What are good practices for engaging the community in the allocation of ARP funds?

Municipalities can take several steps to support community engagement.

During the planning process and in advance of community engagement, a municipality should consider the following non-exhaustive strategies:

• setting clear goals;
• establishing frameworks;
• developing timelines;
• selecting targets of the community engagement program; and
• understanding the extent to which the community will have input into the final allocation process.

Municipalities should understand the full breadth of funding sources being made available to local governments through the American Rescue Plan Act (“ARP”) prior to engaging with the community.  These include but are not limited to the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”),[1] several housing-related programs including Emergency Rental Assistance and Emergency Housing Vouchers,[2] and Federal Transit Administration public transportation grants.[3]One of the ARP’s intended goals is to provide relief to vulnerable populations.[4][5][6] Municipalities should consider ways to continuously evaluate and re-evaluate whether the communities hardest hit by COVID-19 are being reached by federal stimulus funds. To that end, municipalities can: (i) identify barriers to outreach; (ii) develop and address ways to engage at-risk communities; and (iii) activate multiple engagement channels.

The CSLFRF Reporting and Compliance Guide requires annual Recovery Plan Performance Reports from states and municipalities with more than 250,000 residents. The Guide states that the reports must describe the municipalities’ community engagement efforts and:

“… describe how your jurisdiction’s planned or current use of funds incorporates written, oral, and other forms of input that capture diverse feedback from constituents, community-based organizations, and the communities themselves. Where relevant, this description must include how funds will build the capacity of community organizations to serve people with significant barriers to services, including people of color, people with low incomes, limited English proficient populations, and other traditionally underserved groups.”[7]

The successful and equitable allocation of stimulus funds requires broad efforts designed to ensure that allocated funds serve the communities and constituencies mentioned above, and these efforts should be reflected in the reports and supported by a variety of inputs.    

Framework and models for community engagement can be found in the reference links below. These range from municipal planning documents to publications by organizations that encourage community participation in public capital allocation.

• Principles of Community Engagement, Clinical and Translational Science Awards Consortium Community Engagement Key Function Committee Task Force on the Principles of Community Engagement, https://www.atsdr.cdc.gov/communityengagement/pdf/PCE_Report_508_FINAL.pdf.
• Community Planning Toolkit, Community Places, https://www.communityplanningtoolkit.org/sites/default/files/Engagement.pdf.
• Community Engagement Guide, Metropolitan Area Planning Council, https://www.mapc.org/wp-content/uploads/2017/08/MAPC-Community-Engagement-Guide-2016.pdf.
• Community Engagement Strategy Chart, Metropolitan Area Planning Council, https://www.mapc.org/wp-content/uploads/2020/12/CE-Strategy-Chart_1.3.18.pdf.
• Community Engagement Recipe Book, Metropolitan Area Planning Council, https://www.mapc.org/wp-content/uploads/2017/08/RECIPEBOOKFINAL8.16.17FINAL.pdf.
• Community Engagement Framework, New York City Department of Health and Mental Hygiene, https://www1.nyc.gov/assets/doh/downloads/pdf/che/community-engagement-framework.pdf.
• Public Engagement Framework, The Praxis Group for the City of Fort Saskatchewan, https://naaee.org/sites/default/files/fsengagementframeworkfinal.pdf.
• Community Engagement Planning Guide, City of Golden, https://www.cityofgolden.net/media/CommunityEngagementPlan.pdf.
• Participatory Budgeting Project, https://www.participatorybudgeting.org/.

Last Revised: July 1, 2021

What guidance and best practices exist for municipalities when receiving and spending funding for COVID-19 vaccine distributions?

One strategy to assist in maximizing multiple funding sources is to, where reasonable, prioritize more restrictive funding and use it first, before tapping into more flexible funding.  For example, it may be advisable to utilize FEMA PA funding first (which is not capped or competitive) for all eligible activities, and then after using FEMA PA, a municipality can use other funding sources for the expenditures ineligible for FEMA reimbursement.  This may help maximize overall federal funding by saving the nonfinite funding programs for use after the finite funding programs.

It will be important to understand the specific documentation and eligibility requirements of each program.  Each municipality will need to demonstrate compliance and validate that its organization met the rules and requirements of the different programs. Failure to meet documentation requirements, or documentation that does not adequately support the municipality’s claim under any given funding source, may result in having to forgo eligible funding.  It will be prudent for municipalities to record and save all documentation, invoices, proofs of payments, procurement methodologies, etc. Below are some points to consider following to help minimize duplication of benefits (“DOB”) and maximize additional funding:

• Documentation should be detailed;
• documentation should be stored centrally and electronically; and
• documentation should be organized logically.

Understanding the differences between Federal funding programs can help a city determine what activity should be applied to each funding source.  Additionally, detailed tracking of costs is often critical to avoid DOB – a requirement that no two funding sources can provide funding for the same item, service, or scope.  In some cases, multiple funding sources can provide funding for the same item, and your organization should identify which funding source will best meet your needs. 

