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Guidance for tribes on American Rescue Plan compliance and reporting

Jul 19, 2021

The American Rescue Plan Act of 2021 (ARPA) funding is historic in many respects — from its scale and amount, to the equitable treatment of tribal governments, to its acknowledgment of tribal sovereignty and self-determination. However, many questions remained on the specific allowable uses of the funds, compliance and reporting. 

In response, the Treasury published Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Guidance on Recipient Compliance and Reporting Responsibilities. This guidance provides detailed information on how state and local governments, tribes and their business operations should be using and reporting on any funds received related to ARPA. The guidance does not pertain to any of the coronavirus relief funds established by the CARES Act that were distributed in 2020 at the onset of the pandemic. 

The Treasury guidance reiterates the allowable uses of the funds into the following broad categories:

  1. Responding to the COVID-19 public health emergency or its negative economic impacts
  2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to such eligible workers of the recipient, or by providing grants to eligible employers that have eligible workers who performed essential work
  3. For the provision of government services, to the extent of the reduction in revenue of such recipient due to the COVID-19 public health emergency, relative to revenues collected in the most recent full fiscal year of the recipient prior to the emergency
  4. To make necessary investments in water, sewer, or broadband infrastructure

The timeframe for obligating SLFRF/ARPA funds on eligible costs is for the period March 3, 2021, to December 31, 2024, and can be expended up through December 31, 2024. As a reminder, a project may be obligated or encumbered for a particular purpose through a contract that identifies the terms and conditions of the work to be completed. Costs for projects incurred prior to March 3, 2021, are not eligible, as provided for in the Treasury’s Interim Final Rule. 

The SLFRF guidance provides the following examples of eligible use categories to provide assistance to households, businesses and individuals:

Public health/negative economic impacts

Recipients may use SLFRF fund awards to provide assistance to households — such as rent, mortgage or utility assistance — for costs incurred to the household prior to March 3, 2021.

Premium pay

Recipients may provide premium pay retrospectively for work performed at any time since the start of the COVID-19 public health emergency. It must be “in addition to” wages and renumeration already received and must not have been obligated prior to March 3, 2021.

Revenue loss

Allows use of funds up to the extent of any reduction in revenue experienced that can be used for government services. Calculation is based upon the last full fiscal year prior to the pandemic and includes the 12-month period end December 31, 2020, and use of funds for government services must be post March 3, 2021.

Investments in water, sewer and broadband

Funds to make necessary investments in water, sewer and broadband may be used to cover costs incurred for eligible projects planned or started prior to March 3, 2021, provided that the projects costs were incurred after March 3, 2021. 

Reporting requirements are outlined as follows:

  • Interim report: Provide initial overview of status and uses of funding. This is a one-time report that identifies by expenditure category expenditures and obligations from award to July 31, 2021. This report should also include information that was used to calculate revenue replacement.   
  • Quarterly project and expenditure report: Report on projects funded, expenditures and contracts and subawards over $50,000, and other information, required to be filed by October 31, 2021, and 30 days after each quarter end thereafter. For each project, the recipient is required to enter the project name, identification number, project expenditure category, description and status of completion.
  • Annual recovery plan performance report: The recovery plan performance report will provide information on the projects that large recipients are undertaking with program funding and how they plan to ensure program outcomes are achieved. It includes key performance indicators identified by the recipient and some mandatory indicators identified by the Treasury. It’s required to be filed by August 31, 2021, and annually thereafter by July 31. 

You must provide additional detailed information for the quarterly and annual reporting that includes identifying whether projects are new or existing, adequate description of projects (50-250 words), current and cumulative period obligations, percentage of completion, whether it serves economically disadvantaged communities (as identified within a qualified census tract or beneficiaries earn less than 60% of the median income of relevant jurisdiction), detailed obligation and expenditure information for any contacts and grants awarded to subrecipients greater than or equal to $50,000. 

The guidance also provides some key guiding principles for tribes in developing their compliance framework, which includes: ensuring funds are not used for ineligible purposes; no fraud, waste, abuse, etc.; meets urgent needs of community in response to COVID-19 and benefits underserved communities.  

One of the most important parts of the guidance is the requirements that are laid out in the Uniform Administrative Requirements and Award Terms and Conditions sections. Some of the highlights of this section include that all SLFRF funds are subject to Cost Principles, and Audit Requirements for Federal Awards including Allowable Costs and Cost Principles, Compliance Supplement Part 3 issued in August 2020. Other notable compliance requirements include Procurement, Suspension and Debarment, Program Income, Reporting and Subrecipient Monitoring. The Award Terms and Conditions include having an active SAMS.gov account, meeting recordkeeping requirements such as maintaining records and financial documents for five years after all funds expended, meeting Single Audit requirements (recipients expending more than $750,000 in federal awards) and Civil Rights Compliance.  

Wipfli can help answer your questions

As guidance continues to evolve, our team will continue to disseminate information and keep you and your tribe informed. If you have questions about compliance or reporting, or need assistance with strategic planning, please contact us.

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Wipfli Editorial Team