Skip to main content

American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund: Preparing for the April 30, 2023 Project & Expenditure Report

Categories
American Rescue Plan Act (ARPA) Funding, Project & Expenditure Report

Published: 04/11/23

Author: Kara Millonzi

As discussed in previous posts, all NC counties and municipalities received funding from the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund (ARP/CSLFRF). These are federal grant funds that come with eligibility restrictions, compliance requirements, and reporting obligations. The primary reporting vehicle is the Project & Expenditure Report. Local governments with ARP/CSLFRF allocations over $10 million have completed this report quarterly and will continue to do so through the end of the grant term, with the next report due by April 30, 2023. Local governments with ARP/CSLFRF allocations between $0 and $10 million complete the report yearly, with the next report also due by April 30, 2023. This blog post is focused on these $0 to $10 million units and addresses frequently asked questions about the report and other basic ARP/CSLFRF issues.

REVENUE REPLACEMENT EXPENDITURE CATEGORY

As detailed here, local governments receiving between $0 and $10 million can and should spend all their ARP/CSLFRF funds in the Revenue Replacement Category. This category allows for a much broader array of expenditures and significantly reduces compliance and reporting requirements. It is important to remember that “Revenue Replacement” is the title of the expenditure category. It does not describe the act of replacing revenue. By selecting the Standard Allowance, all local governments may spend their full ARP/CSLFRF allocation, up to a maximum of $10 million, in this category, even if they did not experience any revenue loss due to the pandemic. But the title of this category is misleading. A local government cannot simply replace revenue with the ARP/CSLFRF funds. It must expend these monies for specific authorized purposes.

A local government may spend its Revenue Replacement ARP/CSLFRF funds on almost anything it has state law authority to spend money on. The only prohibited expenditures are: (1) extra pension fund contributions; (2) borrowing costs or debt service (loan) payments; (3) financial reserves / rainy day fund contributions; (4) litigation costs, including settlements / judgements / consent decrees; (5) expenditures that undermine or discourage compliance with Centers for Disease Control (CDC) guidelines; (6) expenditures that violate federal conflict of interest provisions; (7) expenditures that violate state law or other federal laws and regulations, including applicable Uniform Guidance requirements; and (8) expenditures covered or reimbursed by other federal, state, or other outside funding earmarked for those expenditures (in other words, no double-dipping).

There are three main ways to spend Revenue Replacement ARP/CSLFRF:

  1. reimburse eligible past expenditures (including employee salaries/benefits) back to March 3, 2021;
  2. pay for future employee salaries/benefits through the end of the grant term; and
  3. pay for future other expenditures (capital projects, services, programs, or other internal costs) through the end of the grant term.

All three paths allow for a local government to supplant—using ARP/CSLFRF funds to reimburse or fund expenditures that the local government used, or would have used, other revenues to fund. That frees up non-grant revenues to be spent for any purpose(s) authorized by state law. The third path also allows a local government to expend its Revenue Replacement ARP/CSLFRF monies for new projects, services, or other activities. This roadmap details all the budgeting and compliance requirements for each of the paths. If a local government follows the applicable steps, it will have completed all compliance requirements under the grant.

The simplest path is to use ARP/CSLFRF funds to reimburse eligible past expenditures. A local government may use ARP/CSLFRF funds to reimburse itself for almost any prior expenditure dating all the way back to March 3, 2021. Reimbursing prior expenditures does not restate the revenues used for the initial payments. It has no impact on previous years’ budgets or financial statements. A reimbursement is a transaction in the fiscal year in which the governing board adopts the grant project ordinance authorizing the reimbursement. For reporting purposes, the ARP/CSLFRF funds are considered obligated and expended on the date that the governing board adopts the grant project ordinance authorizing the reimbursement of the specific prior expenditure(s). The finance officer can then move the cash from the special revenue fund to the general fund or enterprise fund and it becomes unrestricted fund balance. The cash is no longer considered grant funds.

A local government also may expend ARP/CSLFRF Revenue Replacement funds for future eligible expenditures, including employee salaries and benefits, capital projects, services, and other expenditures authorized by state law. Again, the only ineligible expenditures otherwise authorized by state law are those specifically listed above. All ARP/CSLFRF monies must be obligated (meaning the orders are placed or contracts executed) by December 31, 2024, and expended (meaning the amounts are due and owing) by December 31, 2026. The graphic above walks through the budgeting and other process and compliance requirements for future expenditures.

