2025 ARPA-SLFRF: This Isn’t Your Father’s Grant Program 

December 5, 2025

When the ARPA-SLFRF program first launched in 2021, it represented a once-in-a-generation investment: emergency relief to help governments respond to the pandemic. But fast forward to 2025, and what remains of SLFRF bears little resemblance to its original form. With more than 100 policy updates, guidance documents, FAQs, and compliance memos issued over the last several years, SLFRF is now a fundamentally different program — more mature, more regulated, and more demanding of compliance and strategic clarity. 

For jurisdictions entering what has become the final year of SLFRF availability, understanding these changes — including new flexibilities — isn’t optional — it’s essential.

What Has Changed Since 2021

• Expanded compliance expectations: Early flexibility under “emergency relief” has given way to more stringent rules around allowable uses, procurement, documentation, and audit readiness. Funds must now be managed through compliant financial systems, internal control documentation, and adherence to updated guidance.
• Shifting allowable uses and evolving deadlines: Multiple guidance updates have refined — and at times redefined — what is eligible under SLFRF, including personnel costs, subrecipient oversight, infrastructure, and other investments.
• New flexibility through re-obligation and reallocation options: Under recently updated FAQs (notably FAQ 17.16, 17.17, 17.19), jurisdictions that obligated funds by the December 31, 2024 deadline may still re-allocate or re-classify funds — shift cost overruns, change orders, or unused obligations — so long as the original contract or obligation was entered into by 12/31/24 and any amendments remain within the same scope and purpose.
• Greater scrutiny and transparency: As data accumulates from past distributions and federal oversight increases, jurisdictions are expected to document expenditures carefully, monitor subrecipients, and be ready for audits — with serious fiscal and reputational consequences for errors or noncompliance.
• Evolving federal-state coordination expectations: As Treasury and other federal entities continue to update guidance, states and local governments must stay aligned — incorporating new guidance into their own policies, procedures, and administrative practices.

What Jurisdictions Should Do Now

1. Stay current on guidance: With hundreds of pages of new SLFRF policy documents, internal compliance memos, and Treasury updates — assign someone to track changes and regularly brief leadership.
2. Review and update internal systems: Make sure accounting, procurement, payroll, and grant-tracking systems meet updated SLFRF standards.
3. Reassess planned or ongoing SLFRF-funded projects: Some ideas that passed muster in 2021 may no longer qualify under 2025 rules — and some projects may benefit from re-obligation or reallocation flexibility under FAQ 17.16/17.17/17.19.
4. Leverage re-allocation flexibility strategically: If you obligated funds before the deadline but circumstances have changed (e.g., cost overruns, project cancellation, scope adjustments), consider re-allocating remaining funds — or using SLFRF funds to cover contract change orders or contingencies — as long as original contracts remain in the same scope and purpose.
5. Invest in compliance capacity: Train staff or bring in expertise to ensure documentation, internal controls, subrecipient monitoring, and audit readiness are in place.
6. Plan for transparency and accountability: Use reporting dashboards, data standards, documentation protocols, and internal controls so that every dollar spent is defensible under updated SLFRF rules.

The Bottom Line

SLFRF in 2025 is no longer a rapid-response stopgap. It has evolved into a long-term fiscal instrument — one that demands professionalism, discipline, and strategic foresight.

But that evolution also brings new flexibility. The recent guidance changes allow jurisdictions that met the original obligation deadline to adjust course — re-allocate funds, address overruns, cover contingencies, or support unforeseen needs — provided the rules around scope and purpose are respected.

Cities, counties, and states that treat SLFRF like the 2021 version risk compliance failures or wasted opportunities. Those that understand the changes — and leverage the flexibility thoughtfully — may still be able to maximize impact, responsibly close out projects, and support their communities through the final stretch of SLFRF funding.

Managing grants efficiently, without compromising compliance and integrity, can be a challenging task. If your organization is navigating the complexities of grant management, we can help you enhance oversight, streamline processes, ensure outcomes and reduce the risks of waste, fraud, and abuse. Reach out today to learn how our expertise in grants management can ensure your programs meet their goals, stay compliant, and make the best use of taxpayer dollars. 

Authored by: