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Recovery Act Recipients: Understand Your Record-Keeping and Reporting Obligations

The American Recovery and Reinvestment Act of 2009 (ARRA) is capturing news headlines around the country. Approximately $300 billion of additional federal funds are being passed down from federal agencies to entities that are generally subject to single audits. ARRA mandates that there be an unprecedented amount of oversight and transparency around the spending of all funds associated with this law. For this reason, ARRA has imposed new transparency and accountability requirements on federal awarding agencies and their recipients.
The following is a list of commonly asked questions and answers for recipients of ARRA funds.

Should ARRA funds be separately identified and tracked?

Yes. Recipients should consider whether additional internal controls or system requirements would be needed to ensure that the ARRA funds could be separately identified and tracked.

Do recipients need to update their general ledger accounts or record-keeping systems?

Possibly. Upon accepting funding, recipients agree to maintain records that can adequately identify the source and application of the ARRA funds. 

How can unallowable expenditures be prevented?

Recipients should consider whether their current internal control procedures over federal expenditures are appropriate, working properly and designed to prevent unallowable expenditures. 

How should ARRA expenditures be identified on financial statements?

ARRA expenditures should be separately identified on the Schedule of Expenditures of Federal Awards (SEFA) and the Data Collection Form (SF-SAC). The identifying name of the federal program should include the prefix "ARRA" on both forms.

Are ARRA programs considered higher risk?

Yes. Due to the inherent risk with the new transparency and accountability requirements over expenditures of ARRA awards, these programs are considered higher risk.

Where can recipients find government-wide guidance for carrying out the new stringent reporting requirements?

The Office of Management and Budget (OMB) has issued various documents that provide guidance to program managers and auditors including:

• Implementing Guidance for the Reports on the Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009 (issued on June 22, 2009)
  • http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-21.pdf
• List of Programs Subject to Recipient Reporting
  • New CFDA numbers issued by governmental agency for new programs
  • Supplement 1, List of Programs Subject to Recipient Reporting
• Recipient Reporting Data Model
  • Excel reporting template for data submission
  • Data dictionary
  • Supplement 2, Recipient Reporting Data Model

When is the first reporting deadline?

The first statutory reporting deadline will be for the quarter ending on Sept. 30, 2009, which is due to the federal awarding agency by Oct. 10, 2009. Detailed reporting instructions will be made available at www.FederalReporting.gov no less than 45 days before the Oct. 10, 2009 deadline.
Where can recipients find more information on ARRA?

Additional information on ARRA, including frequently asked questions and dates for upcoming webinars, is available at www.recovery.gov.

Questions about ARRA? Contact Jennifer Culotta at 312-980-3226 or your Blackman Kallick representative. 
 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.