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Questions & Answers to ARRA Lapsed Funding Guidance
September 2, 2010 (Updated January 15, 2013)

Q1. How will recovered ARRA amounts available for adjustments to obligations be determined after September 30, 2010?

A1. Understanding that the availability of ARRA funds will change as we proceed until the funds expire - on September 30, 2015, the Office of the Chief Financial Officer (OCFO) will pull periodic reports determining deobligated State balances. This data will be provided in summary to the Division Administrators weekly.

Q2. For what specific purpose can withdrawn ARRA funds be used on existing projects following September 30, 2010?

A2. Recovery Act funds can only be used following September 30, 2010 for upward adjustments to existing obligations. This means that any deobligated funding can be used only to reimburse costs associated with timely obligations related to legitimate cost overruns within the original scope of work and purpose associated with the existing obligation. Recovered ARRA funds cannot be used after September 30, 2010 for new obligations, adjustments to pay claims, or increases under an escalation clause.

Example 1: Permissible - Legitimate upward adjustment - Increased material and labor costs due to changes in condition.

Example 2: Not permissible - Original obligation was for project on Mile 1, and contract included option to add work on Mile 2 (changes in original scope)

Q3. When and how will ARRA funds be withdrawn from recipients?

A3. Controls have been established designating the original ARRA program codes as "cancelled". A program code designated as "cancelled" can continue to reimburse expenditures but once funds have been deobligated, we lose the ability to reobligate. States will be required to follow the process described in A8 requesting recovered ARRA funds to be utilized on an existing project. After the State submits a FHWA-1576 - ARRA Obligation Adjustment form and it has been reviewed and approved, obligation authority will be moved from the original ARRA program code and placed in the appropriate current year code. After approval, States/Divisions will be able to modify their existing project referencing the new program code and associated funding.

Q4. Is the State or FHWA Division Office responsible for tracking balances?

A4. Both - Tracking State balances is a shared responsibility. A customized report providing State balances in total will be emailed to Divisions (Official Mailbox) on a weekly basis. Additionally States and Divisions have the ability to generate FMIS W10A reports for detailed information.

Q5. How will recovered funds be tracked?

A5. Recovered funds will be tracked by State and applicable Program Code. Summary balances will be tracked using the ARRA Weekly Summary Report. Divisions/States can obtain detailed data by generating periodic FMIS W10A reports.

Q6. Will periodic reports be available and distributed detailing state balances? If so, how often will reports be updated and provided to the field (anticipating project actions could increase the overall balance)?

A6. Yes, summary data is provided weekly in the ARRA Weekly Summary Report. More detailed information can be obtained by generating a FMIS W10A report.

Q7. How long will it take for Divisions/HQ to review and take action on funding requests?

A7. The goal is to process funding requests within 30 days of receiving a properly completed "FHWA-1576 - ARRA Obligation Adjustment Form". Transfer requests which do not receive Division concurrence will not be forwarded to the OCFO. If Transfer requests are not approved by the OCFO, the requesting Division / State will be contacted and provided with information supporting the decision.

Q8. What are the requirements for filling out the FHWA-1576 - ARRA Obligation Adjustment form?

A8. A complete ARRA Obligation Adjustment form will include the following information:

• Requesting Agency
• Requesting Agency Contact Information
• Federal-aid Project number (Tracking Numbers)
• State Project number (Tracking Numbers)
• Fund - From (FHWA)
• Entity - To (State)
• Fiscal Year (09)
• Program Code
• Upward Adjustment of Recovery Act funds requested (Amount)
• Description/Reason/Justification for upward adjustment (Box above State Signature)
• State Official's Signature, including the following language "I hereby certify that this request for an upward adjustment is for costs incurred within the original scope and obligation and does not exceed the unobligated program code balance of the State's Recovery Act funds available. The increase in costs is not related to a contract claim or escalation clause." (Box above State Signature)
• Division Administrator or applicable Program Office concurrence signature
• FHWA OCFO Approval (OCFO Comments Box)

Q9. Will State ARRA funds remain available for the State to utilize until the funds expire on 9/30/2015?