Revenue Replacement expenditures are subject to more limited compliance requirements and streamlined reporting. The compliance (and state law budgeting) requirements are discussed here. And for local governments receiving between $0 and $10 million in ARP/CSLFRF there is an annual reporting requirement, referred to as the Project & Expenditure Report. Note that a local government must comply with the compliance and budgeting requirements AND the reporting requirements.

PROJECT & EXPENDITURE REPORTING OBLIGATION

What is the Project & Expenditure Report?

The Project & Expenditure (P&E) Report is the vehicle that local governments must use to report to US Treasury on obligations and expenditures of ARP/CSLFRF funds by project within an Expenditure Category. A project is a group of expenditures made for a particular purpose. Each project must fit within one, and only one, Expenditure Category (EC) for reporting purposes, but a single EC may have more than one project. A list of the ECs is in the Appendix to the Compliance and Reporting Guidance. For reporting purposes, a local government may report all of its Revenue Replacement expenditures as a single project under EC 6.1. (If Revenue Replacement funds were used as the non-federal match for another federal grant program, the project should be reported as EC 6.2.)

In addition to reporting on projects, a local government must select between the Standard Allowance and Formula Approach for calculating the amount of ARP/CSLFRF funds the unit may spend in the Revenue Replacement category in the April 2023 P&E Report. A local government with an allocation between $0 and $10 million should select the Standard Allowance. That allows for expenditure of all its ARP/CSLFRF monies in this category, even if the unit did not experience any revenue loss due to the pandemic. The April 30, 2023 P&E Report may be the last time to select the Standard Allowance. Be sure to verify that it has been selected before certifying the report.

Does My County / Municipality Have to Complete the P&E Report?

YES. All counties and municipalities must complete the P&E Report. As stated above, if your unit received between $0 and $10 million in ARP/CSLFRF funds, you report yearly (by April 30 each year).

If my County / Municipality Is Only Spending ARP/CSLFRF Funds as Revenue Replacement, Do We Have to Complete the Report?

YES. All counties and municipalities must complete the P&E Report for each applicable reporting period.

If my County / Municipality Has Not Expended Any ARP/CSLFRF Funds Yet, Do We Have to Complete the Report?

YES. A county and municipality must complete each P&E Report even if it has not yet obligated or expended any ARP/CSLFRF funds. In the April 2023 Report it is particularly important for any unit receiving between $0 and $10 million to select the Standard Allowance, even if it has nothing else to report.

ACCESSSING THE P&E REPORT

How do we Access the Report?

The Account Administrator assigned within your local government can access the reporting portal through one of the following links, depending on what method the Account Administrator initially used to register/verify their identity:

To access Treasury’s Portal for the first time and be designated for any reporting roles, new users must first register with Login.gov. Users who have previously registered through ID.me may continue to access Treasury’s Portal through that method. If you have not previously registered with ID.me, you should register through Login.gov. After your account has been created and verified, you will be redirected to Treasury’s State, Local, and Tribal Support portal to log in, confirm your roles and provide your ARP/CSLFRF information. Treasury recommends using Google Chrome as your internet browser.

Is The Reporting Portal Open Now?

YES. Treasury announced on April 3, 2023, that the reporting portal is open. Note that there are many state and local government across the country accessing the portal. It is possible you’ll have to try several times to successfully access the portal.

What do we do if we Cannot Access the Reporting Portal?

Local governments are reporting a few different error messages as they attempt to access the portal. If you receive an error message, take a screen shot or otherwise document it. Try again a few hours or a day later and/or try a different internet browser (Google Chrome is preferred). If you still are unable to access the portal, let Treasury know asap and keep documentation of that correspondence. Contact Treasury at (844) 529-9527​ or SLFRF@treasury.gov.

COMPLETING THE P&E REPORT

What Information do we Need to Complete the P&E Report?

A local government must do the following before completing the P&E Report:

    • Verify that the local government’s registration is current in SAM.gov.
    • Verify your local government’s main Unique Entity Identifier (UEI) number. All local governments that had a SAM.gov account as of April 2022 were automatically assigned a UEI#. This replaced the former DUNS# system. You can verify your UEI in SAM.gov.
    • Identify your Account Administrator. That individual should have received an email from Treasury in mid-March. If no one in your unit received the email, and you do not otherwise know who your Account Administrator is, contact Treasury ASAP to troubleshoot ((844) 529-9527​ or SLFRF@treasury.gov).
    • Verify cumulative (March 3, 2021-March 31, 2023) and current period (April 1, 2022-March 31, 2023) obligations and expenditures for all Revenue Replacement funds. You will report these as a single EC 6.1 project (or possibly a EC 6.2 project).

