WEBINAR: State & Local Recovery Fund: Reporting Guidance (Counties/Cities with award over $5million)

Hello and welcome to today's webinar. I'm Chastity Murphy with the State and Local Fiscal Recovery Fund in the Office of Recovery Programs at the Treasury Department. Today's session is intended to provide an overview of the compliance reporting guidance published by the Treasury on June 17. This session is specifically intended for metropolitan cities and counties with a population less than 250,000 which receive less than 5 million in the SLFRF funding. If you are not from this group, you have a separate session and have a separate session scheduled. You should have received an email with those details. We recommend that you participate in the session targeted to your jurisdiction as the state and local fiscal recovery reporting requirements vary according to population and amounts of funding that the jurisdictions receive. On the next slide, we have listed information about the webinar for other types of jurisdictions. Today, we will cover the reporting guidance for state and local fiscal recovery funds. This session will not discuss the interim final rule in detail or provide answers to questions about the session, will not discuss the interim final rule in detail or will not provide answers to the questions about specific allowable uses for the state and local fiscal recovery funds. If you have questions on the allowable uses, your best source is the interim final rule and the related FAQs. If the interim final rule or FAQ does not address your specific questions, then you should email SLFRP at treasury.gov. Here are the sessions scheduled for other recipients. If one of these sessions would be more appropriate for you or you were expecting a different topic to be discussed today, I encourage you to drop from this session to avoid any confusion. During today's session, members of the Treasury's Office of Recovery Programs will be providing an overview of the SLFRF compliance and reporting guidance. There will be an overview followed by a short review of the general guidance. The session will then focus on covering each section of the reporting guidance with some time at the end for Q&A. The link to the reporting guidance is on the screen, and we have also dropped it into the chat. We recommend that you open up the reporting guidance and follow along during today's session as we walk through the guidance section by section. This session is not intended to replace reading the guidance in full. It is designed to provide an overview of key concepts and topics which may help when reading the guidance. This webinar will last one hour, starting with the presentation followed by the Q&A. Participants are in listen mode only, but as mentioned, there will be a dedicated Q&A session at the end. Questions can be submitted through the Q&A feature at the bottom of your screen. You will not see questions submitted by other participants, but we will be collecting them throughout the session and addressing as many as we can in the Q&A portion of the agenda. Finally, before we get started, here are some resources for more information about the State and Local Fiscal Recovery Fund. You can find more information about the program at treasury.gov backslash SLFRP, and if you have any questions on eligible uses or other topics we will not be covering today, you can email SLFRP at treasury.gov. Now I'd like to introduce Kitty Richards. Kitty is the head of the State and Local Fiscal Recovery Fund program and will be giving a brief overview of the program. Thank you so much, Chastity. Hi, I'm Kitty Richards, and I'm really glad to be able to join you today. First, let me just thank all of you on behalf of the Office of Recovery Programs for taking the time today and for everything that you're doing for your communities during this recovery from the coronavirus pandemic. Your governments and workers have really been on the front lines for more than a year now, and just know that the whole Treasury team is really dedicated to supporting you in these efforts. Many of you are probably already familiar with the program, but a brief recap. The American Rescue Plan included $350 billion in support for tens of thousands of state, local, territorial, and tribal governments to respond to the COVID-19 pandemic. Treasury launched the program on May 10th when we issued our interim final rule that governs the uses of the funds and opened our payment portal so that you all can come in and start getting access to your cash. As of last week, Treasury has dispersed $192 billion to more than 3,800 recipients, and I'll just take this opportunity to say if you haven't already come in and applied for your funding, we stand ready to help you with any technical assistance you need and are really excited to get this money into the hands of the governments that can really use it best, so please come on over to the portal. This program is designed to achieve several goals. Give state, local, and tribal governments the resources needed to fight the pandemic, replace revenues lost as a result of the economic crisis, and build the foundation for a stronger, more equitable recovery, both by providing immediate economic stabilization for families and businesses that are still struggling and by addressing long-standing disparities that have been exacerbated by this crisis. The statute and Treasury's interim final rule implementing the statute