The U.S. Treasury is trying to recover COVID-19 relief funds from hundreds of local governments that failed to report how they spent the money.
Under the 2021 American Rescue Plan, $350 billion was distributed to over 30,000 state, local, tribal, and territorial governments. While most complied with reporting rules, about 1,000—mainly smaller governments—never submitted required progress reports, leaving $139 million unaccounted for, according to a Government Accountability Office analysis.
A GAO report last week revealed the Treasury sent notices to local governments to recover the unreported COVID-19 relief funds. As of June 2025, 740 governments filed their reports and avoided repayment, while 13 returned the funds. However, 235 local governments still had neither reported nor returned their relief money.
The GAO told the Associated Press it does not have a list of the specific governments that failed to comply with reporting requirements. The Treasury has also not responded to the AP’s request for details on the 13 governments that returned funds or those still unaccounted for.
Concerns over unreported pandemic relief spending aren’t new. In October 2023, the GAO said the Treasury had sent noncompliance notices to over 3,500 local governments that hadn’t filed progress reports. The Treasury declined to release those letters, prompting the AP to file a FOIA request in January 2024, which remains unfulfilled. The GAO’s latest report warns that missing reports hinder the Treasury’s ability to track proper use of the funds.
