Grant Stewardship and Implementation within the American Rescue Plan

The American Rescue Plan of 2021 (ARP) was signed into law on March 11, 2021. The $1.9 trillion stimulus is perhaps best known for the $1,400 stimulus checks which are already being distributed. In addition to providing immediate relief to workers, the ARP has ambitious policy goals, including safely re-opening schools, supporting the national vaccination program, reducing child poverty, and containing COVID-19.

What’s not making headlines is the grant funding packaged within this bill — grant funding that will make a difference in the lives of millions of Americans. The list below is just a sampling of grant funds to be obligated under ARP.

• The Department of Education receives $128 billion to fund grants to local educational agencies, plus $39 billion in grants to higher education institutions.
• The Department of Health and Human Services receives nearly $15 billion for the Child Care & Development Block Grant Program to help support childcare facilities; more than $3 billion to fund grants for mental health care and the prevention and treatment of substance abuse.
• The Small Business Administration receives $25 billion for a new grant program for restaurants and other food and drinking establishments, with an additional $1.25 billion allocated for the Shuttered Venue Operators Grant Program.
• The Department of Housing and Urban Development receives $25 billion for emergency rental assistance, including emergency housing vouchers for people experiencing homelessness, survivors of domestic violence, and victims of human trafficking.
• The United States Department of Agriculture receives more than $1.5 billion to fund Emergency Rural Development Grants for Rural Health Care and the Supplemental Nutrition Assistance Program (SNAP).
• The National Endowment for the Arts and the National Endowment for the Humanities each receives $135 million for grants to state art and humanities councils and regional organizations.

The legislation compels agencies to move quickly to obligate funds — often within thirty days. This may be a challenge for some agencies, as these additional funds greatly increase the amount of money and number of recipients they will be responsible for.

The administration is clearly aware of the impact the ARP will have to grant-making agencies. On March 19, 2021, OMB issued M-21-20 Promoting Public Trust in the Federal Government Through Effective Implementation of the American Rescue Plan Act and Stewardship of Taxpayer Resources.

This memorandum outlines steps the administration plans to take to support the implementation of the ARP, including working with the Pandemic Response Accountability Committee (PRAC) (previously established under the CARES Act) and agency inspector generals with the goals of minimizing the risk of waste, fraud, and abuse and improving overall award administration “with an increased focus on human-centered program and service design to achieve more equitable results.”

The memo also outlines the responsibilities agencies have — including applying Title 2 of the Code of Federal Regulations (CFR) Grants and Agreements — to the maximum extent authorized by law to all recipients — including for-profits, with limited exceptions. It details measures to take to achieve more equity-oriented results for federal financial assistance and ensure robust and transparent reporting of ARP funds. These points of emphasis align with longstanding grants initiatives, including the DATA Act and the Foundations for Evidence-Based Policymaking Act of 2018, and also align with recent executive orders and memorandums, including Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,  Restoring Trust in Government Through Scientific Integrity and Evidence-Based Policy Making. and  M-20-21 Implementation Guidance for Supplemental Funding Provided in Response to the Coronavirus Disease 2019 (COVID-19).

The memorandum also includes three appendices that provide further guidance on management and oversight of ARP programs and awards:

• Management of Payment Integrity Risks – outlines additional risk factors to be considered as agencies conduct improper payment risk assessments for programs receiving ARP funding and recommends existing resources for agencies to leverage, and recommends that agencies work with their OIGs to identify other areas of potential risk and support needs. 
• Achieving More Equity-Oriented Results for Financial Assistance – which stresses that agencies are required to administer programs “in a manner that promotes fair and equitable administration of financial assistance and takes a risk-based, data-driven approach that balances compliance requirements with demonstrating successful results.” This appendix is provided to remind agencies of requirements of importance for administering ARP funds and notes that “agencies should apply the requirements of 2 CFR part 200 to all types of financial assistance awards funded through the ARP.”
• Disaster Relief Flexibilities to Reduce Burden for Financial Assistance – which provides agencies with authority to grant certain exceptions to recipients affected by the pandemic, including flexibility with SAM registration, allowance of pre-award costs, no-cost extensions on expiring awards, waivers for prior approvals, and extensions on financial reporting, single audit submission, and closeout as needed. Agencies are required to maintain records of all exceptions provided.

The ARP represents a huge step forward in facilitating recovery from the pandemic. Effective distribution and oversight of the funding are critical. Agencies should review M-21-20 and plan to work with OMB to effectively steward their funds while providing transparency into what the funds are being used for and working to limit waste, fraud, and abuse.