CAARO Update Issue #2026-05

The purpose of the California Department of Education (CDE) CAARO updates is to provide local educational agencies (LEAs) and other interested parties with timely information related to programs administered by CAARO.

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Key Dates

• Estimated Cash Flow for State and Federal Programs (Updated Apr-2026)

Federal Categorical Program Updates

Categorical Programs - Allocations & Apportionments (CA Dept of Education)

Title I, Title II, Title III, and Title IV

• The fiscal year (FY) 2024-25 Seventh Apportionments and FY 2025-26 Third Apportionments are expected to be released to LEAs in April 2026.
• FY 2025-26 Final Allocations are currently being calculated. Once calculations are approved, the final allocation amounts will be made available to LEAs in April 2026.

CMDC will be open from April 10, through April 30, 2026. During this period, LEAs must submit their cash balances through the designated reporting system for the data to be considered in the next apportionment cycle.

The Preliminary State Reservation Tables for FY 2026-27 were received by CDE on March 13, 2026. For a summary of preliminary allocations, see CAARO Update Issue #2026-04, issued on April 6, 2026.

• FY 2025–26
  • LEAs that have an approved Application for Funding Status by January 31 will receive payment in April 2026.
• FY 2024–25
  • As a condition of funding, LEAs that have filed expenditures in the Grant Management and Reporting Tool (GMART) by February 28, 2026, will receive payment in April 2026.

The Rural Education Achievement Program (REAP) Fiscal Year 2026-27

REAP is comprised of two formula grant programs dual eligible LEAs may select only one program in the Consolidated Application and Reporting System (CARS):

• Title V, Part B Subpart 1 – Small, Rural School Achievement (SRSA) Program
  • The SRSA program provides funds to very small rural local educational agencies (LEAs).
  • The U.S. Department of Education awards these grants directly to eligible LEAs.
  • LEAs are responsible to submit an application before the deadline through the U.S. Department of Education.
  • SRSA applications become available April 13, 2026. Deadline for transmittal of applications is May 18, 2026.
  • All LEAs eligible for FY 2026 SRSA funds must apply electronically, additional information can be found at Federal Register: Application Deadline for Fiscal Year 2026 web page .
• Title V, Part B Subpart 2 – Rural and Low-Income Schools (RLIS) Program
  • The RLIS program targets rural LEAs that serve large numbers of low-income students.
  • The California Department of Education awards grants to eligible LEAs.
  • RLIS applicants must apply for funds through CARS.

State Categorical Program Updates

Categorical Programs - Allocations & Apportionments (CA Dept of Education)

Prop 39 California Clean Energy Jobs Act

• The CDE is coordinating with the California Energy Commission (CEC) on the recovery of unspent Prop 39 funds as identified in the final project completion reports that were submitted by LEAs to the CEC.
• The CDE is preparing a final recovery of unspent Prop 39 California Clean Energy Jobs Act funds. The schedule of the proposed recovery is posted on CDE’s Prop 39 web page.
• LEAs that would like to dispute the proposed recovery amount may contact Christopher Meyer, California Energy Commission, by email at Christopher.meyer@energy.ca.gov.
• Other questions about Prop 39 can be sent to CDE at prop39fiscal@cde.ca.gov.

Lottery

• The Second Quarter Lottery Apportionment for FY 2025–26 was released by the State Controller’s Office (SCO) on March 30, 2026. Quarterly funding rates are available on the CDE’s Lottery web page.

Literacy Instruction Professional Development

• The allocations for the Literacy Instruction Professional Development funding provided in Section 83 of Assembly Bill 121 (Chapter 8, Statutes of 2025) will be available in May, with the apportionment to be released in late June. Funding is available to school districts, county offices of education, charter schools, and state special schools to support the implementation of California Education Code (EC) Section 33319.6 .
• Funds will be allocated on an equal amount per full-time equivalent (FTE) certificated staff who teach pupils in transitional kindergarten, kindergarten, or any of grades 1 to 5, inclusive, using the data submitted through the California Longitudinal Pupil Achievement Data System (CALPADS) as of October 2025. CAARO will provide the per-FTE certificated staff funding rate once it is available.
• Information regarding the program timeline, reporting requirements, and professional development criteria is available on the CDE’s Literacy Professional Development Programs web page. Details regarding the funds will be available on the CDE’s Categorical Programs web page.

Audit Resolution Updates

Local Educational Agency Annual Audits - Auditing (CA Dept of Education)

Management Decision Letters and Correction Action for 2024–25 Audit Findings

• Management decision letters for the 2024–25 audit findings are currently being issued.
• LEAs should provide corrective action to the CDE within three weeks of receiving a management decision letter.

Key Dates for 2024-25 Kindergarten Through Grade Twelve (K–12) Annual Audit

• 5/15/2026 – COE certifications of annual audits due to the CDE and SCO can be found on the COE Certification web page.
• 2024-25 audit reports were due by 12/15/2025. Reports and any corrective action were required to be reviewed by the governing school board by 1/31/2026. Corrective action was due to be submitted to the COE by March 15, 2026. If your 2024-25 audit report has not been completed and submitted as required, submit the report as soon as possible. The report should be presented to the board within 45 days of submission.

FY 2025-26 Supplemental Audit Guide

• The FY 2025–26 Supplemental Audit Guide will be available on the Education Audit Appeals Panel (EAAP) website . Procedures with substantive changes are listed below. For a summary of changes, see CAARO Update Issue #2026-02, issued on February 25, 2026.

FY 2026-27 Audit Guide

• The FY 2026–27 Audit Guide will be available on the EAAP website on July 1, 2026.

State Controller’s Office (SCO) 2024-25 Audit Advisory

• The SCO releases an annual audit advisory, which includes an overview of the changes proposed for the annual audit guide. The advisory for the 2024-25 fiscal year can be found on the SCO website at 2024-2025 Audit Advisory (PDF).