4182 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

1As noted previously on Treasury’s website, on 

June 30, 2020, the guidance provided under ‘‘Costs 

incurred during the period that begins on March 1, 

2020, and ends on December 30, 2020’’ was 

updated. On September 2, 2020, the ‘‘Supplemental 

Guidance on Use of Funds to Cover Payroll and 

Benefits of Public Employees’’ and ‘‘Supplemental 

Guidance on Use of Funds to Cover Administrative 

Costs’’ sections were added. 

2As noted previously on Treasury’s website, on 

August 10, 2020, the frequently asked questions 

were revised to add Questions A.49–52. On 

September 2, 2020, Questions A.53–56 were added 

and Questions A.34 and A.38 were revised. On 

October 19, 2020, Questions A.57–59 and B.13 were 

added and Questions A.42, 49, and 53 were revised. 

3Section 1001 of Division N of the Consolidated 

Appropriations Act, 2021 amended section 

601(d)(3) of the Social Security Act by extending 

the end of the covered period for Coronavirus Relief 

Fund expenditures from December 30, 2020 to 

December 31, 2021. 

ADDRESSES: Direct all written comments 

to Kinna Brewington, Internal Revenue 

Service, room 6526, 1111 Constitution 

Avenue NW, Washington, DC 20224. 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the form should be directed to 

Kerry Dennis, at (202) 317–5751 or 

Internal Revenue Service, Room 6526, 

1111 Constitution Avenue NW, 

Washington DC 20224, or through the 

internet, at Kerry.Dennis@irs.gov. 

SUPPLEMENTARY INFORMATION: Title: 

Sales of Business Property. 

OMB Number: 1545–0184. 

Form Number: Form 4797. 

Abstract: Form 4797 is used by 

taxpayers to report sales, exchanges, or 

involuntary conversions of assets used 

in a trade or business. It is also used to 

compute ordinary income from 

recapture and the recapture of prior year 

losses under section 1231 of the Internal 

Revenue Code. 

Current Actions: There is no change 

in the paperwork burden previously 

approved by OMB. The forms are being 

submitted for renewal purposes only. 

Type of Review: Extension of a 

currently approved collection. 

Affected Public: Business or other forprofit organizations, individuals or 

households, and farms. 

Estimated Number of Respondents: 

325,000. 

Estimated Time per Response: 50 

hours, 38 minutes. 

Estimated Total Annual Burden 

Hours: 16,454,750. 

The following paragraph applies to all 

the collections of information covered 

by this notice. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid OMB control number. 

Books or records relating to a collection 

of information must be retained if their 

contents may become material in the 

administration of any internal revenue 

law. Generally, tax returns and tax 

return information are confidential, as 

required by 26 U.S.C. 6103. 

Request for Comments: Comments 

submitted in response to this notice will 

be summarized and/or included in the 

request for OMB approval. All 

comments will become a matter of 

public record. Comments are invited on: 

(a) Whether the collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology; and (e) estimates of capital 

or start-up costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Approved: January 12, 2021. 

Chakinna B. Clemons, 

Supervisory Tax Analyst. 

[FR Doc. 2021–00841 Filed 1–14–21; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Coronavirus Relief Fund for States, 

Tribal Governments, and Certain 

Eligible Local Governments 

AGENCY: Department of the Treasury. 

ACTION: Coronavirus Relief Fund 

program guidance. 

SUMMARY: The Department of the 

Treasury (Treasury) is re-publishing in 

final form the guidance it previously 

made available on its website regarding 

the Coronavirus Relief Fund for States, 

tribal governments, and certain eligible 

local governments. 

FOR FURTHER INFORMATION CONTACT: 

Stephen T. Milligan, Deputy Assistant 

General Counsel (Banking & Finance), 

202–622–4051. 

SUPPLEMENTARY INFORMATION: Section 

601 of the Social Security Act, as added 

by section 5001(a) of Division A of the 

Coronavirus Aid, Relief, and Economic 

Security Act (‘‘CARES Act’’) established 

the Coronavirus Relief Fund (the 

‘‘Fund’’) and appropriated $150 billion 

for payments by Treasury to States, 

tribal governments, and certain local 

governments. 

The Secretary of the Treasury has 

adopted this guidance for recipients of 

payments from the Fund pursuant to his 

authority under the Social Security Act 

to adopt rules and regulations as may be 

necessary to the efficient administration 

of the functions with which he is 

charged under the Social Security Act. 

42 U.S.C. 1302(a). This guidance 

primarily concerns the use of payments 

from the Fund set forth in section 601(d) 

of the Social Security Act. Treasury’s 

Office of Inspector General (OIG) will 

use this guidance in its audits of 

recipients’ use of funds. Section 

601(f)(2) of the Social Security Act 

provides that if the Treasury OIG 

determines that a recipient of payments 

from the Fund has failed to comply with 

the use of funds provisions of section 

601(d), the amount equal to the amount 

of funds used in violation of such 

subsection shall be booked as a debt of 

such entity owed to the federal 

government. 

The guidance published below is 

unchanged from the last version of the 

guidance dated September 2, 2020,1 and 

the frequently asked questions 

document dated October 19, 2020,2 each 

of which was published on Treasury’s 

website, except for the following 

changes. The introduction of the 

guidance and frequently asked 

questions have been modified to reflect 

this publication in the Federal Register; 

the guidance and frequently asked 

questions have been revised throughout 

to reflect that the end date of the period 

during which eligible expenses may be 

incurred has been extended to 

December 31, 2021; 3 footnote 2 of the 

guidance has been revised to reflect 

additional restrictions imposed by 

section 5001(b) of Division A the 

CARES Act; FAQ A.59 has been 

updated to correct the cross-reference to 

Treasury OIG’s FAQs; and the 

application of FAQ B.6 has been 

clarified. Treasury is also adding to the 

guidance instructions regarding the 

return to Treasury of unused 

Coronavirus Relief Fund payments. 

Administrative Procedure Act 

The Administrative Procedure Act 

(APA) provides that the notice, public 

comment, and delayed effective date 

requirements of 5 U.S.C. 553 do not 

apply ‘‘to the extent that there is 

involved . . . a matter relating to agency 

management or personnel or to public 

property, loans, grants, benefits, or 

contracts.’’ 5 U.S.C. 553(a). The rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts and is therefore exempt under 

the terms of the APA. 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4183 

1See Section 601(d) of the Social Security Act, as 

added by section 5001 of the CARES Act and as 

amended by section 1001 of Division N of the 

Consolidated Appropriations Act, 2021. 

Regulatory Flexibility Analysis 

The Regulatory Flexibility Act does 

not apply to a rulemaking when a 

general notice of proposed rulemaking 

is not required. 

Paperwork Reduction Act 

The final rule contains no 

requirements subject to the Paperwork 

Reduction Act. 

Authority and Issuance 

42 U.S.C. 1302(a). 

Coronavirus Relief Fund Guidance for 

State, Territorial, Local, and Tribal 

Governments 

The purpose of this document is to 

provide guidance to recipients of the 

funding available under section 601(a) 

of the Social Security Act, as added by 

section 5001 of the Coronavirus Aid, 

Relief, and Economic Security Act 

(‘‘CARES Act’’). The CARES Act 

established the Coronavirus Relief Fund 

(the ‘‘Fund’’) and appropriated $150 

billion to the Fund. Under the CARES 

Act, the Fund is to be used to make 

payments for specified uses to States 

and certain local governments; the 

District of Columbia and U.S. Territories 

(consisting of the Commonwealth of 

Puerto Rico, the United States Virgin 

Islands, Guam, American Samoa, and 

the Commonwealth of the Northern 

Mariana Islands); and Tribal 

governments. 

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 31, 2021.1

The guidance that follows sets forth 

the Department of the Treasury’s 

interpretation of these limitations on the 

permissible use of Fund payments. 

Necessary Expenditures Incurred Due to 

the Public Health Emergency 

The requirement that expenditures be 

incurred ‘‘due to’’ the public health 

emergency means that expenditures 

must be used for actions taken to 

respond to the public health emergency. 

These may include expenditures 

incurred to allow the State, territorial, 

local, or Tribal government to respond 

directly to the emergency, such as by 

addressing medical or public health 

needs, as well as expenditures incurred 

to respond to second-order effects of the 

emergency, such as by providing 

economic support to those suffering 

from employment or business 

interruptions due to COVID–19-related 

business closures. Funds may not be 

used to fill shortfalls in government 

revenue to cover expenditures that 

would not otherwise qualify under the 

statute. Although a broad range of uses 

is allowed, revenue replacement is not 

a permissible use of Fund payments. 

The statute also specifies that 

expenditures using Fund payments 

must be ‘‘necessary.’’ The Department of 

the Treasury understands this term 

broadly to mean that the expenditure is 

reasonably necessary for its intended 

use in the reasonable judgment of the 

government officials responsible for 

spending Fund payments. 

Costs Not Accounted for in the Budget 

Most Recently Approved as of March 27, 

2020 

The CARES Act also requires that 

payments be used only to cover costs 

that were not accounted for in the 

budget most recently approved as of 

March 27, 2020. A cost meets this 

requirement if either (a) the cost cannot 

lawfully be funded using a line item, 

allotment, or allocation within that 

budget or (b) the cost is for a 

substantially different use from any 

expected use of funds in such a line 

item, allotment, or allocation. 

