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Treasury releases final guidance for spending ARPA funds

By Kayla Carter, Research Associate
The final rule allows much more flexibility for counties using their ARPA funds.

Last week, the U.S. Treasury released the Final Rule for the Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act (ARPA). Kentucky counties will receive a direct allocation of approximately $867.8 million under this program. 

View NACo's analysis of the Final Rule here.

Treasury previously released an Interim Final Rule in May 2021 that provided initial guidance to counties on the eligible and ineligible uses of the funds. The Final Rule provides broader flexibility and simplicity to the program based on the comments Treasury received from the Interim Final Rule. 

Counties must comply with the Final Rule beginning April 1, 2022, however, counties can take advantage of the Final Rule’s flexibility now, ahead of the effective date. Until April 1, counties may use funds in a manner consistent with the Interim Final Rule.

New flexibility in the Final Rule

The Final Rule creates a standard allowance for revenue loss of $10 million. This allows counties to use up to $10 million of ARPA funds on government services without using the revenue loss formula provided by the Interim Final Rule. This change will allow a majority of Kentucky counties to use their full award on government services.

Treasury intends to amend its reporting forms to provide a mechanism for recipients to make a one-time, irrevocable election to use either the revenue loss formula or the standard allowance.

Additional flexibility:

  • Broadens the share of eligible workers who can receive premium pay.
  • Expands eligible uses under water and sewer infrastructure to include culvert repair and lead remediation projects.
  • Allows funds to be used for modernization of cybersecurity for existing and new broadband infrastructure including modernization of hardware and software.

To view an overview of the Final Rule, click here

To view the full text of the Final Rule, click here.

To view the Project and Expenditure Report User Guide, click here.

View more information about Recipient Compliance and Reporting Responsibilities here

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