ARPA Closeout: Deadlines, Compliance Risks, and Next Steps

For entities managing American Rescue Plan Act (ARPA) funding, the approaching December 31, 2026, expenditure deadline represents a critical milestone. After years of administering projects, managing expenditures, and reporting on program activities, recipients of State and Local Fiscal Recovery Funds (SLFRF) are entering the final stages of the grant lifecycle.

Even organizations that have completed their projects will still need to reconcile financial records, address reporting discrepancies, resolve subrecipient issues, and satisfy Treasury's closeout requirements. Failure to address these responsibilities can create audit findings, repayment exposure, and additional administrative burdens. Meanwhile, recipients of ARPA's Capital Projects Fund (CPF) face different timelines and requirements, including a recently announced extension of the program's period of performance.

Now grant managers need to move the project forward while confirming that expenditures, reporting, and supporting documentation show how they used federal funds.

Key Takeaways

• Most State and Local Fiscal Recovery Fund (SLFRF) money must be expended by December 31, 2026, while Surface Transportation and Title I projects were subject to an earlier deadline of September 30, 2026.
• Closeout requires more than spending funds. Recipients must complete applicable reporting, financial reconciliation, and certification requirements before Treasury formally closes an award.
• CPF operates under a different timeline. Treasury announced an extension of the CPF period of performance to December 31, 2027, with additional guidance forthcoming.
• Documentation gaps can create compliance exposure. Unreconciled expenditures, incomplete supporting records, and unresolved subrecipient issues can complicate closeout.
• Preparation should begin well before the final reporting deadline. Recipients should review project balances, reporting accuracy, supporting documentation, and outstanding compliance responsibilities now.

What Are the SLFRF Closeout Requirements?

The SLFRF program provided $350 billion to state, local, territorial, and Tribal governments to respond to the public health and economic impacts of the COVID-19 pandemic, maintain government services, and support eligible community investments. As the program approaches its conclusion, recipients must distinguish among three separate milestones: obligating funds, expending funds, and formally closing out the award.

What Are the Key SLFRF Deadlines?

The obligation deadline was December 31, 2024. Expenditures for Surface Transportation and Title I projects were due September 30, 2026. Recipients not previously closed out must submit their Final Project and Expenditure (P&E) by April 30, 2027.

The obligation deadline is established when recipients need to obligate their funds to eligible activities. The expenditure deadline establishes when those funds must be spent in accordance with Treasury requirements.

Treasury has issued additional guidance on certain year-end administrative matters, including processing or correcting final subrecipient invoices and treating outstanding checks. Recipients should consult the applicable Treasury FAQs before assuming that a payment or correction made after the expenditure deadline is allowable.

Recipients may need to return unexpended funds that do not meet applicable requirements to the Treasury.

Does Spending All ARPA Funds Close Out the Award?

Completing the expenditure phase is a milestone, but it does not end a recipient’s federal obligation. Under Treasury’s SLFRF closeout process, eligible recipients must complete the applicable closeout steps through the Treasury Portal, review their financial information, and certify the submission. The process draws on prior P&E Reports and includes review of the SF-425 Federal Financial Report.

Treasury may invite recipients that have fully expended their awards to an early closeout process on a rolling basis. An invitation isn’t a confirmation of closure, though. The award closes only after the recipient completes the submission and receives an Award Closeout Notice from Treasury. Until then, recipients must continue to meet applicable reporting requirements.

This makes the accuracy of earlier reports critical. An expenditure discrepancy identified during closeout may require a recipient to revisit financial records and reporting decisions from months or years earlier.

What Happens After Closeout?

Depending on award terms and federal requirements, recipients may remain responsible for maintaining supporting records, responding to authorized audits or reviews, resolving outstanding findings, and addressing potential repayment obligations.

Capital Projects Fund: A Different Program with Different Requirements

Although SLFRF and CPF were both established under ARPA, the programs were designed to address different needs. While SLFRF provided broad flexibility for eligible government recovery and community investments, CPF focused on capital projects that support access to work, education, and health monitoring. The $10 billion CPF program supports capital projects such as broadband, digital technology, and multipurpose community facility projects. These differences have important implications for grant administration.

What Does the Capital Projects Fund Extension Change?

