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Compliance & Reporting

What are some good practices for a municipality which has submitted a report on planned uses of funds, but the planned uses were not approved by the City Council as of the August 31, 2021 reporting deadline?

Municipalities receiving funds from the American Rescue Plan Act of 2021’s (“ARP”)[1] Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) must meet certain compliance and reporting requirements to ensure an equitable, transparent, and responsible recovery.[2] Specifically, by August 31, 2021, metropolitan cities and counties with populations that exceed 250,000 residents are required to have submitted the following:

  • A one-time Interim Report,[3] with expenditures by category; and
  • The first annual Recovery Plan Performance Report.[4]

The Interim Report submitted by award recipients should have provided expenditures by Expenditure Category covering the period from March 3 to July 31, 2021, or 60 days after recipient’s award date.[5] Recipients should have consulted Appendix 1 in the Guidance on Recipient Compliance and Reporting (“the Guidance”) for the U.S. Department of Treasury’s (“Treasury”) Expenditure Categories.[6]

The Recovery Plan Performance Report will provide information on the projects that municipalities are undertaking with CSLFRF funding, including plans to ensure program outcomes are achieved in an effective, efficient, and equitable manner.[7]

Municipalities should have submitted a Recovery Plan that included information about approved projects covering the period through July 31, 2021, or 60 days after funding was received, on or before August 31, 2021.[8]  Recipients should not report planned uses of funds that have not been approved by appropriate governing bodies. However, upon approval, recipients should amend the report within 60 days of approval by the appropriate governing bodies. The Treasury’s reporting User Guide includes Frequently Asked Questions (“FAQs”) section, including the following pertinent FAQ:

1.5. Should recipients submit a Recovery Plan if they are awaiting approval by legislative or other governance entities on the proposed projects, and such approval is not received as of the end of the reporting period?

Treasury’s response states:

Recipients should submit a Recovery Plan that includes information about any projects that are approved or authorized for release by August 31, 2021. A recipient should then submit an updated Recovery Plan within 60 days after approval by the legislature or other governance entities.[9]

According to Treasury, Recovery Plan Performance Reports should be submitted annually by July 31, covering the 12-month period from July 1 to June 30 through 2026. Furthermore, reports should also discuss activity prior to the end of the final covered period for CSLFRF by March 31, 2027. Recipients cannot receive an extension for the reporting deadlines.[10]

Treasury has provided several resources to help recipients understand their responsibilities in maintaining compliance with the CSLFRF guidelines set forth in the ARP and Treasury’s Interim Final Rule (the “Rule”).[11] Most notably, on June 17, 2021, Treasury released the first version of the Compliance and Reporting Guidance to help recipients understand the reporting requirements and deadlines for CSLFRF.[12] Subsequent revisions have been made to the Guidance and are catalogued in the Revision Log.[13] 

In addition, on August 1, 2021, Treasury released the Recovery Plan template to provide a general format for the annual report.[14] Treasury recommends (but does not require) that recipients use the template to provide project performance data, including information on efforts to improve equity and to engage communities.  Further, on August 9, 2021, Treasury released a document on its Portal for Recipient Reporting that provides additional clarity regarding how and what information to report. This document includes a FAQ section starting on page 27.[15]

Additional major reporting deadlines are looming.  By January 31, 2022, states, territories, metropolitan cities, and counties that received at least $10 million in CSLFRF funding and Tribes that received at least $30 million in CSLFRF funding are required to submit the first quarterly Project and Expenditure Report. This report will cover the period that ends December 31, 2021.[16]  All other recipients, including NEUs and all other metropolitan cities, counties, and Tribes should plan for the submission of their first annual Project and Expenditure Report by April 30, 2022, covering expenditures for the period ending March 31, 2022.[17]

Last Revised: November 16, 2021

[1] American Rescue Plan Act of 2021 § 9901, Pub. L. No. 117-2, amending 42 U.S.C. § 801 et seq., available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#HAECAA3A95C4E4FFAB6AA46CE5F9CB2B5.

[3] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: “Guidance on Recipient Compliance and Reporting Responsibilities,” at 13, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf 

[4] Id., at 23.

[5] Id., at 14.

[6] Id., at 30-31.

[7] Id.

[8] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: “Treasury’s Portal for Recipient Reporting,” at 27, available at: https://home.treasury.gov/system/files/136/SLFRF_Treasury-Portal-Recipient-Reporting-User-Guide.pdf.

[9] Id.

[10] Id., at 29.

[12] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: “Guidance on Recipient Compliance and Reporting Responsibilities,” available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf 

[13] Id., at 33.

[14] U.S. Department of the Treasury Recovery Plan Template, available at: https://home.treasury.gov/system/files/136/SLFRF-Recovery-Plan-Performance-Report-Template.docx.

[15] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: “Treasury’s Portal for Recipient Reporting,” at 29, available at: https://home.treasury.gov/system/files/136/SLFRF_Treasury-Portal-Recipient-Reporting-User-Guide.pdf.

[16] Id.

[17] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: “Guidance on Recipient Compliance and Reporting Responsibilities,” at 16, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf