Late Liquidation for American Rescue Plan Elementary and Secondary School Emergency Relief Funds

On March 24, 2021, the New Jersey Department of Education received $2,764,587,703 for the Elementary and Secondary School Emergency Relief Fund under the American Rescue Plan Act. Of these funds, 90% was awarded to local educational agencies to be used to respond to the COVID-19 pandemic, the NJDOE noted in an advisory.

While both the NJDOE and the United States Department of Education encourage LEAs to spend and liquidate these funds with urgency, the USDOE acknowledges that some grantees may require flexibility liquidating remaining ARP ESSER funds under the ARP Act that are properly obligated by the Sept. 30, 2024, deadline. Accordingly, the NJDOE is offering a liquidation extension request process for immediate use by LEAs.

The NJDOE will submit all approved late liquidation requests to the USDOE on behalf of LEAs approved to request late liquidation. This process, outlined below, ensures strong accountability for the use of funds and important safeguards for both the NJDOE and LEAs. Under 2 CFR § 200.344(b), the USDOE has the authority to approve liquidation extension requests for properly obligated funds upon review of a written request made by the NJDOE. Final approval of the NJDOE’s written request will be based upon the specific facts and circumstances, in accordance with 2 CFR § 200.344(b). If approved by the USDOE under this process, school districts may have an extension to the liquidation period of up to 14 months.

Late liquidation is based on individual properly obligated purchase orders and/or contracts and will not be entertained for entire obligated amounts due to lack of planning or poor fiscal management. It is the expectation of the NJDOE that each LEA is liquidating all obligations prior to the Oct. 18, 2024, due date of the final expenditure report. Each late liquidation request must be tied to an ongoing project and have a strong justification as to why the purchase order/contract will not be liquidated prior to the final expenditure report submission. The liquidation extension does not cover all types of costs, i.e., indirect costs, staff salary or travel, due to the federal rules defining when an obligation was made; therefore, these costs cannot be included in a late liquidation request. All late liquidation requests will be highly scrutinized and must include all relevant facts, documents and a strong justification to be considered for approval. Also, note that requests must be aligned to items and projects that are part of the approved grant application for these funds. Late liquidation does not extend the project period of the grant but does allow for extra time to liquidate properly obligated purchase orders/contracts.

Key Steps/Actions

To request late liquidation, LEAs must contact the EWEG Help Desk to request access to the ARP ESSER Late Liquidation application. LEAs can complete and submit the late liquidation application and provide the required uploads.

The late liquidation application in EWEG includes:

  1. A risk assessment to be completed by the LEA. This will be a tab within the EWEG application. The USDOE requires the NJDOE to assess the risk of any school district requesting late liquidation.
  2. Detailed information on how much of the obligations that remain are being requested for late liquidation.
  3. A justification as to why these obligations were not able to be liquidated within the established timeframe.
  4. An upload of all purchase orders/contracts and supporting documentation that are applicable to the late liquidation request. Please note individual purchase orders that support the request must be uploaded. Only purchase orders/contracts related to the project needing late liquidation should be uploaded.
  5. Approved late liquidation requests will be monitored as part of the NJDOE’s Federal Collaborative Monitoring Process (see Q.8 of the USDOE’s FAQ)
  6. LEAs are required to upload a board resolution approving the request for late liquidation.

All EWEG applications must be submitted to the NJDOE no later than June 28, 2024. Failure to submit by this date will disqualify the district from being included in the late liquidation request made to the USDOE. The approval for late liquidation by the NJDOE does not guarantee approval from the USDOE. The NJDOE will notify districts of the next steps related to late liquidation if the USDOE approves the late liquidation request. LEAs are not permitted to directly request late liquidation from the USDOE.

ARP ESSER Application Amendments

To provide districts the opportunity to amend ARP ESSER plans and budgets in consideration with the late liquidation needs, the system will remain open and districts can submit amendments to their ARP ESSER application and budgets until Friday, June 14, 2024, at 4 p.m.

Note that a liquidation extension request is distinct from prepaying contracts with ESSER funds. The USDOE has suggested that that in very limited circumstances an LEA might be able to pay for services before the standard liquidation deadline and have those services delivered after the deadline. In that case, a late liquidation application would not be necessary. As an example, an LEA might pay for the full cost of a software license before the standard liquidation deadline with services that continue for a period of time after the funds have been liquidated. LEAs should be aware that generally accepted practice does not encourage prepayment of services and that this should be utilized only in accordance with the guidance from the USDOE, which is available here.

Office Hours

To assist districts, the NJDOE will be offering office hours via TEAMs on the following dates and times:

Registration is not required for these office hours.

Resources and Contact Information

The USDOE has released a Frequently Asked Questions document related to late liquidation. Any questions regarding interpretation of this guidance document should be directed to the district’s board attorney.

For information about how these emergency federal funds may be used to meet student needs and how LEAs can pair it with more sustainable federal funding streams, see the NJDOE Maximizing Federal Funds website.

For questions related to ARP ESSER late liquidation, please contact the NJDOE via email.

For general ESSER information and resources, please see the ESSER webpage and for questions or contact the NJDOE.