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2026: The Final Countdown Has Begun for ARP/SLFRF

Categories
American Rescue Plan Act (ARPA) Funding, Project & Expenditure Report, Uniform Guidance

Published: 01/16/26

Author:

The final year of the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds (ARP/SLFRF) program is officially underway. For many North Carolina local governments, ARP/SLFRF already feels like a closed chapter. Funds were obligated long ago, projects are complete or revenue has been replaced, and balances have been fully drawn. But administratively, the program is not over yet for most local governments. And some units are still scrambling to spend all the funds by the deadline.

This year is about wrapping up eligible expenditures, keeping up with required reporting, and, for many local governments, closing out the grant award. Below is a reminder of the expenditure deadline and a step-by-step explanation of what closeout involves. And if you read to the end, there’s a bit of celebratory levity waiting for you.

The Final Expenditure Deadline

For local governments that received ARP/SLFRF funds from the U.S. Department of the Treasury (Treasury), all funds must be fully expended by December 31, 2026. That deadline has not changed. Now is the time to check in on all outstanding projects (including subawards). If you anticipate coming in under budget on any obligated projects, there is still time to make changes consistent with Treasury’s obligation flexibility.

Local governments that also received State ARP/SLFRF funds need to be more careful. State-passed-through funds likely have earlier deadlines that are set by the grant agreements. If you received state ARP/SLFRF, confirm the applicable deadline by reviewing your grant agreement or checking with your state grant liaison. Do not assume you can make expenditures up to December 31, 2026.

Continuing Reporting Requirements

Most North Carolina local governments have already fully expended all their direct ARP/SLFRF funds. That does not mean the grant is finished for those units. Even after all funds are spent and disbursed, Project & Expenditure (P&E) reporting continues until Treasury formally closes out the award.

Units that received more than $10 million of their own ARP/SLFRF funds continue to report quarterly. Most North Carolina units received between $0 and $10 million, which means they report annually, during the month of April. Unless your award is closed out before then, you should expect to submit P&E reports through April 2027. Reporting stops only when Treasury confirms closeout.

Award Closeout: What it is and Starting the Process

A grant award closeout is the official step that marks the end of a grant. It is how the federal government confirms that all the money has been spent properly, required reports have been submitted, and the grant’s rules have been followed. Closeout does not happen automatically when funds are spent. It only happens after the recipient certifies its final information and the granting agency reviews and approves it. After closeout, regular reporting stops, but the government can still review records later if questions arise.

Based on current guidance, Treasury must initiate ARP/SLFRF closeout. A local government cannot begin the closeout process until Treasury makes the closeout option available for that specific award in the Treasury Portal.

Treasury has been inviting eligible local governments to close out on a rolling basis. Local governments become eligible once they have fully obligated and fully expended their own ARP/SLFRF funds and have submitted all required P&E reports. When Treasury determines that a local government is eligible, it opens the Closeout Section in the Treasury Portal and notifies the recipient through an email to the designated points of contact. 

Until Treasury opens the closeout section in the portal and sends an email notice inviting the local unit to close out, a local government must continue to submit P&E reports on its normal reporting schedule, even if all funds have already been spent. The fact that closeout is not yet available does not indicate a problem or delay on the recipient’s part. (Again, our current understanding is that Treasury is sending these notices out in batches and on a rolling basis.)

Once Treasury opens the closeout option, the local government may complete the required closeout certification. Closeout is complete only after Treasury completes its review and provides written confirmation to the local unit.

Award Closeout: Process Specifics

Treasury has published a few different guidance documents related to closeout:

The following highlights important information from these guides.

Step 1: Make Sure Administrative Basics Are in Order

Confirm the following now:

  • Your points of contact in the Treasury Portal are current. Treasury uses these contacts for closeout communications and follow-up questions.
  • Your SAM.gov registration is active and up to date. An inactive SAM registration can delay or prevent closeout.

