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Q&A from the May 12th FREDA ARPA Webinar

As the Treasury recently announced their launch of the Coronavirus State and Local Fiscal Recovery Funds, we know that there’s going to be questions on how to prepare for them, how they can be used, and much more. FREDA previously hosted a Planning for the American Rescue Plan Act Funds: Lessons Learned from the CARES Act webinar where our Director of Assurance Services, Steve Stevens CPA, discussed the importance of preparing for and prioritizing the ARPA funds. During this webinar many important questions were discussed, and we are sharing them below to help you get ready!

Q. Can the state and cities use ARPA funds for administrative costs? Would it be eligible to use them to pay consultants, internal administrative services, etc.?
A. There are references within the interim final rule, but at this point they are still unsure how to look at what should be allowed for this type of spending. They are requesting comments from the government entities that can assist them with this. There is currently a 10% cap on administrative costs, and we are unsure if the Treasury will change this at some point in time during the process.

Q. When do you expect the EDA NOFO funds to be available?
A. It is still unknown, but soon. The funds must be out by September 2022, and EDA is working to get them out as soon as possible. In the meantime, you can go to www.eda.gov and subscribe to their mailing list and you will be notified when the funding announcement comes out.

Q. For non-entitlement units of government and cities under 50,000 in population, do you know when the Treasury will release a list of what their allocations are going to be and is there any information on the application process?
A. Not yet, but we are expecting additional guidance to be released this week.

Q. When procuring services for FEMA Public Assistance disaster grants, certain compliance requirements do not apply Do you know if these compliance requirements are anticipated to be waived with the ARPA funds, as well?
A. From what has been stated in the interim final rule, we believe these requirements will still apply.

Q. It appears that personal information is required such as driver’s license number, facial scan, etc. Is this the correct website and is the information they are requesting legitimate?
A. The portal does require your driver’s license number, social security number, a facial scan, as well as a voice recording, and more. It is a lot more than we have ever seen in any other grant programs, but this is all legitimate.

Q. I’ve been having issues getting through the registration process on the Treasury portal. I’ve been kicked out multiple times trying to get through. Why is this?
A. Due to the demand in registration on the portal there has been an issue with people being kicked off during the process. You will have to keep trying until you get a document to download and sign.

Q. Is there funding for health care construction such as hospital additions or healthcare facilities? Would infrastructure be allowable under this category?
A. With traditional EDA funding, this is something that has been done before if the applicant is eligible. There is an example used in the interim final rule that states necessary improvements for infrastructure at hospital and healthcare facilities are included. We believe that this means it would be permissible if justified.

Q. Would utility workers be included as an essential worker, such as water, wastewater operators, meter readers?
A. In terms of the public health component, it is a possibility. If you can show that the services they provided were directly related to the mitigation/ in response to COVID-19 you could try to use funds for their pay.

Q. Are non-profit employees eligible for premium pay supplements?
A. For not-for-profit employees it would depend on if they met the requirements and need to be an eligible employee. It would also be permissible if a local government gave funding to a non-profit for reasons including to provide pay during the period.

Q. In terms of construction or infrastructure projects, does the EDA have a job to grants ratio or a minimum number of jobs that are required for projects?
A. No, the EDA determines this based on whether it is a rural area or an urban area and what’s going to be the impact. For example, if it’s 50 jobs in a rural area versus 300 jobs in a rural area. They look at it based on where the project is located. There isn’t a specific job to project ratio.

Q. Do we anticipate that the funds can be used to expand a local EOC, and do we think the American Rescue Plan funds may be able to build a community YMCA?
A. With an EOC, we believe if you can show that there is a necessary need for them to assist with the infrastructure to ensure you can mitigate the effects of the pandemic itself, then potentially yes. It goes back to prioritization and planning, looking at the FAQs, and making sure that you have a reason that is tied to the pandemic. You need to be careful and stay in tune with the legal perspective of these infrastructure projects and make sure you have documentation. You may be going down one road and suddenly a new FAQ will come out, and you won’t be able to go down that road anymore. You don’t want to be at risk of having these funds pulled.

Q. How often is there reporting on your expenditures and funding, and what will the process of this reporting be like?
A. We believe the reporting will be done through the portal. For direct recipients, their initial report is going to be from the award day to July 31, 2021, but it won’t be due until August 31, 2021. Then a quarterly report for the first two quarters will be due on October 31, 2021. After that, there will continuously be quarterly reports. If you have a population through 250,000, you will also have to submit an annual recovery plan performance report. If you are a non-entitlement unit of local government, the initial report will be due on September 2021. The Treasury will also require that you submit an annual project and expenditure report until December 31, 2026.

Q. When can we expect the initial flow of money to start coming in?
A. Based on what we have seen before, the direct recipient will be looking at about 30-45 days, meaning they’ll receive funds towards the end of May-early June. For non-entitled units of government, you will most likely not see funds until August. This is just an educated guess based on the past. It is important to get into the portal and get the documents signed now so that the Treasury will have all your information.

Do you have other questions about the American Rescue plan Act funds? You can reach out the Steve Stevens, CPA by emailing sstevens@thf-cpa.com.

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