The ‘‘most recently approved’’ budget 

refers to the enacted budget for the 

relevant fiscal period for the particular 

government, without taking into 

account subsequent supplemental 

appropriations enacted or other 

budgetary adjustments made by that 

government in response to the COVID– 

19 public health emergency. A cost is 

not considered to have been accounted 

for in a budget merely because it could 

be met using a budgetary stabilization 

fund, rainy day fund, or similar reserve 

account. 

Costs Incurred During the Period That 

Begins on March 1, 2020, and Ends on 

December 31, 2021 

Finally, the CARES Act provides that 

payments from the Fund may only be 

used to cover costs that were incurred 

during the period that begins on March 

1, 2020, and ends on December 31, 2021 

(the ‘‘covered period’’). Putting this 

requirement together with the other 

provisions discussed above, section 

601(d) may be summarized as providing 

that a State, local, or tribal government 

may use payments from the Fund only 

to cover previously unbudgeted costs of 

necessary expenditures incurred due to 

the COVID–19 public health emergency 

during the covered period. 

Initial guidance released on April 22, 

2020, provided that the cost of an 

expenditure is incurred when the 

recipient has expended funds to cover 

the cost. Upon further consideration and 

informed by an understanding of State, 

local, and tribal government practices, 

Treasury is clarifying that for a cost to 

be considered to have been incurred, 

performance or delivery must occur 

during the covered period but payment 

of funds need not be made during that 

time (though it is generally expected 

that this will take place within 90 days 

of a cost being incurred). For instance, 

in the case of a lease of equipment or 

other property, irrespective of when 

payment occurs, the cost of a lease 

payment shall be considered to have 

been incurred for the period of the lease 

that is within the covered period but not 

otherwise. Furthermore, in all cases it 

must be necessary that performance or 

delivery take place during the covered 

period. Thus the cost of a good or 

service received during the covered 

period will not be considered eligible 

under section 601(d) if there is no need 

for receipt until after the covered period 

has expired. 

Goods delivered in the covered period 

need not be used during the covered 

period in all cases. For example, the 

cost of a good that must be delivered in 

December in order to be available for 

use in January could be covered using 

payments from the Fund. Additionally, 

the cost of goods purchased in bulk and 

delivered during the covered period 

may be covered using payments from 

the Fund if a portion of the goods is 

ordered for use in the covered period, 

the bulk purchase is consistent with the 

recipient’s usual procurement policies 

and practices, and it is impractical to 

track and record when the items were 

used. A recipient may use payments 

from the Fund to purchase a durable 

good that is to be used during the 

current period and in subsequent 

periods if the acquisition in the covered 

period was necessary due to the public 

health emergency. 

Given that it is not always possible to 

estimate with precision when a good or 

service will be needed, the touchstone 

in assessing the determination of need 

for a good or service during the covered 

period will be reasonableness at the 

time delivery or performance was 

sought, e.g., the time of entry into a 

procurement contract specifying a time 

4184 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

2 In addition, pursuant to section 5001(b) of 

Division A of the CARES Act, payments from the 

Fund are subject to the requirements contained in 

the Further Appropriations Act of 2020 (Pub. L. 

116–94) for funds for programs authorized under 

section 330 through 340 of the Public Health 

Service Act (42 U.S.C. 254 through 256). Section 

5001(b) thereby applies to payments from the Fund 

the general restrictions on the Department of Health 

and Human Services’ appropriations. Of particular 

relevance for the Fund, payments may not be 

expended for an abortion, for health benefits 

coverage—meaning a package of services covered 

by a managed health care provider or organization 

pursuant to a contract or other arrangement—that 

includes coverage of abortion, for the creation of a 

human embryo or embryos for research purposes, 

or for research in which a human embryo is 

destroyed, discarded, or knowingly subjected to risk 

of injury or death greater than that allowed for 

research on fetuses in utero under 45 CFR 46.204(b) 

and 42 U.S.C. 289g(b)). The prohibition on payment 

for abortions and health benefits coverage that 

includes coverage of abortion does not apply to an 

abortion if the pregnancy is the result of an act of 

rape or incest; or in the case where a woman suffers 

from a physical disorder, physical injury, or 

physical illness, including a life-endangering 

physical condition caused by or arising from the 

pregnancy itself, that would, as certified by a 

physician, place the woman in danger of death 

unless an abortion is performed. These provisions 

do not prohibit the expenditure by a State, locality, 

entity, or private person of State, local, or private 

funds (other than a State’s or locality’s contribution 

of Medicaid matching funds). These provisions do 

not restrict the ability of a managed care provider 

from offering abortion coverage or the ability of a 

State or locality to contract separately with such a 

provider for such coverage with State funds (other 

than a State’s or locality’s contribution of Medicaid 

matching funds). Furthermore, no government 

which receives payments from the Fund may 

discriminate against a health care entity on the 

basis that the entity does not provide, pay for, 

provide coverage of, or refer for abortions. Except 

with respect to certain law enforcement and 

adjudication activities, no funds may be used to 

maintain or establish a computer network unless 

such network blocks the viewing, downloading, and 

exchanging of pornography. No payments from the 

Fund may be provided to the Association of 

Community Organizations for Reform Now 

(ACORN) or any of its affiliates, subsidiaries, allied 

organizations, or successors. For the full text of 

these requirements, see Title V of Pubic Law 116– 

94 (133 Stat. 2605 et seq.), available at https://

www.congress.gov/116/plaws/publ94/PLAW116publ94.pdf. 

3See 42 CFR 433.51 and 45 CFR 75.306. 

for delivery. Similarly, in recognition of 

the likelihood of supply chain 

disruptions and increased demand for 

certain goods and services during the 

COVID–19 public health emergency, if a 

recipient enters into a contract requiring 

the delivery of goods or performance of 

services by December 31, 2021, the 

failure of a vendor to complete delivery 

or services by December 31, 2021, will 

not affect the ability of the recipient to 

use payments from the Fund to cover 

the cost of such goods or services if the 

delay is due to circumstances beyond 

the recipient’s control. 

This guidance applies in a like 

manner to costs of subrecipients. Thus, 

a grant or loan, for example, provided 

by a recipient using payments from the 

Fund must be used by the subrecipient 

only to purchase (or reimburse a 

purchase of) goods or services for which 

receipt both is needed within the 

covered period and occurs within the 

covered period. The direct recipient of 

payments from the Fund is ultimately 

responsible for compliance with this 

limitation on use of payments from the 

Fund. 

Nonexclusive Examples of Eligible 

Expenditures 

Eligible expenditures include, but are 

not limited to, payment for: 

1. Medical expenses such as: 

• COVID–19-related expenses of 

public hospitals, clinics, and similar 

facilities. 

• Expenses of establishing temporary 

public medical facilities and other 

measures to increase COVID–19 

treatment capacity, including related 

construction costs. 

• Costs of providing COVID–19 

testing, including serological testing. 

• Emergency medical response 

expenses, including emergency medical 

transportation, related to COVID–19. 

• Expenses for establishing and 

operating public telemedicine 

capabilities for COVID–19-related 

treatment. 

2. Public health expenses such as: 

• Expenses for communication and 

enforcement by State, territorial, local, 

and Tribal governments of public health 

orders related to COVID–19. 

• Expenses for acquisition and 

distribution of medical and protective 

supplies, including sanitizing products 

and personal protective equipment, for 

medical personnel, police officers, 

social workers, child protection 

services, and child welfare officers, 

direct service providers for older adults 

and individuals with disabilities in 

community settings, and other public 

health or safety workers in connection 

with the COVID–19 public health 

emergency. 

• Expenses for disinfection of public 

areas and other facilities, e.g., nursing 

homes, in response to the COVID–19 

public health emergency. 

• Expenses for technical assistance to 

local authorities or other entities on 

mitigation of COVID–19-related threats 

to public health and safety. 

• Expenses for public safety measures 

undertaken in response to COVID–19. 

• Expenses for quarantining 

individuals. 

3. 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. 

4. Expenses of actions to facilitate 

compliance with COVID–19-related 

public health measures, such as: 

• Expenses for food delivery to 

residents, including, for example, senior 

citizens and other vulnerable 

populations, to enable compliance with 

COVID–19 public health precautions. 

• Expenses to facilitate distance 

learning, including technological 

improvements, in connection with 

school closings to enable compliance 

with COVID–19 precautions. 

• Expenses to improve telework 

capabilities for public employees to 

enable compliance with COVID–19 

public health precautions. 

• Expenses of providing paid sick and 

paid family and medical leave to public 

employees to enable compliance with 

COVID–19 public health precautions. 

• COVID–19-related expenses of 

maintaining state prisons and county 

jails, including as relates to sanitation 

and improvement of social distancing 

measures, to enable compliance with 

COVID–19 public health precautions. 

• Expenses for care for homeless 

populations provided to mitigate 

COVID–19 effects and enable 

compliance with COVID–19 public 

health precautions. 

5. Expenses associated with the 

provision of economic support in 

connection with the COVID–19 public 

health emergency, such as: 

• Expenditures related to the 

provision of grants to small businesses 

to reimburse the costs of business 

interruption caused by required 

closures. 

• Expenditures related to a State, 

territorial, local, or Tribal government 

payroll support program. 

• Unemployment insurance costs 

related to the COVID–19 public health 

emergency if such costs will not be 

reimbursed by the federal government 

pursuant to the CARES Act or 

otherwise. 

6. Any other COVID–19-related 

expenses reasonably necessary to the 

function of government that satisfy the 

Fund’s eligibility criteria. 

Nonexclusive Examples of Ineligible 

Expenditures 2

The following is a list of examples of 

costs that would not be eligible 

expenditures of payments from the 

Fund. 