Step 2: Receive Email from Treasury Inviting the Local Government to Close Out the Award

A local government may only begin closeout if has received an email notification from Treasury inviting the unit to initiate the closeout process. Here is a replica of email notices that NC local governments have received: 

Dear SLFRF Recipient: 

In your most recent SLFRF Project and Expenditure (P&E) Report, you indicated that you are ready for program closeout. This notification provides information and key next steps to proceed with SLFRF award closeout. Please note that this notification is for informational purposes only and does not indicate or serve as acknowledgement of program closeout. Recipients must follow the next steps indicated below to proceed with the SLFRF closeout process. 

Treasury has made available [LOCAL GOVERNMENT NAME HERE] Closeout Section in the Treasury Portal. Please review the next steps and instructions below in order to proceed with the closeout process. 

Action Required

Review the final report information and answer the closeout certification question in the Closeout Section in Treasury’s Portal through either option below: 

Once the recipient has certified its final P&E Report to Treasury, the recipient may not expend any remaining award funds for any purpose.

Reporting and Closeout Resources

Treasury has posted many resources to guide recipients’ compliance with reporting requirements on the SLFRF website at State and Local Fiscal Recovery Funds | U.S. Department of the Treasury, including resources to assist in the closeout process that are available at the links below and the closeout resource hub.

1. SLFRF Award Closeout Preparation Checklist: provides a straightforward list of actions recipients should ensure are taken in preparation for closeout.

2. SLFRF Closeout Process Overview: provides an overview resource for SLFRF recipients to initiate closeout of their SLFRF awards.

3. Closeout How To Guide for the SLFRF Program: provides a step-by-step walkthrough guide for award closeout with portal screenshots.

After a recipient completes the closeout certification regarding its final P&E Report, Treasury will review the submitted reports. If a report requires revision, Treasury will request revisions and resubmission from the recipient. If needed, Treasury may request verification of award closeout information from recipients.

If issues are found requiring report revision, Treasury will engage recipients to resolve any issues found in their final P&E Report. Treasury may send instructions to revise and resubmit the final P&E Report or an Information Document Request (IDR) for the recipient to provide further clarity. Please ensure [LOCAL GOVERNMENT NAME HERE] SLFRF Points of Contact are up to date in the Treasury Portal so the designated contact receives all appropriate communications during the closeout process.

If a recipient does not resolve outstanding issues, Treasury will provide a formal opportunity to remedy the noncompliance prior to the recipient being found noncompliant with the requirements set forth in the SLFRF Financial Assistance Agreement.

Thank you for your prompt attention to this matter. If you have questions or need additional information, please send us an email via SLFRF@treasury.gov.

Sincerely,

State and Local Fiscal Recovery Funds
U.S. Department of the Treasury

Step 3: Log Into the Treasury Portal

Log into the Treasury SLFRF Portal using the method your local government uses, either Login.gov or ID.me. Navigate to the Closeout Reports section. If you are eligible to close out, the Portal will allow you to proceed. 

Step 4: Complete the Closeout Certification

In the Closeout section of the Portal, you will:

  • Click on both Project Summary and SF-425 Federal Financial Management tabs to review your unit’s data.
  • Answer the closeout certification question.
  • Verify that signed Award Terms and Conditions Agreement is uploaded. [This only applies to NEUs, which are municipalities with up to 50K population.]
  • Correct any inaccurate information in latest P&E report and resubmit.
  • There is an optional section to allow you to submit impact stories.
  • Certify that reporting is complete and accurate. 

Once you submit the closeout certification, you may not spend any remaining ARP/SLFRF funds for any purpose. 

Step 5: Respond to Treasury Review (ONLY IF PROMPTED BY TREASURY)

After you submit your closeout certification, Treasury will review your materials. Treasury may approve the closeout without follow-up; ask for corrections or clarification; or request additional documentation through an Information Document Request (IDR). Respond promptly and thoroughly to any Treasury requests. Closeout is not complete until Treasury finishes its review.

