WEBINAR: State & Local Recovery Fund: Reporting Guidance (Counties/Cities w/ award under $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 and reporting guidance published by the Treasury on June 17th. This session is specifically intended for metropolitan cities and counties with a population less than 250,000 which received less than 5 million in the SLFRF funding. If you're not from this group you have a separate session scheduled and 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 Fund reporting requirements vary according to population, the amount of funding that jurisdictions receive. On the next slide we have listed information about webinars for other types of jurisdictions. Today we will cover the reporting guidance for State and Local Fiscal Recovery Fund. This session will not discuss the interim final rule in detail or provide answers to questions about specific allowable uses for the State and Local Fiscal Recovery Funds. If you have any questions on allowable uses your best source is the interim final rule and the related FAQs. If the interim final rule or FAQs do 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 if you were expecting a different topic to be discussed today I encourage you to drop from the session to avoid 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 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 will walk through the guidance section by section. This section is not intended to replace the reading of 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 for one hour starting with the presentation followed by the Q&A. Participants are in listen mode only but as I mentioned there will be a dedicated Q&A session at the end. Questions can be submitted through 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 state and local fiscal recovery funds. You can find more information about the program at treasury.gov 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 Jed Herman. Jed is the senior advisor for policy outreach in the office of recovery programs and will be giving a brief overview of the program. Thank you Chastity and thank you all of you for being here today. I'm speaking on behalf of Kitty Richards who is the program lead for the state and local fiscal recovery program. I want to thank you for all you're doing to support our communities in this recovery from the coronavirus pandemic. Your governments and workers have been at the front line of this for more than a year. I know the whole treasury team is dedicated to supporting you in these efforts. The American Rescue Plan included 350 billion dollars in fiscal 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 the interim final rule and opened up our funding portal so that state local and tribal governments can start receiving their funding. As of last week June 17th treasury has distributed more than 192 billion dollars to 3,800 recipients. 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, build the foundation for a stronger more equitable recovery both by providing immediate economic stabilization for families and businesses still struggling and by addressing long-standing disparities that have been exacerbated by the crisis. The statute and treasury's interim final rule implementing it established eligible uses for the funds in several different categories responding to the public health impacts of COVID-19, responding to the pandemic's negative economic impacts, replacing lost revenue, providing premium pay to essential workers and last but not least making investments in water sewer and broadband infrastructure. As noted here treasury is accepting comments on the interim final rule before July 16th. Now to talk a little about the clients and reporting guidance which we issued on June 17th. This builds on the interim final rule and was intended to provide recipients with a full overview of their compliance and reporting responsibilities. It will be followed by a user's guide which will provide additional details on submitting data to treasury via the reporting portal that is now under development. When developing this guidance we had several objectives in mind. First we wanted to make it accountable to ensure these funds provide critical support to communities across the country so that people expect all of us to use them wisely and make every effort to prevent waste fraud and abuse. This guidance reminds recipients of their obligations provides a full overview of responsibilities of the award terms and conditions the interim final rule and the uniform grant guidance. One of these responsibilities which we will focus on today is reporting on the use of funds. While none of us likes the burden that comes with accounting for and reporting on the use of funds this reporting is critical and is the bedrock to ensure that our efforts are in compliance with eligible uses. The state local fiscal recovery program requires programmatic financial and performance reporting to build public awareness, increase accountability, and monitor compliance with eligible uses. Recipients are required to account for every dollar spent and provide detailed information on how funds are used. Second these funds must be transparent. Given the nature and magnitude of this program there will be significant interest on how these funds are spent. Transparency is the key to accountability will 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. This guidance is also user-friendly because we recognize that this reporting while necessary places a burden on you that you have and we have a responsibility to minimize to the extent possible any burden. We're working to make many improvements requested by recipients of CARES Act funding including deadlines that are 30 days after the reporting period versus just 10 days in CARES, streamlined reporting requirements for smaller funding recipients, and increased availability of bulk upload capabilities. Finally this is equity focused. In addition to being accountable, transparent, and user-friendly, Treasury is committed to encouraging uses of funds that enhance racial and economic equity in communities across the country. This reporting guidance requires tracking what proportion of funds are going towards projects that will benefit economically distressed communities. Thank you again for taking the time to be with us here today and for all you're doing to support economic recovery. I look forward to working with you as this program is implemented. Now I'd like to introduce Mark Busow who is going to give a brief overview of the guidance. Mark is a senior advisor in the Office of Recovery Programs and has been overseeing the development of compliance and reporting framework for the program. Mark. Thank you Jed. Glad to be here and appreciate everybody taking the time to join. First let me start with part one of the guidance which provides an orientation on recipient's compliance responsibilities and Treasury's expectation 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 is no fraud, waste, and abuse associated with your award. Part one provides you a short overview of 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 is 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 the award funds in the ways that best suit the needs of your constituents. 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 their sub-recipients or beneficiaries eligibility and must monitor their use of the 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 3rd, 2021 and ends on December 31st, 2024 as long as the funds are obligated by December 31st, 2024 and expended by December 31st, 2026. Costs for projects incurred prior to March 3rd, 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 3rd, 2021 may be eligible. The guidance includes examples on page 5. 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 award funds. The program guidance gives a brief overview of these requirements and I'll highlight just a few points now. Part 1d2 of 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 also discusses record keeping, 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 discuss reporting, which is included in Part 2 of the guidance. As Kitty mentioned earlier, the Treasury team has worked, oh I'm sorry, as Jed 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 less than $5 million in funding, you will be required to submit two types of reports. You will provide a one-time interim report, which provides an overview of expenditures from the award date through July 31st, and you'll submit a project and expenditure report annually, which provides a detailed breakdown of projects funded, obligations and expenditures, subaward, and some programmatic data. The interim report is due on August 31st, covering from the date of the award through July 31st, 2021. The full project and expenditure report is due for the first time by October 31st of this year, covering the period from the date of the award through September 30th, 2021. 