ARPA Funding Obligation Deadline Approaches: Key Updates and Compliance Guidance
- ARPA Deadlines You Need to Know
- Expanded Eligible Uses of Funds
- Compliance and Procurement Guidelines
- Restrictions on Fund Usage
- Leverage CSH
If your organization received funds through the American Rescue Plan Act (ARPA), it’s crucial to note the upcoming December 31, 2024, funding obligation deadline.
Enacted in March 2021, the American Rescue Plan Act (ARPA) is a $1.9 trillion stimulus package designed to provide economic relief from the COVID-19 pandemic. As part of this initiative, the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program allocated $350 billion to over 30,000 state, territorial, local, and Tribal governments to support recovery efforts from the pandemic's public health and economic impacts.
ARPA Deadlines You Need to Know
Understanding and adhering to ARPA’s deadlines is essential to ensure compliance and maximize funding use. The U.S. Treasury’s 2023 Interim Final Rule (IFR) defines “obligating” funds and sets the following key dates:
December 31, 2024
Deadline for obligating ARPA funds across all eligible uses, including Surface Transportation and Title 1 projects.
September 30, 2026
Expenditure deadline for Surface Transportation and Title 1 projects.
December 31, 2026
Expenditure deadline for all other eligible uses.
Expanded Eligible Uses of Funds
Recent updates to the SLFRF program have expanded the scope of eligible uses, enabling municipalities to address broader community needs. These include:
Childcare and Early Education
Addressing learning loss through expanded childcare services and education programs.
Affordable Housing Development
Funding for housing initiatives in communities impacted by the pandemic.
Public Sector Support
Hiring and capacity-building for government agencies.
Infrastructure Projects
Broader eligibility for water, sewer, and broadband projects to improve community access.
Revenue Recovery
Small localities can elect a $10 million standard allowance for revenue loss recovery instead of using the full formula.
Emergency Relief
Funding for disaster recovery efforts related to natural disasters.
Additionally, Surface Transportation and Title 1 projects are now eligible for expenditure under ARPA funds.
Compliance and Procurement Guidelines
When utilizing ARPA funds, recipients must adhere to federal procurement standards outlined in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), codified in 2 CFR 200. These rules ensure fair competition and reduce the risk of fraud, waste, or abuse. Specific limitations also apply to acquiring real property for public purposes.
To stay compliant, municipalities should:
Follow Procurement Standards: Ensure all contracts and purchases meet federal requirements.
Maintain Proper Documentation: Retain thorough records to demonstrate compliance during audits.
Consult Experts: Engage legal or financial advisors to navigate ARPA-specific guidelines.
Restrictions on Fund Usage
Certain restrictions apply to ARPA funds. For instance:
Non-Tribal governments cannot deposit SLFRF funds into pension funds.
States and territories cannot use funds to offset reduced tax revenues resulting from law or policy changes.
SLFRF funds cannot be used to service debt, settle judgments, or contribute to reserve funds.
The Treasury’s 2022 Final Rule and the 2023 IFR provide further details on these restrictions, particularly regarding new eligible uses introduced by the Consolidated Appropriations Act of 2023.
Leverage Clark Schaefer Hackett
Navigating ARPA’s complex requirements can be challenging. At CSH, we specialize in helping municipalities optimize funding opportunities while ensuring full compliance. Our services include:
Grant Management: From application to reporting, we streamline the process.
Compliance Audits: Ensuring your processes align with federal standards.
Documentation Support: Helping you maintain compliance records.
Strategic Consultation: Identifying eligible projects to maximize the impact of ARPA funding.
Have questions about ARPA compliance, funding opportunities, or related accounting, audit, tax, or advisory matters? Contact us today to discuss how we can support your organization.
Brian Mosier
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