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CARES Act: ESSER Funds Under the Education Stabilization Fund

By Jeremy S. Motz / May 06, 2020

This E-Alert is part of a continuing series to address the Federal funding that will be available to Michigan public school districts under the Coronavirus Aide, Relief, and Economic Security Act (“CARES Act”) that was enacted and signed into law on March 27, 2020. The CARES Act created a $30,750,000.000 Education Stabilization Fund (“ESF”), of which 43.9% (approximately $13.23 Billion) was allocated as the Elementary and Secondary School Emergency Relief (“ESSER”) funds. These ESSER funds have been made available to States upon an approved application in the same proportion as each State receives funds under Part A of Title I of Elementary and Secondary Education Act of 1965 (“ESEA”).

On April 29, 2020, the State of Michigan was approved by the U.S. Department of Education (“USED”) to receive $389,796,984 in ESSER funds. Of that amount, 90% (approximately $350,817,286) will be allocated to school districts and charter schools that are a local education agency (“LEA”) in proportion to the amount each LEA receives funding under Part A of Title I of ESEA. The Michigan Department of Education (“MDE”) has posted the amount each LEA will be allocated here.

To receive their ESSER allocation, each LEA will be required to apply through the Michigan Electronic Grant System (MEGS+). The current guidance issued by the MDE states the application will require each LEA to detail the following:

  • A brief narrative of the LEAs most important educational needs;
  • Information on how the LEA will provide equitable access to students, teachers, parents and families; and
  • A budget that outlines their intended use of the ESSER funds the LEA is allocated.

The MDE has indicated it will be publishing detailed guidance for the MEGS+ application process once it is available. Additionally, the MDE will require reporting requirements on the use of the ESSER funds, but those reporting requirements have yet to be defined by MDE or USED. As LEAs plan for the use of their ESSER allocated funds to complete their application process, it should be noted that these funds are a one-time allocation and the MDE has cautioned that LEAs should carefully review the best uses of their ESSER funds, particularly in light of the anticipated challenging financial environment schools may face in the coming fiscal years. 

As detailed in our prior E-Alert that can be found here, LEAs may use the funds for activities that align with any of the 12 categories set forth in Section 18003 of the CARES Act. To the extent LEAs may plan to use these ESSER funds to continue to pay their respective employees and contractors during the period of any disruptions or closures related to coronavirus in accordance with Section 18006 of the CARES Act, it should be noted that such use is only required to the extent practicable, which practicability should be reviewed in light of the LEAs needs, allowable uses under Section 18003 of the CARES Act, and anticipated financial challenges. While the MDE has indicated that these funds will be permitted to be used through September 30, 2022, since these ESSER funds are federal funds, the MDE has further indicated they are subject to all federal regulations, rules, and guidelines that apply to all federal grant awards.    

This is intended as a high-level overview of the ESSER funds of the CARES Act. As this information is fluid, it is subject to the additional clarifications and guidance that is to be forthcoming from the MDE and USED. If you are unsure how these or other provisions of the CARES Act or ESF apply to you and your school district, please feel free to contact one of our Clark Hill Education Law attorneys.