The vaccine distribution process should aim to deploy resources as efficiently as possible. The CDC has identified some best practices municipalities may follow to ensure efficient management of vaccine distribution:^[1]

• Jurisdictions can consider determining a consistent, predictable amount of vaccine to each site or provider. This allows vaccine administrators to schedule patients more efficiently for their second dose within the 28 to 42-day window, if administering Pfizer or Moderna.
• Providers can consider estimating how many patients are due for their second shot on a weekly basis. This requires vaccine distribution to be steady and readily available to the provider. It is recommended that vaccines be closely tracked and allocated in a timely manner.
• Providers should consider prioritizing patients requiring their second dose. A system should be implemented that assesses and determines the appropriate amount of first doses allocated to each site and concurrently prioritizes providers or sites that have patients approaching the end of their 42-day window (six weeks) to receive their second dose. Vaccine distributors must take into consideration the amount of time it takes to place orders and deliver vaccine to providers.
• It is not recommended to hold or place to the side second doses for patients who miss their appointments. Providers should consider evaluating, on a weekly basis, the number of missed appointments and use any remaining as first doses to avoid waste.
• Jurisdictions should consider tracking vaccine administration to identify which providers have a high throughput of vaccine at their location(s), to determine where larger allocation of vaccine can be sent in the future.

Last Revised: May 4, 2021

How can a municipality prepare for potential future disasters?

Preparing for potential future disasters will likely include the following priorities:

• Assessments of disaster response capacity and evaluations of internal structures, processes, and systems that may be able to support the preparation for, response to, and recovery from a disaster;
• Increased public health monitoring;
• Renewed focus on business continuity and emergency operations support;
• Dedication to and investments in infrastructure resilience;
• Identification of potential funding sources;
• Efforts to mitigate long-term economic impacts; and
• Preparation of After-Action Reports or Mid-Action Assessments of the successes/challenges/opportunities for the next pandemic and/or disaster.

The Federal Emergency Management Agency (“FEMA”) has published a report describing how communities can prepare for disasters by developing pre-disaster recovery plans.[1] FEMA states:

Effective pre-disaster planning is an important process that allows a comprehensive and integrated understanding of community objectives. Pre-disaster planning also connects community plans to guide post-disaster decisions and investments. This guide will aid in understanding the key considerations and process that a local government can use to build a community’s recovery capacity and develop a pre-disaster recovery plan.[2]

When identifying potential funding sources, municipalities should monitor any carried insurance policies that may cover some of the effects of a disaster to ensure adequate coverage. Since insurance coverage would need to be exhausted prior to FEMA Public Assistance (“FEMA PA”) funding, understanding insurance coverage available may be a key pre-disaster planning activity.

There are several potential avenues for municipalities to receive funding and assistance both pre- and post-disaster. As an initial step, municipalities should identify all available funding to create a strategy that defines when and how funds should be used. Municipalities should consider: (i) which funding sources are more restrictive vs. less restrictive; and (ii) the short-term and long-term fiscal impact of fund uses.

More restrictive funding can be prioritized for initial use over more flexible funding where reasonable. For example, utilizing FEMA PA funding for all eligible activities before using Coronavirus Relief Funds (“CRF”) derived from the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES”) for expenditures that are ineligible for FEMA reimbursement may result in a more efficient and effective use of federal funding. Additionally, FEMA PA funding typically is not capped or competitive; thus, prioritizing FEMA PA funding may help maximize overall federal funding. In addition, any cost share requirements should also be considered.

The American Rescue Plan Act of 2021 (“ARP”) funding is intended to support recipients in responding to the impact of COVID-19. Some activities eligible for Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) assistance may also support long-term disaster preparedness. Municipalities should conduct reviews to determine eligibility of proposed uses of funds.

The U.S. Department of the Treasury’s (“Treasury”) Final Rule discusses water, sewer, and broadband infrastructure projects as eligible uses of CSLFRF funds.[3] Although these projects are not specifically defined as preparedness activities, municipalities could apply CSLFRF funds to complete projects that would effectively make water, sewer, stormwater, and broadband infrastructure more resilient in the event of potential future disasters. The Final Rule limits all investments in water, sewer, and broadband infrastructure to those that are considered “necessary” investments, meaning those that are:

(1) responsive to an identified need to achieve or maintain an adequate minimum level of service, which may include a reasonable projection of increased need, whether due to population growth or otherwise and (2) a cost-effective means for meeting that need, taking into account available alternatives.[4]

CSLFRF can be used on water and sewer infrastructure projects that are eligible under the Environmental Protection Agency (“EPA”)’s Drinking Water State Revolving Fund (“DWSRF”) program and Clean Water State Revolving Fund (“CWSRF”) program,[5] in addition to other projects meeting the requirements to be considered “necessary” under the Final Rule.[6] For example, Treasury notes in the Final Rule that “some floodplain management and flood mitigation infrastructure projects, including green infrastructure designed to protect treatment works from flood waters and flood impact are currently eligible under the CWSRF and therefore continue to be eligible under the final rule.”[7]

FEMA has authorized several hazard mitigation programs that communities will find useful in planning for future disasters. FEMA’s Building Resilient Infrastructure and Communities (“BRIC”) program is a pre-disaster program that is authorized by the Stafford Act.[8] The BRIC program provides guidance for communities to develop plans to facilitate post-disaster resilient reconstruction.[9]

The Stafford Act includes other FEMA pre-disaster mitigation provisions. The Stafford Act authorizes FEMA to provide increased amounts of hazard mitigation assistance to communities that develop hazard mitigation plans before major disasters occur.[10] These FEMA authorities will be useful for communities that recognize the need for pre-disaster planning.

In addition, the Stafford Act authorizes FEMA to provide several sources of funds for hazard mitigation projects through sections 404 and 406 including:

• Some portion of communities’ costs to implement hazard mitigation projects after major disasters occur[11]
• A portion of the costs of hazard mitigation measures which will reduce future disaster damage[12]
• Hazard mitigation measures specifically at facilities which have already been damaged by major disasters[13]

Although these two authorities are not available before presidential major disaster declarations, they can be useful sources of assistance following disasters.

