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Lost Revenue & Revenue Replacement

Do municipalities need to follow Uniform Guidance procurement rules to use CSLFRF revenue replacement money for government services? For example, if a convention center component plans to do marketing, does it need to follow Uniform Guidance?

The U.S. Department of the Treasury’s (“Treasury”) Final Rule governs the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) established under the American Rescue Plan Act.

Under the Final Rule, a recipient must follow the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”)[1] and federal, state, and local laws as applicable.[2]

The Final Rule specifies that as municipalities design and implement projects, they should establish a framework that ensures compliance with the Uniform Guidance. A strong compliance framework mitigates the risk of fraud, waste, and abuse of federal funds. Municipalities should consider developing internal controls and management practices, procurement and contracting standards, risk-based assessments for subawards, and subrecipient monitoring requirements when developing their compliance framework.

The Uniform Guidance also sets forth cost principles[3] and procurement requirements[4] that municipalities should follow when handling marketing expenses. Specifically, municipalities should consider including procurement controls in their purchasing or procurement policies, including (but not limited to):

  • Provisions addressing a competitive bidding process;
  • Standards of conduct for contract performance;
  • Prohibitions on dealing with suspended or debarred parties;
  • Provisions setting forth procedures to avoid acquisition of unnecessary items;
  • Record retention procedures;
  • Provisions addressing the allowable use of time and materials;
  • Dispute resolution provisions; and
  • Provisions addressing bonding requirements.

When developing internal controls and a compliance framework, municipalities should ensure that projects only fund eligible activities, and that project staff, subrecipients, and/or contractors follow the Final Rule, Uniform Guidance, and federal, state, and local laws, as applicable.

Last Updated: April 11, 2022