The US Department of the Treasury has issued a formal alert to Coronavirus State and Local Fiscal Recovery Funds (SLFRF) recipients, signaling a more aggressive posture on compliance reviews and recoupment efforts tied to the December 31, 2024, obligation deadline.
Counties that received SLFRF allocations under the American Rescue Plan Act (ARPA) are now subject to heightened scrutiny. Treasury has clarified that it will recoup any funds not properly obligated by the deadline and recover funds that were obligated or spent impermissibly under federal guidance.
What Counties Can Expect
Treasury will begin issuing Information Document Requests (IDRs) to counties flagged during compliance checks. These formal notices require prompt response and documentation to support the accuracy of prior reporting.
Based on Treasury’s data, counties that did not fully obligate their SLFRF awards by December 31, 2024, will receive “Financial Instructions to Return Unobligated Funds.” These instructions will:
- Inform the county how much it must return
- Provide a deadline for repayment
- Requiring the use of Pay.gov to process the payment
Counties that do not repay funds by the specified date will have a debt established, and the Treasury will follow standard federal debt collection procedures in coordination with the Bureau of the Fiscal Service — including interest and penalties.
Compliance Guidance & Reporting Tools
Counties should review their SLFRF reporting carefully and ensure their documentation meets the Treasury’s expectations. Relevant resources include:
- SLFRF Compliance and Reporting Guidance
- SLFRF Self-Service Resources
- P&E Report User Guide
- SLFRF March 2025 Compliance Notice (PDF)
Recipients must log in with their id.me credentials to access the Treasury portal and submit any outstanding or amended reports. All projects must be appropriately documented in the system as “obligated” — tied to specific project commitments.
What’s Next?
Counties should act quickly to:
- Review their submitted obligation reports for accuracy
- Prepare to respond to IDRs, if issued
- Track all project obligations and expenditures with documentation
- Consult legal or financial advisors if receiving repayment instructions
This latest notice signals a more aggressive approach from the Treasury and raises concerns about the burden on counties to respond to shifting interpretations and retroactive enforcement. Counties should carefully review their submitted SLFRF reports, ensure documentation is in order, and prepare to respond if contacted by the Treasury.
Even counties that acted in good faith may face follow-up requests or repayment demands based on Treasury’s data and evolving compliance expectations.
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