Last Revised: February 16, 2022

How should a municipality assess and improve equity in its COVID-19 response and recovery?

The U.S. Department of the Treasury’s (“Treasury”) Final Rule expanded the definition of impacted and disproportionately impacted communities and related enumerated eligible uses of Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”). Under the Final Rule, recipients can presume that low-income households were disproportionately impacted by the pandemic.[1] Other disproportionately impacted communities include: (i) households that reside in Qualified Census Tracts (“QCT”); (ii) households receiving services provided by Tribal Governments; (iii) households residing in the U.S. territories or receiving services from these governments; and (iv) households that qualify for certain federal benefits, including:

• Temporary Assistance for Needy Families (TANF);
• Supplemental Nutrition Assistance Program (SNAP);
• Free- and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) programs;
• Medicare Part D Low-Income Subsidies;
• Supplemental Security Income (SSI);
• Head Start and/or Early Head Start;
• Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
• Section 8 Vouchers;
• Low-Income Home Energy Assistance Program (LIHEAP); and
• Pell Grants.[2]

Additionally, the Final Rule expanded the enumerated eligible uses for disproportionately impacted communities:

Disproportionately Impacted Household and Community Assistance:

• Pay for community health workers to help households access health & social services;
• Remediation of lead paint or other lead hazards;
• Primary care clinics, hospitals, integration of health services into other settings, and other investments in medical equipment & facilities designed to address health disparities;
• Housing vouchers & assistance relocating to neighborhoods with higher economic opportunity;
• Investments in neighborhoods to promote improved health outcomes;
• Improvements to vacant and abandoned properties, including rehabilitation or maintenance, renovation, removal and remediation of environmental contaminants, demolition or deconstruction, greening/vacant lot cleanup & conversion to affordable housing;
• Services to address educational disparities, including assistance to high-poverty school districts & educational and evidence-based services to address student academic, social, emotional, and mental health needs; and
• Schools and other educational equipment & facilities.[3] 

Disproportionately Impacted Small Business Assistance:  

• Rehabilitation of commercial properties, storefront improvements & façade improvements;
• Technical assistance, business incubators & grants for start-up or expansion costs for small businesses; and
• Support for microbusinesses, including financial, childcare, and transportation costs.[4]

Disproportionately Impacted Nonprofit Assistance:

Recipients may identify appropriate responses that are related and reasonably proportional to addressing the following disproportionate impacts:

• Nonprofits operating in Qualified Census Tract;
• Nonprofits operated by Tribal governments or on Tribal lands; and
• Nonprofits operating in the U.S. territories.[5]   

Municipalities should consider using CSLFRF to assist disproportionately impacted communities in order to support long-term recovery from the public health emergency.

Responding to the Executive Order

Municipalities should consider taking the following actions to assess and improve equitable COVID-19 response and recovery with the President’s Executive Order[6] in mind: 

• Assess equity across COVID-19 response and recovery measures to date, including, but not limited to, provision of healthcare, vaccination administration and outreach, and positioning programs to mitigate adverse economic impacts of COVID-19. Municipalities may use pre-existing tools in helping to identify typically underserved or most-at-risk communities.
  • For example, municipalities could use the CDC’s Social Vulnerability Index to identify community needs or most-at-risk communities based on socioeconomic, demographic, and spatial information. Built on census data, this information may help to establish baselines and targets for outreach and/or support. 
• Refer to FEMA’s Advisory Civil Rights Considerations During COVID-19 Vaccine Distribution Efforts for a checklist of considerations to plan for equitable vaccine distribution. Additionally, FEMA has included an Equity Job Aid in the COVID-19 Medical Care Policy that outlines expectations for addressing equity in vaccine administration programs, including required reporting and data collection. [FEMA Policy 104-21-004]
• Consult the U.S. Department of Housing and Urban Development (“HUD”)’s Disaster Impact and Unmet Needs Assessment Kit to identify and prioritize critical unmet needs for long-term community recovery. While this assessment is intended to be completed after a disaster, a similar framework can be argued to apply to communities or areas that qualify under HUD’s National Objectives
• Evaluate whether highest-risk communities and underserved populations are being reached then identify and address potential barriers for outreach and engagement by:
  • Assessing if common barriers to public information, such as access to technology or language may be impacting accessibility or engagement for highest-risk communities. If possible, explore feasible options to help expand points of communication or outreach, or assess primary language needs of highest-risk communities.
  • Determining if barriers to accessing services or resources, such as timing of available programs, location, or access to public transportation are limiting engagement for highest-risk communities. Municipalities may consider providing additional resources, or changing locations or times to help expand access for highest-risk communities.
• Leverage existing relationships with community groups, non-profits, front-line workers, or community members to understand local concerns or issues in accessing information or resources.
• Document efforts to incorporate equity or comply with non-discrimination requirements in recovery efforts and monitor additional requirements that may be put in place for federally funded programs.
• Assess if equity concerns are captured in your response framework, operational plans, or after-action or mid-action reports. If they are not addressed, update them to include how your municipality addressed equity concerns to help demonstrate compliance. 
• Document feedback collected through evaluation processes, including efforts to address potential barriers or adaptations to processes to better address equity concerns.
• For federal funding sources with specific compliance requirements related to equity, like FEMA’s updated guidance for vaccination administration, assess potential gaps in data or information to be able to meet requirements both in data collection, data submission, and critical reporting timelines. Document efforts to close those gaps, as well.
• Learn from other municipalities and states on their approach to incorporating equity in COVID-19 response, or from organizations that focus on equity programming outside of disaster response.
• Consult the National League of Cities’ Task Force Report on centering equity in economic development, which includes recommendations and case studies that may be useful for municipalities planning economic development or recovery programs with COVID-19 relief funding.
• Refer to Treasury’s American Rescue Plan: Centering Equity in Policy Making, which includes direct support to American families, Housing Equity and Access, and State and Local Aid.
• Lastly, review the Georgetown Climate Center’s published research, tools, and frameworks for communities to assess and plan for equitable disaster preparedness, response, and recovery. This resource is not COVID-19 specific, but does include tools specific to community engagement, data collection, and needs assessments, including in areas of public health, economic recovery, and infrastructure projects.