Step 6: Receive Official Closeout Confirmation

After Treasury reviews your submission and confirms that all requirements have been met, you will receive a formal closeout confirmation. Below is a replica of what that correspondence has looked like for North Carolina units:

U.S. Department of the Treasury, State and Local Fiscal Recovery Funds (SLFRF): Notification of Compliance with Award Closeout Process

Dear SLFRF Recipient:

We are writing regarding [LOCAL GOVERNMENT NAME HERE] participation in the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program authorized by Sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (Mar. 11, 2021), codified at 42 U.S.C. 802 and 803, as amended.

Based on our review, [LOCAL GOVERNMENT NAME HERE] has successfully completed the following:

  1. Submitted a fully compliant final report, including certification of the accuracy and completion of the final report.
  2. Submitted a fully compliant Federal Financial Report (SF-425).

Following the recipient’s completion of the above tasks, Treasury has completed all actions pertaining to the close out of [LOCAL GOVERNMENT NAME HERE] SLFRF award.

However, after closeout, [LOCAL GOVERNMENT NAME HERE] responsibility to Treasury for post-closeout adjustments to your SLFRF awards and other post-closeout requirements continues:

  1. Treasury has the right to disallow costs and recover funds on the basis of a later audit or other review of [LOCAL GOVERNMENT NAME HERE] SLFRF award.
  2. [LOCAL GOVERNMENT NAME HERE] is required to return any funds due as a result of later refunds, corrections, or other transactions.
  3. [LOCAL GOVERNMENT NAME HERE] remains subject to the SLFRF Award Terms, including paragraph 6 regarding record retention and access to such SLFRF award records.

For more information

If you have questions or need additional information, please send us an email via SLFRF@Treasury.gov. Treasury appreciates your participation in the SLFRF program.

Thank you,
State and Local Fiscal Recovery Funds
U.S. Department of the Treasury
SLFRF@Treasury.gov

Continuing Responsibility: Records Retention and Property Management

Once you receive this letter you are finished. No more P&E reports. But there are two important continuing obligations: records retention and, if applicable, property management. 

Records Retention

Although reporting ends at closeout, record retention does not. All local governments must retain all ARP/SLFRF documentation for five years after the expenditure of the last ARP/SLFRF dollar. This includes policies, contracts, subawards, invoices, payroll records, disbursement documentation, submitted P&E reports, and the Treasury closeout confirmation itself. As a conservative practice, many units are choosing to retain records for five years from the date of the closeout confirmation letter. 

Property Management

The property management requirements in 2 CFR Part 200, Subpart D continue to apply to real property, equipment, and supplies acquired or improved in whole or in part with ARP/SLFRF funds even after the period of performance has ended and the award has been closed out. Closeout of the grant does not eliminate the federal interest in such property. However, consistent with Treasury guidance, these Uniform Guidance property standards do not apply to real property, equipment, or supplies purchased or improved with ARP/SLFRF funds expended under the Revenue Replacement (Government Services) eligible use category. 

For property subject to Subpart D, a local government must continue to comply with applicable requirements related to use, record-keeping, maintenance, insurance, and disposition for as long as the Federal Government retains an interest, as determined under 2 CFR 200.311 through 200.316 and Treasury guidance. Again, this only applies to applicable expenditures made outside the Revenue Replacement category.

The Bottom Line for 2026 and A Little Celebratory Levity

For most North Carolina local governments, 2026 is about finishing the ARP/SLFRF program correctly. That means confirming deadlines, continuing required reporting, watching carefully for Treasury’s closeout invitation, performing closeout procedures, and preserving records for the long term.

The final countdown has begun. For finance and grant professionals this has been a long journey. It feels fitting to take a beat to acknowledge this moment. With apologies to Europe, here is a little earworm for you. (It helps to sing along (loudly) as you play the music in the background. Bonus points if you do it in front of your favorite embarrassed teenager.)

The Final Countdown Closeout

We’re closing it out now, and Treasury’s near,
The deadline is coming,
Yes, this is the year.

We’ve maxed out revenue replace 
We’ve tracked it all (tracked it all)

Will things ever be as “grey” again?

