Lawmakers grill budget officials over ARP funds

21 March 2023

With 21 months away from a December 2024 deadline to obligate the use of all federal relief funds from the American Rescue Plan, lawmakers questioned officials from the Governor’s Finance Office Monday about the possibility the state could lose out on those funds.

Their concerns stem from the state’s process of spending hundreds of millions of dollars in COVID-19 relief funds from the American Rescue Plan (ARP) over the past two years, which has largely seen lawmakers on the Interim Finance Committee approve funding allocations brought forward by the governor’s office but does not include a complete breakdown of actual expenses.

As state agencies and nonprofits spend funds for the allocated purpose, they are reimbursed by the state with ARP dollars, but those expenditures may be less than the allocated amount, leaving the state with extra money to be used for a new purpose.

“If we’re not going to be able to utilize these funds, we collectively all of us working together need to know that and in a very timely manner, so that we can reallocate those funds to other areas to meet the needs of our citizens,” Assemblywoman Daniele Monroe-Moreno (D-North Las Vegas) said. “I can’t drive that home any harder.”

Shauna Tilley, executive branch budget officer with the Governor’s Finance Office, said the office did not have clear guidance from the U.S. Treasury regarding the use of funds reverted back to the state between the deadline for obligation at the end of 2024 and the deadline for expending all ARP funds at the end of 2026.

“I have major concerns that we’re going to have to send money back, and that’s just unacceptable,” Monroe-Moreno said.

But state officials will have a pot of millions of dollars (out of more than $2.7 billion originally allocated for flexible state use from the American Rescue Plan) to reallocate before December 2024. That includes a projected $11 million in savings from American Rescue Plan-funded programs under the Department of Health and Human Services.

Monroe-Moreno also took issue with the process of actually distributing the funds, saying that some organizations are waiting three to nine months to be reimbursed for their approved expenses. But the Governor’s Finance Office has faced vacancies, and had new employees starting Monday, the office’s director, Amy Stephenson, told lawmakers Monday.

“The very last thing that our office wants is for there to be any federal clawbacks because there was money inappropriately spent,” Tilley said. “We’re being thorough in our reviews of the requests for reimbursement, and we’re making sure that everything is intact and ready to go before we issue those payments.”

Editor’s Note: This story appears in Behind the Bar, The Nevada Independent’s newsletter dedicated to comprehensive coverage of the 2023 legislative session. Sign up for the newsletter here.

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