Last Revised: March 11, 2022

What are some best practices our municipality can undertake to help us recoup reimbursable costs traceable to COVID-19 oversight and compliance?

For most federal grants, allowances for administrative costs are generally eligible, though usually up to a capped percentage of the total award. This includes costs associated with ensuring compliance with the terms and conditions of the funding, including collecting and maintaining documentation; preparing and submitting required reporting; and establishing policies, procedures, and processes to manage the funding.

Administrative costs vary between funding sources, with some having specific requirements or additional conditions for recipients. For example:

• The Federal Emergency Management Agency (“FEMA”) Public Assistance can reimburse up to 5% of an applicant’s total obligated funding for a given disaster, based on direct, documented costs. Submitted as a separate project, FEMA can cover documented costs at 100% federal cost share for contract, labor (including regular time and overtime for internal employees), supplies, or equipment used for specific activities to develop, manage, report on, and close out FEMA Public Assistance grants. However, FEMA will not cover indirect costs or costs that cannot be allocated to specific grant management activities.[1]  
• The U.S. Department of the Treasury’s (“Treasury”) Coronavirus State and Local Fiscal Recovery Fund (“CSLFRF”) generally permits the use of funds for program administration. Treasury includes the cost of facilities, administrative functions (e.g., a director’s office), and the costs of consultants to support effective management and oversight as indirect costs that represent the overhead cost of administering the CSLFRF program.[2]  
• HUD’s Community Development Block Grants (“CDBG”) funding, including Disaster Recovery (“DR”) and COVID-19 (“CV”) programs generally permit the use of funds for administrative costs to include direct costs, indirect costs, and planning costs up to 20% of their CDBG allocation. HUD makes a distinction between Activity Delivery Costs – the actual costs necessary for the direct provision of a HUD funded program – and Program Administration Costs – eligible costs for the management of the funding overall, including developing policies and procedures, reporting and financial management, collecting and maintaining documentation, and monitoring compliance.[3]

When preparing to track and manage costs associated with oversight and compliance, some considerations municipalities should consider include:

• Reviewing the funding source’s or grant’s terms and conditions, guidance, and Frequently Asked Questions (“FAQs”) provided by the funding agency for specific details on allowable management or program administration costs.
• Developing and monitoring a budget specific for management costs for the fund, including staffing, additional resources, or technical assistance your municipality may need.
• Updating local policies and procedures specific to the management of federal funding to include policies, procedures, and processes to track, allocate, and document management costs, including directions to employees tracking or allocating their time to the management of the funds.
  • If a federal fund permits the allocation of indirect costs to the management of federal funds, check that the indirect cost rate is consistent with the permissions outlined by the terms and conditions of the grant or the Federal Agency’s Negotiated Indirect Cost Rate and federal regulation on indirect cost calculation.[4]
• Establishing specific codes for timekeeping or purchasing specific to management of funds to help track and allocate costs.
• Documenting costs clearly and with sufficient detail to demonstrate how it was related to the management of the federal fund. Management costs, like other federally funded costs, are generally subject to federal regulations on Cost Principles (2 CFR 200 Subpart E), must be justified as necessary and reasonable, and subject to audit.

Last Revised: March 31, 2022

Where can we find key components and information on the allowable uses of the COVID-19 relief packages?

Federal agencies allocating funding under the COVID-19 relief packages have generally provided centralized locations to access policy, guidance, reporting, and auditing requirements. Frequently Asked Questions (“FAQs”) can help determine how funding may or may not be used by municipalities.[1] The following is a list of some of the federal agencies managing COVID-19 relief funding, and links to where they are aggregating resources, guidance, and FAQs.

