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Coronavirus State and Local Fiscal Recovery Funds

Frequently Asked Questions

on Distribution of Funds to Non-entitlement Units of Local Government

AS OF OCTOBER 20, 2023

This document contains answers to frequently asked questions regarding the distribution of funds 

to non-entitlement units of local government (NEUs) under the Coronavirus State and Local 

Fiscal Recovery Funds (CSFRF / CLFRF, or Fiscal Recovery Funds). This document serves as a 

supplement to the main document of frequently asked questions, which is also available on the 

Department of the Treasury (Treasury)’s website. Treasury will be updating this document 

periodically in response to questions received from stakeholders. Recipients and stakeholders 

should consult the Interim Final Rule (IFR) for additional information.

• For frequently asked questions on topics beyond distribution of funds to NEUs, please 

see the main FAQ document at https://home.treasury.gov/system/files/136/SLFRF-FinalRule-FAQ.pdf. 

• For overall information about the program, including information on requesting funding, 

please see https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-localand-tribal-government. 

• For general questions about CSFRF / CLFRF, please email SLFRP@treasury.gov. 

Questions updated or added:

• 6/7/21: 7.4-7.15 (noted with “[6/7]”)

• 6/22/21: 7.5 (noted with “[6/22]”)

• 6/30/21: 7.16-7.23 (noted with “[6/30]”)

• 10/20/23: 7.24 (noted with “[10/20/23]”)

7. Non-Entitlement Units (NEUs)

7.1. Can states impose requirements or conditions on the transfer of funds to NEUs?

As the statute requires states to make distributions based on population, states may not 

place additional conditions or requirements on distributions to NEUs, beyond those 

required by the ARPA and Treasury’s implementing regulations and guidance.

For example, states may not impose stricter limitations than permitted by statute or 

Treasury regulations or guidance on an NEU’s use of Fiscal Recovery Funds based on the 

NEU’s proposed spending plan or other policies, nor permitted to offset any debt owed by 

the NEU against its payment. Further, states may not provide funding on a reimbursement 
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basis (e.g., requiring NEUs to pay for project costs up front before being reimbursed with 

Fiscal Recovery Fund payments), because this approach would not comport with the 

statutory requirement that states make distributions to NEUs within the statutory 

timeframe.

7.2. Can states transfer additional funds to local governments beyond amount allocated to 

NEUs?

Yes. The IFR permits states, territories, and Tribal governments to transfer Fiscal Recovery 

Funds to other constituent units of government or private entities beyond those specified in 

the statute, as long as the transferee abides by the transferor's eligible use and other 

requirements. Similarly, local governments are authorized to transfer Fiscal Recovery 

Funds to other constituent units of government (e.g., a county is able to transfer Fiscal 

Recovery Funds to a city, town or school district within it).

7.3. May states use funds to pay for the administrative costs of allocating and distributing 

money to the NEUs?

Yes. If necessary, states may use Fiscal Recovery Funds to support the administrative 

costs of allocating and distributing money to NEUs, as disbursing these funds itself is a 

response to the public health emergency and its negative economic impacts.

7.4 What steps do states and territories need to undertake to receive their NEU payments? 

[6/7]

State or territorial governments that have made a request for their own funds in the 

Treasury Submission Portal will be considered by Treasury to have requested funding for 

their NEUs as well and should expect to receive their first tranche of payments for 

distribution to their NEUs within a few days of submission. No further action is required 

on the state or territory’s part to receive these payments from Treasury. State or territorial 

governments that have not submitted a request are encouraged to do so at their earliest 

convenience.

7.5 What are the specific deadlines for state governments in distributing funds? [6/22]

Section 603(b)(2)(C)(i) states that “[n]ot later than 30 days after a State receives a 

payment,” it “shall distribute” funds to each NEU in the state. Section 603(b)(2)(C)(ii) 

provides for a 30-day extension if a state certifies in writing an “excessive administrative 

burden,” and possible additional 30-day extensions at the discretion of the Secretary of 

the Treasury if the state provides a written plan to the Secretary specifying “when the 

State expects to make such distribution and the actions the State has taken and will take 

in order to make all such distributions before the end of the distribution period.”

