Educational grants authorized by the American Rescue Plan Act of 2021 (ARP), Elementary and Secondary School Emergency Relief (ESSER) are not subject to the supplement, not supplant requirement that is normally a requirement of other educational grants, particularly formula grants. In addition, Local Education Agencies (LEAs) receiving ESSER funds may use the funds for:
1. Any activity authorized by the ESEA, including the Native Hawaiian Education Act and the Alaska Native Educational Equity, Support, and Assistance Act (20 U.S.C. 6301 et seq.).
2. Any activity authorized by the Individuals with Disabilities Education Act (IDEA) (20 U.S.C. 1400 et seq.).
3. Any activity authorized by the Adult Education and Family Literacy Act (AEFLA) (29 U.S.C. 3271 et seq.).
4. Any activity authorized by the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins V) (20 U.S.C. 2301 et seq.).
5. Any activity authorized by Subtitle B of title VII of the McKinney-Vento Homeless Assistance Act (McKinney-Vento) (42 U.S.C. 11431 et seq.)
6. Coordinating preparedness and response efforts of LEAs with State, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to COVID-19.
The supplement, not supplant requirement ensures that the applicable grant funds are used to supplement state and local funds, not replace (supplant) state and local funds. While the grants authorized by ARP, particularly ESSER, allow the supplanting of state and local funds, LEAs should carefully consider the impact any supplanting of funds will have on the federal fiscal requirements of their other educational grants.
One of the reasons educational grants include federal fiscal compliance requirements is to ensure that state and local expenditures remain equitable among a specific student population (the population is dependent upon the grant). The supplanting of state and local funds with ESSER funds can have a ripple affect causing a significant impact on other grants’ federal fiscal compliance requirements. For example, below are the three federal fiscal compliance requirements applicable to the majority of LEAs across the nation:
1. ESSA MOE – Every Student Succeeds Act (ESSA) Maintenance of Effort (MOE) requires LEAs maintain their state and local expenditures at a specified level from one fiscal year to the next.
2. ESSA Title I, Part A – Comparability of Services Requirement – requires LEAs to use their state and local funds to provide comparable services at their campuses receiving Title I, Part A funds.
3. IDEA-B LEA MOE – Individuals with Disabilities Education Act of 2004, Part B (IDEA-B) requires LEAs to maintain their state and local expenditures at a specified level from one fiscal year to the next.
Because Federal funds are not considered in the federal fiscal compliance determinations for the above three requirements, the supplanting of state/local funds with ARP/ESSER funds has the potential to cause non-compliance findings. For example:
An LEA in which all campuses are Title I, Part A campuses and that has a special education population makes the decision to supplant 50% of all educational aides’ salaries with ESSER III funds. As a result, a total of $200,000.00 of state and local funds was supplanted. As a result of this decision and because federal funds are not considered in the compliance determinations, the ESSA MOE; Title I, Part A Comparability; and IDEA-B LEA MOE all have the potential to be out of compliance due to the state and local funds being reduced from year to year, or from campus to campus.
The IDEA-B LEA MOE, ESSA LEA MOE, Title I, Part A Comparability, and other grant related federal fiscal requirements still apply. LEAs must be cognizant of their state and local spending in relation to these federal fiscal requirements, especially if supplanting the ESSER funds locally.