ARPA Reports Due April 30

April has arrived, and it is time for the next round of the American Rescue Plan Act (ARPA) reports. Cities must submit ARPA reports to the Treasury Department by April 30 each calendar year regardless of whether any money is expended. Many new city officials will be submitting reports for the first time, which means this refresher article is due.

All but nine Kentucky cities are categorized as non-entitlement units of government (NEUs). NEUs are required to submit a single annual report to the Treasury Department by April 30 each year. The nine cities classified as entitlement cities are Ashland, Bowling Green, Covington, Elizabethtown, Henderson, Hopkinsville, Lexington, Louisville, and Owensboro. Entitlement cities must submit quarterly reports to the Treasury Department.

In the ARPA final rule issued in April 2022, the Treasury Department authorized local governments to take a standard allowance of up to $10 million in revenue loss, not to exceed a local government’s full award. Local governments that elect the standard allowance gain the benefit of simplified reporting but do not have to prove actual revenue loss.

Local governments that elect to take the standard allowance of revenue loss have a much less onerous reporting requirement as explained in the compliance and reporting guide. Revenue loss is a stand-alone expenditure category for reporting all expenditures, whereas each type of project has a distinct expenditure category. Revenue loss expenditure category project reports are in narrative form and do not require local governments to submit documentation, although all documentation must be retained.

Local governments that elect to report by individual project must identify the specific expenditure category that relates to the various projects supported by ARPA funds. These reports require additional documentation, multiple narratives to justify the expense, and references to the section of the final rule that authorizes the expenditure.

Most cities received an email from the Treasury Department as a reminder of the upcoming report deadline. Before panic sets in, how about a recap regarding ARPA reporting?

• NEUs are required to submit an annual report on ARPA expenditures even if no ARPA funds are expended. 
• ARPA recipients are encouraged by the Treasury Department to take the standard allowance of up to $10 million, not to exceed the actual ARPA award. 
• The standard allowance means the Treasury Department assumes this money replaces lost revenue due to the pandemic, BUT recipients do not ever have to prove that it lost revenue.
• Initially local governments were required to select the standard allowance by April 30, 2022, but effective June 2022, the Treasury authorized local governments to make the election in the April 30, 2023, report. 
• Expenditures authorized for the general provision of government services are reported under expenditure category 6.1.
• Cities must provide a written explanation of how the monies are used in the report. 
• Reporting is through March 31, 2023, so expenditures from April 1, 2023, through April 30, 2023, will not be reported until the 2024 report. 
• Follow KLC reporting TIPS from the April 2022 webinar. You can find the PowerPoint here.

To help our member cities navigate ARPA requirements, the late Dr. Joseph Coleman, KLC federal relations manager, recorded a webinar on ARPA reporting in April 2022. Dr. Coleman’s legacy of extraordinary service to our member cities shines through in the thorough, careful explanation of the ARPA reporting process. The recorded webinar can be viewed here.

For more information on this or any other municipal law matters, contact KLC Director of Municipal Law Morgain M. Patterson or KLC Municipal Law Attorney Megan Griffith.