As outlined above, the statute expects state governments to allocate and disburse 

payments to all eligible NEUs within 30 days of receiving their NEU payment from 

Treasury. The statute also directs Treasury to grant a 30-day extension if a state certifies 

an “excessive administrative burden” in writing. Accordingly, Treasury will grant a 30-
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day extension for all states that complete and submit an extension form, which can be 

requested by emailing SLFRP@treasury.gov with the subject line “NEU Distribution -

Extension Form.” Treasury encourages all states to expeditiously distribute funding to 

eligible NEUs. 

At the end of the first 30-day extension (60 days after the date on which the state received 

an NEU payment), states that have not made all distributions of their NEU funding may 

request an additional 30-day extension, which may be granted at the discretion of the 

Secretary of the Treasury. These states will be asked to provide a written plan that 

specifies the expected timing of the remaining distributions and efforts that the state has 

and will undertake to make these distributions. As part of this state plan, Treasury will 

accept plans from states that detail “reasonable efforts” to contact non-responsive NEUs 

and propose issuing a subsequent distribution of unclaimed funds if the NEUs remain 

non-responsive. 

As outlined in the guidance, a state may only issue a subsequent distribution if it has 

made “reasonable efforts” to contact an NEU that remains unresponsive. As detailed in a 

different FAQ, states should not issue a subsequent distribution until at least 60 days after 

the state begins accepting and processing requests for funding from NEUs.

7.6 How long does a state have to wait until an NEU can be treated as “non-responsive” 

and the state can issue a subsequent distribution based on unclaimed funding? [6/7]

As outlined in the guidance, a state can issue a subsequent distribution of unclaimed 

funding allocated to an NEU after it has “made reasonable efforts” to contact an NEU 

that remains unresponsive. Treasury expects that states will undertake multiple outreach 

attempts to each unresponsive NEU before issuing a subsequent distribution. States 

should not determine that NEUs have been unresponsive, reallocate the remaining funds, 

and make a subsequent distribution until at least 60 days after the state begins accepting 

and processing requests for funding from NEUs.

7.7 How should a state treat a local government on the list posted on the Treasury website 

that is no longer in operation and has been dissolved? [6/7]

A state should consider a local government that is no longer in operation and has been 

dissolved as unresponsive and therefore ineligible for funding. As a result, the state 

should not allocate any funds to such local government.

In special circumstances where the local government is no longer in operation because it 

has been wholly annexed or otherwise wholly subsumed by another local government, 

the state may exercise discretion to re-allocate funding that had been allocated to the local 

government that is no longer in operation to the local government that annexed or 

otherwise subsumed such local government.

7.8 How should territories allocate and distribute payments to their NEUs? [6/7]
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On May 24, 2021, Treasury issued guidance to assist states in allocating and distributing 

funds to NEUs. As part of this guidance, Treasury published a list of local governments

for the states, along with a step-by-step guidance document for states to use to determine 

eligible NEUs from this list (NEU Guidance).

However, since the U.S. Census Bureau lacks recent data about NEUs in the territories 

(American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto Rico, 

and the U.S. Virgin Islands), Treasury did not publish a list of local governments in these 

territories. In order to determine the eligibility of its NEUs, territories should follow the 

NEU definitions and standards set forth in the American Rescue Plan Act of 2021 

(ARPA), the IFR, and the NEU Guidance. 

• All active and functioning incorporated places are eligible as NEUs. 

• In addition, the territories should consider active and functioning minor civil 

divisions as eligible, provided that each eligible minor civil division has the legal 

and operational capacity to accept ARPA funds and provides a broad range of 

services that would constitute eligible uses under ARPA. Please consult the NEU 

Guidance and the definitional and data methodology documents for more 

information about how to conduct such a facts-and-circumstances analysis to 

make this determination.

• States are not permitted by the statute to make NEU payments to cities that are 

eligible for a metropolitan city payment directly from Treasury under Section 

603(b)(1) of the Social Security Act. The list of eligible metropolitan cities can 

be found here. 

• Territories should use the population data that it deems most appropriate. In 

evaluating the appropriateness of a data source, territories should give preference 

to the most recent and authoritative data available. Further, territories should 

publish a list of eligible NEUs on their website before issuing their first payments. 

Territories should follow all other parts of the NEU Guidance (other than the subparts on 

identifying eligible NEUs from the list on Treasury’s website), including with respect to 

treatment of overlapping populations, application of the 75 percent budget cap, 

procedures around the initial and subsequent distributions, and reporting requirements to 

Treasury.