1. Expenses for the State share of 

Medicaid.3

2. Damages covered by insurance. 

3. Payroll or benefits expenses for 

employees whose work duties are not 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency. 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4185 

4. Expenses that have been or will be 

reimbursed under any federal program, 

such as the reimbursement by the 

federal government pursuant to the 

CARES Act of contributions by States to 

State unemployment funds. 

5. Reimbursement to donors for 

donated items or services. 

6. Workforce bonuses other than 

hazard pay or overtime. 

7. Severance pay. 

8. Legal settlements. 

Supplemental Guidance on Use of 

Funds To Cover Payroll and Benefits of 

Public Employees 

As discussed in the Guidance above, 

the CARES Act provides that payments 

from the Fund must be used only to 

cover costs that were not accounted for 

in the budget most recently approved as 

of March 27, 2020. As reflected in the 

Guidance and FAQs, Treasury has not 

interpreted this provision to limit 

eligible costs to those that are 

incremental increases above amounts 

previously budgeted. Rather, Treasury 

has interpreted this provision to exclude 

items that were already covered for their 

original use (or a substantially similar 

use). This guidance reflects the intent 

behind the Fund, which was not to 

provide general fiscal assistance to state 

governments but rather to assist them 

with COVID–19-related necessary 

expenditures. With respect to personnel 

expenses, though the Fund was not 

intended to be used to cover 

government payroll expenses generally, 

the Fund was intended to provide 

assistance to address increased 

expenses, such as the expense of hiring 

new personnel as needed to assist with 

the government’s response to the public 

health emergency and to allow 

recipients facing budget pressures not to 

have to lay off or furlough employees 

who would be needed to assist with that 

purpose. 

Substantially Different Use 

As stated in the Guidance above, 

Treasury considers the requirement that 

payments from the Fund be used only 

to cover costs that were not accounted 

for in the budget most recently 

approved as of March 27, 2020, to be 

met if either (a) the cost cannot lawfully 

be funded using a line item, allotment, 

or allocation within that budget or (b) 

the cost is for a substantially different 

use from any expected use of funds in 

such a line item, allotment, or 

allocation. 

Treasury has provided examples as to 

what would constitute a substantially 

different use. Treasury provided (in 

FAQ A.3) that costs incurred for a 

substantially different use would 

include, for example, the costs of 

redeploying educational support staff or 

faculty to develop online learning 

capabilities, such as through providing 

information technology support that is 

not part of the staff or faculty’s ordinary 

responsibilities. 

Substantially Dedicated 

Within this category of substantially 

different uses, as stated in the Guidance 

above, Treasury has included payroll 

and benefits 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. The full 

amount of payroll and benefits expenses 

of substantially dedicated employees 

may be covered using payments from 

the Fund. Treasury has not developed a 

precise definition of what ‘‘substantially 

dedicated’’ means given that there is not 

a precise way to define this term across 

different employment types. The 

relevant unit of government should 

maintain documentation of the 

‘‘substantially dedicated’’ conclusion 

with respect to its employees. 

If an employee is not substantially 

dedicated to mitigating or responding to 

the COVID–19 public health emergency, 

his or her payroll and benefits expenses 

may not be covered in full with 

payments from the Fund. A portion of 

such expenses may be able to be 

covered, however, as discussed below. 

Public Health and Public Safety 

In recognition of the particular 

importance of public health and public 

safety workers to State, local, and tribal 

government responses to the public 

health emergency, Treasury has 

provided, as an administrative 

accommodation, that a State, local, or 

tribal government may presume that 

public health and public safety 

employees meet the substantially 

dedicated test, unless the chief 

executive (or equivalent) of the relevant 

government determines that specific 

circumstances indicate otherwise. This 

means that, if this presumption applies, 

work performed by such employees is 

considered to be a substantially 

different use than accounted for in the 

most recently approved budget as of 

March 27, 2020. All costs of such 

employees may be covered using 

payments from the Fund for services 

provided during the period that begins 

on March 1, 2020, and ends on 

December 31, 2021. 

In response to questions regarding 

which employees are within the scope 

of this accommodation, Treasury is 

supplementing this guidance to clarify 

that public safety employees would 

include police officers (including state 

police officers), sheriffs and deputy 

sheriffs, firefighters, emergency medical 

responders, correctional and detention 

officers, and those who directly support 

such employees such as dispatchers and 

supervisory personnel. Public health 

employees would include employees 

involved in providing medical and other 

health services to patients and 

supervisory personnel, including 

medical staff assigned to schools, 

prisons, and other such institutions, and 

other support services essential for 

patient care (e.g., laboratory technicians) 

as well as employees of public health 

departments directly engaged in matters 

related to public health and related 

supervisory personnel. 

Not Substantially Dedicated 

As provided in FAQ A.47, a State, 

local, or tribal government may also 

track time spent by employees related to 

COVID–19 and apply Fund payments on 

that basis but would need to do so 

consistently within the relevant agency 

or department. This means, for example, 

that a government could cover payroll 

expenses allocated on an hourly basis to 

employees’ time dedicated to mitigating 

or responding to the COVID–19 public 

health emergency. This result provides 

equitable treatment to governments that, 

for example, instead of having a few 

employees who are substantially 

dedicated to the public health 

emergency, have many employees who 

have a minority of their time dedicated 

to the public health emergency. 

Covered Benefits 

Payroll and benefits of a substantially 

dedicated employee may be covered 

using payments from the Fund to the 

extent incurred between March 1 and 

December 31, 2021. 

Payroll includes certain hazard pay 

and overtime, but not workforce 

bonuses. As discussed in FAQ A.29, 

hazard pay may be covered using 

payments from the Fund if it is 

provided for performing hazardous duty 

or work involving physical hardship 

that in each case is related to COVID– 

19. This means that, whereas payroll 

and benefits of an employee who is 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency may generally be 

covered in full using payments from the 

Fund, hazard pay specifically may only 

be covered to the extent it is related to 

COVID–19. For example, a recipient 

may use payments from the Fund to 

cover hazard pay for a police officer 

coming in close contact with members 

of the public to enforce public health or 

4186 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

public safety orders, but across-theboard hazard pay for all members of a 

police department regardless of their 

duties would not be able to be covered 

with payments from the Fund. This 

position reflects the statutory intent 

discussed above: the Fund was intended 

to be used to help governments address 

the public health emergency both by 

providing funds for incremental 

expenses (such as hazard pay related to 

COVID–19) and to allow governments 

not to have to furlough or lay off 

employees needed to address the public 

health emergency but was not intended 

to provide across-the-board budget 

support (as would be the case if hazard 

pay regardless of its relation to COVID– 

19 or workforce bonuses were permitted 

to be covered using payments from the 

Fund). 

Relatedly, both hazard pay and 

overtime pay for employees that are not 

substantially dedicated may only be 

covered using the Fund if the hazard 

pay and overtime pay is for COVID–19- 

related duties. As discussed above, 

governments may allocate payroll and 

benefits of such employees with respect 

to time worked on COVID–19-related 

matters. 

Covered benefits include, but are not 

limited to, the costs of all types of leave 

(vacation, family-related, sick, military, 

bereavement, sabbatical, jury duty), 

employee insurance (health, life, dental, 

vision), retirement (pensions, 401(k)), 

unemployment benefit plans (federal 

and state), workers compensation 

insurance, and Federal Insurance 

Contributions Act (FICA) taxes (which 

includes Social Security and Medicare 

taxes). 

Supplemental Guidance on Use of 

Funds To Cover Administrative Costs 

General 

Payments from the Fund are not 

administered as part of a traditional 

grant program and the provisions of the 

Uniform Guidance, 2 CFR part 200, that 

are applicable to indirect costs do not 

apply. Recipients may not apply their 

indirect costs rates to payments received 

from the Fund. 

Recipients may, if they meet the 

conditions specified in the guidance for 

tracking time consistently across a 

department, use payments from the 

Fund to cover the portion of payroll and 

benefits of employees corresponding to 

time spent on administrative work 

necessary due to the COVID–19 public 

health emergency. (In other words, such 

costs would be eligible direct costs of 

the recipient). This includes, but is not 

limited to, costs related to disbursing 

payments from the Fund and managing 

new grant programs established using 

payments from the Fund. 

As with any other costs to be covered 

using payments from the Fund, any 

such administrative costs must be 

incurred by December 31, 2021, with an 

exception for certain compliance costs 

as discussed below. Furthermore, as 

discussed in the Guidance above, as 

with any other cost, an administrative 

cost that has been or will be reimbursed 

under any federal program may not be 

covered with the Fund. For example, if 

an administrative cost is already being 

covered as a direct or indirect cost 

pursuant to another federal grant, the 

Fund may not be used to cover that cost. 

Compliance Costs Related to the Fund 

As previously stated in FAQ B.11, 

recipients are permitted to use 

payments from the Fund to cover the 

expenses of an audit conducted under 

the Single Audit Act, subject to the 

limitations set forth in 2 CFR 200.425. 

Pursuant to that provision of the 

Uniform Guidance, recipients and 

subrecipients subject to the Single Audit 

Act may use payments from the Fund to 

cover a reasonably proportionate share 

of the costs of audits attributable to the 

Fund. 

