A Transparent Look at How Governments Are Spending the $350B in ARPA Funds

On Aug. 31, states and territories, as well as cities and counties with populations of more than 250,000, are supposed to deliver the first of seven annual Recovery Plan Performance Reports to the U.S. Treasury, and those reports are required to be posted on “publicly facing” websites. 

The reports are unlikely to reveal much about actual performance but will give an initial view of the way in which states and localities are spending the $350 billion in American Rescue Plan Act, which provides a flexible pot of money for pandemic recovery. 

As time goes on, reports required by the Treasury will be supplemented by additional material that state and local governments think will be useful to contituents and others—including greater details about spending as well as information about performance. Of course, the degree of detail offered will vary a great deal from place to place.

While transparency is often set forth as a goal for government spending, given the publicity connected to the huge amounts of money involved here, it was essential that the public be able to see exactly where it’s being spent. It’s likely that the states and localities that have provided good fiscal and performance information in the past are going to be among the leaders in this addition to their online arsenal of information. 

Seattle, for example, has a long history of using and displaying performance information, and managers there have learned that transparency reports of any kind are only worth doing if people pay attention to them. One of the first steps the city has taken to engage the public with this particular set of disclosures has been to replace references to a national American Rescue Plan with the Seattle Rescue Plan, phrasing more likely to garner interest of people who live in that area. Spending decisions were based on a cooperative process involving the administration and City Council, with input from public hearings, a panel with community organizations and other cities, and mayoral listening sessions. 

As of Aug. 31, visitors to Seattle’s website will see where money is being spent, but as spending begins to generate results, performance information will increasingly include customer satisfaction information. 

“We’re not just going to be reporting the metrics, but how it’s affecting Seattle residents. What are the results of this funding–are people better off and who is better off,” says Tina Walha, director of innovation and performance in Seattle.

A clear part of quantifying “who is better off” gets into the equity of distribution, an important theme underlying American Rescue Plan dollars. Reporting on the results of the Seattle Rescue Plan will include storytelling. As Walha says, “We want to be able to tell the story of Seattle residents getting back on their feet.”

Transparency in Planning

In places where only a small portion of the ARPA money has already been spent, there may not be a great deal to report. But that doesn’t mean they can’t make plans to use their transparency websites as more money is allocated. 

So far, in Chattanooga, Tennessee, for example, the City Council has only been asked to allocate about$7 million of the $38.6 million in ARPA money that it will receive. That first bit of spending was incorporated in the fiscal 2022 budget for services like eviction prevention and supportive programs for homelessness. It’s 185,000 population size means it does not need to submit and post a rescue plan performance report Aug. 31, but it is required to submit – and post -- an interim report, which will show zero spending so far, as the City Council won’t pass its fiscal 2022 budget for another two weeks.

Additional rescue plan spending will wait until the appointment of a new equity commission in October. But looking ahead, the reporting goal in Chattanooga is to create information that is accessible and packaged in a way that is easy to understand. Getting to that point requires significant commitment. 

“Transparency is only as good as the support you build around that effort,” says Tim Moreland, deputy administrator for innovation, delivery and performance.

To build its reporting structure, Chattanooga plans to invite community members into the process, with the goal of designing the format that will be easiest to navigate. Plans include the launch of a testing group, working with a cross section of Chattanooga residents to ferret out elements in the disclosures that are confusing to them.  

“We’re big fans of building with people, not for people,” says Moreland. “If you build with the people, you say ‘What do you need?’ then show a prototype, and ask ‘What more would you like to see?’ 

It's no surprise that state transparency websites are going to show a wide range of detail. Some will aggregate information, providing a broad view of how money is being spent. At the other extreme, Wyoming’s transparency website, provides checkbook-style data that reveals, for example, that $29 of ARPA funds were spent on Aug. 24 for fuel by the Department of Corrections in Rapid City. 

Several states have pioneered in developing ARPA-related transparency programs to help their local governments do the best job possible, with limited. West Virginia’s state auditor is offering free accounting software to any city or town that wants it, with the software also helping local governments record the kinds of information the Treasury includes in its reporting requirements for smaller governments. As soon as ARPA spending decisions are formed, the information from participating local governments will be posted on the state website, as well as on local sites.

“We’re going to get everyone a transparency portal,” says Deputy State Auditor Anthony Woods. “We want to make sure that the citizens know that their money is being spent appropriately for projects that will benefit their community,” 

Woods sees this assistance from the state as particularly critical because some of the West Virginia’s 230 towns and cities have never received money from the federal government before and many are small, with populations under 500 residents. 

“They have a deer in the headlights look. They need someone to help them do their reporting,” he says. 

Learning From Each Other

Beyond providing information for residents, transparency websites have the potential to help individual localities learn from one another, and to coordinate their spending plans in ways that can generate great efficiency and economies of scale. 

Delaware State Auditor Kathleen McGuiness is a firm believer in this benefit and has established The Gray Fox Initiative, named for the Delaware state animal. Her website will have summarized state information with local governments invited to send in their weekly spend data. She believes that making this information visible will encourage municipalities to learn from each other and find ways to work together. 

“There’s a real opportunity here to move some projects in a robust coordinated effort,” she says.

The state will invite local governments to send in weekly spending data to be made available on the state website. 

The key to McGuiness’ success will be in getting Delaware’s local governments to agree to participate. In mid-August, 15 of Delaware’s 57 municipalities had committed to providing weekly spending detail to the auditor’s office. McGuiness is planning to attract the remaining 42 by holding town halls in different parts of her small state to bring government officials together, along with the public, to encourage participation.

The motivation to report spending clearly and in understandable ways has the potential to enlist the public to act as ARPA watchdogs, leading, in her view, to greater efficiency and less waste. 

“When you have someone watching, you behave differently with your funds,” says McGuiness.