• The U.S. Department of the Treasury (“Treasury”) has received $975 billion in COVID-19 relief funding including direct assistance to individuals and funding allocated to states to cover costs directly related to COVID-19 response and recovery or to mitigate the economic impacts of COVID-19. [Treasury COVID-19 Relief Hub.[2]] Some of the noteworthy programs for Treasury funds pertinent to municipalities are:
  • Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) – for direct assistance to support long-term recovery from the pandemic including supporting public health expenditures, addressing negative economic impacts caused by the public health emergency, replacing lost public sector revenue, providing premium pay for essential workers, and investing in water, sewer, and broadband infrastructure.[3] Treasury released the CSLFRF Final Rule, which is effective April 1, 2022, allowing for more flexibility in expenditures.[4]
  • Emergency Rental Assistance Program (“ERAP”) – for direct rental assistance to households for rent and utilities.[5]
  • Capital Projects Fund ("CPF") – for states, territories, and tribal governments to carry out capital projects to address infrastructure challenges impacting communities’ access and directly enable work, education, and health monitoring, including remote options, in response to the public health emergency.[6] Treasury updated the CPF FAQ in January 2022.[7]
  • Homeowner Assistance Fund ("HAF") – for states, territories, and tribal governments to provide direct relief to vulnerable homeowners.[8] Treasury updated the HAF-Guidance in February 2022.[9]
  • State Small Business Credit Initiative (“SSBCI”) - provides recipient jurisdictions funding for: (1) credit and investment programs for existing small businesses and start-ups, and (2) technical assistance to small businesses applying for SSBCI funding and other government small business programs.[10]
• The U.S. Department of Housing and Urban Development (“HUD”) has allocated $12.4 billion in COVID-19 relief funding for programs directed at housing relief, supporting vulnerable communities, or supporting economic recovery efforts in line with HUD’s National Objectives.[11] [HUD Coronavirus Hub.[12]]
  • For cities with direct allocations of Community Development Block Grant (“CDBG”) formula programs, HUD is consolidating policy, guidance, and federal register updates specific to CDBG, Community Development Block Grant Disaster Recovery (“CDBG-DR”), and Community Development Block Grant CARES (“CDBG-CV”) allocations. [CDBG COVID-19 Resources.[13]]
• The U.S. Department of Health and Human Services (“HHS”) has received $484.5 billion for COVID-19-related grant programs.[14] HHS is centralizing resources for funding including overviews of available funding, application information, funding-specific guidance, FAQs, and reporting and auditing requirements. [HHS Coronavirus Grant Opportunities and Guidance.[15]]
• Over $263 billion has been allocated to the Coronavirus Education Stabilization Fund to support state and local education facilities recover and rebuild from the COVID-19 pandemic.^[16] The U.S. Department of Education’s COVID-19 Resources for Schools, Students, and Families hub includes a funding overview, guidelines and requirements, and FAQs, as well as specific guidance to direct funding programs:[17]
  • Elementary and Secondary School Emergency Relief Fund (ESSER)[18]
  • Higher Education Emergency Relief Fund (HEERF)[19]
  • Governor’s Emergency Education Relief Fund (GEERF)[20]
• The U.S. Department of Transportation (“USDOT”) has received $106.3 billion in funding [USDOT COVID-19 Relief Funding] available to support COVID-19 preparedness and recovery measures specific to public transportation, airports and air travel, and other transit infrastructure.[21] [Transportation: Coronavirus Relief Resources.[22]]
• The Federal Communications Commission (“FCC”) awarded $450 million in COVID-19 relief funding [FCC Funding] to support communication needs related to telehealth.[23] The FCC also administered the $7.1 billion Emergency Connectivity Fund that supported eligible schools and libraries and the $3.2 billion Emergency Broadband Benefit that supported households struggling to pay for internet service [FCC Coronavirus Overview].[24] As of March 1, 2022, the FCC is continuing to support household broadband through the Affordable Connectivity Program.[25]

Municipalities may find it challenging to determine which funding source to utilize to cover a cost that may be eligible under several different funding sources. Some strategies for making that determination include:

• Position more restrictive funding (e.g., FEMA Public Assistance Program[26]) to be prioritized and used first, before tapping into more flexible funding (e.g., CSLFRF), where reasonable. 
• Understand the specific documentation, timelines, and eligibility requirements of each program as they may differ.
• Track costs to avoid duplication of benefits when funding across multiple funding sources.

Municipalities should also refer to Treasury’s Personal Finance and Consumer Protection - Steps for Quicker Financial Relief to determine how funds can address immediate financial needs of individuals and households including:

• General Information for Bank and Credit Union Customers;
• Mortgage and Housing Assistance;
• Consumer Credit and Other Loans and Debt;
• Student Loans;
• Telephone, Cellphone, and Internet;
• Utility Bills (Water, Gas/Oil, Electricity); and
• Other Help with Finances.[27]

Last Updated: March 31, 2022

May municipalities use ARP funds to promote increased home ownership among low-income residents or increase energy efficiency in homes?

The American Rescue Plan Act (“ARP”) of 2021 was signed into law on March 11, 2021, and includes numerous provisions directly related to increasing homeownership among low-income individuals and families. Provisions within the ARP also increase appropriations for existing programs that address the weatherization and energy efficiency of homes.[1]  

Promoting increased home ownership among low-income residents

Section 9901 of the ARP amended the Social Security Act by creating the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”), administered by the U.S. Department of the Treasury (“Treasury”). The statute provides municipalities with significant programmatic discretion in determining how to allocate funds for these purposes. Treasury published its Final Rule to provide guidance about recipients’ use of this assistance, and the Final Rule contains two provisions that are particularly relevant to this question. 

31 Code of Federal Regulations (CFR) 35.6(b)(3)(ii)(A)(1) provides that this assistance can be used to: 

Respond…to the negative economic impacts of the public health emergency for purposes including: Assistance to households and individuals, including…emergency housing needs…or weatherization…. [2]

In addition, 31 CFR 35.6(b)(3)(ii)(A)(5) authorizes the use of this assistance to: “Develop…repair, and operat(e)…affordable housing and services or programs to increase long-term housing security….”[3] Therefore, it is clear that recipients of CSLFRF assistance, including municipalities, have substantial discretion to use this funding to address housing needs and energy efficiency in homes.

In addition to these provisions in the Final Rule, Treasury also elaborates on the issues raised in the question in the Supplementary Information discussion which accompanies the Final Rule. Treasury states:

the final rule presumes that an expanded set of households and communities are “impacted” or “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities….the final rule provides a broader set of enumerated eligible uses available for these communities as part of COVID-19 public health and economic response, including making affordable housing, childcare, and early learning services eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities.[4]

Treasury also states in the Supplementary Information discussion:

In response to requests for elaboration on the types of eligible services for eviction prevention, Treasury has provided further guidance that these services include “housing stability services that enable eligible households to maintain or obtain housing, such as housing counseling, fair housing counseling, case management related to housing stability, outreach to households at risk of eviction or promotion of housing support programs.[5]

Treasury also notes in the Supplementary Information discussion that:

eligible services…include: rent, rental arrears, utility costs or arrears…mortgage payment assistance…mortgage principal reduction…. This eligible use category also includes emergency assistance for individuals experiencing homelessness….The final rule also clarifies and expands the ability of recipients to use SLFRF funds to address the general lack of affordable housing and housing challenges underscored by the pandemic.[6]

All of these points underscore the discretion that recipients have in using CSLFRF assistance to address housing needs and energy efficiency initiatives. 

