NLC Response to Treasury Backpedaling Congressionally Approved Fiscal Support for Local Governments


Washington, D.C. - On August 28, the U.S. Treasury Office of Inspector General surprised state and local officials with new and contradictory changes to regulatory and reporting requirements for the Coronavirus Relief Fund (CRF), authorized under the CARES Act. The change was communicated by the U.S. Treasury Office of Inspector General’s (OIG)  August 28 memorandum, OIG-CA-20-028, outlining new reporting and record retention requirements for the Coronavirus Relief Fund.

In response, the nonpartisan organizations representing state and local governments have sent a letter to the Deputy Inspector General U.S. Department of the Treasury, calling for a removal of these burdensome and conflicting reporting requirements.

“At the very least, the change mandated by the Office of the Inspector General (OIG) increases regulatory burdens on state and local governments and diminishes confidence in lasting federal support at a time of reduced capacity as a result on unavoidable furloughs necessary to meet balanced budget obligations. More concerning, however, is that the change makes it more likely that the OIG will claw back expended funds, possibly years later, in a similar fashion to FEMA funds.” 

The backpedaling of enacted fiscal support for state and local governments - who are managing and executing the national emergency response to the coronavirus pandemic – warrants greater Congressional scrutiny. At the same time, emergency funding overall for states and localities enacted under the CARES Act has proven insufficient. With more than 75% of Coronavirus Relief Funds already allocated, requests for aid by most municipalities remain unanswered. NLC urges Congress to make additional aid available to all 19,000 cities, towns, and villages by enacting a new emergency relief package that is appropriate, fair, and equitable for every municipal government.

NLC launched the Cities Are Essential campaign in May, calling on the federal government to ensure there is flexible, direct funding relief provided to America’s municipalities.


The National League of Cities (NLC) is the voice of America’s cities, towns and villages, representing more than 200 million people. NLC works to strengthen local leadership, influence federal policy and drive innovative solutions. Stay connected with NLC on FacebookTwitterLinkedIn and Instagram.

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