Helping school districts receive and spend education stabilization relief funds

Montana releases Education Stabilization Fund guidance for LEAs, plus an estimate of allocations for each district and school
By: | April 15, 2020
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As states wait for guidance and an open application process from the U.S. Education Department on the Education Stabilization Fund in the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, at least one state is already preparing its local educational agencies to receive and spend the supplemental funds.

The Montana Office of Public Instruction released a guidance document for LEAs as well as an estimate of allocations for each LEA and school from the CARES Act Governor’s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund. The state educational agency estimates it will receive nearly $8.8 million from the Governor’s Emergency Education Relief Fund, for which K-12 schools and institutions of higher education are eligible, to be distributed at the discretion of the governor’s office.

In addition, the SEA estimates it will receive nearly $41.3 million from the Elementary and Secondary School Emergency Relief Fund. According to the guidance document, the SEA will distribute 90 percent, or an estimated $36.166 million, from the Elementary and Secondary School Emergency Relief Fund to LEAs based on the FY 2019 Title I formula allocations and will reserve 10 percent, or an estimated $4.129 million, for administrative costs and “other emergency needs as determined by the state educational agency to address issues responding to coronavirus.”

Kara Flath, school finance administrator with the Montana Office of Public Instruction, says the 10 percent statewide set-aside will be used for two purposes. “The first one is we wanted to give a baseline of $10,000 to each elementary and high school program,” she told state education officials during an online presentation on the guidance. “If you’re a K-12 district, that means you would get [at least] $10,000 for an elementary and $10,000 for a high school, so we make sure K-12s are at the $20,000 level, and the elementary and high school districts, separate, are at $10,000.”

For instance, an elementary school district that would receive $5,000 based on the Title I formula would receive an additional $5,000 from the state set-aside to bring the district to the $10,000 baseline funding level set by the state.

Secondly, Flath says, “we know there are 32 districts who don’t participate in Title I, and because this is allocated based on the Title I funding formula allocation, we went through and also included those 32 districts so there was some equitability.”

The supplemental funds should have no effect on districts’ general fund in FY 2020 or 2021, she adds. “This is in addition to your Title I money and in addition to your general fund money or any state and local money expected to come into your school district this year and next year.”

“Although this funding stream is allocated based on the Title I funding formula, it is not restricted to the Title I allowances,” she says.

The state is waiting to hear whether the Education Stabilization Funds will be able to be used retroactively to pay for COVID-19 expenses incurred prior to funding availability.

Assurances needed for fund requests

According to the state guidance document, the following assurances are necessary to receive the funds:

  • The SEA must provide assurance it will maintain maintenance of effort (or ask for a waiver) for elementary and secondary education and postsecondary education.
  • SEAs and LEAs must “to the greatest extent practicable” continue to pay employees and contractors.
  • SEAs and LEAs must provide equitable services to private schools in the same manner as in Title I.
  • SEAs and LEAs must retain public ownership of any materials, equipment, or property purchased with these funds.
  • The funds must be expended by Sept. 30, 2021, although the state is awaiting clarification on whether a no-cost one-year Tydings extension would be allowed by ED.

Charles Hendrix covers education funding and other Title I issues for ESEA Now, a DA sister publication.