Oregon K-12 ARRA Implementation

The Oregon Department of Education (ODE) has received numerous inquiries about federal stimulus funding, specifically the State Fiscal Stabilization Fund (SFSF).  While ODE does not have final and complete information from the federal government regarding the SFSF, we do want to share with you what information we currently have.   

The SFSF is a new one-time appropriation of $53.6 billion under the American Recovery and Reinvestment Act of 2009 (ARRA).  The overall goals of the ARRA are to stimulate the economy in the short term and invest in education and other essential public services to ensure the long-term economic health of our nation.  Four principles guide the distribution and use of ARRA funds:

a. Spend funds quickly to avert layoffs and create jobs.

b. Improve student achievement through school improvement and reform.    

c. Ensure transparency, reporting and accountability.  To prevent fraud and abuse, support the most effective uses of ARRA funds, and accurately measure and track results, recipients must publicly report on how funds are used.   Due to the unprecedented scope and importance of this investment, ARRA funds are subject to additional and more rigorous reporting requirements than normally apply to recipients.

d. Invest one-time ARRA funds thoughtfully to minimize the “funding cliff.”  ARRA represents a historic infusion of funds that is expected to be temporary.  Depending on the program, these funds are available for only two to three years. These funds should be invested in ways that do not result in unsustainable continuing commitments after the funding expires.   

 

Of the amount appropriated, the U. S. Department of Education will award governors approximately $48.6 billion by formula under the SFSF program in exchange for a commitment to advance essential education reforms to benefit students from early learning through post-secondary education, including: college- and career- ready standards and high-quality, valid and reliable assessments for all students; development and use of pre-K through post-secondary and career data systems; increasing teacher effectiveness and ensuring an equitable distribution of qualified teachers; and turning around the lowest-performing schools. More guidance is anticipated in the next few weeks.   

 

A critical piece of information of which you should be aware is approximately $115.4 million in SFSF has been used by the Oregon Legislature to back-fill for state revenue shortfalls in 2007-09.   

 

For financial reporting purposes, at this time ODE recommends districts record the State Fiscal Stabilization Fund revenues in the General Fund (100), Source code 4500 – Restricted Revenue From the Federal Government Through the State.  ODE will note on your May 2009 warrant the amount of SFSF in your total payment. 

 

The main uncertainty for the SFSF is how much reporting will be required by the federal government by each district.  Due to the short notice and major inconveniences, ODE does not plan to create a new Area of Responsibility code for tracking purposes.  However, we do know there will be data requested on the use and impact of the funds and districts will need to be able to report specific uses of the funds.  Districts that might be facing shortening of the school year and are able to avert this action with these funds, will need to be able to account for how the SFSF provided for the continuation of the school year.  Districts will need to be able to account for the uses of the funds and how many employees were hired or saved.  The districts will also have to provide assurance that they did not spend the funds on any of the prohibited areas.  We hope to be able to send you more specific information on data collection requirements in the very near future.

 

Subject to limited restrictions in ARRA as defined in further guidance, LEAs may use their share of 81.8% of the SFSF education funds for any activity authorized under the following: 

·         Elementary and Secondary Education Act of 1965 (ESEA) (which includes the modernization, renovation, or repair of public school facilities)

·         Individuals with Disabilities Education Act (IDEA)

·         Adult Education and Family Literacy Act (Adult Education Act)

·         Carl D. Perkins Career and Technical Education Act of 2006 (Perkins Act)

 

Any funds an LEA receives from the 81.8% of the SFSF program (whether distributed through the state’s primary funding formulae or on the basis of the relative Title I, Part A) may be used for any activity listed in the above paragraph.  

 

·         LEAs may use SFSF to pay salaries to avoid having to lay off teachers and other school employees. 

·         To the extent LEAs use funds for modernization, renovation or repair, they should consider the use of facilities for early childhood education and for the community and should create “green” buildings. 

 

The funds cannot be used for:

·         Payment of maintenance costs

·         Stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public

·         Purchase or upgrade of vehicles

·         Improvement of stand-alone facilities whose purpose is not the education of children, including central officer administration or operations or logistical support facilities

·         Any school modernization that is not consistent with state law

 

In terms of use, the SFSF will be distributed as restricted revenue.  There are prohibitions in the federal law.   Also please note this email only addresses the SFSF portion of the federal stimulus package.  The state ARRA website provides more detail on all of the funds for education coming to the state.  The site is http://stimulus.k12partners.org  

 

The State School Day Restoration Fund receipts should be coded to the General Fund (100), Source code 3199 – Other Unrestricted Grants-in-aid.  The SDRF is to help with the State School Fund reduction.  Although assurances will be required prior to the distribution of funds, there will not be additional reporting requirements to ODE.