Treasury Issues SLFRF Reclassification Guidance

The Department of the Treasury has issued numerous guidance documents for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program since the program was implemented, but the agency has recently issued a new guidance that introduces a new word in the title not seen in previous documents — reclassification.

The new document — Reclassification How to Guide for the SLFRF Program — includes key terms, timeline for obligation and use of funds, portal steps to reclassify funds overview, common reclassification scenarios, and related resources.

So first off, what is a reclassification? According to the guidance, if a recipient has excess funds that were obligated as of the Dec. 31, 2024, deadline, but ultimately not expended on an eligible activity, a recipient may reclassify the SLFRF funds from the original activity to another project that would be eligible under the SLFRF program rules, including the requirement that the recipient incurred an obligation by Dec. 31, 2024.

To re-classify funds in Treasury’s portal, a recipient must edit the first project to reduce the amount reported as obligated and edit the latter project to increase the amount reported as obligated. For all such projects, recipients are required to attest that the applicable obligation for the project was incurred by Dec. 31, 2024, and that they have maintained proper documentation of the obligation date. Obligations must be incurred between March 3, 2021, and Dec. 31, 2024, for most eligible uses and between Dec. 29, 2022, and Dec. 31, 2024, for the eligible uses added in the 2023 interim final rule.

Treasury emphasizes that reclassification is not intended to remedy instances of fraud, waste or abuse, which may be subject to additional compliance or recovery actions.

Treasury this month has continued to release other guidance documents for the program, including the April 2026 Project and Report Expenditures User Guide and the SLFRF Treasury Portal Account Access Help — Best Practices + Common Fixes. The program may be in its final year, but Treasury is showing no signs of coasting to the finish line in terms of SLFRF program oversight.

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