California’s state auditor recently criticized the California Department of Education (CDE) for inadequately monitoring $24 billion in federal COVID-19 relief that’s going to school districts, saying that without improved oversight, the department won’t know if districts are misapplying the money or using it wisely.

The department “has not taken a strong leadership role” to ensure that districts are “effectively and promptly” using the money, Auditor Elaine Howle wrote, according to a report by EdSource. Because districts are not consistently filing regular spending reports as required, she said the department won’t be in a position to know if districts “are meeting the educational and safety needs of their students.”

Starting in May 2020, Congress passed three rounds of COVID-19 assistance for K-12 schools to help districts get through the initial crisis. Later rounds included funding for districts to address the learning and social and emotional effects of the pandemic. Through the American Rescue Plan Act (ARP) Elementary and Secondary School Emergency Relief Fund and the Governor’s Emergency Education Relief Fund (GEERF), California was allotted $1.9 billion initially, followed by an additional $7 billion in January 2021 and then $15 billion last May, which districts can spend through January 2025.

The audit said CDE should play a stronger role in monitoring and advising districts on how to use the money. Among the findings, the audit found:

  • In 2021-21, the first year of funding, CDE audited fewer than 1% of districts and charter schools — 15 of the more than 1,600 districts and charter schools — an inadequate number to determine compliance with federal requirements.
  • The number of districts that failed to submit mandated quarterly reports increased from September 2020 to March 2021. About 1 in 20 districts failed to file reports explaining how they used the data in early reporting. Since future quarterly reports will cover much more spending, particularly $15 billion in the latest and biggest installment through the ARP, the audit called on CDE to take steps to ensure it knows how the money will be used.
  • The few audited districts listed 40% of their spending as “other activities.” Although some districts may have appropriately included some costs in this catchall category, other spending may be miscategorized or inappropriately spent. Nonetheless, the audit said, CDE hasn’t focused attention on how this money was spent.
  • As of June 30, nearly 90 districts and charter schools had spent less than 20% of the first round of federal funding, and more than 140 had spent less than 20% of the smaller amount they received through the GEERF. The auditor projected that as much as $160 million would revert to the federal government if the money hadn’t been spent by the spending deadlines.

The auditor recommended that CDE track districts’ spending more closely and do outreach if they’re lagging in their spending and hire more staff for this purpose. In its response, CDE agreed but said it’s already tracking the funding and projecting that only two districts will spend less than 80% of their initial funding, at current rates of spending.

In another recommendation, the audit says CDE should identify districts with the best and most efficient spending practices and spread the word so other districts maximize their use of the money. CDE agreed, while asserting that it already does so by offering webinars that explain what’s permissible under the law.

CDE disagreed with two other recommendations — that it should enact a policy setting a minimum number of districts to monitor and that it should make it a priority to investigate those districts that categorize much of their spending as “other activities.”