To the extent a cost is incurred by 

December 31, 2021, for an eligible use 

consistent with section 601 of the Social 

Security Act and Treasury’s guidance, a 

necessary administrative compliance 

expense that relates to such underlying 

cost may be incurred after December 31, 

2021. Such an expense would include, 

for example, expenses incurred to 

comply with the Single Audit Act and 

reporting and recordkeeping 

requirements imposed by the Office of 

Inspector General. A recipient with such 

necessary administrative expenses, such 

as an ongoing audit continuing past 

December 31, 2021, that relates to Fund 

expenditures incurred during the 

covered period, must report to the 

Treasury Office of Inspector General by 

the quarter ending September 2022 an 

estimate of the amount of such 

necessary administrative expenses. 

Instructions for State, Territorial, 

Local, and Tribal Governments To 

Return Unused Coronavirus Relief 

Fund Payments to the Department of 

the Treasury 

Any remaining amount of payments 

from the Fund not used for eligible 

expenses incurred during the covered 

period must be returned to Treasury in 

one of three ways, set forth below. 

Please note that these instructions are 

for Fund recipients to return the balance 

of unused Fund payments to Treasury. 

If the Treasury Office of Inspector 

General determines that a Fund 

recipient has failed to comply with the 

use restrictions set forth in section 

601(d) of the Social Security Act, the 

Fund recipient should follow the 

instructions provided by the Treasury 

Office of Inspector General for 

satisfaction of the related debt rather 

than following these instructions. 

1. Fedwire receipts—Treasury can 

accept Fedwire payments for the return 

of funds to Treasury. 

Please provide the following 

instructions to your Financial 

Institution for the remittance of Fedwire 

payments to the Department of the 

Treasury. 

FEDWIRE INSTRUCTIONS

Fedwire field tag Fedwire field name Required information 

{1510} .......................................................................... Type/Subtype ............................................................... 1000 

{2000} .......................................................................... Amount ........................................................................ (enter payment amount) 

{3400} .......................................................................... Receiver ABA routing number * ................................... 021030004 

{3400} .......................................................................... Receiver ABA short name ........................................... TREAS NYC 

{3600} .......................................................................... Business Function Code .............................................. CTR 

{4200} .......................................................................... Beneficiary Identifier (account number) ....................... 820010001000 

{4200} .......................................................................... Beneficiary Name ........................................................ DEPARTMENT OF THE TREASURY 

{5000} .......................................................................... Originator ..................................................................... (enter the name of the originator of the payment) 

{6000} .......................................................................... Originator to Beneficiary Information—Line 1 ............. (enter information to identify the purpose of the payment) 

{6000} .......................................................................... Originator to Beneficiary Information—Line 2 ............. (enter information to identify the purpose of the payment) 

{6000} .......................................................................... Originator to Beneficiary Information—Line 3 ............. (enter information to identify the purpose of the payment) 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4187 

FEDWIRE INSTRUCTIONS—Continued 

Fedwire field tag Fedwire field name Required information 

{6000} .......................................................................... Originator to Beneficiary Information—Line 4 ............. (enter information to identify the purpose of the payment) 

* The financial institution address for Treasury’s routing number is 33 Liberty Street, New York, NY 10045. 

2. ACH receipts —Treasury can accept 

ACH payment for the return of funds to 

Treasury. 

Please provide the following 

instructions to your Financial 

Institution for the remittance of 

Automated Clearing House (ACH) 

credits to the Department of the 

Treasury. 

ACH CREDIT INSTRUCTIONS

NACHA 

record type 

code 

NACHA 

field 

NACHA 

data element name Required information 

5 ...................... 3 Company Name ........................................................... (enter the name of the payor) 

5 ...................... 6 Standard Entry Class Code ......................................... CCD 

5 ...................... 9 Effective Entry Date ..................................................... (enter intended settlement date) 

6 ...................... 2 Transaction Code * ...................................................... 22 

6 ...................... 3 & 4 Receiving DFI Identification (ABA routing #) .............. 051036706 

6 ...................... 5 DFI Account Number ................................................... 820010001000 

6 ...................... 6 Amount ........................................................................ (enter payment amount) 

6 ...................... 8 Receiving Company Name .......................................... Department of the Treasury 

* ACH debits are not permitted to this ABA routing number. All debits received will be automatically returned. 

3. Check receipts (not preferred)— 

Checks may be sent to one of the 

following addresses (depending on the 

method of delivery). 

U.S. MAIL/PARCEL DELIVERY ADDRESS

U.S. Mail address— 

processing 

Parcel delivery address—processing 

Fiscal Accounting 

Program, Admin & 

Training Group.

Fiscal Accounting 

Program, Admin & 

Training Group. 

Avery Street A3–G, 

Bureau of the Fiscal Service, P.O. 

Box 1328, Parkersburg, WV 26106– 

1328.

Avery Street A3–G, 

Fiscal Service 

Warehouse & Operations Center 

Dock 1, 257 Bosley 

Industrial Park 

Drive, Parkersburg 

WV 26106. 

Frequently Asked Questions 

The following answers to frequently 

asked questions supplement Treasury’s 

Coronavirus Relief Fund Guidance for 

State, Territorial, Local, and Tribal 

Governments. 

A. Eligible Expenditures 

1. Are governments required to submit 

proposed expenditures to Treasury for 

approval? 

No. Governments are responsible for 

making determinations as to what 

expenditures are necessary due to the 

public health emergency with respect to 

COVID–19 and do not need to submit 

any proposed expenditures to Treasury. 

2. The Guidance says that funding 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. 

How does a government determine 

whether payroll expenses for a given 

employee satisfy the ‘‘substantially 

dedicated’’ condition? 

The Fund is designed to provide 

ready funding to address unforeseen 

financial needs and risks created by the 

COVID–19 public health emergency. For 

this reason, and as a matter of 

administrative convenience in light of 

the emergency nature of this program, a 

State, territorial, local, or Tribal 

government may presume that payroll 

costs for public health and public safety 

employees are payments for services 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency, unless the chief 

executive (or equivalent) of the relevant 

government determines that specific 

circumstances indicate otherwise. 

3. The Guidance says that a cost was not 

accounted for in the most recently 

approved budget if the cost is for a 

substantially different use from any 

expected use of funds in such a line 

item, allotment, or allocation. What 

would qualify as a ‘‘substantially 

different use’’ for purposes of the Fund 

eligibility? 

Costs incurred for a ‘‘substantially 

different use’’ include, but are not 

necessarily limited to, costs of 

personnel and services that were 

budgeted for in the most recently 

approved budget but which, due 

entirely to the COVID–19 public health 

emergency, have been diverted to 

substantially different functions. This 

would include, for example, the costs of 

redeploying corrections facility staff to 

enable compliance with COVID–19 

public health precautions through work 

such as enhanced sanitation or 

enforcing social distancing measures; 

the costs of redeploying police to 

support management and enforcement 

of stay-at-home orders; or the costs of 

diverting educational support staff or 

faculty to develop online learning 

capabilities, such as through providing 

information technology support that is 

not part of the staff or faculty’s ordinary 

responsibilities. 

Note that a public function does not 

become a ‘‘substantially different use’’ 

merely because it is provided from a 

different location or through a different 

manner. For example, although 

developing online instruction 

capabilities may be a substantially 

different use of funds, online instruction 

itself is not a substantially different use 

of public funds than classroom 

instruction. 

4. 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 

4188 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

Act. Such funds would be subject to 

recoupment by the Treasury Department 

if they have not been used in a manner 

consistent with section 601(d) of the 

Social Security Act. 

5. May a unit of local government 

receiving a Fund payment transfer funds 

to another unit of government? 

Yes. For example, a county may 

transfer funds to a city, town, or school 

district within the county and a county 

or city may transfer funds to its State, 

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 outlined in the 

Guidance. For example, a transfer from 

a county to a constituent city would not 

be permissible if the funds were 

intended to be used simply to fill 

shortfalls in government revenue to 

cover expenditures that would not 

otherwise qualify as an eligible 

expenditure. 

6. Is a Fund payment recipient required 

to transfer funds to a smaller, 

constituent unit of government within 

its borders? 

No. For example, a county recipient is 

not required to transfer funds to smaller 

cities within the county’s borders. 

7. Are recipients required to use other 

federal funds or seek reimbursement 

under other federal programs before 

using Fund payments to satisfy eligible 

expenses? 

No. Recipients may use Fund 

payments for any expenses eligible 

under section 601(d) of the Social 

Security Act outlined in the Guidance. 

Fund payments are not required to be 

used as the source of funding of last 

resort. However, as noted below, 

recipients may not use payments from 

the Fund to cover expenditures for 

which they will receive reimbursement. 

8. Are there prohibitions on combining 

a transaction supported with Fund 

payments with other CARES Act 

funding or COVID–19 relief Federal 

funding? 

Recipients will need to consider the 

applicable restrictions and limitations of 

such other sources of funding. In 

addition, expenses that have been or 

will be reimbursed under any federal 

program, such as the reimbursement by 

the federal government pursuant to the 

CARES Act of contributions by States to 

State unemployment funds, are not 

eligible uses of Fund payments. 

9. Are States permitted to use Fund 

payments to support state 

unemployment insurance funds 

generally? 

To the extent that the costs incurred 

by a state unemployment insurance 

fund are incurred due to the COVID–19 

public health emergency, a State may 

use Fund payments to make payments 

to its respective state unemployment 

insurance fund, separate and apart from 

such State’s obligation to the 

unemployment insurance fund as an 

employer. This will permit States to use 

Fund payments to prevent expenses 

related to the public health emergency 

from causing their state unemployment 

insurance funds to become insolvent. 

10. Are recipients permitted to use Fund 

payments to pay for unemployment 

insurance costs incurred by the 

recipient as an employer? 

