Deadlines and Updates for ARPA/Coronavirus SLFRF Recipients

December 31 Funding-Obligation Deadline | Expansion to Eligible Use of Funds

By Elizabeth Gousse Ballotte, Partner and Umer Dangra, Manager

If your entity was a recipient of American Rescue Plan Act (ARPA) funds, be mindful of the upcoming December 31, 2024 funding-obligation deadline. Highlighted in this article are other deadline reminders, more information on the U.S. Treasury’s recent expansion of eligible uses of funds and the ARPA procurement and contracting compliance requirements.

For background, ARPA is the $1.9 trillion stimulus package enacted in March 2021 to provide economic relief in response to the COVID-19 pandemic. Established by ARPA in 2021, the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program has since allocated $350 billion to over 30,000 state, territorial, local and Tribal governments nationwide to aid their response to and recovery from the COVID-19 public health crisis.[i]

ARPA Deadline Reminders

The 2023 Interim Final Rule (IFR)[ii] provides guidance on what it means to “obligate” funds. The upcoming funding-obligation deadline on December 31, 2024 applies to all eligible uses, including Surface Transportation and Title 1 projects.

Other key ARPA deadlines to add to your calendar include:

September 30, 2026: Expenditures deadline for Surface Transportation and Title 1 Projects.
December 31, 2026: Expenditures deadline for other eligible fund uses.[iii]

Expansion to Eligible Uses of Funds

Recipients of Coronavirus SLFRF support can now use funds to offer services like childcare and early education to address learning loss. Affordable housing development is now also available to all communities impacted by the pandemic.

Other uses of funds under the Treasury’s expanded support allow governments to:

Increase public-sector hiring and capacity.
Provide premium pay for essential workers.
Broaden eligible water, sewer and broadband infrastructure projects to help mitigate the unique challenges that face each state and locality in delivering clean water and high-speed broadband to their communities.
Recapture revenue through the option to elect a standard allowance of $10 million for revenue loss, rather than calculate revenue loss through the full formula (primarily for small localities).
Add emergency relief from natural disasters or the negative economic effects of natural disasters
- Surface Transportation and Title 1 projects are now both eligible fund-use expenditures.

Compliance with ARPA

When utilizing American Rescue Plan Act (ARPA) funds, municipalities must adhere to federal procurement requirements outlined in the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (referred to as Uniform Guidance). These requirements are found in Title 2 of the Code of Federal Regulations, Part 200 (2 CFR 200).[iv] Acquisition of certain real property for a public purpose is subject to certain limitations.

These procurement and contracting requirements are in place to mitigate the risk of fraud, waste or abuse of federal funds and to ensure fair and competitive contracts. If you have specific questions related to your municipality’s situation, consult legal or financial experts familiar with ARPA guidelines. [v]

Restrictions on Use of ARPA Funds

Some restrictions exist on the use of SLFRF award funds, including that recipients other than Tribal governments may not deposit SLFRF funds into a pension fund. Recipients that are States or territories may also not use SLFRF funds to offset a reduction in net tax revenue resulting from the recipient’s change in law, regulation or administrative interpretation. In addition, recipients may not use SLFRF funds directly to service debt, satisfy a judgment or settlement or contribute to a “rainy day” fund.

The Treasury’s 2022 Final Rule on Coronavirus SLFR[vi] provides more information on these restrictions, with the 2023 Interim Final Rule (IFR) detailing how these restrictions apply to the eligible uses added by the Consolidated Appropriations Act, 2023.

We Can Help

PKF O’Connor Davies specializes in helping municipalities navigate ARPA/Coronavirus SLFRF requirements, ensuring compliance while optimizing funding opportunities. Our team of experienced professionals offers a range of services, including grant management (from application assistance to reporting), compliance audits to ensure your processes and fund use meet federal standards, documentation support to demonstrate compliance and, most importantly, strategic consultation to help your government identify eligible projects and initiatives that can maximize the impact of ARPA funding for your community.

We’ve successfully partnered with multiple municipalities to navigate the challenges of ARPA and help ensure their funding is fully utilized without the risk of non-compliance. We can do the same for you.

Contact Us

We welcome the opportunity to answer any questions you may have related to this topic or any other accounting, audit, tax or advisory matters. Please contact your PKF O’Connor Davis client service team or:

Elizabeth Gousse Ballotte
Partner
eballotte@pkfod.com

Umer Dangra
Manager
udangra@pkfod.com