Federal government confirms $9.7 million owed to KPBSD by the state

The State of Alaska is facing a major financial crisis as it owes the Kenai Peninsula Borough School District nearly $10 million in COVID-19 relief funds. This revelation comes after a letter from the U.S. Department of Education labeled Alaska as a high-risk grantee due to non-compliance with the requirements set forth in the federal American Rescue Plan Act.

The federal government has pointed out that Alaska is the only state that has failed to meet these requirements and has not provided a plan to repay approximately $29 million to four school districts that were underfunded. This designation puts an additional $425 million in federal funding for Alaska schools at risk.

The Anchorage School District is owed $16.6 million, KPBSD $9.7 million, the Fairbanks North Star Borough School District $3.1 million, and the Juneau Borough School District $204,000. The issue stems from the state’s failure to comply with the “maintenance of equity” provisions aimed at supporting school districts serving low-income students.

DEED has disputed the federal government’s claims, stating that Alaska has already met the requirements through its funding formula based on student enrollment. However, the federal government argues that the decrease in state funding for school districts, due to lower student enrollment during the pandemic, makes Alaska non-compliant with the requirement not to decrease funding and then make up the difference with federal grant money.

The Senate Education Committee is set to hold an emergency meeting with DEED staff to address the situation and determine the next steps. The KPBSD Superintendent has expressed hope that the outstanding funds would be a “game changer” for the district, which is facing a significant deficit for the upcoming fiscal year.