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U.S. Department of Education Designates Alaska as a “High-Risk” Grantee Under Federal Conditions of the American Rescue Plan Act Education Funds
JUNEAU – On Wednesday, April 3, the Senate Education Committee will hold an emergency hearing at 3:30 p.m. to hear from the Department of Education and Early Development on its actions leading up to a designation of a "high-risk" grantee by the U.S. Department of Education and its plan forward to remove the designation.
In a letter dated March 27, the United States Department of Education deemed the State of Alaska and the Department of Education and Early Development (DEED) noncompliant with federal requirements under the American Rescue Plan Act (ARPA) and Elementary and Secondary School Emergency Relief (ESSER) funds. On December 22, 2023, the U.S. Department of Education sent a letter to DEED requiring them to provide a plan within 30 days to demonstrate the state’s effort to resolve the requirements. That demonstration did not occur.
Under 2004(b) of ARPA, the state of Alaska was required to maintain the same level of funding for school districts to utilize the federal recovery funds, which were strictly designed not to supplant state funding. During this period, some school districts saw lower student enrollment numbers. Through the state’s Base Student Allocation formula, Kenai Peninsula Borough School District, Anchorage School District, Juneau Borough School District, and Fairbanks North Star Borough School District received approximately $29 million less state funding while accepting these grants in 2021 and 2022. In the U.S. Department of Education’s original determination, the state of Alaska was required to showcase its plan to appropriate the additional $29 million to those four school districts.
During the legislative session, lawmakers sought answers from the Department of Education and Early Development. Through their questioning, based on the December 22, 2023 letter, Alaska lawmakers were assured by the Department that they were working on a fix to satisfy the federal requirements. The March 27 letter claimed the state of Alaska and the Department of Education and Early Development have shown a lack of compliance and have deemed the state a “high-risk” grantee.
“This federal determination comes with great concern to the Senate and the entire state. School districts are already struggling to keep schools open, continue instructional programs, and retain high-quality teachers,” said Senate President Gary Stevens. “Without a plan and quick action, our local schools could be out additional federal resources, and the responsibility will fall onto the state coffers to fill the gap.”
The consequence of being designated as a “high-risk” grantee by the federal government risks an additional loss of $425 million of additional federal funds to the state. The U.S. Department of Education has required the state of Alaska, within 30 days of March 27, 2024, to confirm “that such an appropriations request has been made; or otherwise presents a sufficient plan to resolve its non-compliance with the maintenance of equity requirements in section 2004(b) of the ARP Act,” which can be achieved through a supplemental appropriations request.
“During a period where we are already doing everything we can to provide school districts with the resources they need, because of the lack of quality oversight and management, the state is on the hook for an additional $29 million while putting in jeopardy hundreds of millions of dollars in federal grants,” said Senate Education Chair Löki Tobin. “Despite being assured by the Department and Commissioner that a resolution was in the works, the state has failed its duties.”
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