On October 23, 2026, Treasury extended the CPF period of performance for grants to December 31, 2027. This announcement changes the planning horizon for CPF recipients. However, the extension should not be interpreted as eliminating existing reporting, monitoring, or project oversight responsibilities. Recipients should review the Treasury’s CPF guidance to determine how the extension affects the project’s milestones, reporting obligations, and closeout schedules.

For organizations managing both SLFRF and CPF awards, maintaining separate compliance calendars is particularly important. Applying the same expenditure and closeout assumptions to both programs could result in missed requirements or unnecessary administrative work.

Why CPF Projects May Require Additional Closeout Planning

CPF-funded projects often involve construction, infrastructure development, technology deployment, and multiple participating organizations. These activities can create challenges that differ from those associated with more traditional, noncapital grant expenditures.

Consider a broadband infrastructure project that is substantially complete but still has outstanding contractor invoices, final acceptance documentation, or performance information needed to demonstrate it achieved its intended objectives. Although the physical project may be nearing completion, the recipient may still need to validate costs, document project outcomes, and address remaining contract or subaward responsibilities.

The distinction between contractors and subrecipients also matters. Subrecipient relationships carry federal monitoring responsibilities, while contractor arrangements require appropriate procurement, contract administration, and payment oversight. Recipients should evaluate these responsibilities throughout implementation rather than waiting until the end of the period of performance.

What Are Common ARPA Grant Closeout Challenges?

Even well-managed grant programs can encounter complications during grant closeout. Many of the most significant challenges arise not from a single large compliance failure, but from smaller issues that remain unresolved until the final reporting period.

Financial Records That Do Not Match Treasury Reports

Differences between an organization's accounting records and its cumulative P&E reports can create uncertainty about the accuracy of reported expenditures.

An organization may have charged an expenditure to one project in its accounting system but reported it under another eligible-use category in the Treasury Portal. Although the expenditure itself may be allowable, the inconsistency can complicate reconciliation and require additional research or reporting corrections.

Practical Consideration

Reconcile expenditures at both the award and project levels and investigate differences before submitting final reports.

Incomplete Documentation of Eligible Uses

Recipients must be able to demonstrate that federal funds were used for allowable purposes. A transaction recorded in the accounting system may establish that a payment occurred, but it does not necessarily demonstrate why the expenditure was eligible under program requirements. Depending on the expenditure, additional documentation may be needed, such as contracts, invoices, eligibility determinations, procurement records, or evidence of completed activities.

Practical Consideration

Evaluate whether the documentation supports not only the amount spent, but also the basis for charging the expenditure to the federal award.

Outstanding Subrecipient Responsibilities

Subrecipient oversight often becomes harder near project completion, when administrative attention shifts to other priorities. A subrecipient may have completed its activities but still owe final financial reports, supporting documentation, or responses to monitoring findings. Without a structured follow-up process, these outstanding matters can remain unresolved when the recipient begins closeout.

Practical Consideration

Identify open subrecipient items, assign responsibility for resolution, and establish internal deadlines that precede the recipient's own reporting requirements.

Assuming the Final Report Is the Final Responsibility

The submission of a final report is not necessarily the end of federal oversight. Recipients may still be required to maintain records, respond to inquiries, participate in audits, or resolve compliance matters after closeout.

Practical Consideration

Establish a post-closeout records management process that identifies where documentation will be maintained, who will have access, and who will respond to future inquiries.

How Can Your Organization Prepare for ARPA Closeout?

As ARPA programs enter their final stages, grant managers face an important transition from administering federal funding to demonstrating that it was managed appropriately. For SLFRF recipients, the approaching expenditure deadline makes timely reconciliation, documentation review, and resolution of outstanding issues especially important. For CPF recipients, Treasury's extension provides additional time to advance projects while maintaining the compliance and reporting practices needed for eventual closeout. Regardless of the program, organizations should proactively identify gaps to maintain processes and fulfill all program obligations.

EisnerAmper's Grants Management team works with government entities and other federal funding recipients to strengthen grants management practices, assess compliance readiness, reconcile financial information, support subrecipient oversight, and prepare for federal reviews and audits.

Whether your organization is preparing for SLFRF closeout or evaluating its remaining CPF responsibilities, a proactive assessment can help identify potential gaps and establish a clear path forward. Contact our team to discuss how we can help your organization prepare for ARPA closeout.