Yes, Fund payments may be used for 

unemployment insurance costs incurred 

by the recipient as an employer (for 

example, as a reimbursing employer) 

related to the COVID–19 public health 

emergency if such costs will not be 

reimbursed by the federal government 

pursuant to the CARES Act or 

otherwise. 

11. The Guidance states that the Fund 

may support a ‘‘broad range of uses’’ 

including payroll expenses for several 

classes of employees whose services are 

‘‘substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency.’’ What are some 

examples of types of covered 

employees? 

The Guidance provides examples of 

broad classes of employees whose 

payroll expenses would be eligible 

expenses under the Fund. These classes 

of employees include 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. Payroll and 

benefit costs associated with public 

employees who could have been 

furloughed or otherwise laid off but who 

were instead repurposed to perform 

previously unbudgeted functions 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency are also covered. 

Other eligible expenditures include 

payroll and benefit costs of educational 

support staff or faculty responsible for 

developing online learning capabilities 

necessary to continue educational 

instruction in response to COVID–19- 

related school closures. Please see the 

Guidance for a discussion of what is 

meant by an expense that was not 

accounted for in the budget most 

recently approved as of March 27, 2020. 

12. In some cases, first responders and 

critical health care workers that contract 

COVID–19 are eligible for workers’ 

compensation coverage. Is the cost of 

this expanded workers compensation 

coverage eligible? 

Increased workers compensation cost 

to the government due to the COVID–19 

public health emergency incurred 

during the period beginning March 1, 

2020, and ending December 31, 2021, is 

an eligible expense. 

13. If a recipient would have 

decommissioned equipment or not 

renewed a lease on particular office 

space or equipment but decides to 

continue to use the equipment or to 

renew the lease in order to respond to 

the public health emergency, are the 

costs associated with continuing to 

operate the equipment or the ongoing 

lease payments eligible expenses? 

Yes. To the extent the expenses were 

previously unbudgeted and are 

otherwise consistent with section 601(d) 

of the Social Security Act outlined in 

the Guidance, such expenses would be 

eligible. 

14. May recipients provide stipends to 

employees for eligible expenses (for 

example, a stipend to employees to 

improve telework capabilities) rather 

than require employees to incur the 

eligible cost and submit for 

reimbursement? 

Expenditures paid for with payments 

from the Fund must be limited to those 

that are necessary due to the public 

health emergency. As such, unless the 

government were to determine that 

providing assistance in the form of a 

stipend is an administrative necessity, 

the government should provide such 

assistance on a reimbursement basis to 

ensure as much as possible that funds 

are used to cover only eligible expenses. 

15. May Fund payments be used for 

COVID–19 public health emergency 

recovery planning? 

Yes. Expenses associated with 

conducting a recovery planning project 

or operating a recovery coordination 

office would be eligible, if the expenses 

otherwise meet the criteria set forth in 

section 601(d) of the Social Security Act 

outlined in the Guidance. 

16. Are expenses associated with 

contact tracing eligible? 

Yes, expenses associated with contact 

tracing are eligible. 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4189 

17. To what extent may a government 

use Fund payments to support the 

operations of private hospitals? 

Governments may use Fund payments 

to support public or private hospitals to 

the extent that the costs are necessary 

expenditures incurred due to the 

COVID–19 public health emergency, but 

the form such assistance would take 

may differ. In particular, financial 

assistance to private hospitals could 

take the form of a grant or a short-term 

loan. 

18. May payments from the Fund be 

used to assist individuals with enrolling 

in a government benefit program for 

those who have been laid off due to 

COVID–19 and thereby lost health 

insurance? 

Yes. To the extent that the relevant 

government official determines that 

these expenses are necessary and they 

meet the other requirements set forth in 

section 601(d) of the Social Security Act 

outlined in the Guidance, these 

expenses are eligible. 

19. May recipients use Fund payments 

to facilitate livestock depopulation 

incurred by producers due to supply 

chain disruptions? 

Yes, to the extent these efforts are 

deemed necessary for public health 

reasons or as a form of economic 

support as a result of the COVID–19 

health emergency. 

20. Would providing a consumer grant 

program to prevent eviction and assist 

in preventing homelessness be 

considered an eligible expense? 

Yes, assuming that the recipient 

considers the grants to be a necessary 

expense incurred due to the COVID–19 

public health emergency and the grants 

meet the other requirements for the use 

of Fund payments under section 601(d) 

of the Social Security Act outlined in 

the Guidance. As a general matter, 

providing assistance to recipients to 

enable them to meet property tax 

requirements would not be an eligible 

use of funds, but exceptions may be 

made in the case of assistance designed 

to prevent foreclosures. 

21. May recipients create a ‘‘payroll 

support program’’ for public employees? 

Use of payments from the Fund to 

cover payroll or benefits expenses of 

public employees are limited to those 

employees whose work duties are 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency. 

22. May recipients use Fund payments 

to cover employment and training 

programs for employees that have been 

furloughed due to the public health 

emergency? 

Yes, this would be an eligible expense 

if the government determined that the 

costs of such employment and training 

programs would be necessary due to the 

public health emergency. 

23. May recipients use Fund payments 

to provide emergency financial 

assistance to individuals and families 

directly impacted by a loss of income 

due to the COVID–19 public health 

emergency? 

Yes, if a government determines such 

assistance to be a necessary 

expenditure. Such assistance could 

include, for example, a program to assist 

individuals with payment of overdue 

rent or mortgage payments to avoid 

eviction or foreclosure or unforeseen 

financial costs for funerals and other 

emergency individual needs. Such 

assistance should be structured in a 

manner to ensure as much as possible, 

within the realm of what is 

administratively feasible, that such 

assistance is necessary. 

24. The Guidance provides that eligible 

expenditures may include expenditures 

related to the provision of grants to 

small businesses to reimburse the costs 

of business interruption caused by 

required closures. What is meant by a 

‘‘small business,’’ and is the Guidance 

intended to refer only to expenditures to 

cover administrative expenses of such a 

grant program? 

Governments have discretion to 

determine what payments are necessary. 

A program that is aimed at assisting 

small businesses with the costs of 

business interruption caused by 

required closures should be tailored to 

assist those businesses in need of such 

assistance. The amount of a grant to a 

small business to reimburse the costs of 

business interruption caused by 

required closures would also be an 

eligible expenditure under section 

601(d) of the Social Security Act, as 

outlined in the Guidance. 

25. The Guidance provides that 

expenses associated with the provision 

of economic support in connection with 

the public health emergency, such as 

expenditures related to the provision of 

grants to small businesses to reimburse 

the costs of business interruption 

caused by required closures, would 

constitute eligible expenditures of Fund 

payments. Would such expenditures be 

eligible in the absence of a stay-at-home 

order? 

Fund payments may be used for 

economic support in the absence of a 

stay-at-home order if such expenditures 

are determined by the government to be 

necessary. This may include, for 

example, a grant program to benefit 

small businesses that close voluntarily 

to promote social distancing measures 

or that are affected by decreased 

customer demand as a result of the 

COVID–19 public health emergency. 

26. May Fund payments be used to 

assist impacted property owners with 

the payment of their property taxes? 

Fund payments may not be used for 

government revenue replacement, 

including the provision of assistance to 

meet tax obligations. 

27. May Fund payments be used to 

replace foregone utility fees? If not, can 

Fund payments be used as a direct 

subsidy payment to all utility account 

holders? 

Fund payments may not be used for 

government revenue replacement, 

including the replacement of unpaid 

utility fees. Fund payments may be used 

for subsidy payments to electricity 

account holders to the extent that the 

subsidy payments are deemed by the 

recipient to be necessary expenditures 

incurred due to the COVID–19 public 

health emergency and meet the other 

criteria of section 601(d) of the Social 

Security Act outlined in the Guidance. 

For example, if determined to be a 

necessary expenditure, a government 

could provide grants to individuals 

facing economic hardship to allow them 

to pay their utility fees and thereby 

continue to receive essential services. 

28. Could Fund payments be used for 

capital improvement projects that 

broadly provide potential economic 

development in a community? 

In general, no. If capital improvement 

projects are not necessary expenditures 

incurred due to the COVID–19 public 

health emergency, then Fund payments 

may not be used for such projects. 

However, Fund payments may be 

used for the expenses of, for example, 

establishing temporary public medical 

facilities and other measures to increase 

4190 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

COVID–19 treatment capacity or 

improve mitigation measures, including 

related construction costs. 

29. The Guidance includes workforce 

bonuses as an example of ineligible 

expenses but provides that hazard pay 

would be eligible if otherwise 

determined to be a necessary expense. Is 

there a specific definition of ‘‘hazard 

pay’’? 

Hazard pay means additional pay for 

performing hazardous duty or work 

involving physical hardship, in each 

case that is related to COVID–19. 

30. The Guidance provides that 

ineligible expenditures include 

‘‘[p]ayroll or benefits expenses for 

employees whose work duties are not 

substantially dedicated to mitigating or 

responding to the COVID–19 public 

health emergency.’’ Is this intended to 

relate only to public employees? 

Yes. This particular nonexclusive 

example of an ineligible expenditure 

relates to public employees. A recipient 

would not be permitted to pay for 

payroll or benefit expenses of private 

employees and any financial assistance 

(such as grants or short-term loans) to 

private employers are not subject to the 

restriction that the private employers’ 

employees must be substantially 

dedicated to mitigating or responding to 

the COVID–19 public health emergency. 

31. May counties pre-pay with CARES 

Act funds for expenses such as a one or 

two-year facility lease, such as to house 

staff hired in response to COVID–19? 

