Planning, Preparing and Complying with the American Rescue Plan Act of 2021 (ARPA) Grant Administration Program
The Federal Government through the American Recovery Plan Act (“ARPA”) has released a total of $1.9 trillion in stimulus and recovery funds. Unlike other recovery funds, ARPA funds may require full compliance with the Uniform Grant Guidance (“UGG”) and cost principles.
While organizations may not be tapping into ARPA funds until fiscal year 2022 or beyond, it is important to ensure that you are ready to administer, monitor, and report on ARPA awards in a manner compliant with fund requirements. There are some important considerations that many organizations may not be adequately resourced or appropriately familiar with federal grants to effectively do this.
The most significant areas of concern are:
- Inappropriate fund usage
- Insufficient resources knowledgeable in Federal grant management, UGG and fund specific reporting requirements
- Non-existent or immature processes, internal controls & governance over grant administration and sub-recipient monitoring
- Unprepared for Single Audit and/or understanding and identifying all sources of federal funding to determine eligibility for a Single Audit
What can you do to prepare yourself?
Make sure that funds are administered and used in accordance with award agreement terms and conditions by establishing a compliant grant administration program. A well-designed program usually includes the following:
- Fund accounting, including disbursements, is conducted in sufficient detail to provide transparency into origin and use of funds.
- Grant administration and program implementation controls, including those supporting procurement, expenditures, disbursements, monitoring and reporting are properly designed and operating effectively.
- State or local government lost revenue calculations are complete and defensible.
- The method of allocating indirect costs (approved indirect rate, cost allocation plan, de minimis rate) is reasonable.
- Sub-recipient guidelines and monitoring procedures exist and are followed.
- Document retention practices are followed to support audit or monitoring of state or local government books and records.
- Key performance metrics are established to enable program effectiveness measurement.
- Grant reporting is performed timely and accurately per grant guidelines.
Receiving and disseminating ARPA funding is an effective way to help those who incurred losses from the COVID-19 pandemic recover from this unprecedented event. However, with this funding comes the responsibility to ensure that it is properly administered. Be prepared. Be ready.