Program

COVID-19 Federal Assistance e311

Topics

Due Diligence & Fraud Protection, Procurements

How should a municipality ensure procurements involving federal funds meet requirements?

Generally, Federal grants and aid, including the American Rescue Plan (ARP) Coronavirus Local Fiscal Recovery Funds (CLFRF), are subject to the provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) (the Uniform Guidance).[1]Municipalities should familiarize themselves with Uniform Guidance procurement regulations.[2] However, it is important to note that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Coronavirus Relief Fund (CRF) is considered “other financial assistance” by the U.S. Treasury and accordingly is not subject to the provisions of the Uniform Guidance applicable to grant agreements.[3] Municipalities should thus confirm what regulations are applicable to their specific award.

Sufficient documentation is always critical in supporting procurement decisions. Every step of your procurement process, including, but not limited to, solicitation and advertising processes, vendor selection and ranking, and executed contracts should be fully documented and retained.

The Federal Emergency Management Agency (FEMA) recently published a “Top 10 Procurement under Grants Mistakes” document that highlights key risk areas and reinforces the importance of documenting your procurement process (provided below).[4] Reviewing the below FEMA document can help procurement personnel avoid mistakes that have resulted in the Federal government denying funding requests or clawing back funds already distributed. As FEMA states in this document “[a]voiding these obstacles can speed up your road to recovery.”

FEMA Procurement Diagram

 

Last Revised: May 28, 2021

[1] Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule, 86 Fed. Reg. 26786 (May 17, 2021), pg 97, https://www.federalregister.gov/documents/2021/05/17/2021-10283/coronavirus-state-and-local-fiscal-recovery-funds

[2] See 2 CFR 200.318 – 200.327

[3] Department of Treasury, Coronavirus Relief Fund for States, Tribal Governments, and Certain Eligible Local Governments, 86 Fed. Reg. 4182 (January 15, 2021), pg 4194 https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf

[4] The Federal Emergency Management Agency, “Top Ten Procurement under Grants Mistakes,” available at: https://www.fema.gov/sites/default/files/2020-08/fema_top-10-mistakes_flyer.pdf.