A9. Deobligated funds will remain available to the State until 9/30/2015 or until HQ is provided with information that a particular State/s will not have the ability to utilize recovered funds for a given program code. This action requires Official correspondence from the Director of the State Department of Transportation. At that time, funding will be permanently withdrawn from the State.

Q10. For approved upward adjustments requests, will the Budget Office and the FMIS Team need to re-allocate funds to the State? If so what is the impact and anticipated time needed?

A10. Yes, the OCFO will coordinate re-allocating funds for approved upward adjustments to the requesting State. The goal is to process funding requests within 30 days of receiving a properly completed FHWA-1576 - ARRA Obligation Adjustment Form. Please see A3 for detailed information..

Q11. How will Transportation Investment Generating Economic Recovery (TIGER) funds be treated?

A11. TIGER grant funds are available for obligation until September 30, 2011 and are not subject to this guidance (but may be subject to subsequent guidance).

Q12. Are there any special rules for ARRA On-the-Job Training /Supportive Services or Ferry Boat Discretionary (FBD) funding?

A12. Program funds will be managed by the respective program office. Requests for upward adjustments will need to be processed through the program office utilizing the FHWA-1576 - ARRA Obligation Adjustment Form.

Q13. What strategies can States employ before September 30 to maximize their utilization of funds in event of recoveries after September 30?

A13.

1. States can adjust the Federal share of ARRA funds up to 100% shortly after award (see 23 CFR 630.106).

2. States should research current costs compared to the engineer estimate and where appropriate decrease unneeded funds and reobligate those funds on eligible underfunded projects.

Q14. Will funds deobligated remain available for legitimate overruns throughout the life of ARRA (September 30, 2015)?

A14. Recovery Act funds deobligated after September 30, 2010 are available to make upward adjustments (increases) to recorded Recovery Act obligations that were obligated prior to September 30, 2010, until September 30, 2015, consistent with 31 U.S.C. 1553(c). Section 1553(c) excludes use of "lapsed funds" (Recovery Act funds deobligated after September 30, 2010) for adjustments to pay contract claims or contract increases associated with an escalation clause.

Q15.Does the $25M cap available for upward adjustment renew at the beginning of each fiscal year?

A15. Yes.

Q16. How will the maximum amount of funding available for upward adjustments be determined for each State within a fiscal year?

A16. Amounts available to each State will be calculated based on the State's proportion of the total amount of ARRA funding apportioned. See the attached table for each State's total upward adjustment amount and the State's percentage of the total available.

Q17. Does this guidance apply to administrative funding?

A17. No. This Guidance does not apply to ARRA administrative funding (internal management and oversight).

Q18. If a State's ARRA deobligations exceed their annual pro-rata share for upward adjustments, do the additional deobligated fund balances remain available in subsequent fiscal years?

A18.Yes. If a State deobligates an amount exceeding its annual pro-rata share in a specific program code, the amount remaining after upward adjustment will carry forward and be available for upward adjustment in subsequent years (through 2015).

Q19.When submitting an upward adjustment FHWA-1576 form, will States have to certify there has been no change in scope? Must States include an attachment to the form documenting the reasons for cost overruns?

A19. Yes. A detailed explanation documenting the specifics of the request is required (stating in detail the need for the adjustment to the amount originally obligated, include the "who, what, when, why, where and how". The State must submit documentation that demonstrates deobligated funds are available to process the upward adjustment (current FMIS W10A). The Division Office is responsible for performing the initial review of a State's supporting documentation and making the determination that the request for upward adjustment is not the result of a change in scope or increased costs due to exercising an escalation clause.

Memorandum: Availability of American Recovery and Reinvestment Act of 2009 Appropriations