On Sept. 8, 2021, a small crowd of community members gathered in Fayetteville, asking that Washington County officials pause any spending of the county's $46 million American Rescue Plan Act (ARPA) funds until a detailed discussion of the community needs and uses of the funds were concluded.
In essence, Washington County residents are asking for a transparent process in the use of ARPA funds.
Local governments like counties and municipalities have been on the front lines in responding to the pandemic. The one-time influx of ARPA funds has the potential to help local governments with unexpected eligible expenses and replace lost revenue, but transparency must be part of the process.
According to the Arkansas Department of Finance and Administration (DFA), since the pandemic, the U.S. Treasury has disbursed to Arkansas a one-time influx of about $2.8 billion under ARPA. That's almost $1,000 per Arkansan. A breakdown of the funds on DFA's website shows that $1.6 billion was designated as the State Fiscal Recovery Fund (SFRF), another $1 billion for the Local Fiscal Recovery Fund (LFRF), and there is about $158 million for the Coronavirus Capital Project Fund (CCPF), all under ARPA.
According to the Arkansas Association of Counties (AAC), about $586 million of the ARPA funds have been allocated to counties so far. In the latest edition of County Lines Magazine published by the AAC, AAC Director Chris Villines wrote that most localities are confronting ambiguities surrounding the use and reporting of ARPA funds.
Though the U.S Treasury Department did provide a non-exhaustive list of examples of eligible uses of the ARPA funds, counties are unsure which projects can be accommodated to fit Treasury's definition of "eligible use" in their specific jurisdictions.
While residents are concerned that counties may not be empowered to use and track the funds, county officials are also worried about the propriety of using ARPA funds for fear of adverse legal recourse by the Treasury Department.
All of the 75 counties in Arkansas are sitting on millions of taxpayer dollars targeted for specific purposes. These funds come from taxpayers, and they must be used for what they are intended for and in a traceable and transparent manner.
Although Act 997 of the 2021 Regular Session provides that the Steering Committee and the Arkansas DFA have oversight on appropriation and disbursement of the ARPA funds, there is no provision of law that protects transparency or accountability. Local-government associations like the AAC provide some guidance to counties on the funding requirements, but fiscal decisions still lie with each county's officials to effectively use and track the funds.
The one-time influx of covid- relief funds presents government officials with an opportunity to gain public trust by being transparent. Transparency is key to reducing the misuse of public funds and promoting public trust.
Arkansas state government can encourage fiscal transparency of the influx of ARPA funding by providing technical assistance to each of Arkansas' 75 counties on how the funds can be spent, tracked, and reported. Local governments should also report all uses of the ARPA funds on their websites or, alternatively, utilize the government transparency website: transparency.arkansas.gov.
Some states like Idaho and Missouri have done this successfully. For example, Idaho has been reporting all uses of the relief funds on its state controller's transparency website, while Missouri has been reporting all covid-19 related funds transparency on its state treasurer's website.
California is another state where the fiscal transparency of covid-19 related funds has been encouraged; its Office of State Audits and Evaluations provides technical assistance to local governments and other groups on using and tracking the federal money.
More transparency of how covid relief funds are spent is beneficial for both citizens and local governments. It can help ensure that the money is spent on true relief and is a crucial aspect of a well-functioning, democratic government.
Joyce O. Ajayi is a policy analyst with the Arkansas Center for Research in Economics (ACRE) at the University of Central Arkansas in Conway and co-author of "Access Arkansas: County Web Transparency," an annual report on the accessibility of fiscal, administrative, and political information in Arkansas counties. The views expressed are those of the author and do not necessarily reflect those of UCA.