The Advocate March 2024: ESSER Late Liquidation

This is the final year for spending for American Rescue Plan funding also known as ESSER III. For many districts, September 30, 2024 is a fairly meaningless deadline as the allocations received through this unprecedented federal funding allocation were easily expended during the 2021-2022 and 2022-2023 school year. But for other districts that have experienced expenditure challenges due to delayed construction work or because projected hiring or program shifts were unable to come to fruition, there is now a formal process to request an extension for more time to spend ARP funding beyond the liquidation deadline of January 28, 2025.

Specifically, the U.S. Department of Education (USDOE) has released a template that State Education Agencies can use to request “late liquidation” flexibility for contracted services, goods and programs. What does this mean? A district that needs additional time to install an HVAC system or roof, or extend tutoring contracts or contracted mental health services could request additional time to liquidate funding from the State Education Agency (SEA). The SEA would in turn would request this permission from the USDOE. 

Does it sound a little complicated? That’s because it is. While roughly 40 states have applied for extensions for ESSER II, many have voiced concerns about the intensity of the late liquidation process. The ARP late liquidation requests, like those for ESSER I and ESSER II, require an SEA to compile and verify paperwork for each extension request by every district, which is particularly challenging for ESSER III given that many (SEAs) are furloughing staff this summer/fall as they, too, have come to the end of the obligation deadline for ARP. 

In contrast, other states such as Maine and Nebraska that never pursued liquidation extensions for ESSER I or ESSER II may believe they can put enough pressure on LEAs to liquidate funding for ESSER III, to avoid going through any formal federal appeals process. Certainly, we applaud those states and districts that have spent all their federal funding on time, but we also recognize that savvy local accounting choices could make it appear that the money has been completely spent as well. 

The prudent option for district leaders is to continue to do everything possible to spend ARP funding and NOT rely on any federal extension to spend it. However, if your district knows now that it will not be possible to liquidate all of your ARP funding by the end of January 2025, reach out to your SEA and inform them of your need for additional time. They can begin to process extension requests and monitor the paperwork required to submit to the USDOE.

Do not expect to be greeted with enthusiasm by the SEA  = when you inform them of your extension need! Instead, remind them that ensuring these funds are spent effectively and, as you indicated in your ARP plan, developed with stakeholder feedback, which supersedes the administrative burden it may create for them. 

Finally, do not forget that in addition to the ARP ESSER III spending your district received, you may also have received a special allocation in ARP dedicated to serving homeless children and youth. The deadline to obligate funding (i.e. purchase vans, pay for gas-cards, motel stays, etc.) is also September 30, 2024. We owe it to our most vulnerable students and families to make these investments as helpful as possible. There are many excellent resources advising you on the best, evidence-based ways to spend this money on your homeless students and youth.  

If you have questions, please don’t hesitate to reach out to Sasha Pudelski (spudelski@aasa.org) on the AASA Advocacy team.