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Capital Expenditures FAQs

FAQs for federal stimulus funding capital expenditures, including the Elementary and Secondary School Emergency Relief (ESSER) I, II, and III funds and the Governor’s Emergency Education Relief (GEER) I and II funds.
  1. What federal funding sources require local educational agencies (LEAs) to obtain California Department of Education (CDE) approval for capital expenditures? (Updated 31-Oct-2022)

    ESSER and GEER funds require prior approval for the single big-ticket purchases of $5,000 or more (as do federal funds generally).

    LEAs are not required to get pre-approval for purchases using the Coronavirus Relief Fund or General Fund dollars. To clarify, when referring to the General Fund dollars, this is the funding source that an LEA was allocated through the Learning Loss Mitigation Funding (LLMF) package established in Section 110 of Senate Bill (SB) 98 (Chapter 24, Statutes of 2020), as amended by Section 59 of SB 820 (Chapter 110, Statutes of 2020), and as amended by Section 4 of AB (Assembly Bill) 86 (Chapter 10, Statutes of 2021).

    To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form (PDF) and then send the completed form via email to EDReliefFunds@cde.ca.gov.

    NOTE: Any approved expenditure is only for the funding source that is approved by CDE. CDE must be notified of any changes to approved funding sources or costs of the approved project. For example, if an LEA receives approval for an expenditure using ESSER I funds and then later wants to use ESSER II funds for that expenditure, an email must be sent to EDReliefFunds@cde.ca.gov requesting approval. Any changes to the scope of the project require a new application to be submitted.

  1. What types of projects require prior approval from the CDE?

    This is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees.

    To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form (PDF) and then send the completed form via email to EDReliefFunds@cde.ca.gov.

  1. Are shade structures allowable as a Capital Expenditure for ESSER/GEER?

    Yes, you must show the cost is reasonable and necessary to prevent, prepare for, or respond to the COVID-19 pandemic. An LEA must describe how the items acquired will support/enhance the educational program.

  1. Can school buses or vehicles be purchased for student transportation under ESSER/GEER? (Updated 7-Jan-2022)

    Yes, you must show it was necessary, reasonable, and allocable. You must also ensure that you have also looked into less expensive options such as leasing, contracted services, or other alternatives that are more reasonable. An LEA must explain how this will support/enhance the educational program.

    Requests for staff cars for district office use or new maintenance vehicles should explain how these expenditures will benefit students and school site staff.

    If an LEA purchases a vehicle (for staff or students) with ESSER/GEER funds, the LEA may need to follow disposition rules within the Uniform Grants Guidance at the end of the grant period. Please see FAQ #12, “If a district makes a capital expenditure with COVID-19 federal stimulus funding, must the item be disposed of when the grant period ends?” for more information.

  1. Are construction costs allowed under ESSER/GEER?

    Yes, ESSER and GEER funds are authorized for construction as long as it is needed to prevent, prepare for, or respond to COVID-19. Additionally, related construction costs resulting from an eligible project, including all California Building Standards Code compliance, such as structural, fire & life safety, access compliance and energy code compliance are allowable uses of ESSER/GEER funds.

  1. What types of construction projects could possibly be allowed?

    School facility repairs and improvements to enable operation of schools to reduce the risk of virus transmission and exposure to environmental health hazards and provide for the health needs of students may be allowable.

    This could include the inspection, testing, maintenance, repair, replacement, and upgrades for indoor air quality improvement.

    Possible projects that may be allowed are:

    • Construction of additional classrooms, purchasing, or leasing portable classrooms to assist with social distancing;
    • Replacing windows for increased air quality;
    • Replacing carpet with tile or similar flooring material for cleaning purposes;
    • Replacing or fixing roof for air quality;
    • Updating facilities to utilize for additional classroom space;
    • Construction of areas for health purposes (e.g. waiting areas for sick students or testing areas).


