Dive Brief:

• Seven states and the District of Columbia got the OK from the U.S. Department of Education to take additional time to spend down money from the first round of federal COVID-19 relief funds directed to districts, known as the Elementary and Secondary School Emergency Relief I, said James Lane, senior advisor in the Office of the Secretary, in an email to K-12 Dive.  
• This late liquidation extension will allow certain districts in those states to spend their ESSER I funds through early 2024, or about 14 months beyond the original deadline. Additionally, five states received approvals to extend spending timelines for the Governor's Emergency Education Relief fund.
• While the district and state liquidation extensions add up to only tiny portions of these pockets of spending, much attention is focused on spending challenges for ESSER III — the largest allocation of COVID-19 recovery assistance.

Dive Insight:

In making the late liquidation requests, states cited challenges such as delays caused by staff shortages, supply chain disruptions and the reallocation of funds reserved for equitable services for participating nonpublic schools. State education agencies made the extension requests for GEER and on behalf of districts for ESSER I. 

In their requests, states cited the need for extending spending for a wide range of activities, including general instructional services and materials, cleaning supplies, technology and technology infrastructure, HVAC and construction materials and services, and contracts for other services like behavioral health and staffing.

ESSER I — allocated under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act — allocated $13.2 billion for pre-K-12. Districts and states needed to obligate or budget the funds by Sept. 30, 2022, and liquidate or spend the money by 120 days after Sept. 30, 2022, or until Jan. 28, 2023.

The seven states, along with the District of Columbia, that requested and received approval to extend districts' ESSER I spending timeline now have until March 30, 2024, or 14 months beyond Jan. 28, 2023, to draw down those funds. Collectively, these states asked to delay $6.6 million — or about 0.05% — from the total $13.2 billion allocated. In addition to the District of Columbia, these states are: Illinois, Indiana, North Carolina, Mississippi, Ohio, Texas and Wisconsin.  

The five states allowed to push back their GEER CARES Act spending deadline now have the same deadlines as the extensions for ESSER I allocations. GEER allocations under CARES totaled nearly $3 billion, and the five states requested collectively to delay spending for $5.7 million, or 0.19%. These states are: Indiana, Missouri, Nevada, Pennsylvania and Rhode Island.

Only 11 states and the District of Columbia submitted applications for extensions, and all were approved.

Sasha Pudelski, advocacy director for AASA, The School Superintendents Association, said as ESSER funding hits the halfway mark, superintendents are evaluating and reevaluating budget priorities for the remaining two pockets of ESSER. 

In this period, district leaders are looking at original budgeting plans and strategizing about whether to make changes. Some administrators, Pudelski said, are having to make tough choices as costs have increased due to inflation. 

Projects that school systems planned to have completed and items they planned to procure are "coming in at a much higher cost than they expected even a year and a half ago," Pudelski said.

While most superintendents are confident about spending all their funds in the given timelines, "the reality is having a flexible policy that ensures that even the best laid plans can be adjusted … is still the best federal policy," she said.

ESSER II, funded at $54.3 billion, has an obligation deadline of Sept. 30, 2023, and a liquidation deadline of Jan. 28, 2024. ESSER III, allocated under the America Rescue Plan, is the largest of the allocations with $121.9 billion. It has a Sept. 30, 2024, obligation deadline and a Jan. 28, 2025, spending deadline. 

In an Education Department FAQ updated in December, the department made recommendations for allowable allocations, which are meant to address COVID recovery activities. Districts, for instance, were advised against using ESSER funds on new construction projects "as this use of funds limits an LEA’s ability to meet other, more pressing needs related to the pandemic’s impact on learning and the emotional and mental health and well-being of our children and youth.”

In an emailed statement to K-12 Dive on March 15, Lane said, “The Department strongly encourages States, LEAs, and other subgrantees to obligate and liquidate funds with urgency for activities that support students’ academic recovery and mental health." Lane is delegated the authority to perform the functions and duties of the assistant secretary for Office of Elementary and Secondary Education.The ESSER and GEER programs are being administered by OESE.