BGR: Governments Should Spend Federal Relief Funds Carefully

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NEW ORLEANS – The Bureau of Governmental Research has released guidance for government entities planning how to spend federal pandemic relief funds.

The nonprofit watchdog said governments have “substantial flexibility” in spending the federal dollars, which creates a “rare opportunity to address public needs without burdening taxpayers. But realizing the full potential of this one-time money will require policymakers to establish a prudent decision-making process with strong oversight mechanisms.”

BGR said it developed its suggestions based on its research on local government fiscal issues and its mission of promoting the effective use of public resources. BGR’s release focuses primarily on the City of New Orleans’ $388 million because it is the largest among Louisiana’s parish and municipal governments. However, BGR’s recommendations “generally apply to other government entities receiving federal aid through the American Rescue Plan Act (ARPA), including school districts and the state government.”

The complete report is here but BGR’s highlights are as follows:

In brief, BGR advises the City of New Orleans to develop an ARPA spending plan that:

  • Covers multiple years and includes options aligned with various economic recovery scenarios
  • Establishes spending priorities based on analysis of City and community needs
  • Maintains efficiencies achieved during the pandemic-related fiscal crisis
  • Identifies new efficiencies that would allow the City to redirect existing revenue
  • Prioritizes expenditures that evidence suggests will deliver effective outcomes
  • Compares the cost effectiveness of spending options

In addition, BGR calls for oversight and accountability measures to ensure relief spending delivers the desired results. These include:

  • Providing residents with the multi-year spending plans and regular updates
  • Managing relief payments through a dedicated fund to facilitate auditing and accountability
  • Alerting the public to proposed expenditures through an online City Council calendar
  • Providing sufficient detail and explanation for individual spending requests
  • Maintaining dashboards that track council appropriations and City expenditures and results
  • Monitoring, auditing and program evaluation by the Office of Inspector General

Click here to see complete report.

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