The State and Local Fiscal Recovery Fund (SLFRF) program is the first fiscal relief program to grant funds directly to tens of thousands of non-entitlement units of local government (NEUs). Treasury recently released the final rule for these funds which offers much more flexibility for recipients, especially so for small local governments across the U.S. According to the Treasury and OMB: “Most notably for smaller recipients, the final rule has introduced a ‘standard allowance’ for revenue loss, allowing all recipients to spend up to $10 million of their allocation on ‘government services’ in lieu of using the more complex revenue loss formula."
This change is the result of consultation with the American Institute of CPAs and the National Association of State Auditors, Comptrollers and Treasurers with regard to the capacity of the U.S. audit community to perform full single audits on the 30,000+ recipients of SLFRF funding. They further added,
“We anticipate that this change will allow us to specify a simpler, more practical approach to compliance and oversight, including the Single Audit process.”
The Treasury and the Office of Management and Budget (OMB) are planning to work closely together in the coming weeks to issue further guidance for clarifying and streamlining the audit process in alignment with the final rule. When they do, we’ll be sure to provide updates.