Have We Learned Any Lessons From Administering Federal Stimulus Funds for Education?

federal stimulus funds
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A lot of focus has been on what federal stimulus funds will do for education, but I thought it was important, for a moment, to take a look back at previous stimulus efforts. 

CARES, CRSSA, and ARPA have been federal stimulus funding targeted for education. In 2014 the Office of the Inspector General (OIG) wrote a lengthy report on how it could have gone better under the American Recovery and Reinvestment Act in 2009. Sadly, some of these challenges look similar today.

Administering Federal Stimulus Funds Lessons: American Recovery and Reinvestment Act (ARRA) 

In 2009, ARRA was enacted during the biggest economic downturn since the Great Depression. The Department of Education received $98 billion to help education-related programs and grants. When this money was given to the Department of Education, there was also $14 million for the Office of Inspector General (OIG), which was put in place to closely monitor the funds. 

The experience is immensely helpful. Let’s look at some of the challenges, lessons, and suggestions and evaluate how they did with ESSER Funds.

The following are lessons learned found directly from their report:

Challenge: Department, Recipients, and Subrecipients Faced Challenges as They Implemented Processes to Administer Grants 

Lesson: Grant recipients benefit from timely guidance, training, technical assistance, and outreach 

Suggestion: The Department should assess outreach and technical assistance activities performed in response to the Recovery Act and consider conducting similar activities for new programs and for existing programs that receive substantial increases in funding to ensure program integrity and effectiveness. This should include providing timely guidance for new grant programs and to new recipients. 

Challenge: The Department Addressed a Variety of Recovery Act Implementation Issues, But Persistent Monitoring and Oversight Challenges Remain 

Lesson: Addressing persistent challenges on monitoring and oversight should improve program integrity and compliance 

Lesson: Independent oversight is a key tool to promote transparency and accountability 

Lesson: The Department needs alternative processes for oversight and monitoring for new or temporary grant programs 

Suggestions: The Department should ensure that its program offices responsible for monitoring recipients are using robust, risk-based monitoring strategies that devote available resources to the highest risk recipients and issues, and work with recipients to ensure that they are employing similar strategies when monitoring their subrecipients. 

The Department should continue its efforts to enhance audit resolution, including identifying trends in audit findings, so that compliance issues can be timely resolved through agreed upon corrective actions. 

The Department should also identify effective corrective actions that can be employed to resolve common issues across various recipients and subrecipients. 

For future legislation like the Recovery Act, we encourage the Department to work with Congress and OMB to provide supplemental funds for State and local audit agencies to oversee new or supplemental Federal grant funds. The Department should also continue implementing early compliance oversight and monitoring processes for newly created or temporarily funded programs under legislation similar to the Recovery Act. 

For newly created programs or programs receiving temporary funding, the Department should work with the U.S. Treasury early in program implementation to determine whether the programs should be added to States’ Treasury-State Agreements for cash management purposes. 

Challenge: New Reporting and Transparency Requirements Created Implementation Challenges 

Lesson: The Department Took Steps to Improve Data Quality, But Accuracy and Reliability Issues Remained 

Suggestions: For future temporary legislation like the Recovery Act, other efforts intended to increase transparency, or to improve ongoing grant programs, the Department should, in conjunction with OMB when appropriate, look for additional ways to improve the quality of recipient and subrecipient data and continue to emphasize the need for appropriate data quality reviews by State and local agencies. Options to improve data quality include piloting new reporting requirements and mechanisms for new or existing programs, establishing a formal process to identify and remediate situations in which recipients or subrecipients demonstrate systemic or chronic reporting problems, ensuring that recipients implement adequate and effective internal controls to ensure high-quality data for key reporting elements and requiring reporting entities to submit management certifications on data quality and to disclose known data limitations. 

Takeaways for Administering Current Stimulus Funding 

The past administration of funds is hugely important when we think about current ESSER funds. For one thing, none of the three rounds of funding provided any additional funding for the OIG.

The current OIG website has materials and resources, but without dedicated funding, the OIG has a lot more work on their plate without additional help. There could be more funds in a larger operating budget, but it’s hard to know for sure what’s going specifically for the Department of Education, and is still different from the clearly allotted $14 million under ARRA.

According to the OIG website: 

“The OIG has produced a pandemic relief oversight plan that includes our plans for (1) auditing ED and grantee management and spending of coronavirus response funds, (2) examining the effectiveness of relief program, and (3) investigating misuse, theft, and other criminal activity involving these funds. The OIG has also produced a summary (PDF, 1.7M) of the most significant management challenges facing ED related to coronavirus emergency relief and response efforts. Our summary was included in the Pandemic Response Accountability Committee report highlighting the top challenges facing all agencies funded by coronavirus-related legislation

Our oversight efforts are well underway. The table below provides information on the OIG’s coronavirus audit and related review work. This table will be updated regularly, so be sure to check back with us for the latest information.”

With stimulus funding occurring every 10+ years, there is a lot of institutional turnover and lost experiential knowledge. The OIG released a report for COVID stimulus funds that references the 2014 report, but added the context that, “The report highlighted the most significant challenges the Department faced in administering Recovery Act programs and offered lessons and suggestions for the Department to consider in the event that emergency legislation providing a large yet temporary funding increase were to be enacted in the future. As detailed in the report, the Recovery Act presented several challenges for the Department, funding recipients, and subrecipients. Two of these are long-standing challenges that have appeared repeatedly in the OIG’s annual reports on the most serious management and performance challenges faced by the Department: (1) oversight and monitoring and (2) data quality and reporting. As it implements and administers the programs and provisions authorized under the CARES Act, the Department must remain alert and take necessary actions related to these two challenges to reduce vulnerabilities to fraud, waste, abuse, noncompliance, and other issues that could impact a grantee’s or subgrantee’s ability to achieve intended programmatic results.” 

There are two years left of stimulus funding. The Department must be strategic in oversight and monitoring and data quality and reporting. These two issues were prominent in 2009 and remain a challenge in 2022. 

Ultimately, districts would be best served by the Department if proper oversight, data quality, and monitoring mechanisms are in place to ensure that no one is held back by fund administration issues that have been challenging in the past.

Susan Gentz

Susan comes from a strong policy background as a former staffer in the United States Senate and Legislative Aide in the Iowa House of Representatives. 

Along with experience at both federal and state levels, she served as the Deputy Executive Director for the Center for Digital Education, worked for a government relations firm in Arlington, VA and heavily worked on federal and state education policy at iNACOL, where she wrote published reports to move the field forward with innovative learning models, best practices, and policy recommendations.