Now that this deadline is rapidly approaching for ESSER III funds, local educational agencies (LEAs) must plan accordingly if they have any remaining funds.
The American Recue Plan (ARP) Act Elementary and Secondary Schools Emergency Relief (ESSER III) was signed into law in March of 2021. The period of availability for the ESSER III funds is from March 13, 2020 (with pre-award), to September 30, 2024 (with carryover). Now that this deadline is rapidly approaching, local educational agencies (LEAs) must plan accordingly if they have any remaining funds.
Reclassifying Allowable Costs to ESSER III Grants
To avoid losing ESSER III funds, LEAS that will not be expending their full award by the grant period (September 30, 2024) are encouraged to reclassify expenditures from other allowable federal and state sources. For an expenditure to be eligible for reclassification, it must:
- Have occurred between March 13, 2020, and September 30, 2024;
- Be reasonable and necessary per federal guidelines;
- Be an allowable ESSER expenditure;
- Meet the intent of the ESSER statute (must be directly tied to the pandemic).
Additionally, expenditures from the following funds can be considered for reclassification:
- State and/or Local Funds: these may be reclassified to ESSER III for allowable activities to free up local maintenance and operating funds that can be used after the ESSER III funds are no longer available to the LEA (such as teacher salaries)
- Other Federal Funds: allowable activities under ESSA, IDEA, McKinney-Vento, or Carl Perkins are also allowable under ESSER and therefore such activity could be considered for reclassification if it was indeed pandemic related
It is important to keep in mind the possible impact on federal maintenance of effort requirements (both for ESSA and IDEA) if pursuing any of the above options for reclassification.
ESSER III Standard Liquidation Period
LEAs must obligate any remaining ESSER III funds that were legally incurred during the grant period (March 13, 2020, to September 30, 2024 within 90 days. This liquidation period spans from October 1, 2024, to December 29, 2024. LEAs may continue to receive and pay for the goods/services that were obligated by September 30, 2024. After the 90-day period, Texas Education Agency (TEA) then has 30 days to liquidate and closeout all funds for the state of Texas.
ARP Liquidation Extension
The U.S. Department of Education (USDE) has also offered a 14-month extension in addition to the standard liquidation period (until February 28, 2026). This extension can be requested by LEAs for obligated costs (by September 30, 2024) for certain contracted services that were not yet received nor paid by December 29, 2024. This extension granted by USDE does not cover all types of costs, such as indirect costs, salaries, or travel, due to the federal rules defining when an obligation was made.
The extension may be requested for allowable contracted services from the following programs:
- ARP ESSER III Formula Grant
- ARP Homeless
- TCLAS Federally funded projects
- Other ESSER III funded projects
TEA will request this 14-month extension on behalf of LEAs that need it. LEAs must be able to describe the contracted service and prepare a sufficient justification for needing the extension. Common justifications include supply chain delays, delays in receiving services, or procurement delays. Note that simply needing additional time to spend the funds is not an allowable justification for the extension.
To receive the 14-month extension, an LEA must also complete a liquidation extension request form. This form must be submitted to TEA by November 30, 2024 (but can’t be submitted before November 2024 due to data required in the submission).
Limited ESSER Extended Service Pre-payment of Costs Flexibility
If an LEA is unable to liquidate certain contracted service costs during the standard or extended 14-month liquidation periods, USDE also offers flexibility with pre-payment. As long as an LEA has obligated the costs by September 30, 2024, the pre-payment is available only for instructional software subscription services that can be properly justified.
The LEA must receive approval from TEA for these pre-payment requests. If a pre-payment has already been done, the LEA must then retroactively request approval from TEA. LEAs are encouraged to submit any approval requests by September 15, 2024. If an LEA needs to amend their ESSER III grant application, they should also contact TEA to do so.
