Sequestration Recent USDE Guidance

Word Version

This is to notify local education agencies (LEAs) that late Friday afternoon, July 20, 2012, the U.S. Department of Education (USDE) released new guidance to states in response to technical questions about how it would implement the sequestration process written into the Budget Control Act of 2011, should it occur in January 2013.

New USDE Guidance on Sequestration

If Congress does not act to avoid sequestration, and assuming the 2013 federal appropriations for the program areas distributed by formula to the states and then to LEAs or other entities are structured similar to past history, the impact of sequestration will go into effect on January 2, 2013.  However, instead of taking sequestered funds from the 2012-2013 school year appropriations, as was described in the agency’s May 29, 2012, To the Administrator Addressed letter, this recent guidance states that the USDE “will take the sequester from funds that would become available in July 2013 for school year 2013-2014….”

Working under the reasonable assumption that Congress will enact a 2013 appropriations bill that is structured similarly to the pending House or Senate bill, USDE has decided to implement any such sequestration in a way that would not affect funding for the 2012-2013 school year.  The guidance further states, “Although most of the harm from the sequestration would not be felt in education programs until the 2013-14 school year, the damage from across-the-board cuts in that year would be severe.”

Exception

LEAs that receive funding directly from the USDE under the Impact Aid program should note that the Budget Control Act sequester could still reduce Impact Aid funds for the 2012-2013 school year.

Acting on the New Guidance

The agency has begun the process of calculating revised planning amounts, incorporating the amount previously withheld for the possible sequestration, and will release the revised planning amounts by program on a rolling basis over the next few weeks as they are completed.  LEAs will be notified via listserv once the revised planning amounts are finalized and posted on the Division of Grants Administration’s Federal Entitlements page.

Agency staff will begin making budget adjustments for the LEAs to incorporate the revised preliminary planning amounts into grant applications that have already been submitted by LEAs and processed by TEA.  The LEA may later amend the application as needed to make changes.  Charter schools and school districts that have not submitted grant applications will need to submit their application with the budget based on the revised planning amounts once released.

For Further Information

If you have any questions, please contact the Division of Grants Administration via electronic mail at GAFPC@tea.texas.gov or at (512) 463-8525.

Sincerely,

Cory Green,
Chief Grants Administrator
Office for Grants and Fiscal Compliance