1. Responding to the public health emergency or its negative economic impacts,
2. Expanding public sector capacity and providing premium pay to workers performing essential work during the COVID-19 public health emergency,
3. Investing in water, sewer, and broadband infrastructure, and
4. Providing general government services to the extent of revenue loss due to the pandemic.

The Final Rule outlines several prohibited uses including rainy day funds, debt service payments, Medicaid or CHIP program cost share, activities that undermine CDC public health guidance, violations of the federal uniform guidance including conflict of interest rules, and extraordinary pension contributions. The prohibition does not apply to pension contributions that are part of regular payroll contributions for employees whose wages and salaries are an eligible use of Recovery Funds.

Counties must have statutory authority under North Carolina law to undertake a particular activity and use ARPA funds to finance the project. See details below:

• North Carolina General Statutes Chapter on Counties § 153 A
• § 160A-17.1 authorizes the governing body of any city or county to make contracts for and to accept grants-in-aid and loans from the federal and State governments and their agencies for constructing, expanding, maintaining, and operating any project or facility, or performing any function, which such city or county may be authorized by general law or local act to provide or perform. 
• § 160D-1311 outlines state authority for local governments to engage in certain community development programs and activities to provide for the “welfare needs of persons of low and moderate income.” 
• § 160A-497 gives local governments broad authority to assist senior citizens.
• The North Carolina Constitution states that “Beneficent provision for the poor, the unfortunate, and the orphan is one of the first duties of a civilized and a Christian state.” 
• The North Carolina Constitution requires all expenditures of public funds to be “for public purposes only.” It also prohibits “emoluments or privileges” (gifts) unless a public service is provided in return.
• Click here to access NCACC/UNC School of Government document outlining authorized county funding options for Broadband projects.

The first is a “standard allowance” for lost revenue, up to $10 million. This means counties can now designate up to $10 million of their total ARPA allocation as “revenue loss” and use the designated amount for eligible general government services.

The other option allows counties calculate their specific “revenue loss” using a specific formula Treasury adopted in its Final Rule.

• Click here for more information on calculating revenue loss.
• Click here to access a revenue loss calculator tool.

In addition to determining the eligibility of a project, counties must also assess whether they have state authority to complete projects, adhere to U.S. Treasury’s reporting requirements, and abide by federal uniform guidance.

Recipients are responsible for effective administration of the federal funds and are accountable to Treasury for oversight of their subrecipients. This includes ensuring subrecipients comply with the fiscal recovery fund statute, fiscal recovery fund Award Terms and Conditions, Treasury’s Final Rule, and reporting requirements as applicable.

Counties must regularly submit reports to U.S. Treasury regarding their expenditures along with any necessary data that justify their eligibility determinations for projects. This rigorous reporting provides publicly available information about projects and expenditures.

Counties with a population over 250,000 must also submit a performance plan describing their efforts to conduct community outreach and improve equity in conjunction with their ARPA expenditures.

These reports are due to Treasury at regular intervals throughout the life of the program. Some county reports are due quarterly and others annually, and they must be posted on a public facing website.

*All ARPA funds, including funds expended under the “revenue loss” category, are subject to federal Uniform Guidance (UG) requirements, and must be tracked and managed separately from the county “general fund account.”

The Uniform Guidance is outlined in the Title 2 of the Code of Federal Regulations Part 200 and ARPA recipients are subject to most of its provisions.

• Click here to access information compiled by UNC School of Government experts on various subparts of the uniform guidance, policies counties must adopt to comply the UG along with customizable sample policy templates. 
• Click here to access various blog posts authored by UNC School of Government experts to outline both state and federal rules that apply to ARPA funds.