Budget & Finance

District Leaders Want More Time to Spend ESSER Funds as Plans Go Astray

By Mark Lieberman — September 16, 2022 4 min read
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The deadline for schools to wrap up spending federal pandemic relief funds, is more than two years away. But some district leaders are already angling for more time to maximize their investments.

During several sessions here at the annual conference for the Association of School Business Officials (ASBO) International, attendees and panelists this week expressed hope that the federal government will offer still more flexibility to finish allocating the more than $190 billion in ESSER funds, which school districts received in three rounds during the pandemic.

Current federal guidelines say schools must lock in spending decisions for all ESSER I funds by the end of this month; for ESSER II by Sept. 30, 2023; and ESSER III by Sept. 30, 2024. Then they have another five months from each of those dates to liquidate, or spend, the money.

Most districts have already exhausted their ESSER I supply, which mainly covered the cost of masks, personal protective equipment, contact tracing, and other pandemic response items. Several recent surveys of district spending show that most of ESSER II has been spent as well.

Districts are taking longer with ESSER III for a number of reasons:

  1. It’s the largest of the three sets of funds, totaling some $122 billion.
  2. Some states waited up to a year after Congress approved the funds before allowing districts to start spending them. Some state education departments took longer than others to submit their required ESSER plans to the federal government. In other states, legislators debated for months over whether to impose additional restrictions on how schools spend the funds.
  3. COVID conditions have changed multiple times since the funds went out, leading to rolling staff outages and scrambling districts’ premature plans for a smooth return to in-person learning.
  4. States are scrutinizing districts’ spending plans and asking for revisions in anticipation of audits that could eventually affect their bottom line.
  5. Supply chain issues and turbulence in the labor market have prevented some districts from securing construction projects or technology purchases.

One audience member during an ASBO session summed up a dilemma many districts are facing. Policymakers have advised against investing in recurring costs, like new personnel, that won’t be sustainable once the ESSER deadlines arrive. But when districts try to invest in stuff—as this administrator put it—it’s a lot more expensive than usual, or it may never arrive.

“We’re kind of in a box,” he said. “We’re trying to do the right thing.” Plus, he added, “there’s only so much new stuff you can buy.”

In the Little Elm district in Texas, an order of digital boards for classrooms is seven months behind schedule. “The time is clicking down,” said Shay Adams, the district’s assistant superintendent for business and finance. “What is our plan for that money if those don’t come in?”

She said her team has built in “triggers” that flag district leaders when an ESSER-funded item has taken too long to arrive, reminding them to divert funds elsewhere.

A ‘workaround’ to buy more spending time

What’s a district to do otherwise? Several conference presenters pitched a workaround: Apply ESSER dollars to salaries and benefits for existing district employees typically paid through general fund dollars—which federal regulations allow as part of “other activities that are necessary to maintain operation and continuity of services.” Then, use those general fund dollars for new investments, with no federal deadline or other ESSER regulations attached.

The U.S. Department of Education has shown some sympathy for these concerns. Roberto Rodríguez, the department’s assistant secretary of planning, evaluation, and policy development, said this summer that districts will be able to petition their state to apply for up to 18 extra months to spend on contracts, mainly for construction projects that will last beyond 2024.

But in an interview last month with Education Week, U.S. Education Secretary Miguel Cardona said there’s only so much he can do to offer flexibility without asking Congress to rewrite the law.

“This isn’t a set of funds that are going to help address education for the next 10 or 15 years,” he said. “It’s for students now.”

In the meantime, ASBO panelists advised attendees to keep careful track of how their spending is progressing, and whether they’re following through with plans to set aside 20 percent of ESSER III dollars for initiatives that address learning loss.

Michele Trongaard, the associate superintendent for business and finance for the Mansfield district in Texas, said she had planned to spend the learning loss set-aside on a tutoring program, but pivoted after fewer students than expected signed up. Instead, that money will go toward summer school programs and Saturday classes in spring for students who need extra help.

Decisions like those show that districts’ plans for ESSER spending will continue to evolve. But according to several district leaders at the conference, the initial wave of public interest that accompanied the arrival of ESSER funds has dissipated. Some speculate that nationwide efforts to move on from the pandemic may be to blame.

“I do not get a lot of questions on ESSER,” Trongaard said. “Is that not bizarre?”

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