Federal Education Jobs Program Funds

A new federal jobs program that impacts county governments was passed by Congress this summer and signed into law on August 10, 2010. It is not a part of ARRA (the American Recovery and Reinvestment Act), but will have similar reporting guidelines and similar purposes. Nationwide, the program authorized $10 billion in financial assistance to states to save or create jobs, specifically targeted to help protect jobs in K-12 education.

Tennessee’s allocation was $195.8 million. The state qualifies for the money under all known federal guidelines and the Bredesen administration has applied for the funds. Once received, the funds must be available to LEAs (Local Education Agencies) for the 2010-2011 school year. The funds must only be used for obligations made on or after August 10, 2010. LEAs may use the funds through September 30, 2012 (which is the end of the 2011-2012 federal fiscal year). However, for ease of administration and reporting, the Tennessee Department of Education is recommending that LEAs expend the funds by June 30, 2012 - the end of the state’s next fiscal year. Although eligible to retain a percentage of the funds for offsetting administrative costs, the state Department of Education is not retaining any of the funding and is letting it all flow through to the LEAs.

The state had the option to distribute the funds under either Title I or the state’s primary education funding formula (the Basic Education Program or BEP). Tennessee has determined that the funds will be distributed under the BEP. The US Department of Education guidelines indicate that a Governor may not direct how an LEA uses its education jobs fund. However, the Federal guidelines do require the funds to be spent in certain areas.

Education Jobs Program funds must be used only for school-level employee compensation and benefits and other expenses, such as support services, necessary to (1) retain existing employees, (2) recall or rehire former employees, and (3) hire new employees. Examples of permissible compensation and benefits include: salaries, performance bonuses, health insurance, retirement benefits, incentives for early retirement, pension fund contributions, tuition reimbursement, student loan repayment assistance, transportation subsidies, and reimbursement for childcare expenses. Besides teachers, examples of other school level employees who may receive these funds would include principals, assistant principals, academic coaches, in-service teacher trainers, classroom aides, counselors, librarians, social workers, interpreters, physical, speech and occupational therapists, security officers, maintenance workers, nurses, bus drivers, and cafeteria workers. The money can be used to restore reductions in salaries and benefits, implement increases or bonuses, or compensate teachers for previously scheduled furlough days. The important distinction is whether the employee is a “school level” employee or an “LEA-level” or “central office” employee. The federal guidelines do not allow the funds to be used for central office administrative personnel such as staff for the superintendent’s office or the board of education. The funds also cannot be used to pay for contracted services. The federal guidelines describe the funds as being for K-12 education. At this time it is unknown whether it is permissible to use the funds for Pre-K expenses.

These funds will have to be tracked, reported and accounted for separately. These are considered federal funds, but their use does not trigger federal non-supplanting guidelines. Additionally, as federal funds, these do not impact the required local match, or state-level non-supplanting or maintenance of effort requirements for LEAs. The funds are expected to be available for draw down in 2-3 weeks. The funds could be spent entirely in this budget year or an LEA could wait to spend the funds in next budget year or use them both years. They simply cannot be spent for obligations arising before August 10, 2010, and must be spent before September 30, 2012.