Agency of Education says FY26 federal funding largely intact but 54 grants need waivers; one district's summer learning at risk

Sean Cousinoe, Interim Chief Financial Officer at the Agency of Education, told the House Appropriations Committee Thursday that the agency’s federal spending authority for fiscal 2026 is about $206,000,000 and that "the majority of that is the grant line," funding districts and child‑nutrition and early‑childhood programs.

The agency said federal dollars directly or indirectly touch a large share of its workforce: the agency has 178 positions, federal funds fully or partly touch 92 positions and the agency counts roughly 65 full‑time equivalent positions funded by federal grants. "8,800,000 is used to fund agency staff," Cousinoe said when asked which portion of the federal budget covers personnel.

Why it matters: Committee members focused on two risks that could affect services in Vermont schools and districts. First, the agency said it is working through 54 grants that were placed into a "late liquidation" status after the U.S. Department of Education rescinded previously granted extensions; each grant now requires a waiver request. Second, the agency said roughly $10–11 million in COVID‑era ESSER carryover remains in limbo pending federal approvals, and some districts positioned summer learning programs to rely on that pandemic funding.

Anne Borenaro, Division Director for Federal and Education Support Programs at the Agency of Education, told the committee the core federal formula grants that supply the bulk of funds — Elementary and Secondary Education Act (ESEA/Title) programs and the Individuals with Disabilities Education Act (IDEA) — "are considered, you know, that they value those programs." She added that dismantling the U.S. Department of Education itself would require congressional action and that, as of the committee meeting, the staff supporting core formula allocations remained in place nationally.

The agency said it is preparing and reviewing waiver requests that districts must submit to restore access to funds. "We have about 54 grants that were caught up in the late liquidation. So every single one of those will need a waiver," Cousinoe said. The agency will review district submissions and forward them to the U.S. Department of Education for consideration.

Committee members pressed how quickly districts could learn whether waivers will be approved. Agency staff said timing is uncertain and that the reduction in federal regional staffing could delay approvals and quarterly draws of funds. That delay is the immediate concern for at least one district: agency officials said Kingdom East had informed them it intended to fund its summer learning program with pandemic carryover and might be unable to operate the program if a waiver is not approved quickly.

On ESSER carryover, agency staff said the majority of COVID‑era funds will be gone in fiscal 2025 but the agency received approval for some late liquidation into 2026 and is seeking additional extensions. Agency staff estimated about $10–11 million remains in limbo and said some of that has already been spent by districts and not yet reimbursed.

Committee discussion also turned to a separate but related federal fiscal matter: pending congressional reconciliation legislation that could include Medicaid changes. Anne Borenaro told the committee that Medicaid eligibility feeds into direct certification for free and reduced‑price meal counts, which in turn affects poverty metrics used to allocate other federal education funds. "Our biggest concern is if the cuts do happen ... we're looking at potentially cuts to Medicaid across the country," she said, adding the timing and scale of any cuts are unclear.

No formal committee action or votes were taken. Agency staff said they will continue processing district waiver requests, coordinate with the Attorney General’s office if federal reallocations are proposed, and monitor the congressional reconciliation process.

Ending: The committee asked agency staff to return with additional details as waiver submissions progress; members and staff also flagged the Senate budget documents and intercommittee coordination as next steps for the committee’s work this spring.