Earlier this month, the Treasury Department Office of Inspector General (OIG) attempted to backtrack on reasonable reporting requirements for state and local governments using Coronavirus Relief Funds (CRF) under the CARES Act. The OIG requirements would have over-ruled a previously granted presumption that all payroll costs for public health and public safety employees would be treated by federal regulators as payments for services to mitigate the impact of COVID-19, as required by the CARES Act.
The new OIG guidance would have imposed burdensome new reporting requirements after states and localities had already relied on the presumption to support budgeting, payroll, and employment decisions. More consequentially, the change would have made it more likely that the OIG could attempt to claw back expended CRF funds, possibly years later, in a similar fashion to FEMA funds.
Our federal partners at the National League of Cities (NLC) quickly brought together a coalition to convince Treasury to reverse course on new reporting requirements, which they did this week in updated guidance published yesterday that dropped the new burdensome reporting requirements and reinforced the original presumption guidance.
NLC’s letter to Treasury explaining the issue in detail is available.
Treasury updated OIG’s “Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and Recordkeeping”. The updates requested by NLC are found in FAQs # 63 and 70-72 that are related to the recordkeeping requirements for public health and public safety employees significantly dedicated to mitigating or responding to the COVID-19 public health emergency.
Contact: Jon Moran, Senior Legislative Analyst, firstname.lastname@example.org, 609-695-3481 x121.