Along with consulting the initial Treasury guidance for determining allowability of specific programmatic ideas under the CSLFRF, municipalities may also consider developing a high-level plan for addressing how they will utilize CSLFRF program funds to address barriers to home ownership and residential energy efficiency. The following is a non-exhaustive list of steps a municipality could take in developing this framework:

• Conduct a comprehensive capacity assessment and unmet needs analysis; 
• Form a cross-sector recovery oversight committee; 
• Engage with the served community to identify key needs; 
• Assess and catalog available funding to prioritize needs; and 
• Develop short- and long-term strategies to implement ARP funds. 

In addition to the Final Rule and its Supplementary Information narrative, Treasury has also issued a series of Frequently Asked Questions (“FAQs”) to provide further guidance about the use of CSLFRF assistance. FAQs 2.5, 2.6, 2.11, 2.21, 4.7, and 4.8 all address this question, but perhaps most noteworthy among these FAQs are 2.11. FAQ 2.11 states in pertinent part:

• Treasury will presume that certain types of services are eligible uses when provided in a Qualified Census Tract (QCT), to families living in QCTs….Eligible services include… Building stronger neighborhoods and communities, including: supportive housing and other services for individuals experiencing homelessness, development of affordable housing, and housing vouchers and assistance relocating to neighborhoods with higher levels of economic opportunity.[7]

In addition, FAQ 4.7 states in pertinent part:

Recipients may use Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households – such as rent, mortgage, or utility assistance – for economic harms experienced or costs incurred by the household prior to March 3, 2021 (e.g., rental arrears from preceding months), provided that the cost of providing assistance to the household was not incurred by the recipient prior to March 3, 2021.[8]

In addition to the CSLFRF authorities discussed above, Subtitle B of Title III of the ARP contains several provisions that relate to the question. The Department of Housing and Urban Development (“HUD”) published a fact sheet that outlines housing-related opportunities contained within those provisions of ARP.[9] One of the most significant of these authorities in responding to this question is the newly created Homeowners Assistance Fund (“HAF”) Program, which is authorized by Section 3206 of ARP. HAF will make funds available to provide mortgage payment assistance and to promote housing stability. 

Increasing energy efficiency in homes

In addition to 31 CFR 35.6(b)(3)(ii)(A)(5), which (as noted above) authorizes the use of CSLFRF assistance to address weatherization needs, ARP includes additional appropriations to implement the Low-Income Home Energy Assistance Program (“LIHEAP”). LIHEAP was originally enacted in 1981 and helps low-income households with their home energy bills.[10]

Last Updated: February 16, 2022

How does the ARP impact deadlines for the Emergency Rental Assistance Program?

What are some best practices and considerations that our municipality should understand in developing our Emergency Rental Assistance Program (“ERA”)?

The Emergency Rental Assistance Program (“ERA”) makes funding available to households for rental and utility assistance. Two separate programs have been established: 

• ERA1 provides up to $25 billion under Division N, Subtitle V of the Consolidated Appropriations Act of 2021, P.L. 116-260; and
• ERA2 provides up to $21.55 billion under section 3201 of the American Rescue Plan Act of 2021 (“ARP”).[1]

The funds are provided by the U.S. Department of the Treasury (“Treasury”) directly to states, U.S. territories, local governments, and (in the case of ERA1) Indian tribes.[2] Grantees use the funds to provide assistance to eligible households through existing or newly created rental assistance programs.[3]

Treasury has published ERA guidance to provide clarity with respect to the use of ERA assistance, as well as the relationship between ERA and other federal funding streams. Below are some practices Treasury has outlined to help grantees deliver relief to renters in need:

• Encourage partnerships with courts to actively prevent evictions and develop eviction diversion programs.
• Help families experiencing homelessness gain access to assistance.
• Remove language and cultural barriers in securing emergency rental assistance.
• Provide a streamlined payment option for utility providers and large landlords to make accessing emergency rental assistance on behalf of multiple tenants easier and more attractive.
• Encourage grantee coordination to reduce the burdens, and delays in providing assistance created by differences in locally imposed requirements among programs operating in the same regions.
• Highlight grantees implementing the most effective practices to ensure that assistance quickly reaches the renters who need it most.[4]

Recipients of ERA funds should also consider implementing the following policies:

• Provide clear program policy and guidance. Provide transparency to all stakeholders regarding the path from application intake to payment.
• Make community and stakeholder outreach a priority.   
• Build a call center and case management teams that have clear directives. If possible, let case managers focus on submitted applications while call center staff help people get applications to a submitted status.
• Have clear criteria for prioritizing applications. The volume of received applications might require a municipality to triage. Give programmatic direction on how staff should prioritize reviews.
• Be mindful of data/document management and governance. When possible, utilize a portal or some application to manage the data and documents required for the program. With even a modest volume of applicants, this can quickly become overwhelming and cumbersome.
• Every interested party, including Treasury, will have reporting requirements. Be mindful of how data is entered and stored by each interested party to minimize the effort involved in creating reports.
• A municipality may have many potential partners/organizations in this space already. Take advantage of those who wish to partner with a municipality, but make sure their role in the program is well-defined.
• Be mindful of vulnerable populations when developing documentation requirements. Some applicants will have difficulty producing supporting documents that demonstrate eligibility criteria such as income or COVID-19 impact.
• Protect and secure Personally Identifiable Information (PII). Bank account numbers, addresses, social security numbers, and other private information must be protected. Security protocols should include, as a minimum, waste, fraud, and abuse protections through second-and-third-party verifications, IT security capabilities, comprehensive oversight, and monitoring techniques.
• Provide information about ERA program in plain language to improve access for those with limited English proficiency.

