The ESSER III Deadline Has Changed

The deadline for the use of round 3 funds from the Elementary and Secondary School Emergency Relief (ESSER III) program under the American Rescue Plan (ARP) Act has changed. The change impacts all ESSER III funds allocated to NYS School Districts.

The ARP, through the ESSER program, provided almost $200 billion to states as part of the federal government’s COVID-19 recovery effort. Funds were allocated by the US Department of Education to NYS and a specific dollar amount was allocated for each of 3 stages of funding to individual School Districts with the New York State Education Department acting as a conduit. We’re now at the conclusion of the 3rd and final stage of the relief fund.

The original ESSER III deadline required funds that were to be used for qualifying expenses, including capital projects, to be spent no later than September 30, 2024 (e.g., the June 30th deadline for spending on an annual capital outlay project which triggers expedited building aid). Some School Districts are struggling to complete their ESSER III funded capital projects by September 30th. Counting on ESSER III funds to finance a capital project and failing to meet the deadline could have severe financial consequences for a School District. Consequently, the deadline change is welcome relief. However, attention to the details of the change is in order. The deadline has not simply been extended, the rules have changed.

Under the revised deadline, ESSER III funds must be “obligated” by September 30, 2024, and “liquidated” within 120 days after September 30th, unless a School District’s extension request has been approved, further extending the liquidation deadline.

“Obligated” in this setting means entering into and/or amending a binding contract for qualifying goods and/or services by September 30th.

“Liquidated” means full payment of the obligation by no later than 120 days after September 30th or an extended deadline.

As long as a Schol District has taken all required steps (e.g., SEQRA), obtained all the required approvals (e.g., NYSED and Board), entered into a final binding contract and/or contract amendment with one or more contractors for a capital project funded under ESSER III by September 30th, and the scope of work is covered by the relief program, the District will be in compliance with the 1st funding requirement of the ESSER III grant.

To qualify for reimbursement from the School District’s ESSER III allocation, it must pay the fees and expenses of the contract in full within 120 days of September 30th, or by an extended deadline, if requested and approved.

The change provides a period of 120 days (4 months) after the obligation deadline of September 30, 2024, to spend the grant money. A District may request a discretionary extension of up to an additional 14 months to spend the grant money for obligations entered into by September 30th for a total of 18 months from the obligation deadline (September 30th) to spend down the grant. Extension requests are submitted to the NYSED for adjudication, but the ultimate authority is the US Dept of Education. The 120-day liquidation period and any additional approved extension are available for all qualifying expenditures under ESSER III.

The change is welcome relief for those School Districts struggling to meet the prior deadline for qualifying capital projects and it also may provide additional funding opportunities for those School Districts that are able to obligate funds under additional contracts or contract amendments prior to September 30th. If you have available (unobligated) ESSER III dollars, you should examine the rule change to determine if it will allow you to qualify additional goods and services for reimbursement under the ESSER III relief program.

Jesse Elmer, a summer intern with the Ferrar Fiorenza firm, contributed to this article. For more information about this article, please contact Dave Tinker, Jeff Lewis, or Joe Shields at Ferrara Fiorenza PC, 315.437.7600.