Dear County and District Superintendents, Special Education Local Plan Area Directors, Special Education Administrators at County Offices, Special Education Program Directors, and WorkAbility I Program Coordinators:

WorkAbility I 2025–26 Program Guidance

This letter provides updated guidance on the reinstatement of one grant condition and the continuation of temporary waivers for two grant conditions for Fiscal Year (FY) 2025–26. It also provides important information regarding student wage requirements and financial reporting expectations for FY 2025–26.

Background and Context

As set forth in the WorkAbility I (WAI) Grant Award Notification (GAN), WAI grantees must comply with applicable certifications, assurances and terms and conditions. Beginning in FY 2021–22, in response to the challenges posed by the COVID-19 pandemic and the impact of California Education Code (EC) Section 45125.1, the California Department of Education (CDE) temporarily waived three grant conditions for WAI grantees. These waived conditions were intended to provide flexibility and support to grantees navigating disruptions in service delivery and opportunities for student work experience. The waived conditions included:

1. All approved project funds must be expended within the designated award period.
2. Grantees must serve all students for which funding was received.
3. Grantees must place into employment at least 15 percent of the students for which funding was received.

This temporary policy adjustment was essential in maintaining program continuity and responsiveness during a period of uncertainty.

Reinstatement of Condition to Expend All Grant Funding

As conditions have stabilized and programs have adapted to the post-pandemic landscape, the CDE is updating its WAI grant guidance to reflect current expectations and priorities. Beginning in FY 2025–26, the requirement to expend all awarded grant funds within the designated award period is reinstated. This update reflects a renewed emphasis on fiscal accountability and program impact.

Grantees are required to plan and implement activities that ensure full utilization of their grant awards within the designated funding period. The WAI FY 2025–26 Budget Revision window will open on April 1, 2026, and close on June 1, 2026. Grantees that do not anticipate expending their full allocation should submit a Budget Revision during this timeframe. Any unspent funds may be subject to reduction and may impact eligibility for future funding. Additionally, grantees that fail to fully expend their FY 2025–26 WAI grant funds may be placed on Conditional Status for FY 2026–27. Information pertaining to fiscal and programmatic requirements can be found in the WAI Fiscal and Program Handbook (PDF).

Fiscal Year 2025–26 Waivers to Grant Conditions

To support continued flexibility in service delivery, the CDE will continue to temporarily waive the following two conditions for FY 2025–26:

1. Grantees must serve all students for which funding was received.
   • While grantees will not be penalized if they are unable to serve all students for whom funding was received, grantees must report expenditures based on the actual amount of funding used to serve students. Remaining funds may be reallocated to other approved grant activities, in accordance with guidelines outlined in the WAI Fiscal and Program Handbook (PDF).
2. Grantees must place into employment at least 15 percent of the students for which funding was received.
   • Grantees will not be penalized if they are unable to place at least 15 percent of the students funding to serve in WAI-funded paid work experience opportunities.

This approach recognizes the ongoing challenges grantees may face in outreach and placement as a result of EC Section 45125.1, while still emphasizing meaningful engagement and outcomes.

Although these two grant conditions are being waived for FY 2025–26, WAI grantees must adhere to the remaining conditions of the grant award as set out in the FY 2025–26 WAI GAN.

Next Steps for Grantees

• Review current budgets and spending plans to ensure full expenditure of funds within the fiscal year.
• Document any barriers to full expenditure and communicate with your local educational agency’s Fiscal Department, as needed.
• Continue to prioritize quality of service and student outcomes, even as placement and service requirements remain temporarily waived.

California State Minimum Wage

As grantees plan for student work-based learning opportunities, please note that the California State minimum wage rose to $16.90 on January 1, 2026. Any WAI grantee seeking clarification regarding student wages pertaining to the California State minimum wage, local city and county minimum wages should consult their local counsel.

California School Accounting Manual

The CDE reminds WAI grantees that they are required to follow the definitions, instructions, and procedures in the California School Accounting Manual (CSAM) (see EC Section 41010). Operating agencies and districts are mandated to follow CSAM guidelines for conformity with generally accepted accounting principles, which are essential for consistency and comparability in financial reporting. The CSAM is to be used for classifying, developing, and recording all revenues and expenditures for the WAI program.

The CSAM may be viewed and downloaded at the CDE Definitions, Instructions, & Procedures web page. Please refer to the CSAM website to view the object classification codes. It is the responsibility of WAI grantees to review the complete listing of object classification codes in the CSAM and to check for updates to this document.

If you have additional questions regarding the information in this letter, please email the WAI inbox at Workability1@cde.ca.gov.

Sincerely,

Dr. Rachel Heenan, Director
Special Education Division
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