This post originally appeared at https://reforminggovernment.org/new-irgs-k-12-covid-relief-audit-update-shows-hundreds-of-millions-unallocated-with-nine-months-remaining/

NEW: IRG’s K-12 COVID Relief Audit Update Shows Hundreds of Millions Unallocated with Nine Months Remaining

Incoming Fiscal Cliff Threatens Districts

WHAT HAPPENED

Since its January 2023 release, the Institute for Reforming Government’s (IRG) K-12 COVID Relief ESSER III Audit has driven statewide attention to financial transparency and made swifter action for students front–page news. IRG was the first Wisconsin entity to track $1.49 billion of federal relief funding intended to pull kids back from the brink. Now, IRG has updated its interactive tool to include all 450 districts’ approved funds through December 22, 2023, 9 months to the deadline. Click through to the dashboard and the full report.

WHAT IRG FOUND

• $307 million remains unallocated with only 9 months left. Before districts spend money, they are supposed to get DPI’s approval. DPI confirms whether their allocations qualify for ESSER III reimbursement. So, districts either lack DPI approval for $307 million or are spending money without DPI approval with no guarantee of reimbursement. Regardless, IRG believes that 100% of ESSER III funds should be allocated by now. Yet, 39 districts have below 50% allocated, including Green Bay and West Bend. 35 districts have over $1 million left to allocate, including Milwaukee and Fond Du Lac. 8 districts are at $0 allocated!
• Wisconsin schools are about to face a painful fiscal cliff. $512 million over 1.5 years has been allocated to district staff. Various factors contributed to this problem, but Wisconsin schools could confront between 1% and 4% holes in the roughly $14 billion they spend as a result. Schools’ recent 2-year, $1.2 billion increase in spendable authority may disappear more quickly than anticipated. DPI could compute next year’s fiscal cliff by subtracting relevant reimbursement receipts through June 30, 2023 from the $512 million.
• Construction is the 2nd-largest allocation category at 24%. This $284 million could grow from inflation or supply chain delays, which is why the Biden administration “strongly discouraged” it.
• The Legislature must clarify whether they have funded training in the science of reading. When legislators passed Act 20, landmark literacy legislation that could solve Wisconsin’s mediocre national education ranking, they clearly intended to fund training for Wisconsin’s teachers. DPI read the final budget and disagreed. The Legislature must let districts know now if training will be funded. If not, ESSER III suits a 1-time cost like that.
• Many districts have allocated their funds. IRG applauds the 244 districts that have more than 98% of their dollars approved.
• DPI corrected and clarified issues that IRG raised. Districts overrunning their total allotments fell from 14 districts going $1.37 million over budget to 3 districts breaching $278 thousand. DPI also clarified that funds labeled “None” are overhead. IRG appreciates this transparency.

WHAT IS NEXT

IRG strongly urges DPI to ensure 100% allocation as soon as possible, to focus districts on student-focused investments, and to communicate what the fiscal cliff means for kids. IRG will update the dashboard through the ESSER III deadline, September 2024, as districts continue to allocate. Those dollars are for students.

Have questions? Reach out to IRG Senior Research Director Quinton Klabon at [email protected]. Follow him for education analysis on X (formerly useful) at @GhaleonQ. Support Wisconsin’s kids.

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The Institute for Reforming Government is a non-profit 501(c)3 organization that seeks to simplify government at every level by offering policy solutions to thought leaders in American government in the areas of tax reform, government inefficiency, and burdensome regulations.

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