skip to main content

American Rescue Plan Act State and Local Fiscal Recovery Funds Obligation Guidance

American Rescue Plan Act State and Local Fiscal Recovery Funds Obligation Guidance

As the Dec. 31, 2024, deadline approaches for obligating State and Local Fiscal Recovery Funds (SLFRF) under the American Rescue Plan Act (ARPA), local governments face critical decisions to preserve and effectively utilize these funds. If ARPA SLFRF funds received from the Treasury are not obligated by December 31, 2024, those unobligated funds must be returned to the Treasury.

What is an obligation of ARPA SLFRF funds?

Treasury has defined “obligationas “an order placed for property and services and entering into contracts, sub-awards, and similar transactions that require payment.” This definition is based on the Uniform Guidance definition of “financial obligations.”

The Treasury Obligation Interim Final Rule released November 9, 2023, adds to include “incurring an obligation by Dec. 31, 2024, in connection with a requirement under federal law or regulation or a provision of the SLFRF award terms and conditions to which recipients are subject to as a result of receiving or expending funds.”

Strategies to meet December 31, obligation deadline

Develop an obligation spending plan

  • By Dec. 31, 2024, have approved and signed purchase orders, contracts, sub-award agreements, or similar approved and signed transactions. These agreements should require payment for all goods or services to be spent by Dec. 31, 2026.
  • Budgets through Dec. 31, 2024, should present that all ARPA SLFRF dollars have been obligated. If you cannot obligate these funds through executing the agreements described above, the next easiest way is to claim lost revenue and use the money on government services to be spent by Dec. 31, 2024.

Maximize revenue loss allocation

  • Utilize SLFRF monies to offset revenue loss incurred during the pandemic. Update your lost revenue calculation through your most recent fiscal year.
  • Ensure compliance by adhering to guidelines regarding eligible expenses, avoiding allocation for tax reductions, debt services, or pension payments.
  • Strategically utilize revenue loss to maximize funding flexibility, optimizing resource allocation.

 Identify allowable costs

  • Leverage ARPA's broad scope to identify previously uncharged but allowable costs for expenditures from post-March 3, 2021, through March 31, 2024, and include in Treasury quarterly reporting due July 31, 2024.
  • Obligate the standard allowance amount (up to $10 million) for revenue loss to the provision of government service expenses to report as obligated on July 31, 2024, reporting.
  • Recalculate revenue loss to determine whether the revenue impact during the pandemic is greater than the standard allowance previously taken to obligate for the provision of government services. (See Treasury FAQs Section 3—Revenue Loss and pages 240-260 of the ARPA Final Rule.)
  • Use expenditure categories Revenue Replacement 6.1 Provision of Government Services or 6.2 Non-federal Match for Other Federal Programs to obligate the total revenue loss.
  • Explore Public Health: Negative Economic Impact – Public Sector Capacity expenditure categories to report funds expended on:
    3.1 Payroll and Benefits for Public Health, Public Safety, or Human Service Workers
    3.2 Rehiring Public Sector Staff
    3.3 Workforce - Other
    3.4 Effective Service Delivery
    3.5 Administrative Needs
    (Note: Per Treasury Obligation Interim Final Rule guidance, the use of APRA funds for public sector payroll and benefits is allowable only from March 21, 2021, through Dec. 31, 2024, as salaries/benefits are normally obligated on the date worked.)
  • ARPA SLFRF funds can be used after December 31, 2024, to meet the following recipient expenses:
    • Reporting and compliance requirements
    • Single Audit costs
    • Record retention and internal controls
    • Property standards
    • Environmental compliance requirements
    • Civil Rights and non-discrimination requirements

      For these costs to be approved by the Treasury, recipients must:
    • Determine the amount of SLFRF funds it will use to cover these expenditures.
    • Document a reasonable justification for this estimate.
    • Report the amount to Treasury by July 31, 2024, with an explanation of how the amount was determined.
    • Report at award closeout the final amount expended for these costs.
      • (Note: Amounts not spent must be returned to Treasury as part of closeout.)

Treasury will issue updated SLFRF Reporting and Compliance Guidance to reflect additional reporting requirements before the July 31, 2024, quarterly reporting deadline.

Our National Government Practice can help you get started or finish obligating your ARPA money. No matter where you are in your spending process, our Grants Management Team is ready to help you navigate the complexities of ARPA funding, maximize your community's potential for growth and resilience, and meet the December 31, 2024, deadline. Fill out the form on this page to connect with an ARPA consultant.



Have a Question?

Fill out the form to speak with one of our ARPA consultants.

Hide Firm Disclaimer


UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc., and its subsidiary entities. UHY Advisors, Inc.’s subsidiaries, including UHY Consulting, Inc., provide tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors” and “UHY Consulting”. UHY Advisors, Inc., and its subsidiary entities are not licensed CPA firms. UHY LLP, UHY Advisors, Inc. and UHY Consulting are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP, UHY Advisors and/or UHY Consulting (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

On this website, (i) the term "our firm", "we" and terms of similar import, denote the alternative practice structure conducted by UHY LLP and UHY Advisors, Inc. and its subsidiary entities, and (ii) the term "UHYI" denotes the UHY international network, in each case as more fully described in the preceding paragraph.