Federal COVID-19 Relief Funding

U.S. Treasury issues notice on unobligated or impermissibly used ARPA funds

The U.S. Department of the Treasury issued an alert to all recipients of Coronavirus State and Local Fiscal Recovery Funds (SLFRF)—also called American Rescue Plan Act or ARPA—awards that it will be vigorously monitoring recipients’ methods of obligating funds by the Dec. 31, 2024, deadline. For non-entitlement unit (NEU) townships (all but Michigan’s eight largest townships), your next report must be submitted to Treasury between April 1 and April 30, 2025, covering obligations through the Dec. 31, 2024, deadline.

U.S. Treasury plans to conduct enhanced compliance checks on the obligation data to ensure funds are used in accordance with program requirements, and to recoup funds obligated or expended impermissibly and recapture funds that were not obligated by the deadline. For local units that did not fully obligate their funds by the deadline, you will receive “Financial Instructions to Return Unobligated Funds” based on the latest data available to Treasury. The instructions will:

• Inform the recipient how much it owes, based on its most recently submitted report.
• Provide a date by which funds must be repaid.
• Require recipients to use Pay.gov to process the repayments.

If recipients do not repay amounts owed by the specified date, U.S. Treasury will establish a debt and follow standard debt collection policy and procedures in coordination with the federal Bureau of the Fiscal Service. Interest and penalties will accrue once the debt is established.

Reminder: Annual NEU Project and Expenditures Report are due April 30

All non-entitlement units of government (NEUs—all but eight of Michigan’s largest townships) that accepted American Rescue Plan Act (ARPA) funds must complete their annual “Project and Expenditure Report” by April 30 each year. Every NEU must complete the report, even if your township has already fully spent the funds. The portal for reporting opens around April 1 each year.

A one-hour webinar recording from the U.S. Department of Treasury offers a portal demonstration and overview of NEU reporting and compliance obligations. Watch the webinar here.

Your township’s SAM.gov registration must be active for the reporting, and must be renewed annually. This is free of charge. Your township does not have to pay, or go through a third party, to renew your registration. (Note: SAM.gov uses a Unique Entity ID instead of a DUNS number. Visit www.SAM.gov or see below for more information.)

MTA-member officials can reach out to MTA’s Member Information Services Department for assistance or with ARPA questions at (517) 321-6467 (press option 1). State Treasury can also assist townships continuing to have issues completing reporting or accessing U.S. Treasury’s reporting system; email them at treas-arpa@michigan.gov.

Townships have until the end of 2026 to spend ARPA funds that were fully obligated by the end of 2024

Townships have until Dec. 31, 2026, to fully spend their allocation of federal ARPA funds.

As a reminder, townships that did not choose the standard allocation option, which allowed use up to $10 million to be used for general government services, can use the funds for the following purposes:

• Provide government services affected by a revenue reduction during the pandemic
• Make necessary investments in water, sewer and broadband infrastructure
• Respond to the COVID-19 emergency and address its negative economic impacts
• Provide premium pay for essential employees performing an essential function in the pandemic
• Emergency relief from natural disasters
• Surface transportation infrastructure
• Title I projects (includes community development in line with the federal Housing and Urban Development Community Development Block Grant program)

ARPA prohibits the use of the funds for pension or to offset revenue loss due to a tax cut.

New ARPA ‘obligation’ interim rule

In late 2023, the U.S. Department of Treasury issued an “Obligation Interim Final Rule” in response to questions and comments regarding obligation of State and Local Fiscal Recovery Funds (SLFRF) through the American Rescue Plan Act (ARPA).

“Obligation,” according to Treasury, continues to mean “an order placed for property and services and entry into contracts, subawards, and similar transactions that require payment.” Under the interim rule, “obligation” now also expands ARPA funds to cover costs related to reporting and compliance requirements, including subrecipient monitoring; single audit costs; record retention and internal control requirements; property standards; environmental compliance requirements; and civil rights and nondiscrimination requirements.

The interim final rule does not alter any deadlines for APRA fund obligations (by end of 2024) or expenditures (by the end of 2026), nor does it alter eligible use categories.

Interim rule includes new eligible uses for ARPA funds

Townships that have not yet obligated their American Rescue Plan Act allocation or that did not choose the standard allocation option to use up to $10 million for general government services now have a few more eligible uses for the funds. Under a new interim rule released by U.S. Treasury in August, the following uses are now eligible (read the overview of the new interim rule here):

• Emergency relief from national disasters (including the negative economic effect of natural disasters)—According to the U.S. Treasury overview of the interim rule, this includes firefighting, search and rescue, emergency repairs, snow removal, and more when responding to a designated or declared natural disaster. The interim rule also outlines eligible uses for mitigation activities for future natural disasters.
• Surface transportation infrastructure—This allowance includes various pathways for recipients to use ARPA funds for surface transportation projects eligible for specific U.S. Department of Transportation programs, for projects not receiving USDOT funds, and to satisfy non-federal share requirements for certain surface transportation projects.
• Title I projects—This includes community development in line with the federal Housing and Urban Development (HUD) Community Development Block Grant program, subject to certain requirements and limitations.

Self-Service ARPA Resources webpage 

A Self-Service Resources page on U.S. Treasury’s State and Local Fiscal Recovery Funds (through ARPA) website includes guidance and frequently asked questions, based on topic, including reporting, accessing Treasury’s portals and eligible use of funds.

SAM.gov UEI replaces previous DUNS

Most, if not all, townships had a federal DUNS number—a unique identifying number used by the federal government to track how federal money is allocated, including, for example, American Rescue Plan Act funds. In 2022, SAM.gov—the federal database used to do business with the federal government—stopped using the DUNS number and changed to a “Unique Entity ID” (UEI) that is generated by SAM.gov. The intention was to allow the government to streamline the entity identification and validation process, and make it easier and less burdensome for entities to do business with the federal government. This information is particularly important for nearly every Michigan township as they prepare for the annual ARPA reporting April 30 of each year.

If you play a role in your township’s federal reporting or activity, you can find your township’s UEI—which has already been assigned—in your entity registration record after logging in. You can also search https://SAM.gov; expand the “Select Domain” option, then select “Entity Information,” then “Entities.” You can then use keywords and filters to search for your township. Visit SAM.gov or https://gsa.gov/entityid for more details.