The resounding answer is "Yes!"
There have been many questions regarding eligible expenditures and the use of Coronavirus State and Local Fiscal Recovery Funds (CSFRF/CLFRF) from the American Rescue Plan Act (ARPA). We’ll go over the ones we’ve heard as well as questions addressed by the Department of Treasury.
When it comes to grant management systems and procuring technologies to ease this complicated process, the good news for governments is yes, you can use your ARP Act funds as eligible expenditures to purchase a grant management system.
Several legal citations from the ARP Act, Treasury FAQs, and the Interim Final Rule are referred to when answering questions regarding procurement, retention and storage of records, incurred expenses, and other issues during emergent times.
What are eligible uses for my ARP funding?
A Treasury Fact Sheet from May 2021 states that the funds may be used to:
Support public health expenditures: COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff.
Address negative economic impacts caused by the public health emergency: Economic harms to workers, households, small businesses, impacted industries, and the public sector.
Replace lost public sector revenue: Funding to provide government services to the extent of the reduction in revenue experienced.
Provide premium pay for essential workers: Additional support to those who bear the greatest health risks because of their service.
Invest in water, sewer, and broadband infrastructure: Make necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and expand access to broadband internet.
How do I know if a specific use is eligible?
According to the Treasury FAQs, Fiscal Recovery Funds must be used in one of the four eligible use categories specified in the American Rescue Plan Act and implemented in the Interim Final Rule.
These four categories include:
Responding to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
Responding to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the State, territory, or Tribal government that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;
The provision of government services to the extent of the reduction in revenue of such State, territory, or Tribal government due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year of the State, territory, or Tribal government prior to the emergency; or
Making necessary investments in water, sewer, or broadband infrastructure.
Do these funds have to be spent within a certain time period?
Like the Coronavirus Relief Funds of the CARES Act, these funds have dates of availability. All funds must be obligated within the statutory period between March 3, 2021 and December 31, 2024, and expended to cover such obligations by December 31, 2026 or returned.
Uniform Guidance Definitions of expenditure and obligation:
- Obligation: When used in connection with a non-Federal entity's utilization of funds under a Federal award, obligations means orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period.
- Expenditure: Charges made by a non-Federal entity to a project or program for which a Federal award was received.
Can recipients use funds for administrative purposes?
Recipients may use funds to cover the portion of payroll and benefits of employees corresponding to time spent on administrative work necessary due to the COVID–19 public health emergency and its negative economic impacts. This includes–but is not limited to–costs related to disbursing payments of Fiscal Recovery Funds and managing new grant programs established using Fiscal Recovery Funds.
If a use of funds is not explicitly permitted in the Interim Final Rule as a response to the public health emergency and its negative economic impacts, does that mean it is prohibited?
The Interim Final Rule contains a non-exclusive list of programs or services that may be funded as responding to COVID-19 or the negative economic impacts of the COVID-19 public health emergency, along with considerations for evaluating other potential uses of Fiscal Recovery Funds not explicitly listed.
The Interim Final Rule also provides flexibility for recipients to use Fiscal Recovery Funds for programs or services that are not identified on these non-exclusive lists, but which meet the objectives of section 602(c)(1)(A) or 603(c)(1)(A) of 2 CFR 200 by responding to the COVID-19 public health emergency with respect to COVID-19 or its negative economic impacts.
Need help managing your stimulus funding? Reach out to see how our grants management software can help.
Grant Writing: Thou Shalt Not Supplant
But you may supplement. If you’ve ever read through a NOFA from the Department of Education,...
COVID-19 Funding: Top FAQs for State and Local Governments
Top Trends in CARES Act Funding for Federal Grants Management
This blog is an excerpt from our free guide, “Top Trends in CARES Act Funding for Federal Grants...