The U.S. Treasury recently issued new guidance for recipients of Coronavirus Relief Fund (CRF) payments. Cities should be aware that these updates impact documentation requirements.

The updated CRF guidance and FAQ provide new requirements for documenting proof that an employee’s time was ‘substantially dedicated’ to responding to the Coronavirus pandemic. New language begins on page five of the guidance document and focuses on use of funds to cover payroll. In the FAQ document, questions A.53 to 56 were added, and Questions A.34 and A.38 were revised.

The main issue that arises in the new documents is the conflicting language between the guidance and FAQ. Previously and in the current FAQ, the Treasury states that CRF recipients “may presume” that an employee was substantially dedicated to mitigating the emergency. However, the updated guidance document requires that: “The relevant unit of government should maintain documentation of the ‘substantially dedicated’ conclusion with respect to its employees.” Until now, governments have been relying on the “may presume” language in the FAQs for months in the absence of guidance from the Treasury.

The National League of Cities has opened dialogue with the Treasury to seek clarification on this issue.

AWC contacted the Department of Commerce regarding these changes. Commerce is aware of the contradictory language; however, Commerce believes that the direction and FAQ’s distributed by the department are already in line with the more stringent Treasury guidance to maintain documentation.

AWC encourages cities to review the document with their legal counsel to ensure compliance with the new guidance and FAQ.