Can You Liquidate ARPA Expenses After December 31, 2026?

 Maybe. But that’s not a bet most recipients should make.    

March 16, 2026

With less than a year remaining in the ARPA Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program, one closeout question remains unresolved: Can programmatic expenses incurred before December 31, 2026 be paid after that date?

Treasury has never answered this question directly. And in a $350 billion program, silence creates risk. Can you afford to be wrong? We break down the challenge below.

1. The Uniform Guidance Argument

Many practitioners point to Uniform Guidance §200.344 (Closeout) for answers. Under typical federal grant rules, recipients generally have up to 120 days after the period of performance ends to liquidate obligations incurred during the award period.

If that rule applies to this program, costs incurred by December 31, 2026 could theoretically be paid in early 2027.

The Challenge: That interpretation is not unreasonable. The problem is that ARPA has never functioned like a typical federal grant.

2. The Revenue Loss Complication

Treasury’s own guidance complicates the Uniform Guidance argument. In FAQ 13.15, Treasury states that §200.344 applies to Treasury’s administration of the funds—but notes that because revenue loss does not involve subawards, recipients are not positioned to apply the closeout provision in the same way.

The Challenge: If closeout rules do not apply cleanly to revenue loss, what governs liquidation timing? This matters because revenue loss is the largest SLFRF spending category nationwide.

3. Treasury Guidance

Treasury officials have been asked to clarify the liquidation interpretation in multiple webinars. While responses have sometimes been unclear, the message has been consistent:

All programmatic activity must be completed by December 31, 2026.

Not obligated. Not invoiced. Completed.

That statement alone should give recipients pause before assuming a post-2026 liquidation window exists.

The Reality of Closeout

Anyone who administers federal awards knows how closeout works in reality:

• Invoices arrive late
  
  
• Contractors reconcile costs after work ends
  
  
• Final documentation often takes weeks or months

That is exactly why Uniform Guidance allows a liquidation period. But ARPA has repeatedly deviated from standard federal assistance rules.

Many SLFRF costs also flow through subrecipient agreements and vendor contracts, where invoicing timelines are often outside the recipient’s control. If Treasury ultimately treats December 31, 2026 as a hard expenditure deadline, late invoices could become unallowable—solely because of timing.

That makes it important for recipients to begin communicating expectations now – including clearly stating invoice deadlines, completion milestones, and documentation requirements for any SLFRF-funded activity expected to occur during 2026.

So the question becomes: Are you willing to bet your audit and recoupment exposures on an assumption? 

Practical Implementation Advice

If you are responsible for SLFRF closeout, the safest and most defensible approach is simple: Treat December 31, 2026 as both the expenditure deadline and the liquidation deadline.

Operationally, that means:

• All programmatic work completed by 12/31/2026
  
  
• All SLFRF invoices submitted, processed, and paid by 12/31/2026
  
  
• Begin conversations now with subrecipients, contractors, and vendors performing SLFRF-funded work 
  
  
• Establish clear invoice submission deadlines that allow sufficient processing time before December 31, 2026 
  
  
• Review subrecipient agreements and procurement contracts to ensure they reflect these expectations 
  
  
• Where necessary, execute contract or agreement amendments requiring earlier invoicing or final cost submission to reduce closeout risk 
  
  
• Use the January 31, 2027 report as a draft final report
  
  
• Spend the remaining closeout window addressing administrative cleanup and any Treasury Information Data Requests 
  
  
• Submit the final report by April 30, 2027 

Is this conservative? Yes.
Is it defensible? Also yes.

Here’s Why: If Treasury ultimately decides liquidation after December 31, 2026 is not permissible, recipients could face repayment exposure for otherwise eligible costs. 

Not because the projects were ineligible. But because the timing was wrong. 

In many cases, that timing risk will not originate with the recipient itself—but with late invoices from subrecipients or contractors whose agreements did not establish firm invoicing deadlines aligned with the program closeout. 

And if there’s one lesson ARPA has taught the grants community, it’s this: When emergency programs deviate from traditional rules, the compliance risk rarely shows up at the beginning. 

It shows up at closeout. 

The Bottom Line

You may be allowed to liquidate ARPA expenses after December 31, 2026.

But unless Treasury says that explicitly, Why take the risk?

Finish the work. Pay the invoices. Close the books. Before December 31, 2026.

Managing grants efficiently, without compromising compliance and integrity, can be a challenging task. If your organization is navigating the complexities of grant management, we can help you enhance oversight, streamline processes, ensure outcomes and reduce the risks of waste, fraud, and abuse. Reach out today to learn how our expertise in grants management can ensure your programs meet their goals, stay compliant, and make the best use of taxpayer dollars. 

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