ARPA FAQ's

The State and Local Fiscal Recovery Funds (SLFRF, aka ARPA)  program provides governments across the country with the resources needed to:

•  Fight the pandemic and support families and businesses struggling with its public health and economic impacts

•  Maintain vital public services, even amid declines in revenue resulting from the crisis

•  Build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity

Click here to access the Local Fiscal Recovery Fund Allocations  

The ARPA funding will arrive in two (2) roughly equal payments ("tranches"). The first payment was in September 2021 and the second payment will arrive about the same time in 2022.  It will be distributed through the State of Missouri to all NEUs that certified to accept their ARPA funds. 

ARPA includes four broad criteria outlining eligible uses:

• To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;

• To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers;

• For the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency; and

• To make necessary investments in water, sewer, or broadband infrastructure.

On January 6, 2022, the U.S. Department of the Treasury issued the Final Rule that further explains eligible and ineligible uses. Recipients may also find the Overview of the Final Rule helpful,. It provides a summary of major provisions of the Final Rule for informational purposes.

Once community priorities are determined, there will be a City of Columbia RFP issued. Look for the City of Columbia RFP after August 2022. The RFP will describe how to apply for these one time funds.

Once community priorities are determined, there will be a City of Columbia RFP issued. The RFP will outline the outcomes the City will be funding.

Look for the City of Columbia RFP after August 2022. The RFP will describe how to apply for these one time funds.

A subrecipient is an entity that receives a subaward to carry out a project funded by Fiscal Recovery Funds on behalf of a recipient. Individuals or entities that are direct beneficiaries of  a project funded by Fiscal Recovery Funds are not considered subrecipients. Households, communities, small businesses, nonprofits, and impacted industries are all potential beneficiaries of projects carried out with SLFRF funds.

The terms and conditions of Federal awards flow down to subawards to subrecipients, requiring subrecipients to comply with all requirements of recipients such as the treatment of eligible uses of funds, procurement, and reporting requirements. Beneficiaries are not subject to the requirements placed on subrecipients in the Uniform Guidance, including audit pursuant to the Single Audit Act and 2 CFR Part 200, Subpart F or subrecipient reporting requirements.

The distinction between a subrecipient and a beneficiary, therefore, is contingent upon the rationale for why a recipient is providing funds to the individual or entity. If the recipient is providing funds to the individual or entity for the purpose of carrying out a SLFRF program or project on behalf of the recipient, the individual or entity is acting as a subrecipient. Acting as a subrecipient, the individual or entity is subject to subrecipient monitoring and reporting requirements. Conversely, if the recipient is providing funds to the individual or entity for the purpose of directly benefiting the individual or entity as a result of experiencing a public health impact or negative economic impact, the individual or entity is acting as a beneficiary. Acting as a beneficiary, the individual or entity is not subject to subrecipient monitoring and reporting requirements.

Project and Expenditure Report User Guide V1.1, Appendix F, Frequently Asked Questions, 1.24, page 86

https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recovery-funds/recipient-compliance-and-reporting-responsibilities

ARPA Revenue Loss Calculator [Link]- VLCT has produced a revenue loss calculator that uses the U.S. Department of the Treasury’s specific formula in the Interim Final Rule.  It is designed to help communities determine if they may use a portion of their ARPA funding to replace lost revenue.

Step 1: Identify general revenues collected in the most recent full fiscal year prior to the health emergency (2019) 

Step 2: Estimate counterfactual revenue which is equal to base year revenue*[(1+growth adjustment)^(n/12)] 

Step 3: Identify actual general revenue collected over the past 12 months (January to December) as of the measurement date 

Step 4: The extent of the reduction in revenue is equal to the counterfactual revenue less actual revenue.

Where:

• Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient’s average annual revenue growth over the three full fiscal years prior to the COVID-19 public health emergency.

• "n" equals the number of months elapsed from the end of the base year to the calculation date.

• Actual General Revenue is a recipient’s actual general revenue collected during 12-month period ending on each calculation date.

On January 6, 2022, Treasury issued its long-awaited Final Rule (overview found HERE) which guides the use of ARPA funds.  It contains many changes, among them the treatment of revenue loss.

"The Final Rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount – in many cases their full award – for government services, with streamlined reporting requirements." 

This would be "a one-time, irrevocable election to utilize either the revenue loss formula or the standard allowance." (Final Rule page 240)  This election must  be made during the April 30, 2022 reporting period.  

No, ARPA money does not need to be in a separate cash (bank) account. Best practice is to create a separate fund in the general ledger to more easily account for and report on these funds.   

Also, any interest earned on this money may be kept by the municipality.

Yes, provided that the project is itself an eligible use of funds and that the award recipients can track the use of funds in line with the reporting and compliance requirements of the Coronavirus Local Fiscal Recovery Funds/ARPA. In general, when pooling funds for regional projects, recipients may expend funds directly on the project or transfer* funds to another government that is undertaking the project on behalf of multiple recipients. To the extent recipients undertake regional projects via transfer to another government, recipients would need to comply with the rules on transfers specified in the Interim Final Rule, Section V. A recipient may transfer funds to a government outside its boundaries (e.g., county transfers to a neighboring county), provided that the recipient can document that its jurisdiction receives a benefit proportionate to the amount contributed.

