Report 2021-614 Recommendation 3 Responses

Report 2021-614: California Department of Education: It Needs to Provide Better Oversight to Ensure That Local Educational Agencies Promptly and Effectively Use Federal COVID‑19 Funds (Release Date: October 2021)

Recommendation #3 To: Education, Department of

To ensure that LEAs effectively use their ESSER and GEER funds before the spending deadlines to mitigate the effects of the pandemic on students, Education should develop a robust process for tracking LEAs' spending of these funds. As part of this process, Education should regularly assess LEAs' spending data to identify those that may be in jeopardy of not spending all of their allocations before the deadlines. This assessment should include projecting LEAs' future spending based on their spending patterns.

Education has fully implemented the CSA's recommendation to create a robust process for tracking LEAs' spending of ESSER and GEER funds to identify those LEAs that may be in jeopardy of not fully expending funds by the deadlines. Education used this robust process to regularly assess LEAs obligation and expenditure of ESSER I and GEER I funds and will continue to use this process to regularly assess ESSER II, GEER II, and ESSER III funds to ensure they are fully obligated by the applicable deadlines. Additionally, Education's assessment includes projecting LEAs future spending based on previous spending patterns.

To date, LEAs have reported obligating/expending 99.82% of GEER I and 99.99% of ESSER I funds.

Based on this information, Education considers this recommendation fully implemented and no further updates will be provided.

California State Auditor's Assessment of Status: Pending

Education did not provide any documentation to support that it has fully implemented our recommendation.

Education continues to assess and communicate with LEAs on spending data after each Quarterly Reporting period. Once the Spring 2022 Reporting Cycle ends, Education will reach out to LEAs with a remaining ESSER I and/or GEER I balance to provide guidance on strategizing future spending of funds to the fullest extent possible. Additionally, Education continues to provide technical assistance and updates to LEAs on the latest guidance from the U.S. Department of Education regarding allowable uses of funds; Education continues to share best practices that highlight how other LEAs are using funding for the benefit of their students in their FAQ section on their website at https://www.cde.ca.gov/fg/cr/esserfaqs.asp.

California State Auditor's Assessment of Status: Pending

Although Education's response does not directly address our recommendation, it provided additional documentation upon our request. However, the documentation that Education provided does not demonstrate efforts to project unspent ESSER and GEER funds by LEAs. Specifically, Education did not separately project unspent funds by LEAs specifically for ESSER and GEER programs. Rather, the documentation it provided only showed projected spending for ESSER I. Further, when projecting each LEA's spending rate, it combined the spending for ESSER I and the Learning Loss Mitigation Funds that had a spending deadline of June 2021. As we state in the report, because of the earlier spending deadlines, LEAs prioritized spending their allocations from the State general fund and the Coronavirus Relief Fund over ESSER and GEER funds. By including the spending for the Learning Loss Mitigation Funds and excluding spending from ESSER II, ESSER III, and GEER in its projections for the latest two quarters, Education overstates LEAs' ability to spend ESSER and GEER funds before their spending deadlines. As we recommended in the report, we believe that it is more appropriate for Education to track and project spending for each individual program to identify LEAs that may be at risk of not spending all funds for that program.

As previously noted, Education began assessing LEAs spending data of the funds at issue in the Fall of 2020, after each reporting period; analyzing both the aggregate and individual spending of each LEA by fund to determine trends in spending and remaining balances. On November 16, 2021, Education sent emails to every LEA with a remaining ESSER I and/or GEER I balance, which notified them that Education would be committed to helping them with spending down funds. Education will continue to monitor the use of funds, and will provide technical assistance to LEAs, as it did with all of the other Federal stimulus money to ensure that LEAs fully expend the funds. It should be noted that LEAs expended 99.75% of Coronavirus Relief Funds, which clearly demonstrates the LEAs ability to appropriately expend funds during the period of availability.

Education confirms that it has completed projections following each reporting period and will continue to do so for future reporting periods. Education adopted a projection methodology that takes into consideration the uniqueness of each funding source, expiration deadlines, and allowable uses to develop complete projections. Education will continue to utilize the practice of combined funding projections made based on total spending, which provides the most complete picture of LEAs' total relief fund spending potential. All relevant spending must be considered in order to make meaningful determinations regarding an LEAs ability to fully expend their funds.

California State Auditor's Assessment of Status: Pending

The documents that Education provided do not demonstrate efforts to project unspent ESSER and GEER funds by LEAs. Specifically, Education did not separately project unspent funds by LEAs specifically for ESSER and GEER programs. The documents show that Education used the spending data for the summer 2021 quarter to project that 443 LEAs will have $223 million in unspent ESSER and GEER funds combined as of September 30, 2022. Further, for projections of unspent funds for the two subsequent quarters, it combined the spending for ESSER and the Learning Loss Mitigation Funds that had a spending deadline of June 2021. As we state in the report, because of the earlier spending deadlines, LEAs prioritized spending their allocations from the State general fund and the Coronavirus Relief Fund over ESSER and GEER funds. By including the spending for the Learning Loss Mitigation Funds and excluding spending from GEER in its projections for the latest two quarters, Education overstates LEAs' ability to spend ESSER and GEER funds before their spending deadlines. As we recommend in the report, we believe that it is more appropriate for Education to track and project spending for each individual program to identify LEAs that may be at risk of not spending all funds for that program.

All Recommendations in 2021-614

Agency responses received are posted verbatim.