If My County / Municipality is Spending All Our ARP/CSLFRF Funds in the Revenue Replacement category, How Do We Complete the P&E Report?

The good news is that Treasury streamlined reporting for the Revenue Replacement category. All obligations and expenditures are reported as EC 6.1. (The only exception is if Revenue Replacement funds were used as the non-federal match for other qualifying federal grant programs, in which case they are reported as EC 6.2.)

On the project page in the P&E Report, either create a new EC 6.1 project or edit an existing EC 6.1 project. The screen will prompt you to enter cumulative and current period obligations and cumulative and current period expenditures, along with a brief narrative describing the project(s) funded with Revenue Replacement funds. You may aggregate all projects into one 6.1 project for reporting purposes. Recall that obligations occur when goods are ordered, or construction or service contracts are executed and there is a legal obligation for payment. (It is the same trigger as for the preaudit process under state law.) Expenditures occur when the goods have been delivered or services are performed, and the amounts are due and owing to the other party. (It is the same trigger as for the disbursement process under state law.) The project description(s) should match the project(s) listed in the local government’s grant project ordinance and other project documentation. You will also select the project status (not started, <50% completed, >50% completed, or completed). You will identify the appropriate status based on percentage of your Revenue Replacement funds that have been fully expended.

Note that although the Revenue Replacement projects may be aggregated for reporting purposes, a local government must maintain a separate project file for each project, detailing all the documentation and other compliance requirements for auditing purposes. The project files must be maintained for at least 5 years after the expenditure of the last dollar of ARP/CSLFRF funds. See this blog post for more information on the budgeting, compliance, and documentation requirements for expenditures in the Revenue Replacement category.

Additionally, a local government receiving between $0 and $10 million total allocation should select the Standard Allowance. The April 2023 P&E Report should indicate whether your unit selected the Standard Allowance last year. If your unit did not, it must do so in this report. There may not be another opportunity to select this option. Be sure to verify that the Standard Allowance is selected before certifying the report.

What If We Did Not Select the Standard Allowance Last Year (Or if we Do Not Remember)?

Your April 2023 Project & Expenditure Report will reflect whether you selected the Standard Allowance last year. Verify that you did. If you did not, be sure to select the Standard Allowance in the April 2023 report. This may be the last opportunity to do so. Note that selecting the Standard Allowance is under a separate tab in the report than the project information.

What if we Reported Some Obligations and Expenditures as Premium Pay or Other Non-Revenue Replacement ECs Last Year?

Several local governments entered projects in last year’s P&E Report in categories other than Revenue Replacement, such as ECs associated with the Premium Pay or Necessary Infrastructure categories. In April 2022 we did not have full information about the Revenue Replacement category. That info did not come until July 2022. Based on the changes Treasury made in July 2022 further streamlining the compliance requirements for Revenue Replacement, it is now clear that all projects that could be funded in another category can and should be funded and reported in the Revenue Replacement category. Everything that can be funded in another category can also be funded in the Revenue Replacement category, but with a much lighter compliance and reporting burden.

Treasury allows a local government to change prior allocations and even cancel out previously reported projects in the P&E Report. Local governments that reported obligations and expenditures outside of the Revenue Replacement should cancel those projects in the April 2023 report and instead report all Revenue Replacement obligations and expenditures as an EC 6.1 (or EC 6.2) project. To cancel a project in another EC, click on the Cancel Project button at the bottom. Then click on the Project Status drop down box and Select “Cancel.” Finally, zero out the cumulative and current period obligations and expenditures. Report these amounts, instead, in the EC 6.1 (or EC 6.2) project. You will list the different expenditure types in the brief description box associated with the EC 6.1 (or EC 6.2) project. The only recommended exception is if the local government previously reported Premium Pay as EC 4.1. Assuming you followed all the requirements for properly awarding premium pay and kept all the necessary documentation, it is fine to leave that project in the report. Report all other obligations and expenditures as Revenue Replacement, though.

What if we Have Not Made Any Obligations or Expenditures Yet?