A government should not make 

prepayments on contracts using 

payments from the Fund to the extent 

that doing so would not be consistent 

with its ordinary course policies and 

procedures. 

32. Must a stay-at-home order or other 

public health mandate be in effect in 

order for a government to provide 

assistance to small businesses using 

payments from the Fund? 

No. The Guidance provides, as an 

example of an eligible use of payments 

from the Fund, expenditures related to 

the provision of grants to small 

businesses to reimburse the costs of 

business interruption caused by 

required closures. Such assistance may 

be provided using amounts received 

from the Fund in the absence of a 

requirement to close businesses if the 

relevant government determines that 

such expenditures are necessary in 

response to the public health 

emergency. 

33. Should States receiving a payment 

transfer funds to local governments that 

did not receive payments directly from 

Treasury? 

Yes, provided that the transferred 

funds are used by the local government 

for eligible expenditures under the 

statute. To facilitate prompt distribution 

of Title V funds, the CARES Act 

authorized Treasury to make direct 

payments to local governments with 

populations in excess of 500,000, in 

amounts equal to 45% of the local 

government’s per capita share of the 

statewide allocation. This statutory 

structure was based on a recognition 

that it is more administratively feasible 

to rely on States, rather than the federal 

government, to manage the transfer of 

funds to smaller local governments. 

Consistent with the needs of all local 

governments for funding to address the 

public health emergency, States should 

transfer funds to local governments with 

populations of 500,000 or less, using as 

a benchmark the per capita allocation 

formula that governs payments to larger 

local governments. This approach will 

ensure equitable treatment among local 

governments of all sizes. 

For example, a State received the 

minimum $1.25 billion allocation and 

had one county with a population over 

500,000 that received $250 million 

directly. The State should distribute 45 

percent of the $1 billion it received, or 

$450 million, to local governments 

within the State with a population of 

500,000 or less. 

34. May a State impose restrictions on 

transfers of funds to local governments? 

Yes, to the extent that the restrictions 

facilitate the State’s compliance with 

the requirements set forth in section 

601(d) of the Social Security Act 

outlined in the Guidance and other 

applicable requirements such as the 

Single Audit Act, discussed below. 

Other restrictions, such as restrictions 

on reopening that do not directly 

concern the use of funds, are not 

permissible. 

35. If a recipient must issue tax 

anticipation notes (TANs) to make up 

for tax due date deferrals or revenue 

shortfalls, are the expenses associated 

with the issuance eligible uses of Fund 

payments? 

If a government determines that the 

issuance of TANs is necessary due to 

the COVID–19 public health emergency, 

the government may expend payments 

from the Fund on the interest expense 

payable on TANs by the borrower and 

unbudgeted administrative and 

transactional costs, such as necessary 

payments to advisors and underwriters, 

associated with the issuance of the 

TANs. 

36. May recipients use Fund payments 

to expand rural broadband capacity to 

assist with distance learning and 

telework? 

Such expenditures would only be 

permissible if they are necessary for the 

public health emergency. The cost of 

projects that would not be expected to 

increase capacity to a significant extent 

until the need for distance learning and 

telework have passed due to this public 

health emergency would not be 

necessary due to the public health 

emergency and thus would not be 

eligible uses of Fund payments. 

37. Are costs associated with increased 

solid waste capacity an eligible use of 

payments from the Fund? 

Yes, costs to address increase in solid 

waste as a result of the public health 

emergency, such as relates to the 

disposal of used personal protective 

equipment, would be an eligible 

expenditure. 

38. May payments from the Fund be 

used to cover across-the-board hazard 

pay for employees working during a 

state of emergency? 

No. Hazard pay means additional pay 

for performing hazardous duty or work 

involving physical hardship, in each 

case that is related to COVID–19. 

Payments from the fund may only be 

used to cover such hazard pay. 

39. May Fund payments be used for 

expenditures related to the 

administration of Fund payments by a 

State, territorial, local, or Tribal 

government? 

Yes, if the administrative expenses 

represent an increase over previously 

budgeted amounts and are limited to 

what is necessary. For example, a State 

may expend Fund payments on 

necessary administrative expenses 

incurred with respect to a new grant 

program established to disburse 

amounts received from the Fund. 

40. May recipients use Fund payments 

to provide loans? 

Yes, if the loans otherwise qualify as 

eligible expenditures under section 

601(d) of the Social Security Act as 

implemented by the Guidance. Any 

amounts repaid by the borrower before 

December 31, 2021, must be either 

returned to Treasury upon receipt by the 

unit of government providing the loan 

or used for another expense that 

qualifies as an eligible expenditure 

under section 601(d) of the Social 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4191 

Security Act. Any amounts not repaid 

by the borrower until after December 31, 

2021, must be returned to Treasury 

upon receipt by the unit of government 

lending the funds. 

41. May Fund payments be used for 

expenditures necessary to prepare for a 

future COVID–19 outbreak? 

Fund payments may be used only for 

expenditures necessary to address the 

current COVID–19 public health 

emergency. For example, a State may 

spend Fund payments to create a 

reserve of personal protective 

equipment or develop increased 

intensive care unit capacity to support 

regions in its jurisdiction not yet 

affected, but likely to be impacted by 

the current COVID–19 pandemic. 

42. May funds be used to satisfy nonfederal matching requirements under 

the Stafford Act? 

Yes, payments from the Fund may be 

used to meet the non-federal matching 

requirements for Stafford Act assistance, 

including FEMA’s Emergency 

Management Performance Grant (EMPG) 

and EMPG Supplemental programs, to 

the extent such matching requirements 

entail COVID–19-related costs that 

otherwise satisfy the Fund’s eligibility 

criteria and the Stafford Act. Regardless 

of the use of Fund payments for such 

purposes, FEMA funding is still 

dependent on FEMA’s determination of 

eligibility under the Stafford Act. 

43. Must a State, local, or tribal 

government require applications to be 

submitted by businesses or individuals 

before providing assistance using 

payments from the Fund? 

Governments have discretion to 

determine how to tailor assistance 

programs they establish in response to 

the COVID–19 public health emergency. 

However, such a program should be 

structured in such a manner as will 

ensure that such assistance is 

determined to be necessary in response 

to the COVID–19 public health 

emergency and otherwise satisfies the 

requirements of the CARES Act and 

other applicable law. For example, a per 

capita payment to residents of a 

particular jurisdiction without an 

assessment of individual need would 

not be an appropriate use of payments 

from the Fund. 

44. May Fund payments be provided to 

non-profits for distribution to 

individuals in need of financial 

assistance, such as rent relief? 

Yes, non-profits may be used to 

distribute assistance. Regardless of how 

the assistance is structured, the 

financial assistance provided would 

have to be related to COVID–19. 

45. May recipients use Fund payments 

to remarket the recipient’s convention 

facilities and tourism industry? 

Yes, if the costs of such remarketing 

satisfy the requirements of the CARES 

Act. Expenses incurred to publicize the 

resumption of activities and steps taken 

to ensure a safe experience may be 

needed due to the public health 

emergency. Expenses related to 

developing a long-term plan to 

reposition a recipient’s convention and 

tourism industry and infrastructure 

would not be incurred due to the public 

health emergency and therefore may not 

be covered using payments from the 

Fund. 

46. May a State provide assistance to 

farmers and meat processors to expand 

capacity, such to cover overtime for 

USDA meat inspectors? 

If a State determines that expanding 

meat processing capacity, including by 

paying overtime to USDA meat 

inspectors, is a necessary expense 

incurred due to the public health 

emergency, such as if increased capacity 

is necessary to allow farmers and 

processors to donate meat to food banks, 

then such expenses are eligible 

expenses, provided that the expenses 

satisfy the other requirements set forth 

in section 601(d) of the Social Security 

Act outlined in the Guidance. 

47. The guidance provides that funding 

may 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. May Fund payments 

be used to cover such an employee’s 

entire payroll cost or just the portion of 

time spent on mitigating or responding 

to the COVID–19 public health 

emergency? 

As a matter of administrative 

convenience, the entire payroll cost of 

an employee whose time is substantially 

dedicated to mitigating or responding to 

the COVID–19 public health emergency 

is eligible, provided that such payroll 

costs are incurred by December 31, 

2021. An employer may also track time 

spent by employees related to COVID– 

19 and apply Fund payments on that 

basis but would need to do so 

consistently within the relevant agency 

or department. 

48. May Fund payments be used to 

cover increased administrative leave 

costs of public employees who could 

not telework in the event of a stay at 

home order or a case of COVID–19 in 

the workplace? 

The statute requires that payments be 

used only to cover costs that were not 

accounted for in the budget most 

recently approved as of March 27, 2020. 

As stated in the Guidance, a cost meets 

this requirement if either (a) the cost 

cannot lawfully be funded using a line 

item, allotment, or allocation within 

that budget or (b) the cost is for a 

substantially different use from any 

expected use of funds in such a line 

item, allotment, or allocation. If the cost 

of an employee was allocated to 

administrative leave to a greater extent 

than was expected, the cost of such 

administrative leave may be covered 

using payments from the Fund. 

49. Are States permitted to use 

Coronavirus Relief Fund payments to 

satisfy non-federal matching 

requirements under the Stafford Act, 

including ‘‘lost wages assistance’’ 

authorized by the Presidential 

Memorandum on Authorizing the Other 

Needs Assistance Program for Major 

Disaster Declarations Related to 

Coronavirus Disease 2019 (August 8, 

2020)? 

