Just over four months from now is the deadline for funds received from the America Rescue Plan (ARP) State and Local Fiscal Recovery Fund (SLFRF). These funds must be obligated by December 31, 2024, and spent by December 31, 2026.
Last year, U.S. Treasury issued an Obligation Interim Final Rule (IFR). Under the revised definition of “obligation,” the term continues to mean an order placed for property and services and entry into contracts, sub-awards, and similar transactions that require payment.
Under the Obligation IFR, a recipient is also considered to have incurred an obligation by December 31, 2024, with respect to a requirement under federal law or regulation or a provision of the SLFRF award terms and conditions to which the recipient becomes subject as a result of receiving or expending SLFRF funds. Accordingly, under the second part of the definition of the obligation set out above, a recipient may use SLFRF funds to cover costs related to:
- Reporting and compliance requirements, including sub-recipient monitoring
- Single Audit costs
- Record retention and internal control requirements
- Property standards
- Environmental compliance requirements
- Civil rights and nondiscrimination requirements
The Obligation IFR does not alter the existing SLFRF obligation or expenditure deadlines. Recipients must obligate SLFRF funds by December 31, 2024, and expend obligated funds by December 31, 2026 (with the exception of projects under the Surface Transportation projects and Title I eligible use categories, for which funds must be expended by September 30, 2026). In addition, the Obligation IFR does not alter the eligible use categories described in the 2022 Final Rule and the 2023 Interim Final Rule.
We encourage you to share this information with your CFO.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.