Commercial Properties (Project A).
• After final design changes, $100,000 is redirected to create a new project under EC 5.15
Drinking Water: Other Water Infrastructure. Although this is a new project in the SLFRF
reporting portal, this is not a “new project” for the recipient. This project existed prior to
the obligation deadline of December 31, 2024, and the recipient previously covered the
costs of this project with local funds and is now using SLFRF funds to cover the costs.
$100,000 $100,000
$900,000 - $100,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds from a project to an existing EC 6.1 project
• $75,000 from Project A (EC 2.33 Enhanced Support to Microbusinesses) is reclassified to
Project B (EC 6.1 Provision of Government Services).
• Because the recipient claimed $200,000 in revenue loss under the standard allowance
($10M) and has only used $125,000 in their existing project under EC 6.1, the recipient is
able to make this change.
$200,000 $75,000
$925,000 - $75,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds from an estimate of personnel costs to an existing
project
• A city budgeted $500,000 in estimated personnel costs for staff under EC 7.3 but used only
$450,000.
• The remaining $50,000 is reclassified to an existing project under EC 1.8.
$450,000 $175,000 $50,000
- $50,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds from a contract change/contingency costs
estimate to a new project
• Project A related to a Water Main Replacement (reported under EC 5.11) included a
$200,000 contingency that went unused.
• The recipient creates Project B related to Water Quality Monitoring (reported under EC
5.10) and reclassifies the $200,000 under the same expenditure category (EC 5). Although
this is a new project in the SLFRF reporting portal, this is not a “new project” for the
recipient. This project existed prior to the obligation deadline of December 31, 2024, and
the recipient previously covered the costs of this project with local funds and is now using
SLFRF funds to cover the costs.
$300,000 - $200,000
$200,000 $200,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds from an estimate of legal and administrative costs
to an existing project
• $30,000 from the Administrative Costs estimate reported under EC 7.3 is reclassified to an
ongoing Housing Assistance project under EC 2.2.
$70,000 - $30,000 $230,000 $30,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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Reclassifying funds as a result of a single audit finding or notice of
non-compliance
• A recipient’s audit identified $120,000 in ineligible spending under Project A related to
Public Safety Payroll (reported under EC 3.4 - Public Sector Capacity: effective Service
Delivery).
• Funds are reclassified to Project B (reported under EC 6.1 Revenue Replacement – Provision
of Government Services).
$0 - $120,000 $200,000 $120,000
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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SLFRF Reclassification How To Guide
1. Key Terms
2. Timeline for Obligation and Use of Funds
3. Portal Steps to Reclassify Funds Overview and Walk Through
4. Common Reclassification Scenarios
• Reclassifying funds from a project to an existing project
• Reclassifying funds from a project to a new project
• Reclassifying funds from a project to an existing EC 6.1 project
• Reclassifying funds from an estimate for personnel costs to an existing project
• Reclassifying funds from a contract change/contingency costs estimate to a new project
• Reclassifying funds from an estimate of legal and administrative costs to an existing project
• Reclassifying funds as a result of a single audit finding or notice of non-compliance
5. Related Resources
U.S. Department of the Treasury, Coronavirus State & Local Fiscal Recovery Funds
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Related Resources
• State and Local Fiscal Recovery Funds (SLFRF) Frequently Asked Questions (FAQs)
FAQ 17.19 (Page 104): After December 31, 2024, may a recipient use SLFRF funds that were initially obligated but
ultimately not expended for an eligible activity?
After the December 31, 2024, obligation deadline, recipients may have excess funds that were obligated as of the
deadline but ultimately not expended on an eligible activity. For example, a subrecipient or contractor may perform
work under-budget, thereby freeing up previously obligated funds. As another example, the recipient, an auditor,
or Treasury may determine that a recipient’s planned project is not an eligible activity. In such cases, the recipient
may reclassify the SLFRF funds from the original activity to another project that would be eligible under the SLFRF
program rules, including the requirement that the recipient incurred an obligation by December 31, 2024, to
expend funds on the activity.
As a further example, in a recipient’s Single Audit covering fiscal year 2024, the auditor identifies that a project
classified as responding to the public health and negative economic impacts of the pandemic is grossly
disproportionate to the type or extent of harm experienced, and thus not in compliance with the 2022 SLFRF Final
Rule.
The recipient may withdraw SLFRF funds from the project and reclassify the funds to a workforce training program
that the recipient initially had been financing with local funds but which is an eligible use under the SLFRF program
as well. In this case, the recipient must have incurred an obligation (e.g., by entering into a contract) to fund the
program by December 31, 2024, in accordance with SLFRF program rules. The recipient may also use such funds to
pay for any permissible upward cost adjustments in other contracts or subawards, as described in FAQs 17.16 and
17.17, including for indirect cost rate increases in a replacement subaward, as described in FAQ 17.20; to cover
expenses that are necessary to meet certain legal and administrative requirements of SLFRF, as described in FAQ
17.10; and to cover personnel expenses obligated by December 31, 2024, as described in FAQ 17.7, including
personnel expenses in excess of the initial estimate.
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
37
Related Resources
• SLFRF Compliance and Reporting Guidance
• Estimated Personnel costs (pages 24-25)
• Estimated Contract Change orders and Contingency costs (page 26)
• Revenue loss (page 39)
• Estimated Legal and Admin costs (page 43)
• SLFRF P&E User Guide
U.S. Department of the Treasury, State and Local Fiscal Recovery Funds
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