April 22, 2009 Update:

Memo to the Field from Johanna Duncan-Poitier, Senior Deputy Commissioner of Education - P-16, on "Additional Guidance on Permissible Expenditures of the American Recovery and Reinvestment Act of 2009 (ARRA) State Fiscal Stabilization Fund for Education"

This information is provided in response to the latest series of questions from the field regarding the appropriate use of ARRA fiscal stabilization funds, including those to restore state support for education. As you finalize your school budgets we emphasize once again that these funds must be used only for allowable activities specified by the federal government. ARRA funds have been provided to preserve and create jobs and promote economic recovery as well as to stabilize state and local government budgets to minimize and avoid reductions in essential services and counterproductive tax increases. Secretary Duncan has made it clear to all states that school districts must:

1. spend the funds quickly to save and create jobs;
2. use the funds to improve student achievement through school improvement and reform;
3. ensure transparency, reporting, and accountability; and
4. invest the funds thoughtfully to minimize the “funding cliff.”

Details on Allowable Expenditures

To help you to spend these additional resources wisely and avoid disallowance, we have attached a list of allowable activities in these priority areas, based on federal guidance that has been shared to date:

• Retaining existing teachers, administrators and support staff;
• Improving teacher effectiveness and the equitable distribution of highly qualified teachers;
• Establishing data systems and using data for improvement;
• Turning around the lowest-performing schools; and
• Improving results for all students.

According to federal guidance, stabilization funds including those to restore state support for education cannot be used for:

• Reducing taxes (districts must actually obligate the funds for specific allowable activities during the period of fund availability);
• Increasing fund balances or creating “rainy day” funds;
• 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 office administration or operations or logistical support facilities;
• School modernization, renovation, or repair that is inconsistent with state law.

Applications for program-specific ARRA resources, which will be forthcoming, will include additional guidance regarding the specific requirements for each of the designated programs (e.g., Title I, IDEA).

Unprecedented Accountability

Secretary Duncan has also been very clear that the use of ARRA funds will be subject to unprecedented levels of scrutiny and transparency. All districts will be required to report quarterly on the activities for which stabilization funds are used. This information will be posted by the federal government on a national website.

We hope this information is helpful to you as you prepare for upcoming school budget votes. I look forward to continuing to work with you to help you maximize ARRA resources to further the important work you are doing to provide a quality education to your students, preserve jobs, and help stimulate the economy.

cc: Richard Mills
     New York State Board of Regents