Last week the U.S. Department of the Treasury released Compliance and Reporting Guidance for State and Local Fiscal Recovery funds from the American Rescue Plan Act (ARPA) including General Guidance with Key Principles, Statutory Eligible Uses, Treasury’s Rule, Uniform Administrative Requirements, and Award Terms and Conditions.
Reporting requirements will be generally subject to Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform Guidance). Municipalities will need to implement robust internal controls and effective monitoring to ensure compliance for both funds spent by the municipality and funds that are sub-allocated to other entities, which are referred to in the guidance as subrecipients.
Municipalities must manage and monitor subrecipients for compliance, including identifying compliance deadlines for subrecipients and compliance requirements for use, evaluating risk of noncompliance, and developing a written process and procedures for monitoring and risk assessment. As was done for municipalities during the application process, subrecipients must complete the Civil Rights Act Compliance to ensure no discrimination on basis of race, color, national origin, disability, age, or sex remains in effect and compliance will be required on the annual reporting.
The guidance issued by U.S. Treasury noted that municipalities may use funds for administrative costs such as hiring consultants to administer the funds. The funds may be deposited in an interest-bearing account and the interest earned does not need to be remitted to Treasury, is not subject to State and Local Fiscal Recovery Funds eligible uses, and is not subject to the ARPA spending deadlines. Similar to the reporting requirements, the administrative costs must support effective management and oversight, as well as ensure compliance with legal, regulatory, and other requirements.
Reporting Requirements by Recipient Type
Municipalities designated as metropolitan cities with a population that exceeds 250,000 must file an interim report by August 31, 2021 with expenditures by category. In addition, metropolitan cities and counties with a population that exceeds 250,000 residents must also submit a Recovery Plan Performance Report by August 31, 2021, and annually thereafter by July 31.
Metropolitan cities and counties with a population below 250,000 residents that received more than $5 million in SLFRF funding must submit a Project and Expenditure Report by October 31, 2021, and then 30 days after the end of each quarter thereafter.
Metropolitan cities with a population below 250,000 residents that received less than $5 million in SLFRF funding and municipalities designated as Non-Entitlement Units must submit a Project and Expenditure Report by October 31, 2021, and then annually.
The U.S. Treasury Coronavirus State and Local Relief Funds routinely updates the Frequently Asked Questions with new information and we encourage you to review them, along with the compliance guidance, with your municipal manager and CFO to ensure your municipality is in compliance.
Contact: Paul Penna, Legislative Analyst, email@example.com or 609-695-3481 ext. 110