WREG Investigates: Much of pandemic relief funding for schools still waiting to be spent

Investigations

MEMPHIS, Tenn. — The U.S. Government has released trillions of dollars in pandemic relief funding for almost every sector of the economic, including schools. But much of that money is still sitting around waiting to be spent.

The need can be seen at secondary schools and in higher education.

University of Memphis junior Nikki Patel is back on campus this spring for the first time in a while. She spent the majority of last year taking classes virtually.

“I went back home. I live two hours from here,” she said.

She’s far from the only one. President David Rudd said the shift to at-home learning put a huge financial strain on the university.

“Naturally the impacts are predominantly in revenue areas where you have students on campus. So housing and dining are the most significant,” Rudd said. “We’ve got an aggregate deficit that we absorbed of in the ballpark of about $60 million.”

But U of M is making up for it thanks to federal funding from the CARES Act, which established the Education Stabilization Fund that so far has gotten more than $100 billion. It has three different funding arms: higher education, secondary education and a governor’s emergency fund. All of the money gets filtered through state agencies.

So far, the U of M has received nearly $45 million, with about half of the money spent going to students.

“We’ve dispersed those dollars directly to students because of the nature of the need. That is people needing to be able to pay their living costs and housing costs,” Rudd said.

“It was $300 and it was an online grant toward our online classes,” Patel said.

The junior said she’s gotten several of these installments, which have been a huge help for the daughter of local business owners.

“My family owns businesses so they couldn’t go in, employees was a big issue for them. They couldn’t find people to help them work,” she said.

But WREG found a lot of this money hasn’t been spent. Federal records updated through February show the U of M has only spent 35 percent of its CARES Act funding. And in data we analyzed, we found states have only spent an average of 17 percent of their CARES Act education funding.

We asked President Rudd why there was so much money still left over in the fund.

“Well, my guess is just inefficiency in a bureaucracy,” he said.

In fact, a U.S. Department of Education Inspector General report found about a fifth of all schools didn’t report their spending correctly.

“If you make a mistake in the application, you have to correct the application and re-submit. So some of that is most likely just inefficiency in the allocation of it and related to that would be workload for people in the federal government. I think it’s a broader issue for all of these relief funds,” Rudd said.

U of M Chief Financial Officer Raaj Kurapati added that the federal government took three months to provide guidelines for how to spend the money from the second round of the CARES Act, which contributed to even more of a delay.

“The guidelines have been a little slower than we would’ve preferred,” Kurapati said. “Finally we’ve gotten them and we’re expending the money as quickly as we can. Frankly, the costs are already incurred by the institution.”

Secondary education institutions are also having challenges spending all their money.

“The intent is that that money is spent,” Tennessee Education Commissioner Penny Schwinn said.

Tennessee has billions of dollars sitting and waiting for spending. Schwinn said the state has little control over how districts spend their portions.

“We have districts who have spent as much as 100 percent of those dollars and we have some districts in the state that are in that one to 10 percent of dollars,” Schwinn said.

But just like with higher education, some of the reporting requirements have caused delays.

“The capacity needed to do the reporting, and the auditor and auditing and the monitoring and the data collection, that’s pretty significant,” she said. “I think they thought the money was going to be spent a lot faster than it was.”

She said her priority now is using the rare funding opportunity so they don’t have any regrets.

“These are funds that should be moving toward student achievement, should be helping students in classrooms and should be providing direct services to students who need them whether that’s in early literacy, looking at options or mental health support,” Schwinn said.

There’s no question, the funding is making a difference for students like Patel.

“It was nice to know they wanted to help students out and help them succeed in the best way possible,” the U of M junior said.

Since writing this story, U of M has increased its relief spending to about 53 percent of its allocation.

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