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Analysis of Costs <br />This regulatory action will generate administrative costs relative to a pre -statutory <br />baseline. This includes, chiefly, costs required to administer SLFRF funds, oversee subrecipients <br />and beneficiaries, and file periodic reports with Treasury. It also requires states to allocate <br />SLFRF funds to nonentitlement units, which are smaller units of local government that are <br />statutorily required to receive their funds through states. Treasury expects that the administrative <br />burden associated with this program will be moderate for a grant program of its size. Treasury <br />expects that many recipients receive direct or indirect funding from federal government <br />programs and that many have familiarity with how to administer and report on federal funds or <br />grant funding provided by other entities. In particular, states, territories, and large localities will <br />have received funds from the Coronavirus Relief Fund (CRF) and Treasury expects them to rely <br />heavily on established processes developed through that program or other prior grant funding, <br />mitigating burden on these governments. Treasury has enhanced the level of recipient reporting <br />as compared to the CRF, incorporating feedback from the Government Accountability Office <br />and others that additions would improve the oversight of recipients' use of funds. To balance the <br />oversight benefits with the costs of added reporting burdens, Treasury has incorporated other <br />mechanisms to mitigate burden. For example, Treasury is "tiering" reporting requirements so <br />that recipients that receive relatively lesser amounts of SLFRF funds are required to submit less <br />frequent reports than recipients receiving greater amounts of funds. Treasury is noting <br />administrative costs as a generally allowable use of SLFRF funds, which defrays administrative <br />expenses to recipients that may be needed to comply with reporting requirements. Treasury has <br />also provided options for recipients to use eligibility thresholds they are already familiar with <br />during administration of SLFRF funds, which will enable recipients to avoid the costs of setting <br />399 <br />