Sneak Preview: Treasury FAQ Addresses Questions on CRF Payments

Jerry Ashworth
May 22, 2020 at 08:11:40 ET
Image Image

(The following was excerpted from an article in the Federal Grants Management Handbook.) State and local governments receiving payments under the Department of the Treasury’s Coronavirus Relief Fund (CRF) should be aware that they are not required to spend other federal funding first on emergency public health needs prior to using CRF dollars, Treasury explained in a recent Frequently Asked Questions (FAQ) document.

“Fund payments are not required to be used as the source of funding of last resort,” according to the FAQ. “However, … recipients may not use payments from the fund to cover expenditures for which they will receive reimbursement” from other sources.

Section 5001 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) added Section 601(a)(1) to the Social Security Act to provide $150 billion for Treasury to make payments to states (including the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands and American Samoa), tribal governments and eligible local governments with more than 500,000 residents.

The CARES Act also added Section 601(d) to the Social Security Act, which requires that these recipients use the funds received to cover only those costs that: (1) are necessary expenditures incurred due to the public health emergency with respect to COVID-19; (2) were not accounted for in the budget most recently approved as of March 27 for the state or government; and (3) were incurred during the period from March 1 to Dec. 30.

Although Treasury issued general CRF guidance in April, recipients continued to have questions about managing the funds, which led to the issuance of the FAQ. The FAQ noted that recipients are not required to submit proposed expenditures to Treasury for approval, and that “governments are responsible for making determinations as to what expenditures are necessary due to the public health emergency with respect to COVID-19.”

While Treasury’s April guidance stated that funds can be used to meet payroll expenses for public safety, public health, health care, human services and similar employees whose services are “substantially dedicated” to mitigating or responding to the COVID-19 public health emergency, a question in the FAQ asked how Treasury determines whether payroll expenses for a given employee satisfy the “substantially dedicated” condition.

(The full version of this story has now been made available to all for a limited time here.)

Join us for our following Federal Grants Forums:
Federal Grants Forum: Chicago, IL | August 12 – 14, 2020
Federal Grants Forum: Denver, CO | October 7 – 9, 2020

Learn more at