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COVID-19 update for K-12: The CARES Act and potential GASB changes

March 27, 2020 / 2 min read

The CARES Act provides $13.5 billion in stabilization funding to states in support of elementary and secondary education programs, which are expected to be distributed based on current Title I program funding allocations. GASB deadlines may also be extended. 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed to help mitigate the economic and societal disruption caused by COVID-19. The bill includes funding for K-12 education as part of the more than $30 billion Education Stimulus Fund, which will provide grants to educational institutions (K-12 and higher education) and agencies. Similar to funding under the American Recovery and Reinvestment Act of 2009 (AARA) during the Great Recession, this package provides state-allocated federal dollars to support public education. Specifics surrounding the deployment and accountability over these funds will likely be released in the coming weeks, and we’ll provide further guidance once more information is available.

How much funding will states and K-12 school districts receive?

The CARES Act provides $13.5 billion in stabilization funding to states in support of elementary and secondary education programs. Funding will likely be distributed based on current Title I program funding allocations. State governors will also share in a $3 billion allocation to use for K-12 and higher education at their discretion.

Other portions of the CARES Act include shared funding, which will be impactful to K-12 districts, but as to what extent is still unclear. This funding includes:

Are there any new programs being funded?

It appears funding will run through programs already established.

Will there be additional compliance requirements related to funding?

The Act doesn’t include this information, however, if a school district receives additional dollars, it may trigger the single audit threshold of $750,000 and/or require compliance audit testing. If your district receives additional funding, make sure you know exactly what the compliance requirements are. You might need to establish a system to collect and track the data.

Our single audit experts are evaluating the implications for K-12, and we’ll provide more guidance as information is released.

Possible postponement of certain GASB standards

The GASB issued a press release about a potential delay of certain GASB standards. A fast-tracked project will consider the postponement of all Statement and Implementation Guide provisions with an effective date that begins on or after reporting periods beginning after June 15, 2018. This would include both Statement 84, Fiduciary Activities, and Statement 87, Leases, along with the related Implementation Guides. The project, if approved, is expected to result in an exposure draft in April 2020, with a final standard to be issued in June 2020.

Many school districts are well on the path to implementation of Statement 84. It may still make sense for your district to continue moving forward in implementing for the June 30, 2020 year.

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