Distinguishing between subrecipient and contractor

Municipalities creating programs that implement many of the eligible activities authorized under the American Rescue Plan Act (ARPA) of 2021 will “transfer” some of their funds to other organizations. The rules for these awards require a determination on whether the entity receiving the funds should be treated as a subrecipient or as a contractor. While many municipalities have some experience with these “transfers,” they may be dealing with organizations that typically haven’t been traditional subrecipients – like commercial firms.

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