Where does the Recovery Office sit?
The Recovery Office sits under the Office of Economic Development and International Trade (OEDIT). The Recovery Office will be hiring additional Recovery Officers for certain departments.
How are we interpreting what “obligation of the funds” means? Can we use it for personal services after 2024?
Obligation means that a formal contract or grant has been executed for the procurement of goods and services. Funds must be obligated by December 31, 2024. The expenditure of obligated funds can occur through December 31, 2026. With the Coronavirus Relief Funds (CRF) under the CARES Act, there was an exception for compliance monitoring and reporting positions.
In the Treasury FAQs published on July 27, 2022, FAQ 13.17 clarifies that: As stated in the final rule, obligation means “an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.” See 31 CFR 35.3. As contemplated by this definition, Treasury recognizes that recipients may obligate funds through means other than contracts or subawards, for example in the case of payroll costs. In these circumstances, recipients must follow state or local law and their own established practices and policies regarding when they are considered to have incurred an obligation and how those obligations are documented. For example, a recipient may have incurred an obligation even though the recipient and its employee may not have entered into an employment contract.
What changes are taking place in CORE (i.e. coding of expenses)?
OSC has provided guidance in the Addendum to the Fiscal Procedures Manual for ARPA and other Federal COVID-19 Acts.
Are indirect costs allowed for subrecipients?
This depends on whether subrecipients are being funded by SLFRF via Treasury funds or from existing grant programs. For funds appropriated by the General Assembly from SLFRF, each department has already been asked to complete a spending plan that includes administrative costs. For funds from existing grant programs, departments should follow the requirements for changing indirect costs for those grant programs.
Will the slide deck be available for the SLFRF Overview Sessions?
Yes, the slide deck has been posted on the OSC ARPA website.
Is OIT considered a subrecipient of SLFRF funds and what will be required of OIT from a reporting standpoint?
OIT is considered a service provider and will be required to report vendor data, however the method of collection has not been determined.
If there are supply chain issues in regard to infrastructure projects, will timeline extensions be granted by the US Treasury?
The US Treasury has not provided any exception to the deadlines to date. OSC will communicate any updates to guidance as it’s provided.
In theory, could SLFRF funds be used starting March 3, 2021? Could we use federal funds instead of state funds?
Yes, however it must align with the statutes and approved department spending plans.
What is the definition of “obligation?” Does the money have to be obligated to an end user?
Yes, it has to be obligated to an “end-user” via a grant, contract, etc. by December 31, 2024. Obligated funds can be expended through December 31, 2026.
In the Treasury FAQs published on July 27, 2022, FAQ 13.17 clarifies that: As stated in the final rule, obligation means “an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.” See 31 CFR 35.3. As contemplated by this definition, Treasury recognizes that recipients may obligate funds through means other than contracts or subawards, for example in the case of payroll costs. In these circumstances, recipients must follow state or local law and their own established practices and policies regarding when they are considered to have incurred an obligation and how those obligations are documented. For example, a recipient may have incurred an obligation even though the recipient and its employee may not have entered into an employment contract.
Do you or will you have advice or guidance on how we document compliance with the SLFRF Treasury requirements?
Yes, guidance and recommended practices are continuous. Please check the ARPA Website frequently for the most up-to-date information as it relates to SLFRF Treasury compliance requirements.
Will the capital funds go through the same process as SLFRF for broadband?
Federal guidelines have not been issued around Coronavirus Capital Projects Funds. Please check the ARPA Website frequently for the most up-to-date guidance.
Are there any restrictions on granting ARPA funds for capital development?
Unfortunately, there is currently no guidance on capital development beyond water, sewer, and IT infrastructure projects. The approval process and evaluation of the Spending Plans, by the Office of State Planning and Budget (OSPB), will be the mechanism to evaluate these scenarios until such time further guidance is issued.
Will the OSC be providing updates on a monthly basis to discuss ARPA and SLFRF topics?
The OSC is holding monthly SLFRF office hours for departments to call in to discuss ARPA and SLFRF related topics. Office hours will begin on Thursday, August 19th from 3:00 - 4:00 p.m. and will be held every third Thursday of the month thereafter. Join office hours here.
Is the Coronavirus Local Fiscal Recovery Fund (CLFR) an interest-bearing fund?
The SLFRF Compliance and Reporting Guidance states that SLFRF monies are not subject to the Cash Management Improvement Act. As such, the funds can be placed in interest-bearing accounts and the interest earnings need not be spent on eligible SLFRF activities. This guidance applies to both the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund. Because the Coronavirus Local Fiscal Recovery Fund is only applicable to DOLA, DOLA should retain the interest earnings and consult with OSPB regarding spending of the earnings. Additionally, statutes allocating the Coronavirus State Fiscal Recovery Funds and the statutes for the funds in which the monies were further allocated dictate how interest earnings are handled.