establishes eligible uses for the funds in several different categories. Responding to the public health impacts of COVID-19 and responding to the negative economic impacts of the pandemic, replacing lost revenue, providing premium pay to essential workers, and making investments in water, sewer, and broadband infrastructure. As noted here, Treasury is accepting comments on the interim final rule through July 16th, and we really encourage you to come into the public comment process and make your views known about the ways that the interim final rule could be strengthened in this process. You all really have a lot of expertise on what would be most beneficial for your communities and how this program can be administered, and so we are really looking for your comments in this process. On June 17th, Treasury released the SLFRF compliance and reporting guidance, which is what we're mostly going to talk about today. It builds on the interim final rule. The guidance was intended to provide recipients with a full overview of your compliance and reporting responsibilities. It will be followed by a user guide, which gives additional details on submitting data to the Treasury, and a reporting portal that is under development now. When developing the guidance, we had a number of objectives in mind. First, accountability. These funds provide critical support to communities across the country, and we're excited to move them out the door, but the American people also expect all of us to ensure that they are used wisely and to take every effort to prevent waste, fraud, and abuse. This guidance reminds recipients of your obligations and provides a full overview of your responsibilities under the award terms and conditions, the interim final rule, and the uniform guidance. One of these responsibilities, which we'll focus on today, is reporting on the use of funds. While none of us like the burden that comes with accounting for and reporting on funds, this reporting is foundational to our efforts to ensure expenditures are in compliance with eligible uses. The SLFRF requires program, financial, and performance reporting to build public awareness, increase accountability, and monitor compliance of eligible uses. Recipients are required to account for every dollar spent and provide detailed information on how funds are used. Apologies. Transparency is the second bedrock principle of our reporting and compliance framework. Given the nature and magnitude of this program, there's going to be a lot of interest in how you're spending the money. Transparency is a core component of accountability, and it'll provide important information for your community as well as leaders here in Washington about how state and local fiscal recovery funds are being used to advance an equitable economic recovery. Treasury will provide comprehensive public reporting based on the information you submit to us. In addition, we're asking you to publish a recovery plan each year on your own website. This recovery plan will allow your residents to understand how funds are being used and what outcomes are being achieved in your community. Last but not least, we really wanted to make this as user-friendly as possible. We recognize that reporting, while necessary, places a burden on you and that we have a responsibility to minimize that burden to the extent possible. We're working to make many improvements that were asked for by recipients of CARES Act funding, including reporting deadlines that are 30 days after the close of the covered period rather than the 10 that you had under CRF, streamlined requirements for smaller funding recipients, and increased available bulk upload capabilities. We'll be using a different reporting system than what was used for CARES Act funding, and we're working to streamline that system as much as possible. In addition, this guidance is really supposed to be equity-focused. It includes a number of provisions designed to promote an equitable recovery and effective use of these funds. Treasury is committed to encouraging uses of funds that enhance racial and economic equity in communities across the country. This reporting guidance ensures that recipients will focus on equity in their planning and holds them accountable for tracking what proportion of their funds are going toward projects that will benefit economically distressed communities. Thank you again for taking the time to be here today and for everything you're doing to support the recovery. I really look forward to continuing to work with you as this program is implemented. I'm going to turn things over to Mark Bussow, who's going to give a brief overview of the guidance. Mark's a senior advisor in the Office of Recovery Programs here at Treasury, and he's been overseeing the development of our compliance and reporting framework for this program. Thanks, Mark. Great. Thank you, Kitty. I'm glad to be here, and thanks, everybody, for taking the time to join. I'm going to start with part one of the guidance, which provides an orientation to recipients on their compliance responsibilities and Treasury's expectations and recommended best practices. As Kitty mentioned, we're all responsible for effective oversight of these funds. As a recipient, you're the first line of defense and responsible for ensuring award funds are not used for ineligible purposes, and there's no fraud, waste, or abuse associated with your award. Part one provides you a short overview of