Beyond the ARPA Obligation Reporting Deadline: Sustaining Fiscal Capacity & Compliance for Municipalities April 30, 2025 in the Rearview Mirror 

For municipalities across the country, April 30, 2025, marked a major milestone: the submission of the final annual SLFRF (State and Local Fiscal Recovery Funds) reports to the U.S. Treasury. After months—if not years—of budget planning, procurement coordination, and regulatory review, communities hit “submit” on the compliance portal. At Capital Strategic Solutions (CSS), we proudly supported small rural communities, to larger cities and towns, as well as counties, in that effort, validating millions of dollars in American Rescue Plan Act (ARPA) obligations and ensuring accurate, timely reporting. 

But while the deadline has passed, the work is far from over. 

From Deadline Mode to Sustainability Mode 

Now begins the next phase of the SLFRF journey—one that is just as important as the reporting deadline: sustaining fiscal capacity and ensuring long-term compliance through the program’s end on December 31, 2026. 

Municipalities should take this time to shift from a reactive stance—racing to obligate and report funds—to a proactive, strategic position that emphasizes oversight, results, and resilience. In short, this is the time to turn short-term compliance into long-term impact. 

1.) Strengthen Internal Oversight and Controls

With obligations recorded, the focus should turn to execution. Municipalities must ensure that procurement processes, contract management, and subrecipient monitoring meet federal requirements. Towns and cities should review internal control structures, document decision-making, and ensure policies are aligned with the Uniform Guidance. 

CSS recommends establishing or reinforcing a local ARPA compliance team or designating a single point of accountability to oversee remaining expenditures.

2.) Track Performance and Tell the Story

The remaining 18 months offer a critical opportunity to track performance metrics and measure outcomes. SLFRF is not just about spending money—it’s about demonstrating impact. 

Whether it’s improving infrastructure, expanding public health programs, or increasing housing stability, municipalities must document how projects are delivering value. This includes preparing for final project and expenditure reports and making sure each project’s data, outcomes, and records are complete and accessible.

3.) Prepare for Closeout

December 31, 2026 is the final expenditure deadline, but the closeout process may extend well beyond that. Municipalities should begin preparing now: 

• Conduct internal audits or reviews to identify and correct gaps. 
• Ensure subrecipients have documented all eligible uses and expenses. 
• Archive key documents that support compliance, including procurement records, contracts, and performance reports.

4.) Plan for Post-ARPA Fiscal Sustainability

As SLFRF funding winds down, towns and cities will need to evaluate which services or programs can be sustained without federal support. For many, ARPA filled critical gaps—but some of those needs may persist beyond the funding period. 

CSS advises communities to start identifying potential long-term funding sources, integrating ARPA project outcomes into budget planning, and leveraging lessons learned to build resilient local finance strategies. 

5.) Stay Informed and Ready

While April 30 marked the last scheduled annual reporting deadline, municipalities must continue monitoring federal updates and guidance. Treasury’s FAQs, guidance updates, and audit standards may evolve, especially as close-out procedures are clarified. 

Being responsive to these changes—and documenting every step—will be essential in avoiding future audit risks or repayment demands.