Other key points regarding ERA and associated reporting requirements include the following:

• Funding should be used in compliance with the unique terms of ERA1 and ERA2. The Treasury’s guidance and FAQs apply to both ERA1 and ERA2, except where differences are specifically noted. References to “the ERA” in the FAQs apply to both ERA1 and ERA2 and will be supplemented by additional guidance.[5]
• Treasury also provides the following guidance regarding data grantees should collect from households which receive rental assistance:[6]
  • At a minimum, grantees should consider how best to anticipate the need to collect from households and retain records on the following:
    • Address of the rental unit;
    • For landlords and utility providers, the name, address, and Social Security number, tax identification number, or DUNS number;
    • Amount and percentage of monthly rent covered by ERA assistance;
    • Amount and percentage of separately stated utility and home energy costs covered by ERA assistance;
    • Total amount of each type of assistance provided to each household (i.e., rent, rental arrears, utilities and home energy costs, utilities and home energy costs arrears, and other expenses related to housing incurred due directly or indirectly to the COVID-19 outbreak);
    • Amount of outstanding rental arrears for each household;
    • Number of months of rental payments and number of months of utility or home energy cost payments for which ERA assistance is provided;
    • Household income and number of individuals in the household; and
    • Gender, race, and ethnicity of the primary applicant for assistance.[7]
  • Grantees should also collect information as to the number of applications received in order to be able to report to Treasury the acceptance rate of applicants for assistance.[8]
• Grantees should require ERA recipients, including tenants and landlords, to commit in writing to use ERA funds only for the intended purpose before issuing payments. Grantees are not required to obtain documentation evidencing the use of ERA funds and are expected to apply reasonable fraud-prevention procedures and investigate and address potential instances of fraud that they become aware of. [9]
• Programs are required to prioritize assistance to low-income households and those with members who have been unemployed for more than 90 days, particularly those with incomes below 50 percent of the area median income. Grantees will be required to report their plans for achieving this objective.[10]

In addition, Treasury has published the following to assist grantees understand and comply with the ERA reporting requirements:

• Q&As on ERA Reporting V 1.0 (September 27, 2021);
• ERA Reporting Guidance v 2.0 (October 07, 2021); and
• Addendum to ERA Reporting Guidance – Clarifications and Guidance for Financial Reporting on Recipient and Subrecipient Activities (October 28, 2021).

As a result of engaging with ERA grantees across the country on program strategies, Treasury has identified the following promising practices:

• Partnerships in Program Implementation
• Culturally and Linguistically Competent Outreach
• Intentional Landlord Engagement
• Partnerships with Broader Eviction Diversion Programs
• Collaboration with Local Utility Companies
• Adjusting Program Strategies to Meet Local Needs
• Making the Application Process Simple and User Friendly
• Using Fact-Specific Proxies to Simplify Documentation Requirements
• Automation Supporting Application Prioritization
• Data-Driven Program Strategies
• Using Commitment Letters to Assist Prospective Renters[11]

Although this question relates specifically to ERA, it is noteworthy that the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) may also be used to provide some forms of rental and related assistance. Some of Treasury’s Frequently Asked Questions (“FAQs”) address the use of CSLFRF assistance for housing needs. For example, FAQ #2.5 asks: “What types of services are eligible as responses to the negative economic impacts of the pandemic?” Treasury’s response states in pertinent part:

Eligible uses in this category include assistance to households…Assistance to households includes…rent, mortgage, or utility assistance (and) counseling and legal aid to prevent eviction or homelessness….[12]

In addition, Treasury’s FAQ #2.21 asks whether CSLFRF funds can be used for eviction prevention efforts or housing stability services. Treasury’s response states in pertinent part:

Yes. Responses to the negative economic impacts of the pandemic include “rent, mortgage, or utility assistance [and] counseling and legal aid to prevent eviction or homelessness.” This includes housing stability services that enable eligible households to maintain or obtain housing, such as housing counseling, fair housing counseling, case management related to housing stability, outreach to households at risk of eviction or promotion of housing support programs, housing related services for survivors of domestic abuse or human trafficking, and specialized services for individuals with disabilities or seniors that supports their ability to access or maintain housing.

This also includes legal aid such as legal services or attorney’s fees related to eviction proceedings and maintaining housing stability, court-based eviction prevention or eviction diversion programs, and other legal services that help households maintain or obtain housing.[13]

Last Updated: February 16, 2022

How should cities prioritize and layer federal funding?

