NC's plan to use $3.6 billion in school stimulus funds on COVID-19 learning recovery receives federal approval

North Carolina schools will soon have access to all of the about $5.5 billion set aside for the state in the three federal stimulus packages passed in the last year and a half.

The money is meant to address issues that have arisen or worsened during the COVID-19 pandemic, such as students not learning as much as they would have under normal circumstances. The plans to address those issues may last as long as three years.

So far, according to data reviewed by WRAL News, about half of the nearly $900 million already spent has gone toward computers, software and other supplies. Most of the rest spent has gone toward salaries — for extended employment contracts, cafeteria workers, bonus pay, salary supplements and stipends, bus driver overtime and new employees.

Most schools have already applied to the state to use the money and been approved. The North Carolina Department of Public Instruction has received most of the money so far, waiting on the final $1.2 billion that federal officials announced today had finally been approved to send to the state.

The U.S. Department of Education announced Monday it has approved DPI’s plan to use the $3.6 billion meant for the state from the third federal stimulus package — the American Rescue Plan.

Major elements of the plan include:

• $30 million for tutoring
• $35 million for a competitive grant program for extending school
• Expanding afterschool programming
• Expanding telehealth availability at schools

The Department of Public Instruction submitted its plan months ago but had until recently been rejected on two counts: insufficient stakeholder input and lack of specificity.

The decision, announced Monday along with three other states’ approvals, means 37 states have now received approval for their American Rescue Plan spending proposals.

WRAL News requested a copy of the plan from DPI but had not received on as of Monday evening.

The American Rescue Plan stimulus funds are allocated according to how many of the district’s or school’s students are considered low-income.

The Department of Public Instruction submitted its plan to the federal education department in June, after a 30-day public comment period on a draft version of it.

Until recently, the U.S. Department of Education had rejected the state’s plan on two counts: insufficient stakeholder input and lack of specificity.

DPI officials organized more stakeholder meetings — including representatives of disadvantaged students — but blamed the lack of specificity on the lack of a legislatively approved budget for the state, as recently as August.

On Monday, DPI officials told WRAL News that State Law 2021-25, passed in May, was sufficient to allocate the funds and the department needed no further action from the General Assembly.

North Carolina received $396.3 million directly from the Coronavirus Aid, Relief and Economic Security Act (CARES Act) passed in spring 2020, as well as about $400 million more of the federal funds directed through the General Assembly and Gov. Roy Cooper. The state received $1.6 billion under the Coronavirus Response and Relief Supplemental Appropriations Act passed in December, and now $3.6 billion under the most recent stimulus, the American Rescue Plan.

Nearly all of the money from the first two stimulus packages went to schools, but only 90% of the American Rescue Plan funds will go to North Carolina schools, about $3.2 billion. The other 10% will be used by DPI for other COVID-19-related programming.

The American Rescue Plan money will last through Sept. 30, 2024, giving schools three years to spend it on continuing COVID-19-related learning needs. Funding from the second stimulus lasts through Sept. 30, 2023, and most of the funding from the first lasts through Sept. 30, 2022.

While the funding comes from several sources within each stimulus package, schools have broad permission to spend the funds. The American Rescue Plan calls for at least 20% of funding to be used to address “learning loss.”

Prior to Monday’s announcement, schools have applied to the state for, and been approved for, spending plans for $3.8 billion of the funds.

Schools had spent more than three-quarters of funding from the first stimulus package, as of July 31, according to the latest Department of Public Instruction data release. They’d spent about 13% of the second round of stimulus funding.

But North Carolina schools have spent only $41.7 million of the $3.2 billion eventually planned for them under the American Rescue Plan, available through the emergency relief fund provision of the act.

Educators have said they want to be able to use the money for the three years they have it, rather than all at once, anticipating that the need extra instructional and behavioral supports needed to accelerate students’ learning could last longer than year for some students. Schools are also using the funds to create positions they’ve been wanting for years but never had the money to create, such as school psychologists.

Total stimulus spending among North Carolina schools was about $874 million at the end of July, the data show.

Schools spent $660 million of the stimulus funds during the last school year.

The biggest chunk of spending since the pandemic began has been on “supplies and materials,” totaling $391.8 million. That includes $177.5 million for computers — purchased to help children with remote learning — and another $48.2 million for computer software and other computer supplies. Another $131.3 million went toward general “supplies and materials.” Of that, $26.2 million was for personal protective equipment.

Schools spent another $92.7 million on extended employee contracts, though it’s unclear from the data whether those were all for summer learning programs.