American Rescue Plan Act Update
End-of-Year ARPA Obligation Deadline-DECEMBER 31, 2024
Time is running out for you to "obligate" your ARPA funds.
All funds must be obligated by recipients within the statutory period between March 3, 2021, and December 31, 2024, and expended to cover such obligations by December 31, 2026. Any ARPA funds not obligated by December 31, 2024 must be returned to Treasury.
ARPA funds may not be encumbered after the deadline period has passed.
The US Code of Federal Regulations defines “obligation” as “an order placed for property and services and entering into contracts, subawards and similar transactions that require payment.” See 31 CFR 35.3. and Treasury SLFRF FAQs 13.17
- First, the unspent funds must have a legally enforceable obligation attached for their expenditure.
- Second, the obligation must attach to the funds before December 31, 2024 deadline.
- Merely voting to expend, encumber, allocate, appropriate, designate, set aside, reserve, etc. your ARPA funds does not meet the definition of obligation!
- A journal entry to transfer your ARPA SLFRF funds into your general fund without specifying an offsetting expenditure and having legally enforceable source documents, such as a contract or purchase order, also does not meet the definition obligation. (Example: "ARPA funds are being used to pay for HVAC upgrades to the town hall".)
Key Considerations for Unobligated Funds
As municipalities prepare to meet the upcoming deadline, they can keep in mind the following key considerations (including recommendations from NLC):
- Recipients should have a plan on how they will obligate funds by the deadline and report their obligations to the Treasury.
- Determine the amount of SLFRF remaining in the award and the estimated amount to be used to cover eligible expenses.
- Consider the time it takes to negotiate and execute a contract when planning to meet the obligation deadline.
- Be sure the expenditure can meet the US Code of Federal Regulations definition of “obligated.” See 31 CFR 35.3.
- Document how the estimate is reasonable and justified.
- Report the estimates to Treasury by July 1, 2024 (Cities that report to Treasury quarterly) or April 30, 2025 (Towns that report to Treasury annually).
- Report at closeout the final amount expended for eligible costs.
- All municipalities should have a designated single point of contact for communication with grant administrators at the Treasury. This is especially relevant for municipalities that have experienced staffing or elected official turnover since the program began. If you are unsure, you can email the contact information for your municipality’s point of contact to SLFRF@treasury.gov.
Can Local Governments Obligate Funds Past the Deadline?
Once the December 31, 2024, deadline has passed, municipalities are not allowed to re-obligate funds, obligate additional funds, or encumber unobligated funds. However, there are a few exceptions (See Treasury SLFRF FAQs 17.2) that would allow a municipality to replace a contract or subaward after December 31, 2024, including:
- The municipality terminates a contract due to the contractor/subrecipient defaulting, going out of business, or being unable to perform the contract;
- The municipality and contractor/subrecipient mutually agree to terminate the contract “for convenience;” or
- The municipality terminates the contract/subaward because it was not properly awarded.
For further discussion of these obligation requirements as well as common SLFRF questions, read Treasury’s State and Local Fiscal Recovery Funds Frequently Asked Questions.
New Treasury Guidance on ARPA SLFRF Eligible Uses
On August 10, 2023, the U.S. Department of Treasury released its long-awaited Interim Final Rule on ARPA Flex. ARPA Flex was a provision passed by Congress in December 2022. The rule opens new expenditure categories and outlines potentially burdensome strings to using the money.
This rule created three new expenditure categories:
- Spending to provide emergency relief from natural disasters.
- Spending on transportation infrastructure eligible projects and matching funds.
- Spending on any program, project, or service that would also be eligible under HUD’s Community Development Block Grant program.
The Interim Final Rule will be published in the Federal Register next week starting a 60-day comment period. The timeline for a final rule is uncertain. The volume and complexity of comments will determine how long it will take to proceed to a final rule.
ARPA SLFRF REPORTING AND COMPLIANCE
The American Rescue Plan Act (ARPA) of 2021 is a $1.9 trillion economic stimulus bill. Within the ARPA, the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) provides $350 billion for states, municipalities, counties, tribes, and territories, including $130 billion for local governments split evenly between municipalities and counties. This webpage provides important information for cities and towns in New Hampshire on ARPA and the CSLFRF.
IMPORTANT NOTICES for NEU's
ARPA funding must be obligated by the end of calendar year 2024 and expended by the end of calendar year 2026.
- The next required reporting for local ARPA funds will be due by April 30, 2025 for ARPA expenditures through *March 31, 2025*
Treasury has published an updated Project and Expenditure Report User Guide (Version 2, April 1, 2022). This document provides information on using Treasury’s portal to submit the required SLFRF Project and Expenditure report for the April 2022 submission deadline. The user guide is a supplement to the updated Compliance and Reporting Guidance (Version 5.1, June 2023) document, which contains relevant information and guidance on ARPA SLFRF reporting requirements.