It’s the FI-NAL CLOSE-OUT
Da-na-na na-na-na-na-naa
Da-na-na na-na-na-na-naa

I know. I won’t quit my day job. 🙂

Coates’ Canons NC Local Government Law

2026: The Final Countdown Has Begun for ARP/SLFRF

Published: 01/16/26

Author:

The final year of the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds (ARP/SLFRF) program is officially underway. For many North Carolina local governments, ARP/SLFRF already feels like a closed chapter. Funds were obligated long ago, projects are complete or revenue has been replaced, and balances have been fully drawn. But administratively, the program is not over yet for most local governments. And some units are still scrambling to spend all the funds by the deadline.

This year is about wrapping up eligible expenditures, keeping up with required reporting, and, for many local governments, closing out the grant award. Below is a reminder of the expenditure deadline and a step-by-step explanation of what closeout involves. And if you read to the end, there’s a bit of celebratory levity waiting for you.

The Final Expenditure Deadline

For local governments that received ARP/SLFRF funds from the U.S. Department of the Treasury (Treasury), all funds must be fully expended by December 31, 2026. That deadline has not changed. Now is the time to check in on all outstanding projects (including subawards). If you anticipate coming in under budget on any obligated projects, there is still time to make changes consistent with Treasury’s obligation flexibility.

Local governments that also received State ARP/SLFRF funds need to be more careful. State-passed-through funds likely have earlier deadlines that are set by the grant agreements. If you received state ARP/SLFRF, confirm the applicable deadline by reviewing your grant agreement or checking with your state grant liaison. Do not assume you can make expenditures up to December 31, 2026.

Continuing Reporting Requirements

Most North Carolina local governments have already fully expended all their direct ARP/SLFRF funds. That does not mean the grant is finished for those units. Even after all funds are spent and disbursed, Project & Expenditure (P&E) reporting continues until Treasury formally closes out the award.

Units that received more than $10 million of their own ARP/SLFRF funds continue to report quarterly. Most North Carolina units received between $0 and $10 million, which means they report annually, during the month of April. Unless your award is closed out before then, you should expect to submit P&E reports through April 2027. Reporting stops only when Treasury confirms closeout.

Award Closeout: What it is and Starting the Process

A grant award closeout is the official step that marks the end of a grant. It is how the federal government confirms that all the money has been spent properly, required reports have been submitted, and the grant’s rules have been followed. Closeout does not happen automatically when funds are spent. It only happens after the recipient certifies its final information and the granting agency reviews and approves it. After closeout, regular reporting stops, but the government can still review records later if questions arise.

Based on current guidance, Treasury must initiate ARP/SLFRF closeout. A local government cannot begin the closeout process until Treasury makes the closeout option available for that specific award in the Treasury Portal.

Treasury has been inviting eligible local governments to close out on a rolling basis. Local governments become eligible once they have fully obligated and fully expended their own ARP/SLFRF funds and have submitted all required P&E reports. When Treasury determines that a local government is eligible, it opens the Closeout Section in the Treasury Portal and notifies the recipient through an email to the designated points of contact. 

Until Treasury opens the closeout section in the portal and sends an email notice inviting the local unit to close out, a local government must continue to submit P&E reports on its normal reporting schedule, even if all funds have already been spent. The fact that closeout is not yet available does not indicate a problem or delay on the recipient’s part. (Again, our current understanding is that Treasury is sending these notices out in batches and on a rolling basis.)

Once Treasury opens the closeout option, the local government may complete the required closeout certification. Closeout is complete only after Treasury completes its review and provides written confirmation to the local unit.

Award Closeout: Process Specifics

Treasury has published a few different guidance documents related to closeout:

The following highlights important information from these guides.

Step 1: Make Sure Administrative Basics Are in Order

Confirm the following now:

  • Your points of contact in the Treasury Portal are current. Treasury uses these contacts for closeout communications and follow-up questions.
  • Your SAM.gov registration is active and up to date. An inactive SAM registration can delay or prevent closeout.