Deadline to Allocate and Spend
Question: Could you please clarify the deadline to allocate and spend the funds outlined in bills passed by the General Assembly? My understanding was that the funds were allocated for one year (this state FY) but the deadline to spend according to ARPA guidelines is December 2024.
Answer: Several SLFRF bills were appropriated for FY 21-22 only, thereby limiting the time period for spending the funds. Some bills did mention legislative intent for a roll-forward. Departments should review the legislation and Fiscal Note for each bill to confirm this restricted time frame. OSPB has noted that extensions would need to go through the supplemental process.
Are there any exemptions from FFATA reporting for ARPA or HR-133 funds? Will there be any consolidated reporting for these funds, or are these monies to be treated like all other federal funds and must be reported per FFATA guidelines?
For SLFRF funds only, the compliance guidance requires that FFATA elements be reported through the US Treasury portal, which the OSC will coordinate. The US Treasury will further transmit the data for FFATA compliance. State agencies should not complete FFATA reporting directly through the FSRS reporting system for SLFRF funds.
There are a number of different programs funded directly by ARPA and HR 133 funds. FFATA requirements generally apply, but the award document and related federal program guidance will need to be reviewed for any exceptions.
Since ARPA/SLFRF funds are passed through the State of Colorado to departments, is the State considered the recipient and the department considered a subrecipient? Or is the State and the department considered one entity (i.e. recipient)?
For federal reporting purposes, the State is considered a single entity. As a result, departments are considered a recipient and not a subrecipient.
Are infrastructure projects subject to the Davis-Bacon Act?
Water, Sewer, and Broadband projects are required to document wages and labor standards for infrastructure projects over $10 million and these requirements can be met with certification that the project is in compliance with the Davis-Bacon Act. Other capital construction projects must comply with OMB guidelines regarding Davis-Bacon.
Is debt service an allowable cost under SLFRF?
No, debt service is not an allowable expenditure under SLFRF.
Are there restrictions on how cities and counties spend the money received under SB21-260?
Yes, cities and counties are required to follow both HUTF and SLFRF requirements.
Will counties and cities be monitored as subrecipients under SB21-260? What are the reporting requirements?
Yes, counties and cities will be monitored as subrecipients under SB21-260. State Treasury will be responsible for reporting to the OSC.
Are capital improvements an eligible use under SLFRF?
Yes, as long as the capital improvements comply with the requirements for eligible uses under SLFRF.
Are housing vouchers considered “services'' under SLFRF? What is the deadline for spending for services under SLFRF?
No, direct housing vouchers are not considered services under SLFRF. The deadline for spending for services is December 31, 2024. If the agency uses a subrecipient to manage a voucher program then the funds must be obligated by December 31, 2024 and spending for that obligation could occur up until December 31, 2026.
When will interest earned from ARPA funds be reported by the State?
The State Treasury posts interest to funds monthly and will do the same for SLFRF funds.
Does 2 CFR 200 apply to contractors, vendors, consultants, etc. selected to complete work for a governmental entity if the funds were earmarked as revenue replacement under ARPA?
Yes, 2 CFR 200 applies to contractors, vendors and consultants.
Is my department required to use the OSC SLFRF Grant Agreement template?
Yes, departments are required to use the OSC SLFRF Grant Agreement template.
The deadline on funds expenditure date of December 2024 differs from the American Rescue Plan Act, is this going to be a problem? How does this relate to requirements under 2 CFR 200?
There is no requirement in 2 CFR 200 regarding expenditure deadlines, however the Interim Final Rule established the timelines around expenditures. The Interim Final Rule can be found at: Coronavirus State and Local Fiscal Recovery Funds.
Do revenue loss funds have additional reporting requirements?
There are no additional federal reporting requirements, however, the Governor’s Office may establish additional reporting requirements for revenue loss funds.
If we can’t get contracts put in place until October, how far can we go back on expenses? Are departments allowed to pay pre-agreement costs back to July 2021 when funding became available via state statute?
Departments are not allowed to pay pre-agreement costs as this would be a violation of the Controller’s statute.
Are ARPA SLFRF subject to State prevailing wage or Federal Davis-Bacon requirements?
US Treasury Guidance states that for projects over $10 million, recipients may provide a certification that all laborers are paid wages at rates not less than prevailing in accordance with the Davis-Bacon Act. If certification is not provided, a recipient must provide additional project employment and local impact information. (See page 21 of the SLFRF Compliance and Reporting Guidance for more information).