the four main sources of recipient compliance responsibilities, the statute, Treasury's interim final rule, the uniform guidance, and the award terms and conditions. I'm not going to go through each in detail, as when it comes to fulfilling these obligations, there's no substitute for consulting the underlying documents and ensuring you and your staff understand and adhere to these provisions. But I do want to highlight a few key points quickly. First, part 1C1 of the guidance provides an overview of eligible and restricted uses, which Kitty reviewed earlier. As a recipient of an SLFRF award, your organization has substantial discretion to use award funds in the ways that best suit the needs of your constituencies, as long as such use fits into one of the eligible use categories, public health, negative economic impacts, lost revenue, premium pay, and water sewer broadband infrastructure. Specifically restricted uses include debt service, deposits into pension funds, and tax reductions. In addition to determining a given project's eligibility, recipients are also responsible for determining the sub-recipients or beneficiaries eligibility and must monitor their use of SLFRF award funds. Second, as discussed in part 1C2 of the guidance, you may use SLFRF funds to cover eligible costs during the period that begins on March 3, 2021 and ends on December 31, 2024, as long as funds are obligated by December 31, 2024 and expended by December 31, 2026. Costs for projects incurred prior to March 3, 2021 are not eligible, as provided for in Treasury's interim final rule, but in some instances, the costs incurred by the households, businesses, and individuals you are serving prior to March 3, 2021 may be eligible. The guidance includes examples of this on page 5, and you might want to check them out. The SLFRF awards are generally subject to the requirements set forth in the Uniform Guidance, and your organization should review the Uniform Guidance requirements applicable to the use of SLFRF funds. The program guidance gives a brief overview of these requirements, and I'll highlight just a few points now. Part 1D2 in the guidance describes how recipients may use funds for administering the SLFRF program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements. This section also clarifies that recipients are permitted to charge both direct and indirect costs to their SLFRF award as administrative costs. The guidance describes a number of considerations when doing so. Part 1E of the guidance discusses recordkeeping, single audit, and legal requirements related to non-discriminatory use of funds, including Title VI Civil Rights Act compliance. We hope the overview of these provisions in the guidance is helpful to your organization, but again, encourage you to consult the underlying documents and ensure that you and your staff understand and adhere to these provisions. Next, let me turn to reporting, which is included in Part 2 of the guidance. As Kitty mentioned earlier, the Treasury team has worked hard to design reporting requirements which fulfill our oversight and transparency responsibilities while minimizing the burden on recipients. As a metropolitan city or county with a population below 250,000 residents and receiving more than $5 million in funding, you're required to submit two types of reports. You'll provide a one-time interim report, which provides an overview of expenditures from the award date through July 31st. I have to note here that the guidance had an error in it when it was originally published, and this was listed as June 30th, but as stated in the IFR, it will cover the period through July 31st, and we've posted an updated file on Treasury's website, so I encourage you to re-download a new version of that. Second, you will submit a project and expenditure report each quarter, which provides a detailed breakdown of projects funded, obligations and expenditures, subawards, and some programmatic data. The interim report is due on August 31st, and the full project and expenditure report is due for the first time by October 31st of this year. Before I go through each report, I'd like to spend a minute on a couple of key concepts. The first is expenditure category. As we have discussed, there are a wide range of eligible uses of these funds, and Treasury must be able to track how funds are being used by recipients for our oversight purposes, and so we can provide transparency to Congress and the public. As such, we have defined 66 expenditure categories which recipients will use to track the funding. We will track both obligations and expenditures. An obligation is an order placed, such as a contract, and similar transactions that require payment. An expenditure is when the service has been rendered or the good has been delivered to the entity and payment is then due. The expenditure categories are important not only for tracking projects and expenditures, but also because for certain expenditure categories, you will need to provide additional programmatic data. You will see these referred to regularly throughout the guidance, referred to with EC followed by a number. The term expenditure category refers to the detailed level. So, for instance, you can see the first category on the slide is 1.1 COVID-19 vaccination. The second key concept is project. While there are 66 expenditure categories, there is still a very broad categorization. Each of them could include many different programs