ARPA FAQs and Myth Busters with the Experts

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We partnered with SLATE Consultingto answer your most-asked questions about the American Rescue Plan Act (ARPA).

When will governments receive ARPA funding? 

Funds are ready now. The first tranche of funding (50%) was required to be distributed by May 11, 2021. The second tranche of funding will begin no earlier than 12 months after the first payment. 

Who will decide how ARPA funds are spent? 

The use of your funding requests follows the normal budgeting process for your department. Appropriations using ARPA funds do not require additional approvals from the federal government.

What does ARPA funding cover?  

The Act allows for very broad usage of funds, with very few restrictions. Specifically allowable (not exhaustive) usages include:   

  • Technology facilitates social distancing, remote work, and business continuity (records request software, document management, modernization, etc.)   
  • Pandemic-related expenditures (public health, vaccines, contract tracing, etc.)  
  • Pay raises for essential workers 
  • Provision of government services due to COVID reductions 
  • Water, sewer, and broadband infrastructure 

What can ARPA funding NOT be used for?  

The two main usage categories that are specifically prohibited are:  

  • Funding pensions  
  • Offsetting tax cuts made since March 3, 2021

How do public records requests relate to the pandemic?  

Most state and local governments experienced a rise in records requests since the pandemic began, causing compliance problems and legal issues due to late (or absent) responses. Our clients saw a 35% rise in requests in 2020 (versus 2019) and another rise of 24% in the Q1 of 2021 across the board. 

What to do when funds run out?  

We recommend that you choose projects for which the return on investment (ROI) is easily provable within the first year of use. When ARPA funds run out in 2024, the ROI for your projects will already be proven and will be more likely to be absorbed into your general budget. 

What are the reporting requirements?  

The bill has not specified reporting requirements other than that projects using ARPA funds have to “periodically report” on usage. 

Does ARPA allow counties to pay for the administrative cost of managing ARPA by using APRA funds? 

Yes. However, the bill puts certain percentage limits on funds spent on administrative expenses.

How are ARP funds allocated? Does every jurisdiction get funding?  

ARPA funds distribution uses a formulaic method for determining allocations. Government funding is based on a mix of factors, such as population, percentage of the population unemployed, and special project plans. Please see the Pandemic Promises: Stimulus Funds for Government Modernization white paper for a more thorough breakdown of ARPA funding.  

How do I apply for ARPA funding?  

ARPA funding is directly allocated to state and local governments automatically and does not require an application to receive funding. Government leadership simply needs to provide basic contact and deposit information on the ARPA portal. 

To ensure your leadership considers your project for funding, we recommend that you download the sample budget request memo to help make a case for your project.  

My government already has plans for ARPA funds. How can my agency still take advantage of this opportunity?  

If your agency’s plan has already been decided and implemented, don’t give up. The ARPA funds indirectly impact projects by freeing up existing or future general funds. The ROI of your project will increase your likelihood of adoption regardless if it directly uses ARPA-allocated funds. 

Additionally, look into the plans that your agency has explicitly stated to evaluate whether your project fits within the plan. For instance, if the plan lists “IT modernization,” this can include records requests software (or your technology project) to modernize existing manual processes.

For more information, schedule a consultation with our team today.