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Accounting for ESSER Funds

Guidance was emailed July 09, 2020 to the Standardized Account Code Structure (SACS) Forum, External Services, and County Office Finance distribution lists regarding accounting for the Elementary and Secondary School Emergency Relief (ESSER) funds.

Following is guidance regarding accounting for the Elementary and Secondary School Emergency Relief (ESSER) Fund. In our effort to reach all intended recipients, you may receive this information more than once. If so, please accept our apology since the email lists we use to send this notice may have some duplication.

In response to the Novel Coronavirus Disease 2019 (COVID-19) the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on Friday, March 27, 2020. The ESSER Fund is one of the main funding sources under the CARES Act.

The California Department of Education (CDE) has established Resource 3210, Elementary and Secondary School Emergency Relief (ESSER) Fund, to allow LEAs to account for ESSER Fund revenues and expenditures. ESSER Fund awards may be used for allowable expenditures incurred on or after March 13, 2020, the date the President declared a national emergency due to COVID-19. Therefore, LEAs that incur allowable expenditures as of March 13, 2020 can report those expenditures using Resource 3210 in 2019–20. However, note that the ESSER Fund will not be appropriated in the state budget until 2020–21. Generally accepted accounting principles for modified accrual basis accounting require that there be an appropriation of funds in order for revenue recognition to take place. Therefore, LEAs should not recognize ESSER Fund revenue until 2020–21.

Because expenditures, but not revenues, may be reported using Resource 3210 in 2019–20, a negative ending balance in Resource 3210 will occur. This negative balance will also result in a few warning technical review check exceptions in the SACS financial reporting software for 2019–20 unaudited actuals reporting. It is appropriate for LEAs to provide explanations for these exceptions, for example “per CDE guidance, ESSER Fund expenditures are allowed to be reported in 2019–20, but revenue will not be reported until 2020–21.” Note that CDE will not open valid code combinations for Resource 3210 revenue sources until 2020–21. Therefore, LEAs that use revenue object codes with Resource 3210 in 2019–20 will also receive technical review check exceptions for the associated invalid resource/object combinations. These exceptions are not appropriate and should be corrected.

Also note that CDE will not open Resource 3210 in combination with contribution object codes 8980, Contributions from Unrestricted Revenues, or Object 8990, Contributions from Restricted Revenues. Because ESSER Fund awards are intended to provide emergency relief to LEAs to address the impact that COVID-19 has had on education, and not a “program,” in the sense that it is not “a group of related activities that operate together to accomplish specific purposes or objectives,” it would be counterintuitive to the reason for contributions to allow them to be made for this funding source. Furthermore, ESSER Fund expenditures would be distorted if contributions were made, preventing transparent reporting.

Please direct questions regarding this guidance to Financial Accountability and Information Services at

Further information about ESSER funding can be found on the CDE CARES Act ESSER Funding web page.

Questions:   Financial Accountability and Information Services | | 916-322-1770
Last Reviewed: Tuesday, December 19, 2023