Your Institution Received a CDFI Rapid Response Program Grant Award. Now what?
This blog was authored by my colleague, Kira Sexton, a signing director in our financial institutions practice in Indianapolis.
In June, the U.S. Department of the Treasury awarded 863 community development financial institutions (CDFIs) with $1.25 billion in grants through the CDFI Rapid Response Program (RRP). These funds were provided to the CDFI Fund from the 2021 Consolidated Appropriations Act. The majority of institutions awarded CDFI RRP grants received an award of approximately $1.8 million.
The CDFI Fund was established in 1994 by the Riegle Community Development and Regulatory Improvement Act. The CDFI Fund’s mission is to expand economic opportunity for underserved people and communities by supporting the growth and capacity of a national network of community development lenders, investors, and financial service providers.
As suggested by the name of this program, the goal was to quickly invest into communities of need as a result of the ongoing impacts from the COVID-19 pandemic. Depending on the type of CDFI, funds through this program must be used in one of the following categories: financial products, financial services, loan loss reserves, development services, or capital reserves. Expenditures for compensation, professional service costs, travel costs, training and education costs, equipment and supplies are limited. Generally, the performance period related to these awards begins with the award announcement of June 15, 2021 and includes two full consecutive fiscal years after the date of the award announcement. For example, if the financial institution has a December 31 year end, then the performance period would end on December 31, 2023.
What should CDFI RRP grant award recipients be doing now?
Many CDFIs may not previously have received grants as large as the ones awarded through the recent CDFI RRP. Here are some next steps if your institution received an award from the CDFI RRP:
- Read and understand your grant award agreement—allowable uses of funds, performance period, key deadlines, and compliance and reporting requirements.
- Consider implementing new controls and processes to ensure compliance with your grant award agreement.
- Assess whether your reporting needs can be met with your current service provider.
- Watch for additional guidance to be issued regarding single audit program requirements.
How can we help?
CLA can help prepare your institution to comply with compliance and reporting requirements of the CDFI RRP. Subscribe to our CLA Financial Institutions Blog to receive future communications on the CDFI RRP and other important topics for financial institutions. Contact Us to learn more about how we can help you navigate the requirements of the CDFI RRP grant awards.
Scott is the leader in CLA’s Financial Institutions group, and a member of the National Assurance Technical Group. He has 15 years of experience with audit and accounting services for financial institutions of all sizes.
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