How To Prepare For ARPA Reporting

by Keenan T. McKinney

On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law. The ARPA established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, which together make up the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program. This new program provides $350 billion to state, local, territorial and tribal governments to aid in response to the economic and public health impacts of COVID-19.

If you are a recipient of this funding, you must adhere to the reporting requirements, as outlined in the U.S. Department of the Treasury’s, “Compliance and Reporting Guidance – State and Local Fiscal Recovery Funds,” (Guidance). We highly encourage all governments receiving funding to review the Guidance for additional detail and clarification on recipients’ compliance and reporting responsibilities. See the Treasury’s website (https://home. treasury.gov/ ). (Note: Please check for updates, as the Guidance may be updated periodically.) The Compliance and Reporting Guidance includes “Table 2: Reporting requirements by recipient type,” that we have included at the end of this article.

This article will: • Highlight key elements of the SLFRF Compliance and Reporting Guidance. • Share preparation tips for meeting the reporting requirements.

Key Elements Of The SLRF Compliance And Reporting Guidance

There are three types of reporting requirements for the SLFRF program: 1. Interim Report: Provides initial overview of status and uses of funding. This is a one-time report. (Note: Per the Guidance, the

Interim Report was due by Aug. 31, 2021, or 60 days after receiving funding if funding was received by

Oct. 15, 2021. Non-entitlement units of local government were not required to submit an interim report. As the due dates will have passed as of the publish date of this article, we will not focus on the Interim Report in this article.)

2. Project and Expenditure

Reports: Report on projects funded, expenditures, contracts, subawards more than $50,000 and other information.

3. Recovery Plan Performance

Report: Provides information on the projects that large recipients are undertaking with program funding and how they plan to ensure program outcomes are achieved in an effective, efficient and equitable manner.

Let us take a closer look at the reporting requirements.

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Project And Expenditure Report

When are the Project and Expenditure reports due?

All recipients of funding are required to submit project and expenditure reports. Some recipients are required to submit quarterly reports, while other recipients are required to submit annually (see Table 2 for a summary of the category of recipients): • Quarterly Reporting: For applicable recipients, the first report was due by Jan. 31, 2022. For these recipients, the initial quarterly project and expenditure report covered the three calendar quarters from March 3, 2021, to Dec. 31, 2021. The subsequent quarterly reports will cover one calendar quarter and must be submitted to Treasury within 30 calendar days after the end of each calendar quarter. • Annual Reporting: For applicable recipients, the first annual report is due April 30, 2022, and then annually thereafter, on April 30. For these recipients, the first project and expenditure report will cover from March 3, 2021, to March 31, 2022. The subsequent annual reports will cover one calendar year.

What should I include in the Project an Expenditure Reports?

The information required in the project and expenditure reports for both quarterly and annual reporting includes: • Projects: Project description, expenditure category, status of completion, etc. • Expenditures: Project obligations and expenditures. • Project Status: Group as “started,” “less than or greater than 50% completed,” or “completed”. • Adopted Budget (for specified recipients): Provide the budget adopted for each project by its jurisdiction. • Project Demographic Distribution Data (not due before April 2022): Information on projects that prioritize economic and racial equity and promote equitable outcomes. • Subawards: Provide detailed obligation and expenditure information for any contracts and grants awarded, loans issued, transfers made to other government entities and direct payments made by the recipient that are greater than $50,000. • Civil Rights Compliance:

Information on recipients’ compliance with Title VI of the Civil Rights Act of 1964, as applicable, on an annual basis. • Ineligible Activities - Tax Offset

Provision (states and territories only): Information related to the

Tax Offset Provision as described in section 602(c)(2) of the Social

Security Act and implemented under 31 CFR 35.8. • Required Programmatic Data (other than infrastructure projects): Will vary by expenditure category, please see details in the

Guidance. • Required Programmatic Data for Infrastructure Projects (EC 5): Water, sewer and broadband expenditure categories. Please see details in the Guidance. • Non-Entitlement Units

Documentation (NEUs only):

Prior to the due date for their first annual project and expenditure report, copies of funding agreement, signed assurances and certain budget documents.

