MSDE says late-liquidation requests submitted after U.S. Education Department shortens ESSER timelines; court order gives states until May 24

The Maryland State Department of Education (MSDE) told its Education Transformation and Finance Committee that it has submitted late-liquidation and drawdown requests to the U.S. Department of Education for unused and encumbered Elementary and Secondary School Emergency Relief (ESSER) funds and is coordinating with the Maryland Office of the Attorney General on legal and procedural next steps.

MSDE staff said the department previously reported roughly $79,900,000 that had been spent by local education agencies (LEAs) and reimbursed under ESSER 2, plus another $46,200,000 that MSDE recorded as a state liability because it had already paid LEAs from ESSER 3 (ARP) funds. MSDE said it submitted a late-liquidation request totaling $98,700,000 that included about $41,900,000 already spent by LEAs and roughly $56,700,000 in encumbered, not-yet-spent funds; MSDE characterized the encumbered and some other figures as estimates. The department also noted about $7,200,000 in unused funds under the Homeless Children and Youth program.

MSDE staff reported that on May 6 a U.S. district judge in the Southern District of New York issued a preliminary injunction temporarily blocking the U.S. Department of Education from enforcing a March 28 change that shortened states' liquidation timelines. The Department of Education then notified participating states that it would allow a wind‑down period through May 24, 2025, for obligations already incurred; MSDE said the federal agency asked states to use that 14‑day window to finish or document work already completed.

MSDE said it has asked LEAs to submit invoices and receipts for completed payments that were part of the $98.7 million late‑liquidation request so the department can prepare drawdown requests before the May 24 deadline. MSDE said it expects to receive additional invoice data from LEAs within days but that not all projects scheduled under the earlier (longer) liquidation timeline could reasonably be completed by May 24; some projects had been scheduled to finish as late as January under the prior timetable.

MSDE said it is working with the Maryland Office of the Attorney General and counterparts in other states to determine whether to resubmit reimbursement requests and to coordinate any legal steps. The department said it would update the board if it receives further federal guidance or developments.

Committee Chair Crawford asked whether MSDE expects to have all documentation and requests submitted by the May 24 deadline; MSDE staff responded that they have mobilized teams and are giving LEAs a tight turnaround to submit invoices but that some encumbered projects likely will remain unspent by the revised federal deadline. MSDE thanked LEAs for rapid responses and thanked the attorney general's office for assistance.

Ending: MSDE said it will continue to monitor federal guidance and work with LEAs and the attorney general; it will present updates to the board as they become available.