FAQs: Navigating the ARPA SLFRF obligation deadline

As the December 31, 2024, obligation deadline for the American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) approaches, many local governments have questions about what constitutes an obligation, how to use funds effectively, and how to stay compliant. Here are some of the most frequently asked questions (FAQs) answered during a recent Treasury webinar co-hosted by the National League of Cities (NLC) and National Association of Counties (NACo).

You can find a recording for the webinar here and the slideshow presented here.

1. What is the obligation deadline, and what does it mean for local governments?

• The obligation deadline is December 31, 2024. By this date, all SLFRF funds must be obligated, meaning committed through contracts, subawards, interagency agreements, or similar transactions.
• Local governments will report its obligations during the next reporting period: 
  • January 31, 2025 – Quarterly reporters.
  • April 30, 2025 – Annual reporters.
• Funds must be spent by December 31, 2026.

2. What qualifies as an obligation?

• An obligation is:
  • A contract, subaward, purchase orders for goods or services, or interagency agreement (e.g., MOU, MOA). You can find a template for an interagency agreement here.
  • Certain payroll expenses for eligible employees if the positions are established by December 31, 2024.
• An obligation is NOT:
  • A budget allocation or amendment.
  • An intention to enter a contract.
  • Moving funds into a general fund but not further establishing an obligation with those funds by 12/31/24.

3. Are revenue loss funds automatically obligated?

• No. Claiming revenue loss using the standard allowance or calculated formula does not automatically obligate funds.
• The two-step obligation process for revenue loss funds:
  • Step One: Report claimed revenue loss: Elect either the $10 million Standard Allowance, up to the award amount, or calculate revenue loss according to the formula provided by Treasury.
  • Step Two: Report projects under expenditure category 6. These projects must include:
    • Amount of SLFRF funds budgeted, obligated, and expended (when applicable) for that specific project. 
    • Project description that summarizes the project in sufficient detail to provide an understanding of the major activities that will occur.

4. What are common errors to avoid?

• Claiming funds as obligated without formal contracts or agreements.
• Misreporting projects under incorrect expenditure categories.
• Failing to document project details, such as activities, costs, or timelines.
• Assuming the $10 million revenue loss allowance automatically obligates funds.

5. Can funds be used for personnel costs?

• Yes, ARPA funds can cover salary, benefits, and payroll taxes for eligible positions, provided these positions are established before December 31, 2024.
• Make sure to report the estimated amount needed for personnel costs in your next Treasury report or execute an interagency agreement.
  • Quarterly reporters will file their estimates by January 31, 2025.
  • Annual reporters will file their estimates by April 30, 2025.

6. The person who was the Authorized Representative/Point of Contact for ARPA left. How do I change the Authorized Representative/Point of Contact, so that I can manage our ARPA funds? 

• If your ARPA Authorized Representative has left, you are able to change the roles in your ARPA portal. 
• Ensure you have an account on ID.gov (go to Login.gov) and verify your postal code You will be taken to a landing page where you are able to update the roles as needed. If you do not have your account identifier (required to update roles), you will need to email Treasury at COVIDReliefITSupport@treasury.gov. Make sure to mention “Account Identifier” in the subject line of the email

7. What if I need to correct reporting errors?

• You may update your report during the next reporting cycle. 
• Please remember that the report is cumulative. Reports must include all obligations and expenditures from earlier in the SLFRF period of performance. 

8. Can I change projects after obligating funds?

• Yes, you can change projects until the December 31, 2024 obligation deadline. You will report these changes in your next report to Treasury with proof of obligation. It is okay if your report is due AFTER the December 31, 2024 obligation deadline – Treasury understands that your obligations will not be reported until your next Project & Expenditure Report.
• If, after the December 31, 2024 obligation deadline, you have excess funds that were obligated by the deadline but not expended on an activity you can reclassify them from the original activity to another eligible SLFRF program, so long as the municipality had incurred an obligation for the project before December 31, 2024. 

9. Does the obligation deadline apply to subrecipients?

• No. Subrecipients are not subject to the December 31, 2024, obligation deadline. The obligation deadline applies only to the recipient of SLFRF funds.

10. Where can I find additional resources?

• Visit Treasury’s SLFRF website for the latest guidance.
• Review the FAQ section for in-depth answers.
• Contact Treasury via SLFRF@treasury.gov for support.