A municipality can engage in some general best practices to assist with the prioritization of funds. The following process is just one example of a way a municipality can approach this issue:

• Assess relative need.
• Determine the total assistance available for each need. Some funding sources can address a broad variety of needs, while others have a narrower field of allowable activities.  Aligning the funding with more specific use restrictions to projects addressing those eligible uses will allow the funding with a wider range of allowable uses to address other needs.    
• Compare expenditure deadlines with project timing requirements. If a project will run 18 months and requires 3 funding sources (all with different expenditure deadlines), the municipality may need to coordinate the use of each funding source (utilizing the sources with most restrictive timelines first) to maximize the funding and not put the project at risk.  
• Understand that Non-duplicative assistance is excluded from final benefit calculation. Examples of non-duplicative assistance include:funds used for a different purpose;
  • funds used for the same purpose, but a different eligible use;
  • funds not available to the applicant;
  • private loans; or
  • other assets or lines of credit.  
• Match unmet needs with allowable uses to secure funding.

Last Revised: April 14, 2021

How can a municipality avoid duplication of benefits?

Municipalities should consider conducting a duplication of benefits analysis from the earliest stages of the process.  This duplication of benefits analysis should be completed before receiving or providing federally funded assistance.

A municipality may complete a duplication of benefits analysis by developing an overall budget that demonstrates the funding needed for the activity and the funding reasonably anticipated (similar to a “sources and uses” analysis for a housing or economic development project). This budget should include all Federal and non-Federal funding, as well as in-kind donations, keeping in mind the specific requirements and restrictions of each funding source. If the budget shows that the need is equal to or greater than the funding sources, there is no duplication of benefits.

Municipalities can take other steps, including but not limited to requiring beneficiaries to disclose all other financial assistance they have applied for or received, provide a self-certification indicating that they have not received a duplicative benefit, or fill out a questionnaire listing potentially duplicative assistance that they have already received or reasonably anticipate receiving.   In addition, municipalities can consider requiring applicants to disclose any new grants approved or other applications for assistance submitted in the period between their application submission to your municipality and its ultimate approval.

Lastly, if your city has an overlapping jurisdiction with another municipality or county, both parties should consider coordinating efforts to avoid duplication of benefits before they start distributing benefits. For example, with rental assistance, a city, county or state might all have rental assistance programs that could potentially provide assistance to the same household for the same period of time.

Last Revised: April 14, 2021

What controls should a municipality have in place for receiving and distributing COVID funds?

I.  Guiding Resources on Internal Controls

A. The Green Book

Standards for internal controls in the Federal Government are collectively known as the “Green Book,” which is a US Government Accountability Office (“GAO”) publication that sets forth standards for an effective internal control system for federal agencies.^[1]

B. COSO Framework

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) has created a framework to help​​ organizations design and implement internal controls.^[2] COSO is a private sector organization and not part of the GAO.  COSO offers a framework that provides useful tools, advice and directions on how to create and apply internal controls in addressing operations and reporting objectives, and also clarifies the requirements for effective internal controls.  COSO has also issued Illustrative Tools for Assessing Effectiveness of a System of Internal Control and the Internal Control over External Financial Reporting (“ICEFR”): A Compendium of Approaches and Examples. The Illustrative Tools are intended to assist entities when assessing whether a system of internal control meets the requirements set forth in the framework.   

II.  The Uniform Administrative Guidance

A.  Generally

The Uniform Administrative Guidance (“UAG”), which is set forth in the Code of Federal Regulations at 2 CFR § 200 and issued by the Office of Management and Budget (“OMB”), includes provisions which lay out internal control requirements. 

The CARES Act and the CRF reference the UAG standards. The US Treasury sets out guidance and responses to FAQs, which include specific reference to internal controls and aspects of the UAG that apply to the CARES Act.  (A potentially useful resource may be found here: https://www.whitehouse.gov/wp-content/uploads/2020/12/2020-Compliance-Supplement-Addendum_Final.pdf ). 

The UAG provisions referenced above, which set forth guidance for internal controls over the use and distribution of CRF and CARES Act funds, may apply in a similar way to the ARP. However, explicit guidance on establishing and applying internal controls with respect to the ARP has not yet been decided or disseminated.

B. Potentially Relevant UAG Provisions^[3]

Below are potentially relevant UAG provisions relative to internal controls.  The following include definitions, processes overview, and regulatory considerations.

2 CFR § 200.61 Internal Controls 

“Internal Controls means a process, implemented by a non-Federal entity, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:  

(a) effectiveness and efficiency of operations;  

(b) reliability of reporting for internal and external use; and  

(c) compliance with applicable laws and regulations.” 

2 CFR § 200.62 Internal control over compliance requirements for Federal awards.  

“Internal control over compliance requirements for Federal awards means a process implemented by a non-Federal entity designed to provide reasonable assurance regarding the achievement of the following objectives for Federal awards:  

(a) Transactions are properly recorded and accounted for, in order to:  

     (1) permit the preparation of reliable financial statements and Federal reports;  

     (2) maintain accountability over assets; and  

     (3) demonstrate compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.

(b) Transactions are executed in compliance with:  

     (1) federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program;  

     (2) any other Federal statutes and regulations that are identified in the Compliance Supplement; and  

(c) funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.”  

According to the Federal Registrar^[4] issued by the U.S. Treasury dated January 15, 2021, fund payments are subject to the requirements in the Uniform Guidance 2 CFR 200.303 regarding internal controls.

2 CFR § 200.303 Internal Controls: 

“The non-Federal entity must:   

(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  

(b) Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. 

(c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. 

(d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings.  

(e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” 

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75883, Dec. 19, 2014]  

III. Conclusion

In addition to the potentially applicable UAG 2 CFR § 200 provisions summarized above, it is important to follow local jurisdictional rules and guidelines for internal controls.  Consideration of the guidance contained in the “Green Book” or the “Internal Control Integrated Framework” (COSO) would be prudent, as well as any guidance which may be forthcoming relative to internal controls and the ARP.