Recovery Plan Performance Report

Recovery Plan Performance Reports are applicable to states, territories, metropolitan cities and counties with a population that exceeds 250,000 residents. The Recovery Plan will provide both the public and Treasury with information on the projects recipients are undertaking with program funding The report will also detail how project recipients are planning to ensure program outcomes are achieved in an effective, efficient and equitable manner.

The Guidance emphasizes transparency and requires that: • The plan must be posted on the public-facing website. • Upload a link to the publicly available document report along with providing data in the treasury reporting portal.

Recovery Plan Performance Reports are applicable to states, territories, metropolitan cities and counties with a population that exceeds 250,000 residents.

When are the performance reports due?

The initial Recovery Plan will cover the period from the date of award to July 31, 2021 and must be submitted to Treasury by Aug. 31, 2021, or 60 days after receiving funding. Thereafter, the Recovery Plan will cover a 12-month period and recipients will be required to submit the report to treasury within 30 days after the end of the 12-month period (by July 31).

What should be included in the performance reports?

The information required in performance reports includes: • Executive Summary: High-level overview of the jurisdiction’s intended and actual uses of funding. • Uses of Funds: Describe in further detail your jurisdiction’s intended and actual uses of the funds. • Promoting Equitable Outcomes: Describe efforts to promote equitable outcomes, including how programs were designed with equity in mind. • Community Engagement: Describe how you obtain input on use of funds that capture diverse feedback from your community. • Labor Practices: Describe workforce practices on infrastructure projects. • Use of Evidence: Identify whether funds are being used for evidencebased interventions. • Table of Expenses by Expenditure Category: Table listing the amount of funds used in each expenditure category. • Project Inventory: List the name and provide a brief description of funded projects. • Performance Report: Include key performance indicators for the major projects. • Required Performance Indicators and Programmatic Data: Mandatory performance indicators and programmatic data must be included. • Ineligible Activities=Tax Offset Provision (states and territories only): Requires certain information be provided to ensure funds are not used for ineligible activities.

How do I submit the expenditure and performance plan reports?

You are probably thinking, “How do I summarize and report all of this information to the treasury”? “Do I need to build report templates”? Well, the Treasury has created a portal that facilitates the entry and submission of the data. The Treasury’s website has guides and instructions to enter information on the Treasury Portal, including the Project and Expenditure Report User Guide and Treasury’s Portal for Recipient Reporting. However, your organization may still need to prepare some external source reports (e.g., spreadsheets, Word documents, other existing reports, etc.) that can be uploaded to the Portal. Preparation Tips For Meeting The Reporting Requirements

We have given you an overview of the reporting Guidance, now your next thought, other than trying to wrap your brain around the amount of detail in the Guidance, may be how can my organization get ready? Here are a few tips: • REVIEW THE TREASURY GUIDANCE! … And review it again! • Get familiar with the Treasury’s portal for submitting the reports (e.g., user credentials, navigating the portal, etc.). • Identify and evaluate the sources of information within your organization (e.g., systems, people, leverage existing reports, etc.). • Evaluate the ability of your financial and operational reporting systems to provide the necessary data. • If you received Coronavirus Relief Funds (CARES Act), there are some similarities in report data elements. Leverage those data sources and lessons learned from the reporting process.

• Assign key roles and responsibilities (e.g., financial information, programmatic information, data entry into the portal, reviewer/certifier, etc.). • Establish a timeline for gathering the information and submitting the reports by the due dates. • Utilize your internal audit department or other similar function/service provider to evaluate your reporting systems, processes and the final report package. • Submit any questions to the Treasury as soon as you identify them.

For full information on the Guidance, please visit the Department of Treasury’s website at: https://home.treasury.gov/

Keenan T. McKinney, CIA, CCA, is a director in the Armanino Risk Assurance & Advisory Services practice. Keenan has more than 27 years of internal auditing and project management experience, including more than 10 years of government internal auditing experience. For more information on preparing for ARPA reporting, contact Keenan McKinney of Armanino’s Risk Assurance and Advisory practice. He can be reached at (314) 983-1316 or Keenan.McKinney@armaninoLLP.com

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