Are ARP funds "emergency" funds and, if so, do they therefore have the flexibility of emergency dollar disbursement protocols?

The American Rescue Plan Act (ARP) of 2021 recently passed and there are no compliance supplements from prior years for reference. Municipalities should thus exercise caution; a municipality that treats ARP funds as subject to emergency dollar disbursement protocols risks its ability to use the Coronavirus Local Fiscal Recovery Fund (CLFRF) monies for those purposes. On May 10, 2021, Treasury published guidance on the ARP and its various funding processes, but did not address whether the ARP funds will have the flexibility of emergency dollar disbursement protocols.

As background the ARP’s CLFRF is a form of federal financial assistance, making it subject to many of the provisions of the Uniform Guidance (2 CFR 200). ^[1]  

In question number 46 of the CLFRF Frequently Asked Questions (“FAQ”) ^[2] document issued on May 10, 2021, the U.S. Department of Treasury (Treasury) addressed which provision of 2 CFR Part 200 will be applicable:

“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.”

In general, in the absence of any specific “emergency dollar disbursement protocols” language from Treasury, municipalities should follow their usual procurement policies and practices.  If a municipality would not pursue a disbursement transaction with its own funding, the municipality in all likelihood ought not consider doing so with CLFRF funds.  

Last Revised: May 24, 2021