Item 125, Paragraph B.30, of the Chapter 2 budget for the 2024-2026 biennium requires school divisions to report to the Department of Education on the use of their federal ESSER (i.e., Elementary and Secondary School Emergency Relief Fund) formula funds since 2020 and on their use of the state ALL In Virginia initiative $418 million funds they received in FY 2024 with a focus on tackling learning loss. The Department of Education must provide a report of this information to the Governor and Chairs of the House Appropriations and Senate Finance and Appropriations Committees by October 1, 2024, 2025, and 2026. This report meets the requirement for the October 1, 2024 reporting.

The Chapter 2 reporting requirement specifically states:

Each school division shall report to the Department of Education information on the use of funds appropriated in fiscal year 2024 for the Flexible Funding Supplement and on the use of pass-through federal Elementary and Secondary School Emergency Relief funds used since 2020. Such reporting shall specify amounts obligated and expensed based on reporting categories as prescribed by the Department of Education. School divisions also shall report how funds address performance gains or losses related to reading and mathematics and support preparation and implementation of the Virginia Literacy Act. The Department of Education shall compile this information and submit it to the Governor and the Chairs of the House Appropriations and Senate Finance and Appropriations Committee no later than October 1, 2024, 2025, and 2026.

The Department of Education surveyed school divisions during July-August 2024 to collect data needed to fulfill this reporting requirement. School divisions reported obligation and expenditure data for the period ending June 30, 2024. The Department compiled the survey data for this initial report due to the Governor and General Assembly by October 1, 2024. Subsequent surveys will be repeated for the October 1, 2025, and 2026 reports covering the FY 2025 and FY 2026 reporting periods.

Federal ESSER formula funds are paid to school divisions on a reimbursement basis by the Department. Use of ESSER I, II, and III formula funds ended on September 30, 2022, 2023, and 2024, respectively, with final reimbursements closed out to school divisions by the following January. For purposes of this report, “expenditure" of ESSER III formula funds means both funds spent by school divisions that have reimbursed by the Department and those spent by divisions pending reimbursement by the Department. The majority of obligated and expended ESSER formula funds (68%) went towards “Other" cleaning/sanitation supplies and devices spending and capital improvements, followed by staff compensation incentives (13%), funding to extend school programming (12%), and 6% allocated towards tutoring.

It should be noted that following the June 30, 2024 reporting end date for this data collection and report, school divisions made substantial progress in the amount of their ESSER III formula funds spent and received reimbursement from the Department. As of September 29th, school divisions had been reimbursed 92 percent of their funding, with a $150.0 million unreimbursed balance from the $1.9 billion in total ESSER III funding awarded. Substantial amounts of ESSER III reimbursement requests were submitted by school divisions daily to VDOE in the weeks leading up to the submission of this report decreasing the unreimbursed balance of funds daily.

The state ALL In Virginia $418 million fund allocations were fully dispersed to school divisions in the fall of 2023 upon submitting their spending plan to the Department. These funds may be used by divisions during FYs 2024, 2025, and 2026. As of the June 30, 2024 collection period, $95.6 million were expended, 62% of which went to high-intensity tutoring, 22% to Virginia Literacy Act implementation, and 11% to chronic absenteeism.