Using ARPA funds to upgrade technology and software systems

The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a $1.9 trillion economic stimulus bill passed on March 11, 2021, to speed up the country's recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession.

The American Rescue Plan has been designed to change the course of the pandemic and deliver immediate and direct relief to families and workers impacted by the COVID-19 crisis through no fault of their own. This law is one of the most progressive pieces of legislation in history and will build a bridge to an equitable economic recovery.

As well as the funds allocated for individuals and businesses, state, local and Tribal governments across America have received relief funds too. The public sector has been under an unprecedented strain in the wake of the COVID-19 crisis; with the need for services increasing —including setting up emergency medical facilities and vaccination sites and supporting struggling small businesses—state and local revenues have plummeted as a result of the economic fallout from the crisis. At the height of the disruption, public sector employment in the U.S. fell by around 1.4 million jobs, including layoffs of 1 million educators, compared to about 750,000 job losses during the Great Recession. As a result, communities have faced untenable choices, between laying off educators, firefighters, and other frontline workers or failing to provide services that communities rely on.

The American Rescue Plan provides $350 billion in emergency funding for state, local, territorial, and Tribal governments to remedy this mismatch between rising costs and falling revenues.

According to the U.S. Department of the Treasury, this includes:

• $195 billion for states (a minimum of $500 million for each state)
• $130 billion for local governments (a minimum of $1.25 billion per state is provided by the statute, inclusive of the amounts allocated to local governments within the state)
• $20 billion for Tribal governments
• $4.5 billion for territories

The Rescue Plan will provide relief to state, local, and Tribal governments to continue supporting the public health response and laying the foundation for a solid and equitable economic recovery. In addition to helping these governments address the revenue losses they have experienced because of the crisis, it will help them cover the costs incurred responding to the public health emergency and provide recovery support – including through assistance to households, small businesses and nonprofits, aid to impacted industries, and support for essential workers. It will also provide resources for state, local, and Tribal governments to invest in infrastructure, including water, sewer, and broadband services.

What can the funds be spent on?

Local government agencies are granted flexibility in choosing how they will spend their ARPA funds. As outlined in the Final Rule, funding must fit into one of the following categories:  

• Responding to the public health and negative economic impacts of the pandemic.  
• Providing premium pay to essential workers. 
• Providing government services to the extent of revenue loss due to the pandemic. 
• Making necessary investments in water, sewer, and broadband infrastructure.  

Can funds be spent on technology?

American Rescue Plan Act funds, including State and Local Fiscal Recovery Funds (SLFRF), can be used to purchase technology. The ARPA funding approach allows state, local, and Tribal governments to drive recovery and respond quickly to their own challenges and needs. The spending criteria were written broadly to allow local governments to best address their unique challenges as long as they adhere to the guidance. Technology is highlighted as a suitable and desirable expenditure to address the negative economic impacts caused by the public health crisis.

Specifically, the "Addressing the negative economic impacts caused by the public health emergency" section of the SLFRF fact sheet states that "funding may be used for technology infrastructure to help rebuild public sector capacity."

This could mean rebuilding public sector capacity by rehiring public sector staff and replenishing unemployment insurance (UI) trust funds up to pre-pandemic levels. Recipients may also use this funding to build their internal capacity to successfully implement economic relief programs, with investments in data analysis, targeted outreach, technology infrastructure, and impact evaluations.

How will technology help

Using funds to make overdue investments in technology and cybersecurity is a way for local government leaders to save on future costs while simultaneously better serving constituents. The final rule offers "non-exhaustive" examples of tech that could be purchased under this category, including:

• Data analysis resources to gather, assess, share, and use data.
• Technology infrastructure to improve access to and the user experience of government IT systems, as well as technology improvements to increase public access and delivery of government programs and services.
• Community outreach and engagement activities.
• Technology infrastructure to adapt government operations post-pandemic.

In short, organizations are already thinking seriously about the investments needed to ensure their workforce can provide high-level digital services over the long term, regardless of where staff and service users are based. Data as a tool will super-charge economic recovery, and local governments are being encouraged to make good use of existing data and the ability to collect new data. Analyzing community data will enable benefit program administrators to understand the gaps and overlaps in services to citizens enrolled in multiple programs. Beyond this initial crisis, this data enables policymakers to predict future community needs.

As communities reopen and recover, data can provide government agencies with insight into citizens and industries that are recovering versus those that are struggling so that policies and resources can be deployed to support a more rapid recovery. Data analytics tools, which easily integrate with existing systems and other cloud platforms, allow a rich set of data analytics, scenario analysis, and artificial intelligence that informs strategy, operations, and tactical activities to accelerate recovery.

Improving efficiencies will bring tangible benefits to the countless people, communities, and businesses that rely on public services. But to be efficient and remain resilient, the public sector workers providing these will need to access information reliably, safely, securely, and at speed. Upgrading technology infrastructure and leveling up technological skills and solutions are where they need to start.

How Unit4 can help your organization

Unit4’s next-generation, smart, cloud-based solutions for public sector organizations focus on People Experience to help free your teams to do more of what matters: delivering greater value to the community. Our purpose-built solutions transform work so your people gain the time and flexibility to focus on doing even better for the people you serve.

It's vital to make the best use of your people's precious time and to maximize the impact you can deliver with available funding. You also need to satisfy rising constituent demands. Conventional, labor-intensive legacy systems and disjointed manual processes no longer meet these needs. So why let them hold you back?

Make your teams more productive while increasing the visibility and control they need to better serve your citizens. Click here to book a demo of our ERP solutions or check out the Unit4 People Experience Suite here.