7.9 Can states pay entities that are not included in the list of local governments provided by 

Treasury? [6/7]

No. The list of local governments on the Treasury website includes the NEUs eligible for 

distribution based on data provided by, and after consultation with, the U.S. Census 

Bureau. The statutory definition of NEU is detailed in the Non-Entitlement Unit of Local 

Government Definitional and Data Methodology. States may not pay entities that are not 

included in the list of local governments without prior Treasury approval. 
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7.10 Is a Second Tranche payment guaranteed for NEUs, provided that they comply with 

the terms and conditions of the funding? [6/7]

Section 603 of the Social Security Act, as added by the American Rescue Plan Act of 

2021, directs Treasury to make two Tranches of payments to states for distribution to 

NEUs. The statute does not require, and Treasury will not require, NEUs to provide 

additional substantive information or receive special approval in order to receive a 

distribution from their state for the Second Tranche payment.

7.11 How should states check to see whether an NEU is excluded or disqualified as outlined 

in the guidance? [6/7]

States should use SAM.gov to check whether an NEU is excluded or disqualified in 

accordance with 2 C.F.R. Part 180 and Treasury’s implementing regulations at 31 C.F.R. 

Part 19. Please contact the General Services Administration for further technical 

assistance with SAM.gov, including batch processing.

7.12 Are states required to collect key information from the NEU as outlined in the 

guidance (e.g., banking information or top-line budget totals) or may states rely on existing 

information in their systems? [6/7]

Provided that the existing information in a state’s system complies with the requirements 

set forth in Section 603 of the Social Security Act, as added by the American Rescue Plan 

Act of 2021, and Treasury’s Guidance on Distribution of Funds to Non-Entitlement Units 

of Local Government, a state may rely on existing information from their systems. Prior 

to using the information, the state should confirm that the information is accurate and up 

to date with the NEU.

7.13 Do states have to collect actual budget documents to calculate the “75 percent budget 

cap,” or can they rely on a budget total? [6/7]

States can rely on a budget total from an NEU in order to calculate the “75 percent

budget cap.” As part of their first report to Treasury, NEUs will be asked to submit the 

actual budget documents that validate the budget total.

7.14 Do states have to monitor NEUs for compliance with use of funds? [6/7]

NEUs are considered prime recipients of Treasury and states are not responsible for 

monitoring NEUs for compliance with use of funds, beyond distributing and collecting 

signed copies of the award terms and conditions and assurances of compliance with Title 

VI of the Civil Rights Act of 1964. However, if a state transfers funds to an NEU under 

Section 602 of the Social Security Act, as added by the American Rescue Plan Act of 

2021 (e.g., a transaction that is not a distribution of funds to the NEU as required by 

Section 603(b)(2)(C) of the Social Security Act) or otherwise establishes a subrecipient 

relationship with an NEU, the state will be obligated under the award terms to account for 

the uses of the funds and report on such uses.
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7.15 Is there a requirement to distribute funds to NEUs electronically, or can funds be 

distributed via check? [6/7]

While Treasury encourages payment in the most efficient way possible, there is no 

requirement that funds must be distributed to NEUs electronically.

7.16 When does the states’ statutory 30-day period begin for purposes of distribution of 

funds to NEUs? How do states request an extension? [6/30]

For purposes of determining the beginning of the 30-day distribution period outlined in Section 

603(b)(2)(C)(i), Treasury will assume that states receive their NEU payment three business days 

after the “invoice date,” which is the date on which Treasury initiates a payment to the state. 

Three business days is an estimate as to the length of time it takes for payment processing. The 

status of payments to states can be found on the Treasury website. States that receive their 

payment more than three business days after the invoice date may contact Treasury in order to 

update records.

Section 603(b)(2)(C)(ii)(I) directs Treasury to grant a 30-day extension if a state certifies an 

“excessive administrative burden” in writing before the end of the 30-day distribution period. To 

request an extension form, states should email SLFRP@treasury.gov with the subject line, “NEU 

Distribution – Extension Form.” 

