Use a Grants Management System to Meet ARPA Compliance Requirements

The American Rescue Plan Act (ARPA) provides significant funding to state and local governments, as well as nonprofit organizations, to help with COVID-19 relief efforts. Receiving the funding requires a single audit for those expending more than $750,000 in federal funds in a fiscal year.

The current federal compliance supplement for ARPA funding, released on May 29, 2024, designates ARPA as a “higher risk” program, meaning repeat single audits may be necessary.

Learn how an effective grants management system can help your organization prepare for its federal single audit of ARPA funding.

Tracking required information

Using ARPA funding requires tracking significant revenue, expenditure, and unearned revenue balances. Proper tracking of grant-related balances is critical to achieving a complete and accurate Schedule of Expenditures of Federal Awards, especially when considering the substantial, often unprecedented amount of ARPA funding.

By tracking and storing reconciliations, or by interfacing directly with the financial system, a grants management system can help confirm balances are complete, accurate, and recognized in the proper period.

Accurate reporting on funds

ARPA funding requires numerous reports to be submitted to the United States Treasury, dependent on the size of the recipient and amount of funding received. Safeguarding the accuracy of these reports is critical for reducing the possibility of findings during single audits and potential future audits by the federal government.

Along with financial reporting requirements, a grants management system can track reporting deadlines and budget information, send reminders to staff on assigned tasks, and verify reports are accurate and reconcile back to the financial system.

Staying within the period of performance

The period of performance is the time frame during which grant funds must be spent, and it’s important expenditures are made within this period. All ARPA funding must be obligated by December 31, 2024, and spent by December 31, 2026.

A grants management system can track start and end dates and send reminders of obligation and spending deadlines.

Streamlining procurement

ARPA expenditures must comply with federal, state, and local procurement guidelines, and a centralized platform for tracking and managing procurement activities can be very helpful.

A grants management system can house data for federally funded procurements and provide vendors with the items necessary to document compliance. It can also automate the procurement process, making it faster and more efficient.

Subrecipient monitoring

Your organization’s federal single audit must report funds passed through to subrecipients, in addition to those expended directly. Extensive monitoring is required, and it’s important to understand the difference between beneficiaries and subrecipients.

A grants management system can support proper monitoring procedures, confirm agreements are in place, and generate reports on subrecipient monitoring activities.