School Funding Related to COVID-19 and State Budget Update Presentation

CPAs & Advisors

Jennifer Watkins
Jennifer Watkins CPA Principal CPAs & Advisors

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CARES Act allocation for Michigan schools
Schools received a memo announcing Michigan’s allocation of the Elementary and Secondary School Emergency Relief (ESSER) Fund portion of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in mid-April. On April 23, 2020, the U.S. Department of Education (USED) published initial ESSER guidance to support state education agency implementation.

On April 24, 2020, the Michigan Department of Education (MDE) released a memo stating they would apply to USED for the ESSER funding immediately. It is anticipated that the distribution of the USED funds will be based upon the fiscal year 2019-20 Title I, Part A funding formula and will be allowed to be used through September 30, 2022.

The ESSER funding is allowable for several uses not limited to, but including:

  • Coordination of preparedness and response efforts to prevent, prepare for and respond to coronavirus
  • Providing principals and other school leaders with the resources necessary to address the needs of their schools
  • Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population.
  • Developing and implementing procedures and systems to improve the preparedness and response efforts
  • Training and professional development for staff on sanitation and minimizing the spread of infectious diseases
  • Purchasing supplies to sanitize and clean the facilities
  • Planning for and coordinating during long-term closures
  • Purchasing educational technology
  • Providing mental health services
  • Planning and implementing activities related to summer learning and supplemental afterschool program
  • Other activities that are necessary to maintain the operation and continuity of services

These will be one-time funds, and schools should allocate and spend the funds wisely. 

Read the memo from MDE.

State Office Budget Presentation
The State Budget Office (SBO) provided information on April revenue and the anticipated May Revenue Estimating Conference. The SBO recommends that schools consider the following actions right now:

  • Mitigate expenses for the current fiscal year.
  • Hold off on large projects or contracts, if possible.
  • Start looking at various budget scenarios for the next fiscal year. At this time, recommendations have shown schools to anticipate three budget scenarios for fiscal 2021, including possible reductions of $500, $750, and $1,000 in per-pupil funding.

View the April 2020 SBO presentation on the budget and the ESSER funding.

We will watch the actual sales tax revenues during the upcoming months, the extent that federal funds will be freed up to mitigate the losses to the school aid fund, and how much of the state’s Budget Stabilization Fund the Governor and legislature will make available for state aid.

Contact your Yeo & Yeo professional if you have questions or need assistance.

The information contained in this post may not reflect the most current developments, as the subject matter is extremely fluid and constantly changing. Please continue to monitor Yeo & Yeo’s COVID-19 Resource Center for ongoing developments. Readers are also cautioned against taking any action based on information contained herein without first seeking professional advice.

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