The US Department of the Treasury released a detailed document guiding the use of federal funds to pay for, and reimburse, expenses related to the COVID crisis.
A newly released guidance document (four pages, pdf document) is available on the Treasury website. It covers the categories of uses permitted under the emergency federal CARES legislation. From the guidance:
The CARES Act provides that payments from the Fund may only be used to cover costs that—
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
More details are provided in the full guidance document.
Treasury has also released a short Q&A document, covering some topics being raised by state and local government recipients:
Coronavirus Relief Fund
Frequently Asked Questions
April 22, 2020
Do governments have to return unspent funds to Treasury? Yes. Section 601(f)(2) of the Social Security Act, as added by section 5001(a) of the CARES Act, provides for recoupment by the Inspector General of the Department of the Treasury of amounts received from the Coronavirus Relief Fund (the “Fund”) that have not been used in a manner consistent with section 601(d) of the Social Security Act. If a government has not used funds it has received to cover costs that were incurred by December 30, 2020, as required by the statute, those funds must be returned to the Department of the Treasury.
May a State receiving a payment transfer funds to a local government? Yes, provided that the transfer qualifies as a necessary expenditure incurred due to the public health emergency and meets the other criteria of section 601(d) of the Social Security Act. Such funds would be subject to recoupment by the Treasury Inspector General if they have not been used in a manner consistent with section 601(d) of the Social Security Act.
May governments retain assets purchased with these funds? Yes, if the purchase of the asset was consistent with the limitations on the eligible use of funds provided by section 601(d) of the Social Security Act.
What records must be kept by governments receiving payment? A government should keep records sufficient to demonstrate that the amount of Fund payments to the government has been used in accordance with section 601(d) of the Social Security Act.