    Please note: all applications must provide a thorough justification of how the project is reasonable and necessary to specifically prevent, prepare for, or respond to the COVID-19 pandemic. The examples above should not be considered a pre-approved list.

  1. What requirements must be followed for construction projects?

    For construction projects, LEAs must follow applicable federal construction regulations, such as safety and health standards (34 Code of Federal Regulations [CFR] 75.609), energy conservation (34 CFR 75.616), and Davis-Bacon prevailing wage rules. Any LEA requesting pre-approval must provide documentation showing that the LEA is not able to meet the need arising from the health emergency in a more cost-effective or efficient manner, such as leasing property or improving property already owned and in use.

    Additionally, the placement of new modular classrooms, other new construction and many modernization projects on a school site is subject to the requirements of Title 5 CCR Section 14030, and oversight by the Division of the State Architect (DSA). For information about DSA assistance during the COVID-19 pandemic for emergency school facilities, LEAs should refer to BU 20-01 External link opens in new window or tab. (PDF). New relocatable buildings and structures, including shade structures, may be temporarily installed for a maximum period up to three years in accordance with IR A-1.16 External link opens in new window or tab. (PDF). Reconstruction or alteration projects to school buildings less than specified construction cost thresholds are exempt from DSA review, as described in IR A-22 External link opens in new window or tab. (PDF).

    The project must also be tied to the allowable uses of the applicable fund source and prevent, prepare for, or respond to COVID-19. Additionally, an LEA will have to show that the cost is reasonable and necessary and that cheaper alternatives were evaluated.

    Important: The project must also follow federal procurement requirements and be implemented during the allowable grant period of the funding source that is being used.

  1. Can the CDE provide approval for a purchase that has already been made by an LEA?

    Given the authorization to go back to March 13, 2020, there is some flexibility with the approval. If you plan on using ESSER or GEER funds for a purchase that has already been made, the purchase must have been made during the eligible grant period (e.g. ESSER I is available for obligation March 13, 2020 – September 30, 2022) and ensure that you have met all federal requirements in regards to the bidding process, compliance with construction regulations, and that you are able to show the purchase is necessary, reasonable, and allocable in response to COVID-19.

  1. Can an LEA use ESSER/GEER funds to replace or install a heating, ventilation, and air conditioning (HVAC) system?

    Most likely this would be allowed as long as the LEA can demonstrate in its pre-approval application that the purchase is reasonable and necessary in order to prevent, prepare for, and/or to respond COVID-19. You must also meet federal requirements on procurement and likely will have to comply with Division of the State Architect (DSA) requirements.

  2. Do construction projects funded under ESSER/GEER require CDE or Division of the State Architect (DSA) plan approval for the architectural plans?

    If the funding source of the construction project does not include state reimbursement through the School Facility Program (i.e. Proposition 51), then CDE plan approval is not required. However, the LEA must ensure the project meets Title 5 Regulations.

    The DSA has issued an updated Bulletin 20.01 DSA ASSISTANCE DURING THE COVID-19 PANDEMIC FOR EMERGENCY SCHOOL FACILITIES External link opens in new window or tab. (PDF). The information in this bulletin offers guidance on prioritization, indicates plan approval requirements for specific project types related to school re-opening, and encourages outreach to the local DSA Regional Office. Not all HVAC projects require review; however, when structural alterations or improvements are needed, then DSA structural review is required and access compliance path of travel improvements are triggered.

    LEAs should contact DSA External link opens in new window or tab. for more information.

