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Grants and Other Financial Assistance Programs: FY2012

State Fiscal Stabilization Fund
Fund Code: 780

Purpose: The State Fiscal Stabilization Fund (SFSF) program, which is funded through the American Recovery and Reinvestment Act (ARRA) of 2009, is a one-time appropriation the U.S. Department of Education (USED) is awarding to governors to help stabilize state and local budgets in order to minimize and avoid reductions in education and other essential services.
Priorities: USED encourages school districts to help meet the commitment that governors have made in their state SFSF applications by using their SFSF grants in ways most likely to lead to improved results for students, long-term gains in school system capacity, and increased efficiency and effectiveness.

While there is no requirement that districts spend a certain percentage of their SFSF funds on investment versus recovery activities, the Massachusetts Department of Elementary and Secondary Education (Department) is advising districts to split SFSF grant funds between saving jobs and strategic investment-that is, for program improvements that will provide enhanced educational opportunities and/or cost savings that will extend beyond the limited two-year life of this unprecedented grant program.

The following two priorities, established by USED, guide the use of ARRA education funds:
Priority-Recovery: Spend funds quickly to save and create jobs.

Priority-Investment:Improve student achievement through school improvement and reform in at least one of the following four areas:
  • Educator Quality and Effectiveness -Activities that will result in increased educator effectiveness and equitable distribution of qualified teachers, para-educators, administrators, and other personnel.
  • Support and Intervention -Activities that will result in increased implementation of intensive and effective systems, supports, and programming for the district's lowest performing schools and students.
  • Assessment and Data Systems -Activities that will result in increased implementation of high-quality assessment and data systems to track progress and foster continuous improvement.
  • College and Career Readiness -Activities that will result in greater numbers of students effectively prepared for college and careers.
The Department encourages districts to consider using their ARRA SFSF grants to support and strengthen regional and collaborative approaches in order to achieve efficiencies and economies of scale that will last beyond the life of ARRA funding. This could include partnering with other districts, educational collaboratives, non-profit organizations, colleges and universities, and professional associations in making strategic investments.
Eligibility: Under ARRA, the state is required to use its primary funding formula for K-12 education, which in Massachusetts is the Chapter 70 formula, to determine each district's eligibility for SFSF funds. In FY11, the governor and legislature used SFSF grants to offset reductions in Chapter 70 funding for all operating districts. All operating districts were eligible to receive SFSF grants in FY11, for a total of distribution of $20,667,813. For the first quarter of FY12, only districts that have remaining SFSF funds are eligible to apply.
Funding: FY2012 Q1 allocations: Final SFSF awards are included in the SFSF workbook in the Required Forms section below. All SFSF grant funds must be obligated by September 30, 2011.
Fund Use: In general, SFSF grants may be used for any educational expenditures that would be eligible under the Elementary and Secondary Education Act/Impact Aid Act (ESEA), the Individuals with Disabilities Education Act (IDEA), the Adult Education and Family Literacy Act (AEFLA), and the Carl D. Perkins Career and Technical Education Act (Perkins Act).

Eligible expenses include any FY12 expenses directly related to the school district's operation, with the following exceptions*:
  • maintenance costs;
  • stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public;
  • purchase or upgrade of vehicles;
  • improvement of stand-alone facilities whose purpose is not the education of children, including central office administration, operations, or logistical support facilities.
*See Part III - Required Program Information, Assurances section.

Eligible expenses can include expenses in the school department budget as well as expenses in other municipal department budgets that directly support the operation of the schools.

SFSF grants are no longer exempt from the 9% MTRS pension chargeback requirement. MTRS is calculated on the Budget Pages.

Districts' net school spending requirements will continue to be based on the sum of the municipality's minimum required contribution and the district's state-funded Chapter 70 aid. Any district that is not using all of its SFSF grant for net school spending purposes will need to document whether it will be able to meet its foundation budget target using other sources of funds. If a school committee chooses to set an operating budget lower than its foundation budget target, it will need to document the reasons for that decision and how it proposes to ensure that all students receive an adequate level of services.
Project Duration: July 1, 2011 - September 30, 2011**

**All SFSF funds must be obligated by September 30, 2011.
Program Unit: Office of Strategic Planning, Research, and Evaluation
Phone Number: (781) 338-3116
Date Due: Applications must be submitted by June 17, 2011.
Required Forms: Download MS EXCEL file  FY12 Q1 ARRA - SFSF Workbook
Additional Information: Districts must comply with quarterly ARRA reporting requirements.

Download PDF Document  For additional guidance: Guidance on the State Fiscal Stabilization Fund Program
Submission Instructions: Complete and submit the application workbook through the Security Portal. Mail (2) copies of the Cover Sheet, each with the Superintendent's original signature, to:
School Business Services
Massachusetts Department of
Elementary and Secondary Education
75 Pleasant Street
Malden, MA 02148-4906

Last Updated: June 1, 2011
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