Step 2: Receive Email from Treasury Inviting the Local Government to Close Out the Award

A local government may only begin closeout if has received an email notification from Treasury inviting the unit to initiate the closeout process. Here is a replica of email notices that NC local governments have received: 

Dear SLFRF Recipient: 

In your most recent SLFRF Project and Expenditure (P&E) Report, you indicated that you are ready for program closeout. This notification provides information and key next steps to proceed with SLFRF award closeout. Please note that this notification is for informational purposes only and does not indicate or serve as acknowledgement of program closeout. Recipients must follow the next steps indicated below to proceed with the SLFRF closeout process. 

Treasury has made available [LOCAL GOVERNMENT NAME HERE] Closeout Section in the Treasury Portal. Please review the next steps and instructions below in order to proceed with the closeout process. 

Action Required

Review the final report information and answer the closeout certification question in the Closeout Section in Treasury’s Portal through either option below: 

Once the recipient has certified its final P&E Report to Treasury, the recipient may not expend any remaining award funds for any purpose.

Reporting and Closeout Resources

Treasury has posted many resources to guide recipients’ compliance with reporting requirements on the SLFRF website at State and Local Fiscal Recovery Funds | U.S. Department of the Treasury, including resources to assist in the closeout process that are available at the links below and the closeout resource hub.

1. SLFRF Award Closeout Preparation Checklist: provides a straightforward list of actions recipients should ensure are taken in preparation for closeout.

2. SLFRF Closeout Process Overview: provides an overview resource for SLFRF recipients to initiate closeout of their SLFRF awards.

3. Closeout How To Guide for the SLFRF Program: provides a step-by-step walkthrough guide for award closeout with portal screenshots.

After a recipient completes the closeout certification regarding its final P&E Report, Treasury will review the submitted reports. If a report requires revision, Treasury will request revisions and resubmission from the recipient. If needed, Treasury may request verification of award closeout information from recipients.

If issues are found requiring report revision, Treasury will engage recipients to resolve any issues found in their final P&E Report. Treasury may send instructions to revise and resubmit the final P&E Report or an Information Document Request (IDR) for the recipient to provide further clarity. Please ensure [LOCAL GOVERNMENT NAME HERE] SLFRF Points of Contact are up to date in the Treasury Portal so the designated contact receives all appropriate communications during the closeout process.

If a recipient does not resolve outstanding issues, Treasury will provide a formal opportunity to remedy the noncompliance prior to the recipient being found noncompliant with the requirements set forth in the SLFRF Financial Assistance Agreement.

Thank you for your prompt attention to this matter. If you have questions or need additional information, please send us an email via SLFRF@treasury.gov.

Sincerely,

State and Local Fiscal Recovery Funds
U.S. Department of the Treasury

Step 3: Log Into the Treasury Portal

Log into the Treasury SLFRF Portal using the method your local government uses, either Login.gov or ID.me. Navigate to the Closeout Reports section. If you are eligible to close out, the Portal will allow you to proceed. 

Step 4: Complete the Closeout Certification

In the Closeout section of the Portal, you will:

  • Click on both Project Summary and SF-425 Federal Financial Management tabs to review your unit’s data.
  • Answer the closeout certification question.
  • Verify that signed Award Terms and Conditions Agreement is uploaded. [This only applies to NEUs, which are municipalities with up to 50K population.]
  • Correct any inaccurate information in latest P&E report and resubmit.
  • There is an optional section to allow you to submit impact stories.
  • Certify that reporting is complete and accurate. 

Once you submit the closeout certification, you may not spend any remaining ARP/SLFRF funds for any purpose. 

Step 5: Respond to Treasury Review (ONLY IF PROMPTED BY TREASURY)

After you submit your closeout certification, Treasury will review your materials. Treasury may approve the closeout without follow-up; ask for corrections or clarification; or request additional documentation through an Information Document Request (IDR). Respond promptly and thoroughly to any Treasury requests. Closeout is not complete until Treasury finishes its review.

Step 6: Receive Official Closeout Confirmation

After Treasury reviews your submission and confirms that all requirements have been met, you will receive a formal closeout confirmation. Below is a replica of what that correspondence has looked like for North Carolina units:

U.S. Department of the Treasury, State and Local Fiscal Recovery Funds (SLFRF): Notification of Compliance with Award Closeout Process

Dear SLFRF Recipient:

We are writing regarding [LOCAL GOVERNMENT NAME HERE] participation in the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program authorized by Sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (Mar. 11, 2021), codified at 42 U.S.C. 802 and 803, as amended.

