MSDE staff report $3.46B in pandemic relief use; tutoring and staffing largest spending areas

Maryland Department of Education officials told the State Board’s Education Transformation Finance Committee on Feb. 1 that the department and local education agencies received about $3.464 billion in COVID‑relief education funds and that, as of Feb. 1, 2025, 84.3% of federal funds available in fiscal 2024 had been spent.

The update, delivered principally by Donna Gunning with assistance from Christian Tullor, reviewed how federal Elementary and Secondary School Emergency Relief (ESSER) tranches — CARES, CRRSA and ARP — and state fiscal relief funds were allocated and used, and provided a breakdown of spending categories, objects and selected program details, including the Maryland LEADS state set‑aside.

Why it matters: the briefing detailed how large pandemic relief sums were directed to tutoring, summer learning, technology and staffing and explained remaining balances, late‑liquidation approvals, and the department’s work to reconcile and clean federal grant accounting.

Big picture and timing: MSDE said the total reported to the committee included roughly $3.0 billion distributed through U.S. Department of Education ESSER formula programs plus additional funding routed through the governor and state/local fiscal relief funds. MSDE reported that LEAs are permitted to liquidate obligated funds under approved late‑liquidation requests through March 2026; the department had set some internal deadlines (for example, June 2025) for use of particular line items.

Spending priorities and amounts: presenters said the largest single use of funds was for tutoring and extended learning, supported through summer school, after‑school programs and contracted tutoring; summer school payments covered four summers (2020–2024) in varying degrees across LEAs. MSDE also said 36% of ESSER spending falls in “salaries and wages” objects overall, with instructional salaries and wages representing the largest slice within that object; the department clarified that a portion of salary spending included stipends and retention bonuses as well as substitutes for social‑distancing and extended learning. A department official summarized: “The use of these funds for permanent positions was minimal.”

Category and object detail: MSDE presented spending broken out by 13 statutory categories (instructional salaries/wages; student personnel; student health services; operations and maintenance; etc.) and then by objects (salaries/wages; contractual services; supplies; equipment; other). Contractual services was the second‑largest object, reflecting purchases of learning management systems, intervention program contracts and IT contracts. The “other supplies and materials” object included staff and student devices, peripherals and materials to support career and technical education at home.

Maryland LEADS: MSDE said it used the state set‑aside (the 10% reserved from ESSER CRRSA and ARP) to award $173.9 million in Maryland LEADS competitive grants across seven strategy areas. The department said partner organizations received subawards; MSDE reported that many remaining balances in LEADS awards are approved for late liquidation and largely tied to Grow Your Own tuition support, staff support and retention efforts and Science of Reading instructional purchases.

Fiscal cleanup and drawdowns: Gunning told the committee the department completed a large cleanup of federal grant accounting for 2019–2025, tying state reporting to federal reporting systems; she reported 91% of the federal funds that had been spent had been drawn down (reimbursed) from the U.S. Department of Education. MSDE said it expects LEAs to fully expend remaining balances but cautioned that invoice amounts lower than anticipated can leave unused balances that cannot be repurposed.

Board questions and follow‑up requests: board members asked about the evidence of effectiveness for tutoring and other interventions, geographic distribution of remaining balances and the degree to which spending maps to current strategic priorities. MSDE said federal reporting collections include counts of students served by tutoring and that staff would return with additional data and options to analyze links between spending and outcomes. The committee also asked MSDE to provide more granular cross‑cuts showing how ESSER spending aligns with MSDE strategic initiatives.

No formal votes were taken. MSDE said the team will continue reconciling older federal grants (2014–2018) and provide additional reporting to the committee on the effectiveness and distribution of funded activities.