Budget & Finance

States Grill Districts on How They’ll Spend Their ESSER Money for Learning Recovery

By Mark Lieberman — May 26, 2022 6 min read
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School districts are racing to spend federal relief funds designed to help students catch up on learning they missed during the pandemic. But as states vet those spending plans with an eye toward potential federal audits down the road, some end up rejecting districts’ proposed investments or asking for more detail that may add delays to the process.

These hurdles have slowed down many districts’ hurried efforts to make use of a key portion of the nearly $200 billion in one-time funds they got from the federal government during the pandemic. Services to help students deal with and recover from the pandemic hang in the balance.

The deadline for schools to spend the $123 billion Congress approved last March through the American Rescue Plan, colloquially known as ESSER III, is more than two years away. Politicians and U.S. Department of Education officials, including Secretary Miguel Cardona, have urged districts to spend the money as quickly as possible.

ESSER III requires each district to set aside at least 20 percent of its allocated amount for evidence-based initiatives that specifically tackle lost instructional time. The remaining 80 percent of funds have no such restrictions, as long as districts spend them on broadly defined efforts to recover from the pandemic.

But before districts can spend the money, they must submit a plan to their state education department outlining where it will go. That’s the step where many districts are hitting roadblocks.

Thousands of districts have successfully submitted spending plans and moved forward with wide-ranging investments. Many districts that appear to have spent minimal ESSER funds have already invested them in ongoing costs, like staff salaries, that will roll out over time.

But close to 1 in 5 respondents who answered an Association of School Business Officials survey in January said compliance issues are among their biggest concerns about quickly spending federal relief funds.

The 20 percent set-aside for addressing lost instructional time appears to be a key stumbling block. States and districts don’t always agree on which efforts will help improve student learning.

Policies aren’t set in stone. In Colorado, two districts that wanted to invest their set-aside in purchasing Chromebook charging stations were denied, said Jeremy Meyer, a spokesperson for the Colorado Department of Education.

Those districts used their other ESSER funds for the Chromebooks instead. Then in May, the U.S. Department of Education notified the Colorado department that Chromebooks are an allowable expense for the set-aside, as long as students will be using the Chromebooks as part of an evidence-based initiative to address learning loss.

Fourteen other districts proposed purchasing Chromebooks with their ESSER set-asides and didn’t have to revise their applications, Meyer said.

In many cases, states and districts end up resolving the issues.

A district in Massachusetts tried to use its set-aside for purchasing a school building to reduce overcrowding and allow for more social distancing, said Jackie Reis, a spokesperson for the Massachusetts Department of Elementary and Secondary Education.

“It seemed more aimed at reducing COVID transmission than unfinished learning,” Reis said.

The Massachusetts department determined that the proposal didn’t meet the guidelines, and the district ended up instead using its set-aside for wraparound services to provide social-emotional support to students, Reis said.

What counts as ‘evidence-based’?

Even as states help districts comply with federal guidelines, time is ticking while they deliberate. The U.S. Department of Education wants states to move as quickly as possible to help schools use ESSER funds productively, and most states have done that, a department spokesperson said.

“Bureaucratic hurdles should not get in the way of student recovery,” the spokesperson wrote in a statement. “States should [be] doing everything they can to get these badly needed resources into the classroom and helping students recover.”

Regulations for the American Rescue Plan require districts to demonstrate that their plans for the set-aside funds meet the standards of evidence as defined in the Every Student Succeeds Act.

Most states have referred districts to databases like the What Works Clearinghouse and the U.S. Department of Education’s COVID-19 Handbook for examples of practices that already have the federal seal of approval. The department has clarified that districts do not need to point to research studies that took place during the COVID-19 pandemic.

States will eventually be the subject of Education Department audits looking into how districts spent federal relief dollars. A relatively new program like ESSER might be daunting for a state that knows its money is on the line if districts run afoul of federal guidelines, said Julia Martin, legislative director for the law firm Brustein & Manasevit, which consults with districts on spending federal funds.

“A state is going to be approving or denying expenditures basically using [Education Department] guidance and their best guess as to whether something meets that benchmark” for the set-aside, Martin said. “The risk is having to repay that grant.”

Providing more details upfront can help prevent audit headaches down the road

Some states said districts didn’t share enough detail linking their proposals to concrete principles of evidence-based practices.

State education department officials in South Carolina asked 20 districts to resubmit their ESSER plans with more detail on how their plans for the set-aside met federal guidelines for research-based interventions, said Derek Phillips, a spokesperson for the South Carolina Department of Education.

Several districts in Missouri applied to use their set-asides for adding staff. But without specifying what those staff members would be doing, department officials couldn’t be sure that the plan met the federal requirements. They asked districts for more detail, according to Mallory McGowin, a spokesperson for the state’s department of elementary and secondary education.

What works in one place doesn’t necessarily work in another. Georgia’s education department sent districts a list of allowable approaches that included class size reduction. But in Wisconsin, the Department of Public Instruction determined class size reduction alone doesn’t significantly improve student achievement, said Chris Bucher, a spokesperson for the state’s Department of Public Instruction.

Districts that applied to use their set-aside to reduce class sizes had to divert those funds to something else instead, like high-dosage tutoring and evidence-based reading and math curricula, Bucher said.

Districts must demonstrate their proposed ESSER expenses fit into one of the federal department’s broad categories of allowable expenditures, and explicitly state how the expenses relate to the effects of the pandemic. Some districts that want to expand existing programs have struggled to justify to their state how their use of ESSER funds will respond to the pandemic, Martin said.

Many smaller districts lack the administrative staff to manage complex grants like the ESSER funds or recent offerings from the Federal Emergency Management Agency. These revision processes can also slow down the flow of funds into programs and services that directly benefit students and staff.

Martin said she’s seen many cases where districts don’t provide enough detail upfront, or where the form districts are required to complete doesn’t leave enough room for all the necessary detail.

“Districts feel like, ‘We know why we’re doing this,’” Martin said. "...But it is much less burdensome to justify it on the front end, to write that down and make that connection, than to have an audit on the back end.”

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A version of this article appeared in the June 08, 2022 edition of Education Week as States Grill Districts on How They’ll Spend Their ESSER Money for Learning Recovery

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