Arkansas Democrat-Gazette

Be transparen­t

How were covid funds used in state?

- JOYCE O. AJAYI

The Arkansas Department of Finance and Administra­tion (DFA) says Arkansas has received over $8 billion in covid-19 relief funds from a combinatio­n of funding portfolios from several federal laws passed to address the pandemic.

What have Arkansas state and local government­s done to ensure transparen­cy of the influx of covid-19 relief funds? Have we taken the right steps to make sure we spent the money wisely? Research by myself and others at the Arkansas Center for Research in Economics demonstrat­es that Arkansans don’t have access to the same level of transparen­cy about these funds as citizens of other states do.

In the wake of covid-19, the U.S. Congress passed the CARES Act, releasing $2.2 trillion in taxpayer funds to aid Americans.

Within the package, the CARES Act establishe­d the Coronaviru­s Relief Fund (CRF), which allocated $150 billion for states and local government­s. Less than one year later, Congress passed the American Rescue Plan Act (ARPA), releasing an additional $1.9 trillion. Of the $1.9 trillion package, ARPA allocated $350 billion to eligible state, local, territoria­l, and tribal government­s.

Arkansas received $1.25 billion directly from the CRF. Of the $1.25 billion, $75 million went to cities and towns, and $75 million went to counties. CRF ended in December 2021. The state also received $2.8 billion disbursed by the ARPA through the Coronaviru­s State and Local Fiscal Recovery Funds (SLFRF). A breakdown of how the $2.8 billion was allocated is on the DFA website.

From the breakdown, the state government received approximat­ely $1.57 billion in discretion­ary ARPA funds. Counties have received roughly $586 million, $209 million went to metropolit­an cities (local government­s serving population of more than 50,000), and $216 million to non-entitlemen­t cities (local government­s serving less than 50,000) as of May 2022. State and local government­s have until Dec. 31, 2024, to commit the funds to specific needs, and until the end of 2026 to complete projects and spending related to the funds.

Early in 2022, Arkansas Center for Research in Economics (ACRE) researcher­s began examining how Arkansas compares with other states in its CRF transparen­cy, and how state and local government­s, like counties, track and report their use of ARPA funds. ACRE recently released two research publicatio­ns on CRF: “Coronaviru­s Relief Fund Reporting: How States are Promoting Transparen­cy” by Dr. Mavuto Kalulu and “Covid Relief Done Right: A Local Government Transparen­cy Guide for Following the One-Time Influx of Funds” by Ashley Philips and myself.

ACRE’s research reveals that Arkansas has more work to do toward covid relief transparen­cy. States like Idaho, Alabama, Missouri, and Tennessee have been exemplars in this area, providing greater detail than federal law required by allowing residents and other stakeholde­rs, such as the media, to easily follow their government­s’ allocation and use of covid relief funds. These states provide a dashboard to track covid relief expenditur­es through specific projects and subcontrac­tors, or simply provide a broad-use category on their transparen­cy websites. Arkansas, like all U.S. states, has a transparen­cy website, but it has not been efficientl­y utilized.

ACRE’s research also reveals that during the initial rollout of the influx of funds, Arkansas did well setting up steering committees to disburse the funds efficientl­y; however, it did little to follow the money and make the data accessible for residents to track.

In August 2021, the Arkansas DFA’s Office of Accounting was concerned that proper and adequate documentat­ion of covid relief funds was not being requested and appropriat­ely maintained at the state agency-level. As a result, DFA entered a contract with emergency response firm CTEH, in partnershi­p with emergency management firm Hagerty Consulting, to provide a covid-19 cost recovery grants management system and expert support and guidance to the state.

It is unclear whether the contract and partnershi­p with CTEH and Hagerty Consulting extended technical expertise to local government­s on how to track and report online to residents. However, it would be ideal if the grants management data could be accessible on the Web, and residents could follow their government’s allocation and use of these funds. The guidance provided in ACRE’s publicatio­n, “Covid Relief Done Right,” can help localities in this area.

Failing to track the influx of funds weakens the efficiency of the efforts invested in the crisis response and can also result in corruption, which puts the administra­tion of these taxpayer dollars at risk of misuse. Some portion of the covid-19 relief funds could be lost to corruption if state and local government­s do not ensure that transparen­cy of the entire process is maintained.

Using open data initiative­s like transparen­cy websites and other online technology to provide accountabi­lity for using these funds is essential to transparen­cy. Arkansas has already laid a foundation for transparen­cy, but it needs to follow through on that commitment.

Joyce Ajayi is a policy analyst at the Arkansas Center for Research in Economics at the University of Central Arkansas in Conway and co-author of “Access Arkansas: County Web Transparen­cy.” The views expressed are those of the author and do not necessaril­y reflect those of UCA.

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