CAARO Update Issue #2026-07

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 May-2026)

Federal Categorical Program Updates

Categorical Programs

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

• Federal Cash Management Data Collection (CMDC) closed on April 30, 2026. Cash balances submitted by LEAs through CMDC are used to calculate LEA apportionment payments that will be released in June 2026.
• FY 2026–27 Preliminary Allocations are being released on a rolling basis. Some programs are currently posted, and remaining programs will be posted soon: Categorical Programs.

Categorical Programs

Prop 39 CA Clean Energy Jobs Action – Recovery of Unspent Funds

• There has been a change to the Prop 39 closeout process for May 2026. After further review, we will not use the Principal Apportionment Offset in April or May 2026 and will instead issue invoices for the return of unspent funds.
• Selected LEAs will receive an invoice reflecting the amount already calculated for their agency.
• This change is intended to reduce the risk of unintended impacts on LEAs. The invoice process provides a clearer and more controlled method for returning funds, allowing your LEA to either:
  • Return the funds promptly, or
  • Notify us of any discrepancies before repayment.
  • This approach ensures accuracy and transparency for all parties as we complete the Prop 39 closeout.
  • If you have any questions once you receive your invoice, please contact us at prop39fiscal@cde.ca.gov.

Reversing Opioid Overdose

• The county office of education (COE) allocations will be available in May on the CDE’s Reversing Opioid Overdose web page, with the funds to be released in June 2026.

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

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 State Controller’s Office (SCO) can be found on the COE Certification web page.
• The 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 . For a summary of changes, see CAARO Update Issue #2026-02, issued on February 25, 2026.

FY 2026-27 Audit Guide

• The Notice of Proposed Rulemaking to adopt the FY 2026-27 Audit Guide has been posted on the Education Audit Appeals Panel website . The written comment period closes at midnight June 2, 2026.
• Written comments for consideration by EAAP should be directed to:
  Martin Vazquez, Supervisor I
  Education Audit Appeals Panel
  770 L Street, Suite 1100
  Sacramento, CA 95814
  martin.vazquez@eaap.ca.gov