City warns groups that deadlines are looming for using pandemic grants

Some Indianapolis not-for-profits that landed COVID pandemic-related grants from the city are encountering a looming deadline problem that might prevent them from receiving the funding.

On Friday, Local Initiatives Support Corp.’s Indianapolis office received a direct email from the city controller. The organization had been granted $3.2 million in American Rescue Plan Act, or ARPA, funding for food access and small business capacity-building efforts, but the email told LISC that it “may not continue to incur expenses as of the date of this notice of cancellation.”

In short, the not-for-profit would not be able count on receiving the ARPA funds promised it. 

Officials charged with managing city finances have recently sent several grantees similar notices, which state that the organizations have not provided proper documentation regarding ARPA spending. The documents are required by the federal government to track local government expenditures. 

Local governments have until Dec. 31, 2024, to “obligate” their ARPA funds by showing that orders have been placed, contracts have been entered or financial transactions have been made. Funds that haven’t been obligated are to be returned to the U.S. Department of the Treasury, according to city spokeswoman Aliya Wishner.

LISC appears to be on the way to having its troubles resolved, but other organizations that qualified for city ARPA grants face a similar threat of termination if they can’t show the funds are obligated.

Wishner declined to name the remaining groups, citing continued work by the Office of Finance and Management.

Indianapolis began monitoring 46 grant recipients in March for spending plans that were behind schedule. 

“Many of them got back on track, several agreed to return some portion of their grants that they could not spend, and a few, including LISC, just failed to respond,” Wishner wrote. Emails reviewed by IBJ show that city officials gave LISC previous submission deadlines in March and July, which Wishner said it did not meet.

However, LISC sent the documents required to the city late Wednesday night. Officials with the city’s Office of Finance and Management grants team plans to put LISC on a “performance improvement plan” to “minimize negative effects on their subgrantees” and ensure city ARPA funds aren’t reverted back to the federal government.

David Hampton, executive director of LISC Indianapolis, told IBJ in a statement that the APRA funds provided to the organization support five “community food builder” staff positions. Additionally, the funds go towards four healthy food access projects and support 13 organizations working to build capacity for small businesses.

“It is imperative that these projects move forward so that our city can be the healthy, inclusive, and economically robust home we all deserve,” Hampton wrote.

Hampton added that LISC is confident that federal funds will be deployed by the state deadline and that the organization will provide the proper documentation to the city.

The notices from the Office of Finance and Management are a “necessary step” to good fiscal stewardship, Wishner wrote.

“With just four months left in the year to reevaluate and commit remaining ARPA funding, it is simply too great a risk that residents of Indianapolis will lose out on millions of dollars of funds intended to support and uplift them.”