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August 2, 2021 Article 5 min read

The government has issued guidance on Coronavirus State and Local Fiscal Recovery Fund compliance and reporting requirements, and the first reporting deadline is approaching fast. Here’s what you need to know.

Business professionals sitting in a modern conference room having a meeting.The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021 providing $350 billion in relief to states and local governments to support families, businesses, and communities suffering from the continued impact of the COVID-19 pandemic through the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF). In June 2021, the U.S. Department of the Treasury (Treasury) issued guidance on CSLFRF compliance and reporting requirements, including specific guidance on uniform administrative requirements, reporting requirements, and principles and eligible uses.

This article — part one of a two-part series on the compliance and reporting requirements applicable to CSLFRF — focuses on uniform administrative and reporting requirements based on the Treasury guidelines issued June 24, 2021.

Interim reporting deadline

The first deadline under the new guidelines is rapidly approaching. If your state, U.S. territory, tribal government, or metropolitan cities or counties received CSLFRF payments under the ARPA, the first interim report is due by Aug. 31, 2021.

If your state, U.S. territory, tribal government, or metropolitan cities or counties received CSLFRF payments under the ARPA, the first interim report is due by Aug. 31, 2021.

Uniform administrative requirements

CSLFRF has been assigned Assistance Listing Number (ALN) (formerly CFDA) 21.027. To expedite payments and meet statutory timelines, Treasury issued initial payments under a previous listing number — ALN 21.019 — assigned to the Coronavirus Relief Funds; however, entities should update systems and records to reflect the correct ALN for CSLFRF (21.027) for future requests. Entities must use this updated ALN for all financial accounting, sub-awards, and associated program reporting requirements for the CSLFRF awards.

Expenditures of CSLFRF are subject to the provisions of the Uniform Guidance (2 CFR Part 200) and should be included in your analysis to determine whether your organization meets the threshold requiring a single audit (a single audit is required when total expenditures equal or exceed $750,000 in a given fiscal year). If your organization will be subject to a single audit for the first time or you’d like a refresher on single audit considerations, the following articles may be helpful:

Uniform Guidance aims to reduce the administrative burden on award recipients while at the same time guarding against the risk of waste and misuse of federal funds. Accordingly, entities receiving federal funding must establish and maintain internal control over the award that provides reasonable assurance that the award is administered in compliance with the applicable laws and regulations. Entities issuing CSLFRF payments must evaluate their internal controls to ensure they’re adequate and operate effectively while ensuring that all required documentation is maintained, including required policies.

Reporting requirements

There are three main reporting categories for CSLFRF: a one-time interim report, project and expenditure reports, and the recovery plan performance report. Timing requirements vary based on the type of report.

Chart showcasing ARPA and CSLFRF compliance and reporting requirements.

Source: Compliance and Reporting Guidance State and Local Fiscal Recovery Funds, June 24, 2021, Version 1.1
  • Interim report: The interim report is required to be submitted one time and is due by August 31, 2021.  It should provide an overview of the status and uses of funding from March 3, 2021 to July 31, 2021. Recipients are required to enter obligations and expenditures of CSLFRF by specified category for the reporting period. There’s also a requirement to report programmatic data if recipients have or plan to have expenditures in the categories of revenue replacement or distributions to Non-Entitlement Units (NEUs).
    • Project and expenditure report: Quarterly reports are due one month after quarter-end and annual reports are due Oct. 31. The initial report will cover the award date through Sept. 30, 2021 and is due by Oct. 31, 2021. Required information includes:
      • Project description including name, ID number, expenditure category, and status of completion.
      • Expenditure detail including current period and cumulative obligations as well as current period expenditure and cumulative expenditures.
      • Project status including if started, less than or more than 50 percent complete, or completed.
      • Details on whether projects are targeted to economically disadvantaged communities as defined by HUD’s Qualified Census Tract.
      • Detailed obligation and expenditure information for contracts and grants awarded, loans issued, transfers made to other government entities, and direct payments made by the recipient that are greater than or equal to $50,000.
      • Required programmatic data for projects, with specific information required for infrastructure projects.
      • Information on distributions to NEUs.
  • Recovery plan performance report: The initial report will cover the period from the award date through July 31, 2021 and is due by Aug. 31, 2021. The reports are due annually thereafter and cover the periods from July 1 - June 30 and are due by July 31 following the end of the reporting period. These reports should include:
    • An executive summary.
    • Detail on the use of funds including commentary on how the recipient’s approach helps support strong and equitable recovery, strategies utilized to maximize impact, and details on how recipients are promoting the eligible uses of the funds.
    • A description of efforts to promote equitable outcomes, community engagement, labor practices for infrastructure projects, and evidence-based interventions and use of data.
    • A listing of projects as well as expenses by expenditure category.
    • Use of key performance indicators (KPIs) that include both output and outcome measures. There are both required and recipient-created KPIs.
    • States and territories must also provide reporting data to ensure that CSLFRF is not being used for ineligible activities, particularly tax offset provisions.

Now’s the time to act

Now that reporting deadlines have been established and due dates are quickly approaching, recipients need to begin aggregating data, including obligations and expenditures of CSLFRF to ensure proper support is available for the activity. For organizations that have not had single audits in recent years, proactively understanding the Uniform Guidance requirements related to internal controls and process documentation is critical to preparing for compliance requirements. Our next article in this series will focus on the most recent guidance related to compliance requirements.

Now that reporting deadlines have been established and due dates are quickly approaching, recipients need to begin aggregating data, including obligations and expenditures of CSLFRF.

If you have questions as you work through your strategies give us a call. We’re here to help.

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