What is the process for notifying the Office of the State Architect (OSA) and the Capital Development Committee (CDC) for “vertical” construction projects funded under ARPA/SLFRF?
The agency would submit all construction projects to the OSA for a quick review before gaining OSPB approval. Once approved by OSPB, the CDC should be notified.
How is the State reporting on revenue replacement?
The State is following US Treasury guidelines and will report quarterly and annually on revenue replacement. The OSC plans to track financial information at the level allocated in legislation related to revenue replacement projects. The guidance does not require additional performance measures.
Is there information available regarding payments made to individuals under SLFRF?
The Internal Revenue Service (IRS) provided information in an IRS FAQ document. The FAQ document details the tax consequences for individual recipients, in addition to reporting requirements for states and local governments, and employers, as applicable. CORE is configured to meet the IRS tax reporting requirements for the SLFRF funds.
What is the federal award number for the funds that were allocated in SB-292 that should be included in subaward grant agreements to agencies or should we just reference SB-292 in the grant agreement?
The federal award number is SLFRP0126.
Who is the proper person to sign the SLFRF Department Certification form?
The SLFRF Department Certification form can be signed by an Executive Director, Deputy Executive Director, Chief Operating Officer, Chief Financial Officer or any individual authorized to sign on behalf of the Department.
Who is the proper person to sign the SLFRF Subrecipient Certification form?
Any individual that is authorized to enter into a legal-binding agreement on behalf of the Subrecipient Agency can sign the SLFRF Subrecipient Certification form.
What is the process for determining which Treasury Expenditure Category is appropriate if more than one category applies?
The OSC, the Governor’s Office, the Recovery Officer, and the department will need to collaborate to determine the most appropriate Expenditure Category if it is not evident.
Is FFATA reporting applicable to SLFRF?
Yes, but it will occur through SLFRF federal reporting to the US Treasury rather than direct reporting through the FSRS website. The US Treasury will transmit the data to the FSRS site.
My agency has already issued a grant without using the OSC approved SLFRF Grant Agreement template. How do I proceed?
Contact the OSC SLFRF Compliance team to discuss how to meet the SLFRF compliance and reporting requirements.
Does it count as an expenditure if an agency transfers funds to another agency or institution of higher education?
No, the expenditure has to be incurred (spent) by the final state recipient within the time frame established by legislation.
Can subrecipients request indirect costs as part of their ARPA grant award since indirect is addressed in 2 CFR 200? The agency considering it does not have a negotiated federal indirect cost rate so would be using the 10% de minimis rate.
Yes, subrecipients can request indirect costs.
Does CDOT have any responsibilities regarding NEUs?
No, CDOT does not have responsibilities as DOLA distributes the funds to the NEUs. The NEUs are responsible for reporting directly to the US Treasury.
However, if any agency grants funds to a subrecipient, regardless of whether or not they are a local government, non-profit or other eligible recipient, that agency has a responsibility for financial, programmatic and administrative monitoring.
Are all capital expenditure projects funded solely by SLFRF exempt from Davis-Bacon Act requirements, or only those listed in Expenditure Category 5 (Infrastructure)?
Yes, all capital expenditure projects funded solely by SLFRF are exempt from Davis-Bacon Act prevailing wage requirements. If a project is over $10 million, however, similar labor reporting requirements apply. Please contact your Compliance Liaison with additional questions.
If an agency receives funding from revenue replacement category 6, are funded projects still subject to other expenditure category eligibility requirements?
No. Revenue replacement projects do not need to meet SLFRF eligibility requirements, but must still meet all federal regulations and award terms and conditions.
A program is funded by multiple sources, including SLFRF. When reporting performance metrics, how should those performance metrics be calculated to address the multiple funding sources?
SLFRF performance metrics should be reported based on the prorated amount of funding supporting a program. For example, if a Workforce Center's Back-To-Work Program serves 20 people in a quarter and the Back-to-Work program is funded 50% with state funds and 50% with SLFRF funds, the performance metric of people served by SLFRF funds that should be reported is 10 (20 total people served x 50% SLFRF funding = 10 people served by SLFRF funds).
According to SLFRF guidance, costs must be obligated by 2024 but can be spent until 2026. Can salaries/personnel costs be spent until 2026, and if so, what is the documentation required to support the personnel obligation?
For subrecipients of SLFRF funds that are not state entities, the grant award or contract detailing approved personnel costs is evidence of obligation, as long as the grant award or contract is executed before 12/31/2024 it may include personnel costs to 2026. This means that if a state agency has granted funds to a non-profit, local government or contracted with a vendor, the associated personnel costs are considered obligated at the time of contract execution.