and activities. So, recipients are asked to identify projects to break down an expenditure category into more detail. A project is defined as a grouping of closely related activities that together are intended to achieve a specific goal or directed to a common purpose. They can include new or existing services funded either in whole or in part by an SLF award. Within this broad definition, recipients have flexibility to define their projects in a way that provides the greatest clarity on the work which will be performed. With that said, some expenditure categories and types of projects require additional reporting, and you're required to define projects at a sufficient level of granularity to be able to do any of the programmatic reporting that is required. If that sounds complicated, hopefully this graphic shows the relationships more clearly. Each recipient will have expenditures in a number of different expenditure categories. For each expenditure category you use funding for, you will have one or more projects. For each project, you will need to track obligations and expenditures, as well as any subawards that are made. And we'll discuss subawards in more detail later. And these relationships and the definitions for each will be explained in greater detail in the forthcoming user's guide. It's important recipients begin collecting and structuring data in this way, as all SLFRF funding a recipient receives will be broken down and reported by expenditure categories and projects. In this example, the overall expenditure category is education assistance early learning, which falls into the category of services to disproportionately impacted communities. And you can see this in Appendix 1 of the guidance. With the spending on early learning, there are likely several projects focused on different types of early learning initiatives. In this example, one of those projects might be focused on preschool. And within that preschool initiative, there might be several subawards to different types of service providers. Now that we've reviewed those key concepts, let's turn to the required reports. The interim report will include a table in the reporting portal, which lists all of the expenditure categories in Appendix 1. And then for each, you'll be asked to enter any obligations and expenditures incurred through July 31st. We've actually already gotten a question on what level of detail is required here, and I just want to be clear that in the interim report, you do not need to include a full breakdown by projects. Data is only required for any of the 66 expenditure categories listed in Appendix 1, where you have already incurred obligations or expenditures. In the example shown on the slide, you can see that obligations have been incurred in three categories, and expenditures in two. And that's the only data that needs to be filled out in the table. In the interim report, you will also need to submit some programmatic information. If you're planning to use some SLFR funding for revenue replacement due to revenue lost during the coronavirus pandemic, you will submit information on how that calculation was made. The formula was included in the IFR, and you'll also provide a description of how the revenue replacement funds will be allocated. Okay, that covers the information required by August 31st. Your first quarterly project and expenditure report will be due October 31st, and reports will be due 30 days after the end of the period. There are three basic categories of information which will be required. First, we will collect information on each project. The project description will be very important. As I described a minute ago, this will be a key field we use to understand the are undertaking. The system will require project descriptions to be between 50 and 250 words. For each project, you will also need to report on obligations and expenditures and project status, as well as the demographic distribution of the project. And Jetta is going to describe that in more detail in a minute. Second, you'll need to report on all subawards of $50,000 and above each quarter. A subaward is an agreement that a prime recipient makes with another entity to perform a portion of the award. In most cases, this will occur when you award a contractor grant over $50,000 using these funds. As many of you know, subaward reporting is a federal requirement across programs, and this information will be provided to usaspending.gov. Third, for projects in specific expenditure categories, you will need to report additional data, and the guidance includes a list broken out by expenditure category. Now, I'm going to turn it over to Jed Herman, who's a senior advisor in the Officer Recovery Programs for Outreach, and he's going to provide a little more detail on that reporting in the Project and Expenditure Report. Thanks so much, Mark, and thanks to all of you for joining us today. I'd like to add a little more detail, as Mark said, in just a few areas of the Project and Expenditure Report. First, in line with the goal to ensure that state and local fiscal recovery funds are being used for a strong and equitable recovery, it's important for the public and Treasury to understand how funds are being spent to serve specific communities, and in particular, those communities most impacted by the pandemic and its economic effects. As such, the Project Demographic Distribution section provides information to track if projects are focused