If your local government has not obligated or expended any of its ARP/CSLFRF funds as of March 31, 2023, select “No Projects to Report” on the project page in the P&E Report. You still must verify that you have selected the Standard Allowance before certifying the April 30, 2023 report. Note that Treasury may flag your report if you do not have any obligations and expenditures to date. Be prepared to explain the delay and demonstrate a plan to obligate and expend the funds soon.

Do we Report on ARP/CSLFRF Funds Received from the State?

In addition to their own allocations of ARP/CSLFRF monies, many local governments also received direct appropriations or competitive grants from the State, funded with the State’s allocation of ARP/CSLFRF. A local government must follow all compliance and documentation requirements specified by the state agency administering the funds, BUT A LOCAL GOVERNMENT SHOULD NOT INCLUDE THESE STATE FUNDS IN THE LOCAL GOVERNMENT’S P&E REPORT. The State will report on these funds in its P&E Report.

What if we Need More Help?

There are several places to turn for help. The North Carolina League of Municipalities and North Carolina Association of County Commissioners, along with many, if not all, of the regional Councils of Government (COGs) across the State, have staff available to answer reporting questions. The School of Government will continue to hold ARP Office Hours weekly and will switch to daily for the last week of April to help with P&E Report issues (see schedule and Zoom link below.) Finally, US Treasury has posted several helpful resources and tutorials:

Upcoming ARP Office Hours

    • Friday, April 14, from 8:30-9:30am
    • Wednesday, April 19, from 8:30-9:30am
    • Friday, April 21, from 12:30-1:30pm (note slightly modified time)
    • April 24, from 2-4pm (P&E report)
    • April 25, from 2-4pm (P&E report)
    • April 26, from 11-1pm (P&E report)
    • April 27, from 8:30-10:30am (P&E report)
    • April 28, from 9-11am (P&E report)

Zoom Info for All Office Hours: 

https://zoom.us/j/95481909044?pwd=UlE2VHNhN2luS0JEYTJqeTZTMFRWdz09

Meeting ID: 954 8190 9044 / Passcode: 779726

 

Coates’ Canons NC Local Government Law

American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund: Preparing for the April 30, 2023 Project & Expenditure Report

Published: 04/11/23

Author: Kara Millonzi

As discussed in previous posts, all NC counties and municipalities received funding from the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund (ARP/CSLFRF). These are federal grant funds that come with eligibility restrictions, compliance requirements, and reporting obligations. The primary reporting vehicle is the Project & Expenditure Report. Local governments with ARP/CSLFRF allocations over $10 million have completed this report quarterly and will continue to do so through the end of the grant term, with the next report due by April 30, 2023. Local governments with ARP/CSLFRF allocations between $0 and $10 million complete the report yearly, with the next report also due by April 30, 2023. This blog post is focused on these $0 to $10 million units and addresses frequently asked questions about the report and other basic ARP/CSLFRF issues.

REVENUE REPLACEMENT EXPENDITURE CATEGORY

As detailed here, local governments receiving between $0 and $10 million can and should spend all their ARP/CSLFRF funds in the Revenue Replacement Category. This category allows for a much broader array of expenditures and significantly reduces compliance and reporting requirements. It is important to remember that “Revenue Replacement” is the title of the expenditure category. It does not describe the act of replacing revenue. By selecting the Standard Allowance, all local governments may spend their full ARP/CSLFRF allocation, up to a maximum of $10 million, in this category, even if they did not experience any revenue loss due to the pandemic. But the title of this category is misleading. A local government cannot simply replace revenue with the ARP/CSLFRF funds. It must expend these monies for specific authorized purposes.

A local government may spend its Revenue Replacement ARP/CSLFRF funds on almost anything it has state law authority to spend money on. The only prohibited expenditures are: (1) extra pension fund contributions; (2) borrowing costs or debt service (loan) payments; (3) financial reserves / rainy day fund contributions; (4) litigation costs, including settlements / judgements / consent decrees; (5) expenditures that undermine or discourage compliance with Centers for Disease Control (CDC) guidelines; (6) expenditures that violate federal conflict of interest provisions; (7) expenditures that violate state law or other federal laws and regulations, including applicable Uniform Guidance requirements; and (8) expenditures covered or reimbursed by other federal, state, or other outside funding earmarked for those expenditures (in other words, no double-dipping).

