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New report finds billions in pandemic relief funding remains unspent

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States and the District of Columbia have allocated about 73% of the roughly $350 billion given out through one federal COVID-19 relief program and spent about 53% of that money as deadlines for using it approach.

When Congress passed the American Rescue Plan Act of 2021, it created the Coronavirus State and Local Fiscal Recovery Funds program. The U.S. Treasury allocated $350 billion in State and Local Fiscal Recovery Funds to tribal governments, states, the District of Columbia, local governments and U.S. territories. The money was to help cover a broad range of costs stemming from the pandemic, including revenue replacement.

States and the District of Columbia reported obligating 73%, or $142.4 billion, of their $195.8 billion in SLFRF awards as of Sept. 30, 2023, according to a new report from the U.S. Government Accountability Office. States and the District of Columbia reported spending 53%, or $103.7 billion, of their $195.8 billion in SLFRF awards as of Sept. 30, 2023.

Deadlines for obligating and spending that money are approaching. SLFRF recipients have until Dec. 31, 2024, to allocate their SLFRF awards and generally have until Dec. 31, 2026, to spend their awards.

All but eight states reported spending at least 25% of their awards. Eight states reported spending 75% or more of their awards. Minnesota (99%) and Alaska (96%) each reported spending the largest share of their awards. Oklahoma and South Carolina reported spending the smallest shares (5% each).

The latest GAO snapshot report on SLFRF spending doesn’t mention the thousands of local governments that hadn’t filed required reports on how they used the money.

An earlier GAO report found that 4,268 localities (14%), with a collective $3 billion in SLFRF awards, did not submit a required report to Treasury that detailed spending as of March 31, 2023, by the April 30. 2023 deadline. And 2,155 of these 4,268 localities, with nearly $606 million in combined SLFRF awards, also did not submit a report in the previous reporting cycle (spending as of March 31, 2022), according to the report.

The Treasury Department hasn’t publicly identified the thousands of local governments that failed to comply with reporting requirements, in part, because of their size. Most are smaller local governments – typically serving fewer than 50,000 people – referred to as non-entitlement units of local government (NEUs). Treasury officials said those small governments have “limited capacity and other challenges that affect their ability to report on time,” according to the GAO report.

Officials also said those small governments “were often the ‘most nervous’ to accept SLFRF awards (due to their limited experience with receiving federal funds), Treasury had concerns over creating ‘undue pressure’ or a ‘chilling effect’ on these recipients by publicly sharing information about who did not submit a report,” according to the GAO report.