Nearly $30 million in ARPA funds for small Wisconsin businesses remain unspent

Yahoo

13-02-2025

Wilona Young, owner of Chicago's House of Hoagies in Menasha, was counting on a grant from the African American Chamber of Commerce to help her recover from some hefty maintenance expenses. She was told the application process was supposed take around 90 days.
Instead, the process dragged on 10 months. Young took on a part-time job to stay afloat.
The chamber ultimately denied Young's application the week of Thanksgiving due to "inconsistent financial documentation," according to emails shared with Public Investigator.
"They are being so tedious," Young said. "Even if they're not doing anything wrong, I feel like the fact that they're asking for so much unnecessary paperwork is probably one of the reasons the process is taking so long."
Young's experience could explain why $25.8 million in federal COVID relief dollars meant to support small businesses remains unspent months after the December 2024 deadline.
Since announcing the Diverse Business Assistance Grant program more than three years ago, the state has awarded the African American Chamber of Commerce and 37 other organizations more than $73.5 million to distribute to small businesses. The money comes from the American Rescue Plan Act, or ARPA.
The taxpayer-funded program is meant to support business owners from underserved communities who were disproportionately affected by the pandemic and have historically faced difficulty accessing credit and capital.
Young and two other business owners contacted Public Investigator after reading an article last year about delays in the disbursement process at the African American Chamber of Commerce and other groups.
Each say the African American Chamber of Commerce made accessing the taxpayer-funded grant frustrating and time consuming. Their effort didn't pay off — all were denied after months of waiting.
Takeyla Spear, owner of KMT Accounting Services LLC, says she and 25 of her clients applied for the chamber's grant. She said the chamber frequently asked her and her clients for documents they'd already supplied.
"It was absolutely horrendous," Spear said.
Wisconsin Department of Administration spokesperson Tatyana Warrick said grantees have faced a variety of challenges, including difficulty hiring and retaining experienced staff.
"Some grantees needed to acquire familiarity with the federal funding process and build in-house expertise in this area," Warrick said in an email. "Such capacity building takes time and fulfills one of the purposes of the grant program itself."
She said the African American Chamber of Commerce and 24 other grantees have received extensions. One other grantee is still having its extension request processed.
Unspent dollars will ultimately return to the federal government, Warrick said.
Nikki Purvis, president and CEO of the African American Chamber of Commerce, didn't respond to requests for comment. The chamber has until June to spend the remaining $2.7 million of its $5 million grant.
In a Jan. 6 email to applicants viewed by Public Investigator, Purvis told applicants the chamber hired "additional support" to expedite the process.
Glencora Haskins, a research associate for the Brookings Institution, says the state Department of Administration's compliance and reporting process could be slowing down these grantees.
Haskins tracks how local governments across the country are investing ARPA funds. Across the board, she's seen that getting the funding out the door to nonprofits and small businesses has been slower than other programs because of the strict monitoring requirements.
"It's important to make sure that we're not engaging in waste and that the funding isn't being missed used," Haskins said. "That level of caution does create additional constraints on awardees."
Haskins added that agencies like the Department of Administration could streamline things by providing more technical assistance and grant planning assistance to grantees.
For the Wisconsin Chinese Chamber of Commerce, delays stemmed from the grant arriving later than anticipated, said its CEO Ziming Wu. Wu said the department approved the chamber's application in March 2022, but the chamber didn't have access to the grant until November 2022.
The chamber used its $1.5 million grant to provide business support and digital marketing assistance to more than 150 businesses statewide. The Department of Administration gave the chamber an extension until June to spend its remaining $280,000, but the chamber hopes to have until the end of the year.
"We are evaluating the possibility of extending the program through December 2025 to maximize impact and ensure businesses continue receiving necessary resources and support," Wu said.
Many other grantees haven't responded to the Journal Sentinel's requests for comment.
The Wisconsin Indigenous Housing and Economic Development Corporation declined to comment on how it spent its $4 million grant or how much of the grant remains. The corporation's application for an extension was approved, according to Fern Orie, the corporation's chief executive officer.
The Business Council Milwaukee, which was awarded $5 million, didn't respond to the Journal Sentinel's calls and emails for comment.
To this day, Young said she still doesn't understand why she was rejected by the African American Chamber of Commerce. She said she provided receipts for her repair expenses, tax transcripts, six months of bank statements and more.
Her business is staying above water thanks to an alternative funding source.
Young said she submitted those same invoices to Heinz's Black Kitchen Initiative. She had zero issues, she said. Heinz awarded her $20,000.
However, Young is still out $150. To be eligible for the African American Chamber of Commerce grant, all applicants were required to pay a membership fee.
The fee depends on how many people the business employs and ranges from $150 to $500 annually. In September, Purvis said the chamber received applications from 340 businesses.
"They're supposed to help small business owners financially," Young said. "You (the chamber) put us under more hardship than anything."
Gina Castro is a Public Investigator reporter for the Milwaukee Journal Sentinel. She can be reached at [e-mail].
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This article originally appeared on Milwaukee Journal Sentinel: $30M in ARPA funds for small Wisconsin businesses still unspent