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documents on a table to help grant managers understand the difference between ARPA and traditional funding

Understanding Differences Between Managing ARPA & Traditional Funding

Managing funding provided by the American Rescue Plan Act (ARPA) has required agencies to shift their focus from a compliance-heavy grants management strategy to one that is focused on using data collection to make informed choices for future policymaking based on program performance. At a high level, agencies must be more focused on creating measurable goals to manage ARPA funds. Because of that focus, recipients of those funds must establish improved communication strategies and streamline their processes for data collection and reporting to demonstrate their performance. The key factor that drives the difference in funding management practices needed with ARPA funds is the accelerated timeline to disbursement and delivery of those funds.  

ARPA funding is allocated faster  

The typical awarding process for federal funds is lengthy, and projects are presented in applications that are frequently awarded on a competitive basis. Funding emergencies related to the coronavirus pandemic changed the process overall because of the need to get funding to communities that were affected as fast as possible. With State and Local Fiscal Recovery Funds (SLFRF), the federal government allocated a set amount of funding to States, cities, counties, tribes, and NEUs directly, and authorized them to allocate it to a wide range of projects that met eligibility requirements. Those requirements themselves are designed to be flexible so communities can spend the funds where they are needed most urgently.  

Managing ARPA funds requires more flexible and well-defined processes and procedures 

Because ARPA funds are meant to be quickly disbursed to respond to a public health emergency, agencies and organizations must have well-designed procedures that can be quickly adjusted to ensure performance goals are met. This potential for rapid adjustment requires additional reporting along the way so performance can be evaluated at regular intervals, and this requires timely and accurate communication of adjustments to program staff. Managing ARPA funds also requires increased intra-agency cooperation and collaboration to ensure community needs are being met 

Recipients required to ensure delivery of service and compliance 

To disperse ARPA funds quickly and efficiently, localities and organizations also need to have the ability to deliver services effectively and efficiently. To do so, recipients need to be able to modify policies and/or procedures quickly for operational purposes, and to have the ability to communicate changes to program staff and any subcontractors. Centralizing your grants management practices can help you achieve this even if your team is not as fully resourced as you would prefer 

If you can’t deliver services to the community that you allocated funding for because of a breakdown in communications, or a failure to collect timely data that would have allowed for process adjustment, it could affect your ability to keep all the funds you have been awarded. Managing ARPA funds requires establishing good internal communication practices and more efficient processes. Establishing even more effective subrecipient monitoring practices is an essential component of managing ARPA funds. While not required in the guidance, requesting annual reports may have sufficed for traditional funding, but your organization may want to implement a quarterly reporting process to ensure both delivery of services and general compliance as well.  

Data collection is more flexible and focused on performance 

Maintaining records to support funding decisions is an absolute must when it comes to managing all funding, of course, but with ARPA funding, it is an absolute necessity. ARPA funding guidance requires data collection to be measurable and relatable to the funded award, and in a way that streamlines recipient data capture. By requiring agencies to evaluate each award in context to a portfolio, and against proposed outcomes, the awards’ performance results can be used to direct future policy decision-making. This means that for ARPA funded programs, grant managers need to collect more data for performance reporting overall. ARPA funds require you to ensure that your organization is implementing strong internal controls, paying close attention to subrecipient monitoring practices (if applicable), and beginning to standardize data for reporting.

Whether you are managing ARPA funds, traditional funds, or both, the creation of processes to collect standard data has been and will continue to be critical for maintaining compliance. To make sure you’re collecting the data you need so it will be there when you need it, you can: 

To see if your state, local, or tribal government could benefit from technology support before you start reporting on your funded projects, we have a checklist to help you evaluate. Additionally, AmpliFund clients can reach out to their Customer Success Lead to find out more about how to automate SLFRF reports  in AmpliFund.  

To learn more about how a grant management system can help you prepare for the single audit and maintain compliance, schedule a demo today. 


*Photo by Pixabay from Canva

Topics:  Funding