Based on our review, [LOCAL GOVERNMENT NAME HERE] has successfully completed the following:

  1. Submitted a fully compliant final report, including certification of the accuracy and completion of the final report.
  2. Submitted a fully compliant Federal Financial Report (SF-425).

Following the recipient’s completion of the above tasks, Treasury has completed all actions pertaining to the close out of [LOCAL GOVERNMENT NAME HERE] SLFRF award.

However, after closeout, [LOCAL GOVERNMENT NAME HERE] responsibility to Treasury for post-closeout adjustments to your SLFRF awards and other post-closeout requirements continues:

  1. Treasury has the right to disallow costs and recover funds on the basis of a later audit or other review of [LOCAL GOVERNMENT NAME HERE] SLFRF award.
  2. [LOCAL GOVERNMENT NAME HERE] is required to return any funds due as a result of later refunds, corrections, or other transactions.
  3. [LOCAL GOVERNMENT NAME HERE] remains subject to the SLFRF Award Terms, including paragraph 6 regarding record retention and access to such SLFRF award records.

For more information

If you have questions or need additional information, please send us an email via SLFRF@Treasury.gov. Treasury appreciates your participation in the SLFRF program.

Thank you,
State and Local Fiscal Recovery Funds
U.S. Department of the Treasury
SLFRF@Treasury.gov

Continuing Responsibility: Records Retention and Property Management

Once you receive this letter you are finished. No more P&E reports. But there are two important continuing obligations: records retention and, if applicable, property management. 

Records Retention

Although reporting ends at closeout, record retention does not. All local governments must retain all ARP/SLFRF documentation for five years after the expenditure of the last ARP/SLFRF dollar. This includes policies, contracts, subawards, invoices, payroll records, disbursement documentation, submitted P&E reports, and the Treasury closeout confirmation itself. As a conservative practice, many units are choosing to retain records for five years from the date of the closeout confirmation letter. 

Property Management

The property management requirements in 2 CFR Part 200, Subpart D continue to apply to real property, equipment, and supplies acquired or improved in whole or in part with ARP/SLFRF funds even after the period of performance has ended and the award has been closed out. Closeout of the grant does not eliminate the federal interest in such property. However, consistent with Treasury guidance, these Uniform Guidance property standards do not apply to real property, equipment, or supplies purchased or improved with ARP/SLFRF funds expended under the Revenue Replacement (Government Services) eligible use category. 

For property subject to Subpart D, a local government must continue to comply with applicable requirements related to use, record-keeping, maintenance, insurance, and disposition for as long as the Federal Government retains an interest, as determined under 2 CFR 200.311 through 200.316 and Treasury guidance. Again, this only applies to applicable expenditures made outside the Revenue Replacement category.

The Bottom Line for 2026 and A Little Celebratory Levity

For most North Carolina local governments, 2026 is about finishing the ARP/SLFRF program correctly. That means confirming deadlines, continuing required reporting, watching carefully for Treasury’s closeout invitation, performing closeout procedures, and preserving records for the long term.

The final countdown has begun. For finance and grant professionals this has been a long journey. It feels fitting to take a beat to acknowledge this moment. With apologies to Europe, here is a little earworm for you. (It helps to sing along (loudly) as you play the music in the background. Bonus points if you do it in front of your favorite embarrassed teenager.)

The Final Countdown Closeout

We’re closing it out now, and Treasury’s near,
The deadline is coming,
Yes, this is the year.

We’ve maxed out revenue replace 
We’ve tracked it all (tracked it all)

Will things ever be as “grey” again?

It’s the FI-NAL CLOSE-OUT
Da-na-na na-na-na-na-naa
Da-na-na na-na-na-na-naa

I know. I won’t quit my day job. 🙂

This blog post is published and posted online by the School of Government for educational purposes. For more information, visit the School’s website at www.sog.unc.edu.

Coates Canons
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