Visit the Code of Federal Regulations website here: https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200

ARPA funds must be obligated by December 31, 2024. Any funds not obligated by this date must be returned to Treasury.

ARPA funds must be expended by December 31, 2026. Any funds not expended by this date must be returned to Treasury.

Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.

What does the “provision of government services” mean and what is restricted?

Recipients can use ARPA funds on government services up to the revenue loss amount (in most cases in Vermont, the entire ARPA award), whether that be the standard allowance amount or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise*. Here are some common examples, although this list is not exhaustive:

✓ Construction of schools and hospitals

✓ Road building and maintenance, and other infrastructure

✓ Health services

✓ General government administration, staff, and administrative facilities

✓ Environmental remediation

✓ Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles)

* Restrictions:

✓ No deposits into pension funds

✓ No debt service or replenishing financial reserves

✓ No satisfaction of settlements and judgments

✓ No project that conflicts with or contravenes the purpose of the American Rescue Plan Act statute (e.g., uses of funds that undermine COVID-19 mitigation practices in line with CDC guidance and recommendations) and may not be used in violation of the Award Terms and Conditions or conflict of interest requirements under the Uniform Guidance. Other applicable laws and regulations, outside of SLFRF program requirements, may also apply (e.g., laws around procurement, contracting, conflicts-of-interest, environmental standards, or civil rights).

From the award Terms and Conditions, item 2. "The period of performance for this award begins on the date hereof and ends on December 31, 2026."  The "date hereof" is the date your Authorized Representative signed the cover page of the Terms and Conditions document

An Authorized Representative is an individual with legal authority to bind the government entity (e.g., the Chief Executive Officer of the government entity). An Authorized Representative must sign the Acceptance of Award terms for it to be valid.

Treasury FAQ 11.7

Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program, including the Cost Principles and Single Audit Act requirements. Recipients should refer to the Assistance Listing for detail on the specific provisions of the Uniform Guidance that do not apply to this program. The Assistance Listing will be available on beta.SAM.gov.

Treasury FAQ 9.3

NEUs are considered prime recipients of Treasury and States are not responsible for monitoring NEUs for compliance with use of funds.

"Implementation of the Fiscal Recovery Funds also reflects the importance of public input, transparency and accountability." In addition, the IFR establishes certain regular reporting requirements, including requiring local governments to publish information regarding uses of Fiscal Recovery Funds (ARPA) payments in their local jurisdiction. This means your reporting  on use of funds will be open for public viewing, perhaps posted on Treasury's website and others, easily found through search engines. "These reporting requirements reflect the need for transparency and accountability." Treasury urges State and local governments "to engage their constituents and communities in developing plans to use these payments, given the scale of funding and potential to catalyze broader economic recovery and rebuilding."

The "Date of Award" is the date your organization certified to accept its ARPA funding (summer 2021).

Certain federal regulations are applicable to your ARPA award, such as Uniform Guidance (2 CFR Part 200).  Section 200.425 discusses audit services and states: “A reasonably proportionate share of the costs of audits required by, and performed in accordance with, the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, are allowable.”  If you expended funds from multiple federal grant programs in a fiscal year, each program would pay a proportionate share of the cost of the Single Audit. 

Yes. Premium pay amounts paid to employees are considered wages. Employers generally must withhold federal income tax as well as social security tax and Medicare tax from employees' wages. (Employers also may have to pay federal unemployment tax on the wages.) Any payment from SLFRF/ARPA that is in the nature of compensation for services, even a one-time payment (such as a hiring "bonus"), is considered wages. More information can be found on the IRS CSLFRF (ARPA) FAQ.

The Assistance Listing Number (ALN), formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all federal assistance award mechanisms, including federal grants and cooperative agreements.

ARPA's ALN is: 21.027

Applicants are not required to secure or provide other funding sources for their projects. However, applicants may choose to provide other funding sources to demonstrate a commitment to the project and strengthen its sustainability.  

Final Rule overview states: In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response. For example, recipients may build certain affordable housing, childcare facilities, schools, hospitals, and other projects consistent with final rule requirements. (also Behavioral health facilities & equipment)

Recipients interested in using funds for capital expenditures (i.e., investments in property, facilities, or equipment) should review the Capital Expenditures section in addition to the eligible use sub-category.

Explanation of why a capital expenditure is appropriate. For example, recipients should include an explanation of why existing equipment and facilities, or policy changes or additional funding to pertinent programs or services, would be inadequate.

Where relevant, recipients should consider the alternatives of improving existing capital assets already owned or leasing other capital assets.

Treasury presumes that the following capital projects are generally ineligible:

 Construction of new correctional facilities as a response to an increase in rate of crime

 Construction of new congregate facilities to decrease spread of COVID-19 in the facility

 Construction of convention centers, stadiums, or other large capital projects intended for general economic development or to aid impacted industries