Maximize Your ESSER Funds While Avoiding a Fiscal Cliff
Maximize Your ESSER Funds While Avoiding a Fiscal Cliff
Key takeaways from a panel session at the 2021 National Charter Schools Conference
For charter schools, figuring out how to spend a multi-billion-dollar influx of federal funds, and doing so without breaking any program rules or making any potentially untenable long-term financial commitments, is a good problem to have.
“It’s a big pot of money,” Chad Aldeman, policy director at the Edunomics Laboratory at Georgetown University, observed during a recent panel discussion moderated by BuyQ CEO Marco Rafanelli at the virtual 2021 National Charter Schools Conference (#NCSC21).
Still, for schools and educational organizations that receive emergency relief money from the various Elementary and Secondary School Emergency Relief (ESSER) funds established during the COVID-19 pandemic, those awards do come with important caveats, compliance responsibilities and strategic complexities that organizations should take care not to overlook.
All told, the U.S. government has set aside close to $190 billion in ESSER relief funds for educational organizations, including $67.5 billion in 2020 via ESSER and ESSER II, plus another $122 billion in 2021 via the American Rescue Plan ESSER (also known as ESSER III), “to help safely reopen and sustain the safe operation of schools and address the impact of the coronavirus pandemic on the Nation’s students.”
The U.S. Department of Education awards ESSER grants to state educational agencies (SEAs), which in turn provide subgrants to local educational agencies (LEAs) according to the familiar Title 1 formula. A charter school that serves as their own LEA may receive an ESSER formula subgrant like any other LEA. A charter school that is not an LEA may receive support under ESSER through the LEA of which it is a part.
With ESSER grant funds already flowing to state agencies (and available until Sept. 30, 2023), now is the time for charter schools and charter management organizations to mobilize to take advantage of this unprecedented support, and in the process, begin to rebuild, restore and renew after an exceedingly difficult couple of years.
Here are a few recommendations from the experts who sat on the recent NCSC21 panel about how to maximize the impact of their ESSER dollars, while remaining fiscally responsible and compliant with program rules.
Become fluent in ESSER. Like other federal grant programs, ESSER funds come with strings attached — compliance responsibilities that entities receiving the funds must fulfill. And those responsibilities differ depending on which of the three ESSER programs — the first ESSER Fund (from the CARES Act), the ESSER II Fund (from the CRRSA Act) and/or ARP ESSER — an organization accesses for funding.
Each of the three programs require separate tracking of funds, for example, and each have their own reporting requirements. The rules that accompany each of the three funds also specify “allowable purposes” for how funds can be used (hiring new staff and avoiding layoffs; safe reopening and operation of school facilities, etc.). The largest of the three funds, ARP ESSER, includes a requirement that the LEA reserve at least 20% of its total allocation to address learning loss through the implementation of evidence-based interventions, such as summer learning or summer enrichment, extended day, comprehensive afterschool programs, and extended school year programs.
It’s critical that school leadership gain a firm understanding of these and other program requirements before making decisions about how to use ESSER funds, so they’re clear on their obligations. “Know the rules, know the rules, know the rules” urged fellow panelist Stephen Parmer, senior director of finance at Uplift Education, a charter management organization with 43 schools in North Texas. “Read the FAQs that your state [education agency] puts out and train your leadership on the requirements.”
For additional details on the programs, check out this primer and this resource page from the U.S. Dept. of Education.
Gather input to inform your funding priorities. ESSER parameters are “very flexible” regarding how local agencies can spend their funds, notes Aldeman. That flexibility gives school leaders an opportunity to gather ideas about how to use the money they’re awarded. Soliciting feedback from stakeholders in the community should be a top priority.
Uplift Education’s CEO and principals held town halls and roundtables in the neighborhoods the organization’s schools serve, basically asking, “What do you need? What would you like to see for your community?” Family engagement coordinators likewise reached out directly to engage parents. The goal was to ensure that ESSER-funded initiatives are tailored to the needs of their individual communities and that the return to full, in-person learning is as positive as possible for students. For one school, that meant investing in a new athletic track, for others it could mean an art program or counseling services for students, parents or staff struggling in the aftermath of the pandemic.
Plan wisely. The fiscal cliff looms large in setting ESSER funding priorities, so be prudent about tying yourself to long-term spending commitments. “You want to be careful about adding recurring costs going into the future because the money is going to run out in a few years,” Parmer cautioned. “It’s being thoughtful about the [fiscal] trade-offs [school] directors and principals will have to make in the future.”
Being prudent with your funding choices is particularly important with regard to adding permanent full-time positions and raising salaries, obligations that can push an organization closer to the fiscal cliff.
Through Uplift’s community outreach efforts, it was clear that high-impact tutoring needed to be a major priority. But rather than taking on new, full-time staff and the long-term commitments that entails, Uplift has turned instead to contract-based tutors.
Using contractors in other positions, like for nurses and counselors, is also an option, noted Aldeman. He also suggested considering temporarily bringing back retired teachers or offering stipends to staffers who are willing to take on summer hours or start their school year early. Just “make it clear that it’s not a permanent investment,” advised Aldeman.
Beyond decisions about staffing and compensation, the panelists urged organizations to pay close attention to technology purchases, for example, by focusing on total cost of ownership. On the programming side, they suggested that organizations consider using ESSER funds for pilot initiatives instead of permanent programs.
“I encourage you to think of [ESSER funds] as an on-ramp,” said Aldeman. “What are your priorities and how do you use this money for planning, for testing or experimentation or piloting different initiatives that you would like to accomplish.”
Developing a formal, detailed plan for how your organization will spend ESSER funds is another key step in the process. The panelists recommended that organizations detail not only how the funds will be earmarked but also establish a schedule for how and when they will be spent down. Then make sure your organization’s leadership signs off on the plan. “Be thoughtful and plan ahead,” Rafanelli advised. “If you are spending it on staffing, if you are spending it on capital equipment, really think about what that will do in year three or year four and what commitments you’re making.
Keep close tabs on where you stand, stay compliant, and watch for new program guidance issued by the Dept. of Education. Stay on top of the tracking and reporting requirements associated with the three ESSER funds, ensuring you have the necessary finance and accounting tools to support your compliance responsibilities. Check to confirm compliance with other program requirements, like the 20% allocation to address learning loss. And, use rigorous procurement methods, including running open and fair bids and RFPs that will stand up to increased scrutiny later. Pre-negotiated group purchasing contracts, such as those offered by BuyQ, can help save individual charter schools and charter management organizations the time of running their own RFP while keeping them compliant. Also keep an eye out for new program guidance issued at the state and federal levels.
ESSER is indeed a large pot of money. By being thoughtful, creative and well-prepared in how they spend those dollars, charter schools and charter management organizations will put themselves in a strong position to help their students, staff and communities recover and rebuild from a lengthy and lingering crisis.