There are three main ways to spend Revenue Replacement ARP/CSLFRF:

  1. reimburse eligible past expenditures (including employee salaries/benefits) back to March 3, 2021;
  2. pay for future employee salaries/benefits through the end of the grant term; and
  3. pay for future other expenditures (capital projects, services, programs, or other internal costs) through the end of the grant term.

All three paths allow for a local government to supplant—using ARP/CSLFRF funds to reimburse or fund expenditures that the local government used, or would have used, other revenues to fund. That frees up non-grant revenues to be spent for any purpose(s) authorized by state law. The third path also allows a local government to expend its Revenue Replacement ARP/CSLFRF monies for new projects, services, or other activities. This roadmap details all the budgeting and compliance requirements for each of the paths. If a local government follows the applicable steps, it will have completed all compliance requirements under the grant.

The simplest path is to use ARP/CSLFRF funds to reimburse eligible past expenditures. A local government may use ARP/CSLFRF funds to reimburse itself for almost any prior expenditure dating all the way back to March 3, 2021. Reimbursing prior expenditures does not restate the revenues used for the initial payments. It has no impact on previous years’ budgets or financial statements. A reimbursement is a transaction in the fiscal year in which the governing board adopts the grant project ordinance authorizing the reimbursement. For reporting purposes, the ARP/CSLFRF funds are considered obligated and expended on the date that the governing board adopts the grant project ordinance authorizing the reimbursement of the specific prior expenditure(s). The finance officer can then move the cash from the special revenue fund to the general fund or enterprise fund and it becomes unrestricted fund balance. The cash is no longer considered grant funds.

A local government also may expend ARP/CSLFRF Revenue Replacement funds for future eligible expenditures, including employee salaries and benefits, capital projects, services, and other expenditures authorized by state law. Again, the only ineligible expenditures otherwise authorized by state law are those specifically listed above. All ARP/CSLFRF monies must be obligated (meaning the orders are placed or contracts executed) by December 31, 2024, and expended (meaning the amounts are due and owing) by December 31, 2026. The graphic above walks through the budgeting and other process and compliance requirements for future expenditures.

Revenue Replacement expenditures are subject to more limited compliance requirements and streamlined reporting. The compliance (and state law budgeting) requirements are discussed here. And for local governments receiving between $0 and $10 million in ARP/CSLFRF there is an annual reporting requirement, referred to as the Project & Expenditure Report. Note that a local government must comply with the compliance and budgeting requirements AND the reporting requirements.

PROJECT & EXPENDITURE REPORTING OBLIGATION

What is the Project & Expenditure Report?

The Project & Expenditure (P&E) Report is the vehicle that local governments must use to report to US Treasury on obligations and expenditures of ARP/CSLFRF funds by project within an Expenditure Category. A project is a group of expenditures made for a particular purpose. Each project must fit within one, and only one, Expenditure Category (EC) for reporting purposes, but a single EC may have more than one project. A list of the ECs is in the Appendix to the Compliance and Reporting Guidance. For reporting purposes, a local government may report all of its Revenue Replacement expenditures as a single project under EC 6.1. (If Revenue Replacement funds were used as the non-federal match for another federal grant program, the project should be reported as EC 6.2.)

In addition to reporting on projects, a local government must select between the Standard Allowance and Formula Approach for calculating the amount of ARP/CSLFRF funds the unit may spend in the Revenue Replacement category in the April 2023 P&E Report. A local government with an allocation between $0 and $10 million should select the Standard Allowance. That allows for expenditure of all its ARP/CSLFRF monies in this category, even if the unit did not experience any revenue loss due to the pandemic. The April 30, 2023 P&E Report may be the last time to select the Standard Allowance. Be sure to verify that it has been selected before certifying the report.

Does My County / Municipality Have to Complete the P&E Report?

YES. All counties and municipalities must complete the P&E Report. As stated above, if your unit received between $0 and $10 million in ARP/CSLFRF funds, you report yearly (by April 30 each year).

If my County / Municipality Is Only Spending ARP/CSLFRF Funds as Revenue Replacement, Do We Have to Complete the Report?

YES. All counties and municipalities must complete the P&E Report for each applicable reporting period.

If my County / Municipality Has Not Expended Any ARP/CSLFRF Funds Yet, Do We Have to Complete the Report?