on areas with the most need. Recipients are asked to classify whether projects' intended recipients are primarily in economically distressed areas. The need to identify whether or not the project is serving economically disadvantaged communities is required of projects and expenditure categories related to negative economic impacts, services to disproportionately impacted communities, and COVID-19 testing and vaccinations. It is not required of projects like infrastructure that are less targeted toward specific recipients and broadly serve entire communities. The purposes of this reporting, economically distressed areas, are defined by HUD's Qualified Census Tract designation, which is focused on areas that earn less than 60 percent of median income or a poverty rate of above 25 percent. Project funds count as being targeted toward economically disadvantaged communities. The funds are spent on a program or service that meets one of the following four criteria. First, if the service is provided at a physical location in a Qualified Census Tract. Second, if the primary intended recipients live in a Qualified Census Tract. Third, if the eligibility criteria are such that the primary intended beneficiaries earn less than 60 percent of the median income for the relevant jurisdiction, which could be a state, county, metropolitan area, or other jurisdiction. Or finally, fourth, if the eligibility criteria are such that over 25 percent of the intended beneficiaries are below the federal poverty line. To be clear, to qualify as an economically distressed area, you must meet one of these four criteria. And also, this does not require that information needs to be tracked on each individual beneficiary. Use of reasonable estimates is permissible to determine if a project meets one of these criteria and thus is serving an economically disadvantaged community. I'll move on and talk a little bit more about the program data and the project and expenditure report, where there are a few other areas where specific data needs to be provided. This information helps track results and ensure that funds are spent on eligible uses. I won't go into the measures for each specific area where programmatic information is needed, as the reporting guidance has a very clear list. But as a couple of examples, project and the small business economic assistance are asked for a brief description of the program, the number of small businesses served, and the approach to ensuring aid responds to a negative impact of the COVID-19 pandemic. As another example, for expenditures on rehiring public sector staff, it asks about the number of FTEs rehired by the governments using state and local fiscal recovery funds. Now, talk a little bit more about the infrastructure projects. And to ensure accountability for these large infrastructure projects, there is detailed project level reporting that includes things like location and expenditure data. It's important to note that because you'll need to collect this type of specific location information for these projects, it's likely that reporting for infrastructure projects will be more detailed than in other areas. In addition, because infrastructure projects need a steady supply of labor to ensure they are completed within the timeline for spending state and local fiscal recovery funds, recipients must also report information on the wages and benefits provided, as well as how they're minimizing the risk of labor disputes and ensuring a safe and healthy workplace. Finally, before I summarize some of your reporting requirements, I'm going to talk about the Treasury submission portal. So, all of this information that we've talked about thus far today will be submitted to Treasury through the Treasury submission portal. In the coming weeks, we will provide a detailed user guide and other reference materials to help recipients enter their information into this reporting system. In addition, Treasury plans to host a series of technical assistance webinars like today to help recipients comply with relevant reporting requirements. Further communications will be shared with recipients and posted on Treasury's website on the state and local fiscal recovery homepage. On the next slide, I'll briefly recap the reports that your jurisdiction is required to file. So, this webinar today is intended for metropolitan cities or counties with a population below 250,000 residents and that are receiving more than $5 million in state and local fiscal recovery funds across their total allocation. So, as a metropolitan city or county with a population below 250,000 residents and receiving more than $5 million in funding, you're required to submit ongoing reports on your use of activities. We will provide a one-time interim report, which Mark mentioned, that provides an overview of expenditures from the award date through July 31st. You will submit a project and expenditure report each quarter, which provides a breakdown of projects funded and obligations and expenditures, sub-rewards, and some programmatic data. The interim report is due on August 31st, and the first full project and expenditure report is due on October 31st. Note that cities and counties with populations below $250,000 are not required to file an annual performance. So, the recovery plan performance report is not required of recipients that have a population of less than 250,000. With that, that concludes the presentation portion of our webinar.