The Administration Seeks to Build Trust through Effective Stewardship of American Rescue Plan Funds

Totaling approximately $1.9T, the Biden administration wants to ensure responsible spending and management of American Rescue Plan (ARP) funding. To emphasize this point, OMB released a memo last week outlining requirements for accountability and transparency in federal spending of ARP funds.  The memo also stated that “Effective stewardship of taxpayer funds also means supporting all Americans, and as such, requires advancing racial equity and supporting underserved communities across our country.” The memorandum instructs agencies to “foster accountability and public trust by delivering effective and equitable relief while implementing sound financial management of the resources funding that relief.”

Agencies are to work with the existing Pandemic Response Accountability Committee (PRAC) and agency Inspector Generals to minimize the risk of waste, fraud, and abuse by strengthening payment integrity. Agencies are also instructed to increase their focus on human-centered design of programs and services in order to achieve results that are more equitable.

Specific agency requirements for improving program and service design to achieve more equity-oriented results for federal financial assistance include the following:

• Abide by rules set forth in the Code of Federal Regulations (CFR) for financial assistance such as registering with SAM.gov.
• For any new programs authorized by the ARP, agencies must submit their proposed implementation plan to OMB.
• Agencies should also apply flexibilities for recipients that are of particular importance for an equity-oriented approach to achieving results.
• Agencies should also include ARP programs in their ongoing processes for agency equity and service assessments.
• As related to the Executive Order, “Tackling the Climate Crisis at Home and Abroad, agencies should consider how ARP funding could increase the benefits that flow to disadvantaged communities and invest in opportunities that help revitalize energy communities.
• To alleviate burden for recipients, agencies should identify synergies across programs and agencies and use afforded flexibilities for funds distribution and reporting.
• For all federal financial assistance, agencies are required to establish detailed and accurate award descriptions at the time of the award.
• Agencies are instructed to use federal data to assess the effectiveness and equitable delivery of programs and to suggest improvements.
• To reduce recipient reporting burden, agencies are required to consult with the relevant Quality Service Management Organization (QSMO), prior to developing new or modernized technology to support the execution of ARP.
• OMB wants to be able to articulate the outcomes of federal financial assistance to the American people.  As such, federal awarding agencies are directed to collect recipient performance reports in a manner that would facilitate this.
• Performance planning, management, and agency reporting for ARP funding should be incorporated into agencies’ existing organizational performance management routines.

To ensure robust and transparent reporting, OMB’s memo requires the following:

• Agencies are to use existing financial transparency and accountability mechanisms established by a 2020 OMB memo entitled “Implementation Guidance for Supplemental Funding Provided in Response to the Coronavirus Disease 2019.” This includes reporting spending to USAspending.gov using DATA Act requirements and incorporating a description of the use of funds into mission performance plans and reports.
• Agencies are required to establish an assistance listing in the Federal Assistance Listings prior to publicly releasing information regarding the administration of any new financial assistance program.  
• Agencies subject to DATA Act reporting must maintain a Data Quality Plan. Agencies for which loans are a significant part of their portfolio are directed to consider whether their compliance with the existing policy should be included in their Data Quality Plans. According to OMB’s memo, reporting on loans is an essential part of providing transparency for federal spending.