Two Groups with Ties to Chattanooga Council Members Received Federal Pandemic Funds

For state and local governments, scrutiny is growing over the usage of American Rescue Plan Act (ARPA) funds, as one city in Tennessee recently found. Two organizations were recently found to have ties to Chattanooga Council Members who are tasked with fund distribution.

Partner Jack Reagan, who spearheads UHY's ARPA consulting team and serves as an advisor to Chattanooga, noted the process for approving grants includes an assessment of how much experience an organization has managing federal, state, or private grants and prior work with the city. The end goal is to understand if the selected organizations are familiar with the compliance for funding programs with strings attached, he said.

In this case, where conflicts of interest cases had arisen, Reagan said the city of Chattanooga has taken care to adequately address any potential conflicts.

"Conflicts of interest aren't inherently bad or wrong or nefarious," he said. "It's just that they have to be very, very transparently disclosed to everybody so that they know that things were done at an arm's length and followed in the normal course of business and there wasn't any preferential treatment given to anybody."

Read the full article published by Times Free Press.

Transparency and conflict of interest concerns are among the top issues for state and local governments during the dissemination of funds. The city of Chattanooga correctly took preemptive steps with aid from UHY and was able to weather the scrutiny that came with ARPA allocations. Without those safeguards, it could have quickly resulted in a much more complicated situation. Speaking with the right advisor on how to ensure independence, compliance, and transparency for ARPA funding is a good first step. Please contact UHY if you have any questions on ARPA, vetting organizations, or reporting fund uses.