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Forward Progress on ARP Liquidations

September 26, 2023

The United States Department of Education released a letter to States advising them that they would begin the process of allowing States to apply for late liquidation funds this fall. This is a
terrific development as AESA and AASA have been pushing Congress and the Administration to begin the ARP liquidation process as early as last summer. You can read the very short letter announcing the liquidation here. That said, there are several troubling pieces about the letter that we want to highlight for our members.

First, it appears that ED is going to utilize the same process for CARES/CRRSA for ARP, which is a major problem. For CARES and CRRSA ESSER, ED only offered transaction-specific extensions (see Question 6), which may be unmanageable for ARP ESSER. and SEAs must list each and every subgrant-level transaction that will be covered by the extension request, the amount involved for each transaction, and a justification of why an extension is needed for each transaction.  For many states, this will be unmanageable for ARP ESSER.  Given the size of ARP ESSER, there are potentially thousands of transactions that would benefit from liquidation extensions. Federal regulations do not limit ED to transaction-specific extensions, and it would be helpful if ED would consider broader extension options, as this puts a tremendous burden on both SEAs and LEAs in submitting requests.

Second, for CARES and CRRSA ESSER, ED is only considering extensions for projects that were intended to be completed by the obligation deadline but were unexpectedly delayed by a specific circumstance.  If continued for ARP, this may limit the reach of ARP funds. ED currently requires a justification for why additional time to liquidate funds is needed for each transaction covered by the request such as supply or labor shortages. ED notes, “needing more time to expend funds is not an adequate reason or justification for a liquidation extension request.”  If applied to ARP, this would limit the extent to which states and districts can strategically plan to extend ESSER services or projects in the 2024- 2025 school year and beyond.  For example, a school district using ARP ESSER funds for a successful tutoring program could not proactively apply for a liquidation extension to continue those services after September 30, 2024, even though the data is clear students will continue to need them. Third, the letter linked above states that liquidation requests must be linked to how they “contribute to the acceleration of academic success for students and how continuing these investments may extend or expand on a continued path of academic recovery.” That means that continued mental health supports and services or any non-academic extensions would not be applicable for liquidation extensions nor would delays pertaining to construction of new or improved facilities. Unlike CARES and CRRSA, which did not limit the liquidation requests to academic success and recovery efforts, this ARP funding appears to be focused on extending the money utilized for those purposes exclusively.

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