YES. A county and municipality must complete each P&E Report even if it has not yet obligated or expended any ARP/CSLFRF funds. In the April 2023 Report it is particularly important for any unit receiving between $0 and $10 million to select the Standard Allowance, even if it has nothing else to report.

ACCESSSING THE P&E REPORT

How do we Access the Report?

The Account Administrator assigned within your local government can access the reporting portal through one of the following links, depending on what method the Account Administrator initially used to register/verify their identity:

To access Treasury’s Portal for the first time and be designated for any reporting roles, new users must first register with Login.gov. Users who have previously registered through ID.me may continue to access Treasury’s Portal through that method. If you have not previously registered with ID.me, you should register through Login.gov. After your account has been created and verified, you will be redirected to Treasury’s State, Local, and Tribal Support portal to log in, confirm your roles and provide your ARP/CSLFRF information. Treasury recommends using Google Chrome as your internet browser.

Is The Reporting Portal Open Now?

YES. Treasury announced on April 3, 2023, that the reporting portal is open. Note that there are many state and local government across the country accessing the portal. It is possible you’ll have to try several times to successfully access the portal.

What do we do if we Cannot Access the Reporting Portal?

Local governments are reporting a few different error messages as they attempt to access the portal. If you receive an error message, take a screen shot or otherwise document it. Try again a few hours or a day later and/or try a different internet browser (Google Chrome is preferred). If you still are unable to access the portal, let Treasury know asap and keep documentation of that correspondence. Contact Treasury at (844) 529-9527​ or SLFRF@treasury.gov.

COMPLETING THE P&E REPORT

What Information do we Need to Complete the P&E Report?

A local government must do the following before completing the P&E Report:

    • Verify that the local government’s registration is current in SAM.gov.
    • Verify your local government’s main Unique Entity Identifier (UEI) number. All local governments that had a SAM.gov account as of April 2022 were automatically assigned a UEI#. This replaced the former DUNS# system. You can verify your UEI in SAM.gov.
    • Identify your Account Administrator. That individual should have received an email from Treasury in mid-March. If no one in your unit received the email, and you do not otherwise know who your Account Administrator is, contact Treasury ASAP to troubleshoot ((844) 529-9527​ or SLFRF@treasury.gov).
    • Verify cumulative (March 3, 2021-March 31, 2023) and current period (April 1, 2022-March 31, 2023) obligations and expenditures for all Revenue Replacement funds. You will report these as a single EC 6.1 project (or possibly a EC 6.2 project).

If My County / Municipality is Spending All Our ARP/CSLFRF Funds in the Revenue Replacement category, How Do We Complete the P&E Report?

The good news is that Treasury streamlined reporting for the Revenue Replacement category. All obligations and expenditures are reported as EC 6.1. (The only exception is if Revenue Replacement funds were used as the non-federal match for other qualifying federal grant programs, in which case they are reported as EC 6.2.)

On the project page in the P&E Report, either create a new EC 6.1 project or edit an existing EC 6.1 project. The screen will prompt you to enter cumulative and current period obligations and cumulative and current period expenditures, along with a brief narrative describing the project(s) funded with Revenue Replacement funds. You may aggregate all projects into one 6.1 project for reporting purposes. Recall that obligations occur when goods are ordered, or construction or service contracts are executed and there is a legal obligation for payment. (It is the same trigger as for the preaudit process under state law.) Expenditures occur when the goods have been delivered or services are performed, and the amounts are due and owing to the other party. (It is the same trigger as for the disbursement process under state law.) The project description(s) should match the project(s) listed in the local government’s grant project ordinance and other project documentation. You will also select the project status (not started, <50% completed, >50% completed, or completed). You will identify the appropriate status based on percentage of your Revenue Replacement funds that have been fully expended.

Note that although the Revenue Replacement projects may be aggregated for reporting purposes, a local government must maintain a separate project file for each project, detailing all the documentation and other compliance requirements for auditing purposes. The project files must be maintained for at least 5 years after the expenditure of the last dollar of ARP/CSLFRF funds. See this blog post for more information on the budgeting, compliance, and documentation requirements for expenditures in the Revenue Replacement category.

Additionally, a local government receiving between $0 and $10 million total allocation should select the Standard Allowance. The April 2023 P&E Report should indicate whether your unit selected the Standard Allowance last year. If your unit did not, it must do so in this report. There may not be another opportunity to select this option. Be sure to verify that the Standard Allowance is selected before certifying the report.