Yes. As previous guidance has stated, 

payments from the Fund may be used to 

meet the non-federal matching 

requirements for Stafford Act assistance 

to the extent such matching 

requirements entail COVID–19-related 

costs that otherwise satisfy the Fund’s 

eligibility criteria and the Stafford Act. 

States are fully permitted to use 

payments from the Fund to satisfy 100% 

of their cost share for lost wages 

assistance recently made available 

under the Stafford Act. If a State makes 

a payment to an individual under the 

‘‘lost wages assistance’’ program and 

later determines that such individual 

was ineligible for the program, the 

ineligibility determination has the 

following consequences: 

• The State incurs an obligation to 

FEMA in the amount of the payment to 

the ineligible individual. A State’s 

obligation to FEMA for making an 

improper payment to an individual 

under the ‘‘lost wages assistance’’ 

program is not incurred due to the 

public health emergency and, therefore, 

payments made pursuant to this 

obligation would not be an eligible use 

of the Fund. 

• The ‘‘lost wages assistance’’ 

payment to the ineligible individual 

would be deemed to be an ineligible 

4192 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

expense for purposes of the Fund, and 

any amount charged to the Fund (e.g., 

to satisfy the initial non-federal 

matching requirement) would be subject 

to recoupment. 

50. At what point would costs be 

considered to be incurred in the case of 

a grant made by a State, local, or tribal 

government to cover interest and 

principal amounts of a loan, such as 

might be provided as part of a small 

business assistance program in which 

the loan is made by a private 

institution? 

A grant made to cover interest and 

principal costs of a loan, including 

interest and principal due after the 

period that begins on March 1, 2020, 

and ends on December 31, 2021 (the 

‘‘covered period’’), will be considered to 

be incurred during the covered period if 

(i) the full amount of the loan is 

advanced to the borrower within the 

covered period and (ii) the proceeds of 

the loan are used by the borrower to 

cover expenses incurred during the 

covered period. In addition, if these 

conditions are met, the amount of the 

grant will be considered to have been 

used during the covered period for 

purposes of the requirement that 

expenses be incurred within the covered 

period. Such a grant would be 

analogous to a loan provided by the 

Fund recipient itself that incorporates 

similar loan forgiveness provisions. As 

with any other assistance provided by a 

Fund recipient, such a grant would need 

to be determined by the recipient to be 

necessary due to the public health 

emergency. 

51. If governments use Fund payments 

as described in the Guidance to 

establish a grant program to support 

businesses, would those funds be 

considered gross income taxable to a 

business receiving the grant under the 

Internal Revenue Code (Code)? 

Please see the answer provided by the 

Internal Revenue Service (IRS) available 

at https://www.irs.gov/newsroom/caresact-coronavirus-relief-fund-frequentlyasked-questions. 

52. If governments use Fund payments 

as described in the Guidance to 

establish a loan program to support 

businesses, would those funds be 

considered gross income taxable to a 

business receiving the loan under the 

Code? 

Please see the answer provided by the 

IRS available at https://www.irs.gov/ 

newsroom/cares-act-coronavirus-relieffund-frequently-asked-questions. 

53. May Fund recipients incur expenses 

associated with the safe reopening of 

schools? 

Yes, payments from the Fund may be 

used to cover costs associated with 

providing distance learning (e.g., the 

cost of laptops to provide to students) or 

for in-person learning (e.g., the cost of 

acquiring personal protective equipment 

for students attending schools in-person 

or other costs associated with meeting 

Centers for Disease Control guidelines). 

Treasury recognizes that schools are 

generally incurring an array of COVID– 

19-related expenses to either provide 

distance learning or to re-open. To this 

end, as an administrative convenience, 

Treasury will presume that expenses of 

up to $500 per elementary and 

secondary school student are eligible 

expenditures, such that schools do not 

need to document the specific use of 

funds up to that amount. 

If a Fund recipient avails itself of the 

presumption in accordance with the 

previous paragraph with respect to a 

school, the recipient may not also cover 

the costs of additional re-opening aid to 

that school other than those associated 

with the following, in each case for the 

purpose of addressing COVID–19: 

• Expanding broadband capacity; 

• hiring new teachers; 

• developing an online curriculum; 

• acquiring computers and similar 

digital devices; 

• acquiring and installing additional 

ventilation or other air filtering 

equipment; 

• incurring additional transportation 

costs; or 

• incurring additional costs of 

providing meals. 

Across all levels of government, the 

presumption is limited to $500 per 

student, e.g., if a school is funded by a 

state and a local government, the 

presumption claimed by each recipient 

must add up to no more than $500. 

Furthermore, if a Fund recipient uses 

the presumption with respect to a 

school, any other Fund recipients 

providing aid to that school may not use 

the Fund to cover the costs of additional 

aid to schools other than with respect to 

the specific costs listed above. 

The following examples help 

illustrate how the presumption may or 

may not be used: 

Example 1: State A may transfer Fund 

payments to each school district in the 

State totaling $500 per student. State A 

does not need to document the specific 

use of the Fund payments by the school 

districts within the State. 

Example 2: Suppose State A from 

example 1 transferred Fund payments to 

the school districts in the State in the 

amount of $500 per elementary and 

secondary school student. In addition, 

because State A is availing itself of the 

$500 per elementary and secondary 

school student presumption, State A 

also may use Fund payments to expand 

broadband capacity and to hire new 

teachers, but it may not use Fund 

payments to acquire additional 

furniture. 

54. May Fund recipients upgrade 

critical public health infrastructure, 

such as providing access to running 

water for individuals and families in 

rural and tribal areas to allow them to 

maintain proper hygiene and defend 

themselves against the virus? 

Yes, fund recipients may use 

payments from the Fund to upgrade 

public health infrastructure, such as 

providing individuals and families 

access to running water to help reduce 

the further spread of the virus. As 

required by the CARES Act, expenses 

associated with such upgrades must be 

incurred by December 31, 2021. Please 

see Treasury’s Guidance as updated on 

June 30 regarding when a cost is 

considered to be incurred for purposes 

of the requirement that expenses be 

incurred within the covered period. 

55. How does a government address the 

requirement that the allowable 

expenditures are not accounted for in 

the budget most recently approved as of 

March 27, 2020, once the government 

enters its new budget year on July 1, 

2020 (for governments with June 30 

fiscal year ends) or October 1, 2020 (for 

governments with September 30 year 

ends)? 

As provided in the Guidance, the 

‘‘most recently approved’’ budget refers 

to the enacted budget for the relevant 

fiscal period for the particular 

government, without taking into 

account subsequent supplemental 

appropriations enacted or other 

budgetary adjustments made by that 

government in response to the COVID– 

19 public health emergency. A cost is 

not considered to have been accounted 

for in a budget merely because it could 

be met using a budgetary stabilization 

fund, rainy day fund, or similar reserve 

account. 

Furthermore, the budget most recently 

approved as of March 27, 2020, provides 

the spending baseline against which 

expenditures should be compared for 

purposes of determining whether they 

may be covered using payments from 

the Fund. This spending baseline will 

carry forward to a subsequent budget 

year if a Fund recipient enters a 

different budget year between March 27, 

2020 and December 31, 2021. The 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4193 

spending baseline may be carried 

forward without adjustment for 

inflation. 

56. Does the National Environmental 

Policy Act, 42 U.S.C. 4321 et seq, 

(NEPA) apply to projects supported by 

payments from the Fund? 

NEPA does not apply to Treasury’s 

administration of the Fund. Projects 

supported with payments from the Fund 

may still be subject to NEPA review if 

they are also funded by other federal 

financial assistance programs 

57. Public universities have incurred 

expenses associated with providing 

refunds to students for educationrelated expenses, including tuition, 

room and board, meal plans, and other 

fees (such as activities fees). Are these 

types of public university student 

refunds eligible uses of Fund payments? 

If the responsible government official 

determines that expenses incurred to 

refund eligible higher education 

expenses are necessary and would be 

incurred due to the public health 

emergency, then such expenses would 

be eligible as long as the expenses 

satisfy the other criteria set forth in 

section 601(d) of the Social Security 

Act. Eligible higher education expenses 

may include, in the reasonable 

judgment of the responsible government 

official, refunds to students for tuition, 

room and board, meal plan, and other 

fees (such as activities fees). Fund 

payments may not be used for expenses 

that have been or will be reimbursed by 

another federal program (including, for 

example, the Higher Education 

Emergency Relief Fund administered by 

the Department of Education). 

58. May payments from the Fund be 

used for real property acquisition and 

improvements and to purchase 

equipment to address the COVID–19 

public health emergency? 

The expenses of acquiring or 

improving real property and of 

acquiring equipment (e.g., vehicles) may 

be covered with payments from the 

Fund in certain cases. For example, 

Treasury’s initial guidance referenced 

coverage of the costs of establishing 

temporary public medical facilities and 

other measures to increase COVID–19 

treatment capacity, including related 

construction costs, as an eligible use of 

funds. Any such use must be consistent 

with the requirements of section 601(d) 

of the Social Security Act as added by 

the CARES Act. 

As with all uses of payments from the 

Fund, the use of payments to acquire or 

improve property is limited to that 

which is necessary due to the COVID– 

19 public health emergency. In the 

context of acquisitions of real estate and 

acquisitions of equipment, this means 

that the acquisition itself must be 

necessary. In particular, a government 

must (i) determine that it is not able to 

meet the need arising from the public 

health emergency in a cost-effective 

manner by leasing property or 

equipment or by improving property 

already owned and (ii) maintain 

documentation to support this 

determination. Likewise, an 

improvement, such as the installation of 

modifications to permit social 

distancing, would need to be 

determined to be necessary to address 

the COVID–19 public health emergency. 