As you review the reporting guide and establish a plan for submitting your report, we encourage you to make use of the following Treasury resources:
- Treasury’s SLFRF website
- Project and Expenditure Report User Guide FAQs
- Compliance and reporting guidance
- SLFRF: Overview of the Final Rule
- SLFRF Final Rule
- Webinar: SLFRF: Compliance & reporting guidance
- Webinar: SLFRF: Reporting for non-entitlement units
If you have general questions or need additional assistance, please contact Treasury at SLFRP@treasury.gov.
Revenue Loss (Expenditure Category 6.1) - For towns and cities that elected the standard allowance and will spend their funds on the "general provisions of government services" (Expenditure Category 6.1 Revenue Replacement), please continue to refer to relevant sections of Uniform Guidance (2 CFR Part 200) that apply to the use of these funds. Please refer to the 2 CFR Part 200 Desk Reference provided by the State of NH.
NEUs, as recipients of State and Local Fiscal Recovery Funds, were required to submit project and expenditure reports by April 30, even if no funds were expended, according to the Final Rule Guidance. The Treasury Department has acknowledged, however, that some NEUs continue to have technical and administrative issues with submitting their mandatory reporting. If you have not successfully submitted your first report, please contact the Treasury immediately at SLFRF@treasury.gov. According to Treasury, a record of late reporting could lead to a finding of non-compliance, which could result in development of a corrective action plan, or other consequences. (Source: Project and Expenditure Report User Guide, Appendix F FAQ, Q 1.17.)
Treasury's Portal: https://portal.treasury.gov/compliance
NEU Steps for April 30, 2024 Reporting:
- Create a Login.gov user account. (Follow instructions HERE)
- Access Treasury’s Portal. (Link to Treasury's Portal HERE)
- Assign/Designate Roles in the Portal. (The Account Administrator is the only role that can do this)
- Upload the required documents to the Portal.
- Complete your Project and Expenditure Report.
- State and Local Fiscal Recovery Funds: SLFRF@treasury.gov or call (844) 529-9527
- Local Assistance and Tribal Consistency: LATCF@treasury.gov or call (844) 529-9527
- Emergency Rental Assistance program: EmergencyRentalAssistance@treasury.gov or 877-398-5861
- Homeowners Assistance Fund: For states and territories: HAF@treasury.gov; for tribes: HAF_Tribal@treasury.gov; or 877-398-5861
- Coronavirus State and Local Fiscal Recovery Funds Treasury's ARPA homepage
- Final Rule Issued January 6, 2022, the Final Rule (FR) outlines how Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) may be spent. The FR describes the rules and parameters for use of SLFRF monies from ARPA. The FR is the official rule from Treasury, and it applies to all municipalities, both metropolitan communities and NEUs.
- Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule
- CSLFRF Final Rule FAQ
- Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds This Treasury guidance (Version 5.1, issued 6/06/23) provides details, requirements and clarification for each recipient’s compliance and reporting responsibilities.
- The Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance") apply to the LFRF. These include, but are not limited to:
- Contracts must follow federal procurement rules and cost principles.
- Cities/towns may enter into Grant Agreements with subrecipients (such as to broadband suppliers, water departments, or school districts that serve multiple NEUs). Cities/towns are responsible for monitoring and reporting on subrecipient use of LFRF funds.
- Single Audit requirements apply to subrecipients who receive in the aggregate more than $750,000 in federal funds for the year.
For the full text of applicable requirements, see Title 2, Part 200 of the Code of Federal Regulations.
- General FAQs and NEU-specific FAQs: The FAQs are the best resource for any policy related questions related to eligible uses of State and Local Fiscal Recovery Funds.
- Title-By-Title Summary of the Entire Act
- Text of the full bill (H.R. 1319)
- Changes made by the U.S. Senate before passing bill
- Letter from Governor Sununu (April 19, 2021)
Materials from GOFERR/Guidehouse:
- GOFERR website for NEUs
- Questions? NH (GOFERR) has hired Guidehouse to provide resources and support to NEUs on eligible uses, compliance, and reporting. Watch this brief tutorial on how to contact Guidehouse.
- NEU allocations
- NLC's Pandemic Response & Relief Website
Subrecipients v. Contractors
- Subrecipient v. Contractor Classification
- Subrecipient v. Contractor Determination Checklist
- Subrecipient Risk Assessment Tool
- Municipalities considering direct assistance to households should read this first.
- States are required to report how funds are used and how their tax revenue was modified during the time that funds were spent during the covered period (covered period begins on March 3, 2021, and ends on the last day of the fiscal year a state or local government has expended or returned all funds to the U.S. Treasury).
- If a state, county or municipality does not comply with any provision of this bill, they will be required to repay the U.S. Treasury an equal amount to the funds used in violation.
"Agreements" - Grant Awards Documents
- Award Terms and Conditions. This is your grant agreement. This document was signed by the Authorized Representative for your municipality and dated when your municipality received the first tranche of funding in August of 2021 and was submitted to GOFERR.
- Assurance of Compliance with Civil Rights Requirements. This document was signed by the Authorized Representative for your municipality and dated when your municipality received the first tranche of funding in August of 2021 and was submitted to GOFERR.