The Office of the State Controller (OSC) has issued a policy for State Staffing and Obligations for SLFRF (State and Local Fiscal Recovery Funds).
This policy provides definitions and direction for how agencies can obtain approval and report obligations for State staffing for SLFRF by December 2024 and be able to fund State Staffing with SLFRF in 2025 and 2026.
The OSC developed this policy in response to the US Department of the Treasury update to FAQs that included a new FAQ, 13.17. This FAQ provides that state and localities may follow their own policies and practices concerning when they are considered to have incurred an obligation for payroll costs.
Is household assistance taxable to the beneficiary?
Generally, household assistance under a grant is not taxable.
Financial reports are due before fiscal month close. Will we need to do a true-up to address costs that come in prior to month close?
No. Financial reports are submitted on a cash basis. The report should be run as of the final day of the quarter.
What if we have reported on line items under one Expenditure Category (EC) and now that EC has changed? How will that look on the next report?
The agency will reverse prior reporting and re-report the total project cost in the correct expenditure category if there is a change in expenditure category.
Is the reporting cumulative or just what was spent since last time?
Each quarterly report will reflect only that quarter’s expenditures.
Will redlined versions of the updated SLFRF Grant Agreement templates be shared reflecting all of the changes from the last versions to the current?
OSC posts a summary listing all changes made to SLFRF Grant Agreement templates.
Is anyone aware of a lookup tool for qualified census tracks - for example, to look up the address of a nonprofit to see if they're working in a QCT?
A good resource is the Community Planning and Development map from the U.S. Department of Housing and Urban Development.
Funds for administrative purposes
FAQ 10.2 permits the recovery funds to be used to cover a portion of payroll and benefits of employees corresponding to time spent on administrative work necessary due to COVID-19 impacts.
Questions:
- Are administrative employees required to track their time? Can this time be less than a substantial amount of their job duties?
- If a state provides state funds for economic recovery to address the same situation as the recovery funds, and a state agency hires a recovery officer to manage both state and federal recovery funds, can the state pay the recovery officer using all federal recovery funds? Another way to ask this question is if the state funded work would qualify as eligible federal recovery expenses, can a state pay the recovery officer from federal funds to manage both state and federal funds for economic recovery?
Yes, all employees charging time to a grant program must track and document the time spent on the program(s) charged per 2 CFR 200.430(i)(1)(x). Whether or not a position can be charged to SLFRF depends on the expenditure category funding the position. If the expenditure category allows for administrative support for programs other than SLFRF, time and effort should be tracked and documentation retained for audit purposes.
If SLFRF funds are going to be refinanced with general funds what entry would be needed for the transfer?
Please contact OSC to transfer any funds from SLFRF to general funds. The OSC and Governor’s office will work with the agency to make the transfers.
What is required for the annual report?
The annual report is a narrative report that summarizes major program group expenditures, objectives and outcomes. If performance metrics have been submitted via Gravity and the Governor’s Office per the required schedule, no additional action is needed.
Will some of the legislative transfers not happen until SFY23?
Legislation dictates the date of the transfer, If legislation directed a transfer to happen in FY22, the transfer will occur in FY22. Some transfers were legislated for FY23.
I have seen some KFLZA appropriation codes come through on new PCard applications. I understand that the Division is allowed to use $ from SLFRF for admin purposes. Is this allowed?
Yes, if SLFRF administrative funds have been authorized for your agency, those funds may be used through PCard purchases.
Are Tier 2 subrecipients required to procure the same insurance policies as Tier 1 subrecipients?
If a subrecipient requires a change to the insurance requirements for their Tier 2 subrecipients, this must be handled on a case by case basis with DPA's Office of Risk Management. The state awarding agency must consult with DPA’s Risk Management prior to authorizing any change.
If the executed grant agreement requires a pass-through of insurance requirements, any change to the grant agreement will require a grant amendment, and all subrecipients must, at a minimum, follow their internal insurance requirement policies.
For SFLRF appropriated through a bill, can spending continue beyond the bill’s appropriation clause end date, as long as the funds have been obligated by that date and before December 31, 2024?
Operating appropriations must be expended by the appropriation clause end date while capital construction appropriations remain available to be expended to the extent funds are encumbered by the three-year project end date. Note that SFLFRF obligation and expenditure rules may further limit the availability of funds.
Which controls SLFRF timelines, statutory language or appropriation clauses?
Generally, it is the appropriation clause that controls the timeframe over which spending can occur. However, there may be statutory language that further extends the appropriation life, including spending in continuously appropriated funds. Because statutory language varies, please consult with the OSC for guidance. Note that SFLFRF obligation and expenditure rules may further limit the availability of funds.