REQUIRED FEDERAL RECORDING AND REPORTING
To assist local school districts in responding to the COVID-19 pandemic, local school districts received Elementary and Secondary School Emergency Relief (ESSER) Funds via the CARES Act, the CRRSA Act and the ARP Act. The US Department of Education determined that facilities construction, acquisition, or improvements are allowable uses of ESSER funds. These funds may have been used to make critical improvements in schools' indoor air quality; remediate lead, mold, and other environmental hazards in aging facilities; and keep schools operating safely for in-person learning.
RECORDING FEDERAL INTEREST (Notice of Federal Interest, NFI)
As required by 2 CFR 200.316, districts that use ESSER funds to acquire or improve facilities with federal funds must record the federal interest in the property no later than January 28, 2005. This requirement will ensure that a facility continues to be used for educational purposes after a grant has ended; establishes the level of federal investment in the facility that may be recouped if the property is subsequently transferred to private ownership; and promotes nondiscrimination, including accessibility, while the property is used for the ESSER fund's educational purpose.
When $1 million or more of ESSER funds are used for renovation, major remodeling, construction, or real property projects, a school district must record a Notice of Federal Interest (NFI) by January 28, 2025. Recording may also be required if less than $1 million in ESSER funds is invested. For projects under $1 million, federal interest must be recorded:
- If the ESSER funds represent “the vast majority" of the total value (such as building with a total value of $1.5 million that used $900,000 in Federal funds)
- If US ED determines that a district is in high-risk status, US ED may require an NFI be recorded (to protect the Federal interest from other liens that could prevent the building from being used for its educational purpose)
- If the Federal interest in the project is insignificant but the project is (even slightly) above $1 million (such as building with a total value of $100 million that used $1,000,005 in Federal funds)
Notice of Federal Interest – KDE Template
REPORTING REAL PROPERTY REPORTING STATUS
Federal 2 CFR § 200.330, set by the Federal Office of Management and Budget (OMB), and implemented by the US Department of Education provides that ESSER recipients must report annually, for at least the first 15 years, on the status of the real property in which ESSER funds were invested and therefore, the federal government, has an ongoing interest.
Regardless of the amount of ESSER funds invested, districts that use ESSER funds to acquire or improve facilities must report on the status of the property annually, for at least the first 15 years. the status is reported by submitting a Federal Real Property Status Report (Cover Page) (SF-429) and Standard Form 429 Attachment A each year to KDE. If the district is approved to dispose of property with a federal interest, the district will also complete Standard Form 429 Attachment (C) in the year the property was disposed.
ESSER Real Property Status Reports
The most current version of the Federal Real Property Status Report forms and instructions can be found on this Grants.Gov web site.
- Federal Real Property Status Report (Cover Page), Form SF-429
- Federal Report Property Status Report, Form SF-429 Attachment A
- Federal Report Property Status Report, Form SF-429 Attachment C
Completed Federal Real Property Status Report forms shall be submitted to KDE by September 30, 2024. Instuctions for submitting the Reporting Forms can be found at the following link ESSER Document Upload Instructions. Completed federal real property status report forms shall be uploaded at the following link ESSER Real Property Status Reports.
Steve Lyles
Office of Finance and Operations
Division of District Support
300 Sower Blvd., 4th Floor
Frankfort, KY 40601
(502) 564-3930
Fax (502) 564-6771