The U.S. Treasury has released updated an FAQ on the Coronavirus State and Local Fiscal Recovery Funds from the American Rescue Plan Act (ARPA), which you can access HERE. Treasury has also released a supplementary FAQ regarding the distribution of ARPA funds to non-entitlement units of local governments (NEUs), which you can access HERE.
Treasury has stated it intends to update its FAQs periodically to help clarify questions about the ARPA Interim Final Rule, and these updated documents do not reflect all of Treasury’s planned clarifications regarding ARPA guidelines.
The following are the new questions addressed in the updated State and Local Fiscal Recovery Funds FAQ:
· May recipients use funds to establish a public jobs program?
· In calculating revenue loss, are recipients required to use audited financials?
· In calculating revenue loss, should recipients use their own data, or Census data?
· Should recipients calculate revenue loss on a cash basis or an accrual basis?
· Do restrictions on using Coronavirus State and Local Fiscal Recovery Funds to cover costs incurred beginning on March 3, 2021 apply to costs incurred by the recipient (e.g., a State, local, territorial, or Tribal government) or to costs incurred by households, businesses, and individuals benefiting from assistance provided using Coronavirus State and Local Fiscal Recovery Funds?
· How do I know if a water, sewer, or broadband project is an eligible use of funds? Do I need pre-approval?
· May recipients use Fiscal Recovery Funds to fund Other Post-Employment Benefits (OPEB)?
· Once a recipient has identified a reduction in revenue, how will Treasury track use of funds for the provision of government services?
· What is the Assistance Listing and Catalog of Federal Domestic Assistance (CFDA) number for the program?
· May recipients use funds to cover the costs of consultants to assist with managing and administering the funds?
The following are the new questions addressed in the updated supplemental FAQ regarding non-entitlement units of local government (NEU) funding distribution:
· Can states impose requirements or conditions on the transfer of funds to NEUs?
· Can states transfer additional funds to local governments beyond amount allocated to NEUs?
· May states use funds to pay for the administrative costs of allocating and distributing money to the NEUs?
· What steps do states and territories need to undertake to receive their NEU payments?
· What are the specific deadlines for state governments in distributing funds?
· How long does a state have to wait until an NEU can be treated as “non-responsive” and the state can issue a subsequent distribution based on unclaimed funding?
· How should a state treat a local government on the list posted on the Treasury website that is no longer in operation and has been dissolved?
· How should territories allocate and distribute payments to their NEUs?
· Can states pay entities that are not included in the list of local governments provided by Treasury?
· Is a Second Tranche payment guaranteed for NEUs, provided that they comply with the terms and conditions of the funding?
· How should states check to see whether an NEU is excluded or disqualified as outlined in the guidance?
· Are states required to collect key information from the NEU as outlined in the guidance (e.g., banking information or top-line budget totals) or may states rely on existing information in their systems?
· Do states have to collect actual budget documents to calculate the “75 percent budget cap,” or can they rely on a budget total?
· Do states have to monitor NEUs for compliance with use of funds?
· Is there a requirement to distribute funds to NEUs electronically, or can funds be distributed via check?
We will continue to keep our members up to date on all ARPA guidance as it is released.
ARPA Fact Sheets and Resources:
We encourage our members to refer to the series of fact sheets released by the National League of Cities (NLC). These fact sheets contain critical information on how local governments can access, spend and properly report ARPA funds:
· How to Spend Coronavirus State & Local Recovery Funds (HERE)
· How to Use ARPA to Access Coronavirus State & Local Recovery Funds (HERE)
· How to Meet Reporting Requirements for Coronavirus State & Local Fiscal Recovery Funds (HERE)
· How States Can Allocate Coronavirus State & Local Fiscal Recovery Funds to Local Governments (HERE)
· How to Use Coronavirus State & Local Fiscal Recovery Funds to Ease Budget Shortfalls (HERE)
· ARPA Supporting Housing Stability Funding and Income Security (HERE)
· Supporting Education Success Through the American Rescue Plan Act (HERE)
· From the Event: ARPA Coronavirus Local Fiscal Recovery Funds Guidance Update (Call) (HERE)
· A Local Leader’s Guide to Talking About the American Rescue Plan Act (HERE)
· ARPA Local Recovery Funds: What’s in it for Connectivity and Technology? (HERE)
· Using American Rescue Plan Act Funds for Water, Wastewater and Stormwater Infrastructure Projects (HERE)
· How Non-Entitlement Units of Local Government Access Recovery Funds (HERE)
Members can also use this Revenue Loss Calculator (HERE) to measure losses in revenue due to the COVID-19 pandemic.
You can access all NLC resources for local governments regarding ARPA funds HERE.