  3. Can ESSER and GEER funds provided under the Expanded Learning Opportunity Grant be used for Capital Expenditures?

    Yes, an LEA who receives the Expanded Learning Opportunity Grant (ELO-G) funding may use this funding for Capital Expenditures. LEAs will be required to submit a Capital Expenditures Pre-Approval Application Form to EDReliefFunds@cde.ca.gov for any funding that uses the following federal funds under the ELO-G:

    • ESSER II State Educational Agency (SEA) Reserve (Resource Code 3216)
    • GEER II (Resource Code 3217)
    • ESSER III SEA Reserve – Emergency Needs (Resource Code 3218)
    • ESSER III SEA Reserve – Learning Loss (Resource Code 3219)

    The purchase must be allowable under both federal and state requirements under the ELO-G program. For more information on the allowable uses of the ELO-G please refer to the Expanded Learning Opportunities Grants page or you may contact the ELO-Grants Team via email at ELOGrants@cde.ca.gov.

    Note: If an LEA is using state funds and not using any federal funds for a purchase, then a capital expenditure pre-approval is not required. However, the purchase must still be aligned with applicable state allowable uses and law.
  4. If a district makes a capital expenditure with COVID-19 federal stimulus funding, must the item be disposed of when the grant period ends? (Added 7-Jan-2022)

    Per 2 CFR 200.313(c)(1), equipment purchased with coronavirus funding may continue to be used for the original purpose or activity “as long as needed, whether or not the project or program continues to be supported by the Federal award.” If the equipment is no longer needed for the original purpose, then it may be used in other activities supported by the same federal agency (U.S. Department of Education) or federal awards from other federal agencies. Only when the equipment is no longer needed for the original purpose and is not needed for any other federal purpose, then the district must follow disposition rules in 2 CFR 200.313(e).

    For example, if a district purchases a vehicle to assist with socially-distanced transportation using ESSER funds, e.g. reducing bus loads from 36 students to 23 students, the district may continue use the vehicle to provide transportation services at reduced numbers after the ESSER period ends. If the bus is no longer used to provide socially distanced transportation, or for any other federal purpose, then the district must follow disposition rules in 2 CFR 200.313(e).

  5. How can an LEA dispose of equipment that is no longer in use? (Added 31-Oct-2022)
    Generally, when equipment is no longer needed for the original purpose or program, or cannot be used in other currently or previously federally-supported activities, the following disposition rules apply:

    Equipment with a current per unit fair market value of $5,000 or less may be retained, sold, or otherwise disposed of with no further responsibility to the U.S. Department of Education.

    Equipment with a current per unit fair market value in excess of $5,000 may be retained or sold, but the U.S. Department of Education should be contacted by the LEA to request disposition instructions, if required by the terms of the award. The U.S. Department of Education must be compensated for its share of the cost of the original purchase. To calculate this amount, multiply the current market value (or proceeds from the sale) by the federal agency’s percentage of participation in the cost of the original purchase. However, the LEA may be permitted to deduct and retain from the Federal agency’s share $500 or 10 percent of the sales proceeds, whichever is less, for the recipient’s selling and handling expenses (2 CFR 200.313[e]).

    The disposition of items purchased with Federal Stimulus funds must be noted on the equipment inventory maintained by the LEA for all equipment with a current fair market value in excess of $500 (California Education Code Section 35168). The LEA is also responsible for completing and submitting to the CDE the ESSER and GEER Equipment Removal Form(PDF) for approval before the equipment can be removed from the inventory.
  6. Can an LEA pre-pay for a multi-year product license using ESSER or GEER funds? (Added 31-Oct-2022)

    While licenses themselves may be an allowable use of funds, depending on the necessity and reasonability as part of the LEA’s response to the COVID-19 pandemic, it is important to make sure all licenses follow federal requirements. An LEA must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance (2 CFR 200.344[b]). For federal awards utilized by LEAs, “financial obligations” means orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the LEA (2 CFR 200.1). 

    In accordance with these requirements, licenses paid for with Federal Stimulus Funds must conclude prior to the end of the allowable time period of the funds utilized. Licenses cannot be paid in advance for services that would continue after the allowable time period, as the liquidation would not have occurred until the service is completed.

Questions:   Federal Stimulus Team | EDReliefFunds@cde.ca.gov
Last Reviewed: Monday, October 31, 2022
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