Audit Guidance for CARES Act Funding

Local governments in North Carolina are currently receiving and expending funds from the Coronavirus Aid Relief, and Economic Security Act (CARES). CARES Act federal funding is from the US Department of State Treasury (Treasury). The predominant amount of funding from the CARES Act appropriated to the State and local governments in North Carolina is from the Coronavirus Relief Fund (CRF), that was created by the CARES Act. In addition, the General Assembly in Session Law 2020-4 appropriated CRF funds to State agencies; some will be passed to local governments to be used for expenditures related to COVID-19. Among the State agencies that will receive CFR funding are NC Dept. of Public Instruction, and NC Dept. of Health and Human Services.

CRF funding is considered federal financial assistance and subject to federal single audit requirements found in the 2 CFR 200 (Uniform Guidance), Subpart F. CRF is the federal program name and has a CFDA No. of 21.019. The Treasury is the granting agency. Uniform Guidance Subparts B, C, D, with exceptions, and Subpart E are not applicable. Subpart D sections on internal controls (§200.303) and subrecipient monitoring and management (§§200.330 to 332) are applicable. Procurement standards found in Subpart D (§§200.317 to 326) do not apply to CRF funds. CRF funds that are transferred from a government to another government, such as a state to a county or a county to a municipality, is considered a subaward. Counties that received CRF funds from the State and pass CRF funds to a municipality are considered both a pass-through entity and a subrecipient. The expenditures for these funds should be reported on the respective Schedule of Expenditures of Federal and State Awards.

Two documents from the Treasury provide guidance on using funds from CFR:

Coronavirus Relief Fund Guidance for State, Territorial, Local, and Tribal Governments (April 22, 2020)
Frequently Asked Questions (periodically updated)

In addition, the NC Pandemic Relief Office (NCPRO) has provided additional guidance below:

Frequently Asked Questions for Local Governments (periodically updated)

Other sources of funds from the CARES Act local governments will receive directly or will be passed through State agencies. These sources will be from newly created federal programs or existing programs, some commonly used. A non-exclusive list of existing programs and estimated amounts to be provided can be found in Session Law 2020-4, Section 4.1(b). Information on these federal programs, including compliance requirements, can be found at Some of these programs are included in the document below, located at NCPRO’s website:

Guide to Federal COVID-19 Funding for Local Governments

IMPORTANT: No State funds have been appropriated for Coronavirus relief as of the date of this posting.