ESSER Program Removed From Higher Risk Designation

AAFCPAs would like to make clients aware that the U.S. Office of Management and Budget (OMB) under the Office of Federal Financial Management released the 2024 OMB Compliance Supplement, removing the Elementary and Secondary School Emergency Relief (ESSER) program from the listing of programs with higher risk designation.

Many charter schools have undergone an audit under Subpart F of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), known as a Single Audit, for the last few fiscal years due to COVID-19 pandemic-related funding. This Federal funding has been available to charter schools through their respective state boards of education. The most significant portion of this funding is the ESSER program funds.

While these funds have been integral to helping charter schools in a post-pandemic environment, the ESSER program had been designated by OMB as higher risk on their compliance supplement since 2021. Programs with a higher risk designation are more likely to be chosen by auditors as a major program and tested under the Single Audit requirements. Removing the high-risk designation from the ESSER program will result in some consequences. If the ESSER program has been tested at the charter school for the last few years, it may not need to be tested again. This leaves other significant charter school programs open for testing (i.e., Title I, Nutrition, Charter School Program (CSP), and Special Education).

To best prepare for a Single Audit during fiscal year 2024, AAFCPAs advises that charter school clients familiarize themselves with the Uniform Guidance requirements and the 2024 OMB Compliance Supplement to ensure they have current policies and procedures in place for all federal programs.

How We Help

AAFCPAs’ Education Practice serves independent schools, colleges/universities, special education schools, education services, charter schools and charter management organizations (CMOs). We work with clients to address business and operational challenges including funding and regulatory issues, assist with capital campaign debt structure, and advise on capital campaigns. We also assist clients with complex endowments and help them fund new capital initiatives with tax credit programs.

If you have questions, please contact Nichole A. Reilly, CPA, MBA, Partner at 774.512.4016 or nreilly@nullaafcpa.com—or your AAFCPAs Partner.