As a part of the American Rescue Plan Act (ARPA), cities are required to file periodic reports with the Treasury Department on how federal funds were used. April 2022 marked the first time that all ARPA recipients were required to submit spending reports
to Treasury. In late July, Treasury publicly published all of the April 2022 reporting data – Here's what we found for cities in Washington.
As a reminder, Washington cities received roughly $1.2 billion over two payments made in 2021 and 2022. As of March 31, 2022, cities spent $223,014,868 in ARPA funds and obligated $421,437,247.
Treasury required cities to report spending and obligations under one of seven categories. One important note, under Treasury’s final rule for spending ARPA funds, cities are allowed to claim a standard allowance of up to $10 million. Expenditures
made using that standard allowance were reported under “Revenue Replacement”. Below is a breakdown of how cities reported using their funds between March 2021 and March 2022:
- Public health: $9,956,074
- Negative economic impacts: $115,573,051
- Public sector capacity: $7,050,738
- Public sector employees: $6,578,380
- Infrastructure: $25,096,181
- Revenue replacement: $479,440,453
- Administrative: $757,778
AWC staff reviewed projects reported under “Revenue Replacement” and found that the top five areas cities spent funds included:
- General government
- Public safety
- Human resources
- Water & sewer infrastructure
- Housing & homelessness
Along with all this new federal funding comes new challenges with state audits. The State Auditor’s Office recently published its findings on how state agencies handled federal funds. The 1,083-page report details the 25 audited federal programs managed across all agencies. A summary of the report notes that the most significant issues were:
- Improper or unsupported payments
- Insufficient monitoring of subrecipients
- Not meeting special federal government provisions
- Inadequate reports to the federal government
We encourage cities to review current policies and procedures to ensure they comply with state and federal rules. To help in your review, the Auditor's Office has a newly designed resource library that provides helpful checklists and topic guides.