CAARO Update Issue #2026-08

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 Jun-2026)

Federal Categorical Program Updates

Categorical Programs - Allocations & Apportionments

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

• The fiscal year (FY) 2024-25 Eighth Apportionments and FY 2025-26 Fourth Apportionments are expected to be released to LEAs in June 2026.
• The CARS Application for Funding is now open for FY 2026-27. The FY 2026-27 LEA Preliminary Eligibility amounts for each program have been posted to the CDE website and can be viewed by selecting the Federal Programs tab on the Categorical Programs web page. The Schedule of preliminary eligibility is available on the “Funding Results” web page for each of the ESSA programs.
• To receive an allocation, an LEA must submit an SBE approved Consolidated Application for Funding and an approved LCAP Federal Addendum by 12/15/2026.
• To receive an apportionment, LEAs with an allocation must report cash balances via CMDC.
• Preliminary Eligibility for FY 2026-27 will be updated in July, following enactment of the state budget bills.
• LEAs with an approved Consolidated Application for Funding and an approved LCAP Federal Addendum by July 24, 2026, and reported cash balances by July 31, 2026, will be eligible for payments in Q1, which will be released to LEAs in September of 2026.
• CMDC will open on July 10, 2026, for cash balance reporting.

Categorical Programs - Allocations & Apportionments

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.

Lottery

• The 3rd Quarter apportionment for 2025–26 will be released by the State Controller’s Office at the end of June, after which the apportionment letter will be posted on the CDE’s Lottery web page.
• The 4th Quarter estimated accrual for 2025–26 and revenue projections for 2026–27 will be calculated by the CDE in early July when details from the Lottery Commission are available.

Classified School Employee Summer Assistance Program (CSESAP)

• School districts and county offices of education that elected to participate in the Classified School Employee Summer Assistance Program (CSESAP) for the 2025–26 school year must request payment from the California Department of Education (CDE) by July 31, 2026. The web-based reporting application to make this notification will be available from June 22, 2026, through July 31, 2026, on CDE’s CSESAP notification web page.
• Please ensure that the amount requested for the “Total Amount of Pay Withheld from Participating Classified Employees for the 2025–26 School Year” equals the total amount withheld during the 2025–26 school year from eligible participating classified employees in accordance with the classified employees’ election choices. LEAs must not request a prorated amount or the amount paid to employees. The total amount requested statewide will exceed the amount appropriated in the state budget, and the CDE will prorate the amounts requested accordingly.
• The final state match amount will be based on the amounts requested by LEAs through July 31, 2026, and the final amount will be available in August 2026, on the CSESAP Funding Results web page.
• If you have any questions regarding this program, please contact the Categorical Allocations and Audit Resolution Office by email at csesap@cde.ca.gov.

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 closed at midnight June 2, 2026.