Administration asks authority to reassign ERA cash balances and outlines ARPA reallocation options
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Summary
The chief recovery officer told the committee that some ERA2 funds ($152,000,000) were used to replace general funds in eligible places, leaving cash funds that cannot be moved without authority; as of Dec. 31, 2025 the administration reported about $74,000,000 in ARPA remaining and described reallocation strategies (broadband, payroll) subject to timing and committee approval.
Lisa Farnham briefed the committee on the administration’s request for transfer authority tied to emergency rental assistance (ERA) accounting and described the status of remaining ARPA funds.
Farnham reviewed ERA history: an ERA1 allocation of about $200,000,000 (roughly $32,000,000 returned) and ERA2 of $152,000,000 that ended Sept. 30, 2025. She said the administration had applied ERA2 to eligible uses and thereby freed up general fund dollars in some programs, but lacked explicit authority to transfer the freed cash fund balances out of certain agencies. "So they're sitting there until we can get this authority to move them back," Farnham told the committee.
Farnham said Treasury later tightened its interpretations of eligible uses and in some instances deemed certain spending ineligible (for example, uses tied to repairs of affordable housing units), which has increased audit and recapture risk; the administration has used state funds to replace some amounts identified as fraud and worked with federal law enforcement on certain cases. To complete accounting and reduce recapture risk, the administration is requesting language that would allow transfers of cash fund balances resulting from ERA2 applications.
Separately, Farnham reported ARPA spending status: as of Dec. 31, 2025 about $74,000,000 remained to be expended. The administration can propose reallocations to move funds from awards that cannot spend in time to other eligible uses, but reallocation is constrained by joint fiscal committee approval and by award timing (awards must have been established before 12/31/24 and remain open to accept reallocations). Farnham pointed to broadband as a broad eligibility category where spending is active and described interagency approaches to use ARPA for payroll in narrowly defined circumstances; payroll transfers would likely need to remain on the general fund bottom line until the Budget Adjustment Act.
Farnham said the administration is developing a reallocation strategy and hopes remaining ARPA obligations will fall to between $40 million and $50 million after the next quarterly report, but cautioned that many of the remaining funds are concentrated in programs that historically struggle to complete projects on schedule.