What If We Did Not Select the Standard Allowance Last Year (Or if we Do Not Remember)?

Your April 2023 Project & Expenditure Report will reflect whether you selected the Standard Allowance last year. Verify that you did. If you did not, be sure to select the Standard Allowance in the April 2023 report. This may be the last opportunity to do so. Note that selecting the Standard Allowance is under a separate tab in the report than the project information.

What if we Reported Some Obligations and Expenditures as Premium Pay or Other Non-Revenue Replacement ECs Last Year?

Several local governments entered projects in last year’s P&E Report in categories other than Revenue Replacement, such as ECs associated with the Premium Pay or Necessary Infrastructure categories. In April 2022 we did not have full information about the Revenue Replacement category. That info did not come until July 2022. Based on the changes Treasury made in July 2022 further streamlining the compliance requirements for Revenue Replacement, it is now clear that all projects that could be funded in another category can and should be funded and reported in the Revenue Replacement category. Everything that can be funded in another category can also be funded in the Revenue Replacement category, but with a much lighter compliance and reporting burden.

Treasury allows a local government to change prior allocations and even cancel out previously reported projects in the P&E Report. Local governments that reported obligations and expenditures outside of the Revenue Replacement should cancel those projects in the April 2023 report and instead report all Revenue Replacement obligations and expenditures as an EC 6.1 (or EC 6.2) project. To cancel a project in another EC, click on the Cancel Project button at the bottom. Then click on the Project Status drop down box and Select “Cancel.” Finally, zero out the cumulative and current period obligations and expenditures. Report these amounts, instead, in the EC 6.1 (or EC 6.2) project. You will list the different expenditure types in the brief description box associated with the EC 6.1 (or EC 6.2) project. The only recommended exception is if the local government previously reported Premium Pay as EC 4.1. Assuming you followed all the requirements for properly awarding premium pay and kept all the necessary documentation, it is fine to leave that project in the report. Report all other obligations and expenditures as Revenue Replacement, though.

What if we Have Not Made Any Obligations or Expenditures Yet?

If your local government has not obligated or expended any of its ARP/CSLFRF funds as of March 31, 2023, select “No Projects to Report” on the project page in the P&E Report. You still must verify that you have selected the Standard Allowance before certifying the April 30, 2023 report. Note that Treasury may flag your report if you do not have any obligations and expenditures to date. Be prepared to explain the delay and demonstrate a plan to obligate and expend the funds soon.

Do we Report on ARP/CSLFRF Funds Received from the State?

In addition to their own allocations of ARP/CSLFRF monies, many local governments also received direct appropriations or competitive grants from the State, funded with the State’s allocation of ARP/CSLFRF. A local government must follow all compliance and documentation requirements specified by the state agency administering the funds, BUT A LOCAL GOVERNMENT SHOULD NOT INCLUDE THESE STATE FUNDS IN THE LOCAL GOVERNMENT’S P&E REPORT. The State will report on these funds in its P&E Report.

What if we Need More Help?

There are several places to turn for help. The North Carolina League of Municipalities and North Carolina Association of County Commissioners, along with many, if not all, of the regional Councils of Government (COGs) across the State, have staff available to answer reporting questions. The School of Government will continue to hold ARP Office Hours weekly and will switch to daily for the last week of April to help with P&E Report issues (see schedule and Zoom link below.) Finally, US Treasury has posted several helpful resources and tutorials:

Upcoming ARP Office Hours

    • Friday, April 14, from 8:30-9:30am
    • Wednesday, April 19, from 8:30-9:30am
    • Friday, April 21, from 12:30-1:30pm (note slightly modified time)
    • April 24, from 2-4pm (P&E report)
    • April 25, from 2-4pm (P&E report)
    • April 26, from 11-1pm (P&E report)
    • April 27, from 8:30-10:30am (P&E report)
    • April 28, from 9-11am (P&E report)

Zoom Info for All Office Hours: 

https://zoom.us/j/95481909044?pwd=UlE2VHNhN2luS0JEYTJqeTZTMFRWdz09

Meeting ID: 954 8190 9044 / Passcode: 779726

 

This blog post is published and posted online by the School of Government for educational purposes. For more information, visit the School’s website at www.sog.unc.edu.

Coates Canons
© 2009 to present. School of Government at the University of North Carolina at Chapel Hill.
All rights reserved.