7.17 The guidance outlines a process where states may issue a subsequent distribution of 

funds. Which NEUs should receive a subsequent distribution? [6/30]

The Guidance on Distribution of Funds to Non-entitlement Units of Local Government outlines a 

process by which states can issue a subsequent distribution of funds to “residual NEUs” that 

received an initial distribution and whose initial allocation was below the 75 percent cap. These 

residual NEUs include NEUs whose initial allocation was below the 75 percent budget cap and

which either (1) requested funding for itself; or (2) declined funding for itself and requested a 

transfer to the state under Section 603(c)(4).

7.18 Some NEUs have declined their funding without requesting a transfer to the state

under Section 603(c)(4). Can the state still retain these funds for its own use? [6/30]

No. NEUs that have expressly declined funds but do not request a transfer to the state under 

Section 603(c)(4) should be treated as non-responsive, and their unclaimed funding can be reallocated as part of the subsequent distribution. More details on the requirements and process of 

the subsequent distribution can be found in the guidance on Treasury’s website and other FAQs 

in this document.

7.19 If an NEU is non-responsive for its First Tranche payment, is it eligible for a Second 

Tranche payment? [6/30]

No. An NEU only needs to request funding once for the entire sum of payment, including both 

its First and Second Tranches. An NEU that is non-responsive for its First Tranche payment is 

not eligible for a Second Tranche payment.
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7.20 For weak-MCD states, does the facts-and-circumstances test apply to entities’ existing 

capacity or their potential capacity to undertake specific activities in the future? [6/30]

The facts-and-circumstances test applies to the local government’s existing capacity, not their 

potential capacity to undertake specific activities. For example, in determining whether an MCD 

in a weak-MCD state is eligible for funding, states should determine whether the MCD currently

has the legal and operational capacity to accept ARPA funds and currently provides a broad 

range of services that would constitute eligible uses under ARPA.

7.21 What is the assistance listing number for the Coronavirus State and Local Fiscal 

Recovery Funds? [6/30]

The Assistance Listing for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) 

was published May 28, 2021 on SAM.gov. This includes the CFDA Number for the program, 

21.027.

The assistance listing includes helpful information including program purpose, statutory 

authority, eligibility requirements, and compliance requirements for recipients. The CFDA 

number is the unique 5-digit code for each type of federal assistance, and can be used to search 

for program information, including funding opportunities, spending on usaspending.gov, or audit 

results through the Federal Audit Clearinghouse. 

To expedite payments and meet statutory timelines, Treasury issued initial payments under an 

existing CFDA number. If you have already received funds or captured the initial CFDA 

number in your records, please update your systems and reporting to reflect the CSLFRF CFDA 

number 21.027. 

Treasury has since updated the terms and conditions to be signed by NEUs to reflect the 

CSLFRF CFDA number. The updated agreement can be found on the Treasury website.

7.22 Who needs to sign the Award Terms and Conditions for NEUs? [6/30]

As outlined in the guidance, states should distribute the Award Terms and Conditions for NEUs

for signature by an authorized representative of an NEU as part of the process to request funding. 

The NEU should then submit the signed terms and conditions back to the state, leaving the 

Treasury signature line blank, and keep a copy for submission with its first report to Treasury. 

7.23 By when do NEUs have to register with SAM? [6/30]

All eligible recipients, including NEUs, are required to have an active registration with the 

System for Award Management (SAM) (https://www.sam.gov). NEUs who have not previously 

registered with SAM.gov may do so after receipt of the award, but before the submission of 

mandatory reporting.

Please note that the requirement for SAM registration is distinct from the requirement for a valid 

Dun & Bradstreet (DUNS) number. NEUs are required to have a DUNS number when they 

request funding from the state.

7.24 When is a State’s distribution of SLFRF funds to NEUs considered final? [10/20/23]
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Each State is required to submit reports to Treasury regarding its distribution of SLFRF funds to 

NEUs. These reports include information about NEUs’ participation in the SLFRF program and 

the State’s distributions and expectations for returning funds to Treasury. Once Treasury has 

reviewed these reports, Treasury sends an email to the State summarizing the State’s NEU 

distributions and identifying any funds that must be returned to Treasury. This email indicates 

that Treasury considers the State’s distribution of NEU payments to be final, and after this point, 

the State may not make further changes regarding the participation of NEUs or payments to 

NEUs. After receiving this email from Treasury, the State must submit required information in 

the Award Redirect Portal. Then, if any funds are owed to Treasury, the recipient must promptly 

return such funds. For more information about the Award Redirect Portal, please review the 

Award Redirect Portal walkthrough instructions.