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Date: July 22, 2020
To: School District Superintendents and Business Managers
From: Rick Crager, Assistant Superintendent
Office of Finance and Information Technology
RE: CARES Act - Equitable Share Calculation for Private Schools
As most of you are aware, the Oregon Department of Education (ODE) has been working to understand how school districts must comply with Section 18005 of the CARES Act. This Section requires a local education agency receiving funding from either the Governor’s Emergency Education Relief (GEER) Fund or the Elementary and Secondary School Education Relief (ESSER) Fund to “provide equitable services in the same manner as provided under Section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.”
ODE, as well as many other state education agencies, have interpreted this portion of the Act to be implemented by using the Title I equitable share calculation which is also required by Section 1117 of the ESEA. Up to this point, the Department has suggested that school districts use this same method which is based on the percentage of the number of low-income private school students to the total low-income students in a Title I attendance area. The result of this calculation would then be made available to all private schools wishing to participate in service that have either previously qualified for Title I funds or currently meet the low-income residency requirements.
On July 1, 2020, this interpretation was complicated by guidance provided by the U.S. Department of Education (USDOE) outlined under an Interim Final Rule. These rules contradict and confuse our original interpretation, and directs local education agencies to use all ESSER or GEER funding allocations to either 1) use Section 1117 of the ESEA to calculate equitable share and serve only Title I eligible public schools and all private schools, or 2) use the percentage of total enrollment of private schools to total enrollment of all schools in the district to calculate equitable share and serve all public and private schools in the district. In addition, should a school district determine it will use the option of ONLY Title I schools, it will be required to adhere to the supplement, not supplant rule which is not a requirement under the CARES Act for education.
There is clearly a different interpretation between what the CARES Act states and what is stated in the USDOE Interim Final Rule. As a result, some states have put forward a lawsuit against the USDOE with the claim that their guidance violates the statutory intent of the CARES Act. In addition, there are a variety of federal legislative proposals seeking to confirm the original interpretation and codify this in law. Unfortunately, until there is a formal decision or law change, we face uncertainty and potential risk in any of the interpretations.
Given the lack of clarity and discrepancy between laws and guidance, ODE sought advice from the Oregon Department of Justice. ODE is now advising school districts, in consultation with their legal counsel, to choose one of the following three interpretations to determine the method of allocating the proportionate share to private schools within their district.
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INTERPRETATION 1 (CARES Act – Section 1117 of ESEA) - Districts calculate the equitable share of its ESSER and GEER allocation based on Section 1117 of ESEA using the percentage of the number of low-income private school students to the total low-income students in a Title I attendance area. The proportionate share for private schools may be used only for private schools that meet the Title I eligibility.
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INTEREPRETATION 2 (USDOE Interim Rule – Option 1) - Districts calculate the equitable share of its ESSER and GEER allocation based on Section 1117 of ESEA using the percentage of the number of low-income private school students to the total low-income students in a Title I attendance area. The proportionate share for private schools may be used for any private school within the district; however, funding is limited to only public schools that meet the Title I eligibility. In addition, in accepting this interpretation, the school district must comply with the supplement, not supplant requirements.
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INTERPRETATION 3 (USDOE Interim Rule – Option 2) - Districts calculate the equitable share of its ESSER and GEER allocation based on the percentage of the number of enrolled private school students to the total enrolled students in the district. The proportionate share for both public and private schools may be used for any school within the district.
ODE recognizes that by using any of these interpretations to calculate the private school equitable share for both ESSER and GEER, there is a risk of non-compliance with USDOE rules or the enacting CARES Act. ODE has determined that Interpretation 2 would be the least risky for many school districts. This is primarily due to the fact that it aligns with the calculation method (Section 1117 of ESEA) that is identified in the CARES Act and is part of the Interim Final Rule issued by USDOE. However, it does not meet the intent of the CARES Act of providing supports to all schools and students, and requires the supplement, not supplant rules which is not required under the education portion of the CARES Act.
We remain hopeful that in the coming weeks either Congress will provide the clarification necessary in law, or this is settled within the courts. Until that point, we advise that school districts discuss these options with their legal counsel prior to allocating resources.
ODE recognizes the ongoing frustration this has added to an already troubling and unprecedented time, and apologizes for inconsistencies which current regulations have created. If you have any further questions, please contact Joni Gilles at (503) 947-5638.
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