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've discussed, there are a wide range of eligible uses of these funds, and Treasury must be able to track how the 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 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 you, and the payment is now 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. For instance, you can see on the slide the first category is 1.1 COVID-19 vaccination. The second key concept is project. While there are 66 expenditure categories, there's 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 towards a common purpose. They can include new or existing services funded in whole or in part by the SLFR award. Within this broad definition, recipients have flexibility to define their projects in a way that provides greatest clarity on the work which will be performed. With that said, some expenditure categories and types of projects require additional reporting, and so you're required to define projects at a sufficient level of granularity to be able to do any 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 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. We will 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 very important that 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 overall category of services to disproportionately impacted communities, and you can see this in appendix one of the guidance. With the spending on early, within the spending on early learning, there might be 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 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 one. For each, you will be asked to enter any obligations and expenditures that you occur through July 31st. We have actually already gotten a question on what level of detail is required. You do not need to include a full breakdown of the detail by project. In the interim report, data is only required for any of the 66 expenditure categories listed in appendix one, where you have incurred obligations or expenditures. In the example shown, you can see that obligations have been incurred in three categories and expenditures in two, and that's the only data that will need to be filled out. In the interim report, you will also need to submit some programmatic information. If you are planning to use some SLFRF funding for revenue replacement due to revenue lost during the coronavirus pandemic, you will submit information on how calculation was made. The formula was included in the IFR. You will also provide a description of how the revenue replacement funds will be allocated. Okay, that covers all the information required by August 31st. Your first annual project and expenditure report will be due October 31st. Reports will be due 30 days after the end of the reporting period. There are three basic categories of information which will be required. First, we'll collect information on each project. The project description is going to be very important. As I described a minute ago, this will be a key field that we will use to understand the activities you are undertaking. The system is going to 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 Jed's going to describe that in more detail in just a minute. Second, you will report on all subawards of $50,000 and above in each annual report. 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 contract or 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 back to Jed Herman to highlight a few specific areas in more detail from the project and expenditure report. Jed? Thanks, Mark. As Mark mentioned, I'd like to add a little bit more detail 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 to promote a strong and equitable economic recovery, it is 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 primarily focused on areas with the most need. Recipients are asked to classify whether their project's intended recipients are primarily in economically distressed areas. The need to identify whether or not the project is serving an economically disadvantaged community is required of projects and the expenditure category is related to negative economic impacts, services to disproportionately impacted communities, and COVID-19 testing and vaccinations. It is not required for projects like infrastructure that are targeted less towards specific recipients and more broadly serve entire communities. For the purposes of this reporting, economically distressed areas are defined by HUD's Qualified Census Tracts designation, which is focused on areas that earn less than 60% of the median income or have a poverty rate above 25%. Project funds count as being targeted for economically disadvantaged communities if they are spent on a program or service that meets one of the following four criteria. First, that the program or service is at a physical location in a Qualified Census Tract. Two, the primary intended recipients of the program or service live within a Qualified Census Tract. Third, eligibility criteria are such that the primary intended beneficiaries earn less than 60% of the median income for the relevant jurisdiction, state, county, metropolitan area, or other jurisdiction. Or finally, fourth, eligibility criteria such that over 25% of intended beneficiaries are below the federal poverty line. Of note, recipients do not have to meet all four of these criteria, just one of those four for the area to be counted as serving an economically distressed area. Also, to be clear, 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 is serving an economically disadvantaged community. Next, I want to talk about the programmatic data in the Program 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 one of these because there's very specific information in the reporting guidance, but as one example, projects and 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 response to a negative impact of COVID-19. For expenditures on rehiring public sector staff, it asks about the number of FTEs rehired by governments using state and local fiscal recovery funds. Next, I want to talk a little about the infrastructure project data that is required. This is used to ensure accountability for large-scale infrastructure projects. This includes things like location and expenditure data. It's important to note that because you need to collect location-specific information for these projects, it is likely that reporting for infrastructure projects may be more detailed than other areas. Because the projects need a steady supply of labor to ensure they're completed within the timeline for spending state and local fiscal recovery funds, recipients must also report on the wages and benefits provided. In addition, recipients must report on how they will minimize the risk of project labor disputes and ensure a safe and healthy workplace. Finally, all this information needs to be submitted to Treasury through this Treasury submission portal. In the coming weeks, Treasury will provide a user guide and other reference materials to help recipients enter their information into the reporting system. In addition, Treasury plans to host a series of technical assistance webinars, like this one, to help recipients comply with relevant reporting requirements. Further communications will be shared with recipients and posted on Treasury's website. On the next slide, I will briefly recap the reporting requirements that your jurisdiction will be required to file. As a city or county with less than 250,000 residents and receiving less than $5 million in state and local fiscal recovery allocation across any disbursement, so a total of less than $5 million, you must provide a one-time interim report which provides an overview of the expenditures from the award date through July 31st, as well as Mark mentioned. You will also submit a project and expenditure report annually, which provides a detailed breakdown of projects funded, obligations and expenditures, subawards, and some programmatic data. In terms of deadlines, the interim report is due on August 31st, and the full project and expenditure report is due for the first time on October 31st of this year. With that, this concludes the presentation portion of our webinar today. Thank you for joining us. Have a nice day.