Previous guidance regarding the 

requirement that payments from the 

Fund may only be used to cover costs 

that were incurred during the period 

that begins on March 1, 2020, and ends 

on December 31, 2021 focused on the 

acquisition of goods and services and 

leases of real property and equipment, 

but the same principles apply to 

acquisitions and improvements of real 

property and acquisitions of equipment. 

Such acquisitions and improvements 

must be completed and the acquired or 

improved property or acquisition of 

equipment be put to use in service of 

the COVID–19-related use for which it 

was acquired or improved by December 

30. Finally, as with all costs covered 

with payments from the Fund, such 

costs must not have been previously 

accounted for in the budget most 

recently approved as of March 27, 2020. 

59. If a small business received a Small 

Business Administration (SBA) Payment 

Protection Program (PPP) or Economic 

Injury Disaster Loan (EIDL) grant or loan 

due to COVID–19, may the small 

business also receive a grant from a unit 

of government using payments from the 

Fund? 

Receiving a PPP or EIDL grant or loan 

for COVID–19 would not necessarily 

make a small business ineligible to 

receive a grant from Fund payments 

made to a recipient. As discussed in 

previous Treasury guidance on use of 

the Fund, a recipient’s small business 

assistance program should be tailored to 

assist those businesses in need of such 

assistance. In assessing the business’ 

need for assistance, the recipient would 

need to take into account the business’ 

receipt of the PPP or EIDL loan or grant. 

If the business has received a loan from 

the SBA that may be forgiven, the 

recipient should assume for purposes of 

determining the business’ need that the 

loan will be forgiven. In determining the 

business’ eligibility for the grant, the 

recipient should not rely on selfcertifications provided to the SBA. 

If the grant is being provided to the 

small business to assist with particular 

expenditures, the business must not 

have already used the PPP or EIDL loan 

or grant for those expenditures. The 

assistance provided from the Fund 

would need to satisfy all of the other 

requirements set forth in section 601(d) 

of the Social Security Act as discussed 

in Treasury’s guidance and FAQs, and 

the business would need to comply with 

all applicable requirements of the PPP 

or EIDL program. 

Treasury’s Office of Inspector General 

has provided the following guidance in 

its FAQ no. 75 on reporting and 

recordkeeping that would apply to the 

recipient: 

The prime recipient is responsible for 

determining the level and detail of 

documentation needed from the subrecipient of small business assistance to 

satisfy [the requirements of section 

601(d) of the Social Security Act], 

however, there would need to be some 

proof that the small business was 

impacted by the public health 

emergency and was thus eligible for the 

CRF funds. 

In the above OIG FAQ, ‘‘subrecipient’’ refers to the beneficiary of the 

assistance, i.e., the small business. 

B. Questions Related to Administration 

of Fund Payments 

1. 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 Department of the 

Treasury of amounts received from 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 31, 2021, as 

required by the statute, those funds 

must be returned to the Department of 

the Treasury. 

2. 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. 

3. May recipients deposit Fund 

payments into interest bearing 

accounts? 

Yes, provided that if recipients 

separately invest amounts received from 

4194 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

the Fund, they must use the interest 

earned or other proceeds of these 

investments only to cover expenditures 

incurred in accordance with section 

601(d) of the Social Security Act and the 

Guidance on eligible expenses. If a 

government deposits Fund payments in 

a government’s general account, it may 

use those funds to meet immediate cash 

management needs provided that the 

full amount of the payment is used to 

cover necessary expenditures. Fund 

payments are not subject to the Cash 

Management Improvement Act of 1990, 

as amended. 

4. May governments retain assets 

purchased with payments from the 

Fund? 

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. 

5. What rules apply to the proceeds of 

disposition or sale of assets acquired 

using payments from the Fund? 

If such assets are disposed of prior to 

December 31, 2021, the proceeds would 

be subject to the restrictions on the 

eligible use of payments from the Fund 

provided by section 601(d) of the Social 

Security Act. 

6. Are Fund payments to State, 

territorial, local, and tribal governments 

subject to the provisions of the Uniform 

Guidance applicable to grant 

agreements? 

No. Fund payments made by Treasury 

to State, territorial, local, and Tribal 

governments do not entail grant 

agreements and thus the provisions of 

the Uniform Guidance (2 CFR part 200) 

applicable to grant agreements do not 

apply. The payments constitute ‘‘other 

financial assistance’’ under 2 CFR 

200.40. 

7. Are Fund payments considered 

federal financial assistance for purposes 

of the Single Audit Act? 

Yes, Fund payments are considered to 

be federal financial assistance subject to 

the Single Audit Act (31 U.S.C. 7501– 

7507) and the related provisions of the 

Uniform Guidance, 2 CFR 200.303 

regarding internal controls, §§ 200.330 

through 200.332 regarding subrecipient 

monitoring and management, and 

subpart F regarding audit requirements. 

8. Are Fund payments subject to other 

requirements of the Uniform Guidance? 

Fund payments are subject to the 

following requirements in the Uniform 

Guidance (2 CFR part 200): 2 CFR 

200.303 regarding internal controls, 2 

CFR 200.330 through 200.332 regarding 

subrecipient monitoring and 

management, and subpart F regarding 

audit requirements. 

9. Is there a Catalog of Federal Domestic 

Assistance (CFDA) number assigned to 

the Fund? 

Yes. The CFDA number assigned to 

the Fund is 21.019. 

10. If a State transfers Fund payments to 

its political subdivisions, would the 

transferred funds count toward the 

subrecipients’ total funding received 

from the federal government for 

purposes of the Single Audit Act? 

Yes. The Fund payments to 

subrecipients would count toward the 

threshold of the Single Audit Act and 2 

CFR part 200, subpart F re: audit 

requirements. Subrecipients are subject 

to a single audit or program-specific 

audit pursuant to 2 CFR 200.501(a) 

when the subrecipients spend $750,000 

or more in federal awards during their 

fiscal year. 

11. Are recipients permitted to use 

payments from the Fund to cover the 

expenses of an audit conducted under 

the Single Audit Act? 

Yes, such expenses would be eligible 

expenditures, subject to the limitations 

set forth in 2 CFR 200.425. 

12. If a government has transferred 

funds to another entity, from which 

entity would the Treasury Department 

seek to recoup the funds if they have not 

been used in a manner consistent with 

section 601(d) of the Social Security 

Act? 

The Treasury Department would seek 

to recoup the funds from the 

government that received the payment 

directly from the Treasury Department. 

State, territorial, local, and Tribal 

governments receiving funds from 

Treasury should ensure that funds 

transferred to other entities, whether 

pursuant to a grant program or 

otherwise, are used in accordance with 

section 601(d) of the Social Security Act 

as implemented in the Guidance. 

13. What are the differences between a 

subrecipient and a beneficiary under the 

Fund for purposes of the Single Audit 

Act and 2 CFR part 200, subpart F 

regarding audit requirements? 

The Single Audit Act and 2 CFR part 

200, subpart F regarding audit 

requirements apply to any non-federal 

entity, as defined in 2 CFR 200.69, that 

receives payments from the Fund in the 

amount of $750,000 or more. Nonfederal entities include subrecipients of 

payments from the Fund, including 

recipients of transfers from a State, 

territory, local government, or tribal 

government that received a payment 

directly from Treasury. However, 

subrecipients would not include 

individuals and organizations (e.g., 

businesses, non-profits, or educational 

institutions) that are beneficiaries of an 

assistance program established using 

payments from the Fund. The Single 

Audit Act and 2 CFR part 200, subpart 

F regarding audit requirements do not 

apply to beneficiaries. 

Please see Treasury Office of 

Inspector General FAQs at https://

www.treasury.gov/about/organizationalstructure/ig/Audit%20Reports

%20and%20Testimonies/OIG-CA-20- 

028.pdf regarding reporting in the 

GrantSolutions portal. 

Dated: January 11, 2021. 

Alexandra H. Gaiser, 

Executive Secretary. 

[FR Doc. 2021–00827 Filed 1–14–21; 8:45 am] 

BILLING CODE 4810–25–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

Joint Biomedical Laboratory Research 

and Development and Clinical Science 

Research and Development Services 

Scientific Merit Review Board, 

Amended Notice of Meeting 

The Department of Veterans Affairs 

(VA) gives notice under Federal 

Advisory Committee Act, 5 U.S.C. 

App.2, that a meeting of the Joint 

Biomedical Laboratory Research and 

Development and Clinical Science 

Research and Development Services 

Scientific Merit Review Board (JBL/CS 

SMRB) will be held Thursday, January 

21, 2021, via WebEx. The meeting will 

begin at 3:00 p.m. and end at 5:00 p.m. 

Eastern daylight time. The meeting will 

have an open session from 3:00 p.m. 

until 3:30 p.m. and a closed session 

from 3:30 p.m. until 5:00 p.m. 

The purpose of the open session is to 

meet with the JBL/CS Service Directors 

to discuss the overall policies and 

process for scientific review, as well as 

disseminate information among the 

Board members regarding the VA 

research priorities. 

The purpose of the closed session is 

to provide recommendations on the 

scientific quality, budget, safety and 

mission relevance of investigatorinitiated research applications 

submitted for VA merit review 

evaluation. Applications submitted for 

review include various medical 

specialties within the general areas of 

biomedical, behavioral and clinical 

science research. The JBL/CS SMRB 

meeting will be closed to the public for