Few strings for colleges on how to spend record federal Covid relief dollars

From Berkeley to USC to community colleges and beauty schools, California higher education is awash in cash from more than $9.5 billion in federal Covid-19 relief meant for student grants, emergency equipment, reimbursements for lost revenue and other programs to ease the effects of the global pandemic.

The Golden State’s share of money awarded by Congress across three major pandemic relief bills to what’s called the Higher Education Emergency Relief Fund is by far the nation’s largest, over $3.5 billion more than second-ranked Texas, records show. The state’s total award across 497 universities, colleges and trade schools is bigger than the gross domestic products of 54 individual nations, according to World Bank data.

“It’s just oodles and oodles and oodles of money,’’ said Wendy Brill-Wynkoop, president of the Faculty Association of California Community Colleges. She, like many, is monitoring the tremendous influx of once-in-a-lifetime cash. Combined with a state budget flush with a record surplus, community college “districts are receiving more money than they have in years,” she said.

Nationwide, 5,177 colleges will share more than $69 billion from the relief bills, with about half of the money tagged for direct aid to students.

With Congress and Presidents Donald Trump and Joe Biden attaching few strings to the funding, it’s going to take years to flesh out exactly how all the money was spent, if then.

As California emerges from the pandemic, its economy revs up and students return to classrooms, most of the federal money has yet to be spent.

As of April 30, colleges nationally had spent only 28% of the money, an EdSource data analysis shows. California’s colleges had spent 26%.

Washington’s spigot will remain open, giving colleges and universities about a year after their last round of funding to spend all monies received, according to guidance to colleges.

Half of the money flows through colleges to students in grants and aid meant to get them through the pandemic’s hard times. The remainder falls into wide categories to make up for lost revenue to colleges from sources like parking and food sales, and to buy personal protective equipment, cleaning supplies, lab equipment and to train professors to teach online.

A breakdown of $69 billion in federal Covid relief to the nation’s colleges and universities

EdSource has gathered for easy public view newly available federal data, with tables, charts, and maps which detail funding and spending across the country.

“The lack of controls about how this money should be spent is a blessing and a curse,” said Kevin Cook, associate center director of the Public Policy Institute of California’s Higher Education Center.

Often, Cook said, one-time money to higher ed “comes with handcuffs that stops them from being able to do what’s best for the college.”

But with the unprecedented federal money, the policy institute “heard from a number of different policymakers who asked, ‘How do we spend this amount of one-time funding?’ Sometimes having that much money can be tough politically.”

The complex ways education funds are allocated and spent muddle efforts to follow the money, Cook added: “Tracking dollars through higher education institutions is really, really difficult. Just the fungibility of it and how it all often gets blended together before it’s redistributed.”

But Cook also said it is prudent for the colleges to not rush through the money, noting uncertainty around Covid and a changed world.

“There are a lot of ways to spend all this money,” he said, and it makes sense that time and thought are put into how that is accomplished.

How to spend it all?

As the pandemic ebbs, questions remain about how to best use the funds.

Brill-Wynkoop from the faculty association, said that among the ways the community colleges should spend some of the money is to give stipends to thousands of part-time faculty members who did extra, unpaid work transitioning to remote teaching.

Unlike full-time professors, she said, they are paid only for the time they are in front of students, and most have received nothing for time spent learning and preparing to teach online.

But because faculty employment contracts are negotiated at the state’s 73 community college districts by local unions and not at the state level, there is little to no uniformity in how part-time academics are compensated.

“That’s a significant challenge that hinders our ability to provide equitable resources for our part-time faculty,” Brill-Wynkoop said. Some districts have given federal money to part-timers to pay for the extra work, some haven’t, she said, adding, “It’s so inconsistent.” The association advocates for faculty, but it is not a union and can’t negotiate contracts.

But other than having to direct money to students, colleges are largely on their own over how to spend their allotment within broad federal categories. Some have deferred maintenance. Others lost revenue from canceled sporting events or from not renting out their facilities. Some needed to buy additional lab equipment so students who remained on campus could work at safe distances.

The biggest limitation on the money is that colleges can’t use it for new construction projects, buying land, or for salaries, benefits or bonuses for executives, according to U.S. Department of Education rules.

With so much money pouring in, the only consistency in its use seems to be that it’s being used inconsistently school by school.

Amazon orders

In March 2020, at colleges all over the state, students, professors and administrators skidded toward an abyss as shutdown orders swept California. If they went over it, the semester would be lost, an unprecedented scenario no one wanted.

The only answer was to pivot to remote instruction as fast as possible. But colleges serving low-income students soon found many of them lacked good laptops and reliable internet access.

Among them was tiny Palo Verde College in far eastern Riverside County along the Colorado River, where college officials knew they couldn’t wait for outside help. Just more than 46% of Palo Verde’s students are low income.

At first, the college experimented with students working on papers at home — sort of like old-fashioned correspondence courses. When school officials found out some couldn’t even afford the postage to mail in their work, drop boxes were placed in Blythe and Needles, the population centers the college serves. But it was painfully clear that the students needed modern equipment, said Stephanie Slagan, Palo Verde’s vice president of administrative services.

Calbright, the state’s online community college, loaned Palo Verde excess laptops, but they didn’t cover the need. And Congress hadn’t even passed the first Covid relief bill yet.

“When Covid hit, we were right in the middle of the semester,” Slagan said.

There was no time to wait. So Slagan did what it seemed like everyone did as the pandemic halted regular life, but goods were still needed. She got on Amazon.

Indeed, colleges across the nation were scouring the web to get equipment, so instruction could shift to the internet.

Colleges were “buying the stuff on Amazon and wherever you could find it and shipping it,” said Kristen Soares, president of the Association of Independent California Colleges and Universities, which represents private nonprofit schools. Some even bought refurbished laptops or got them from nonprofits that fix up old computers and give them to the needy, she said.

“Then you’re calling the student to make sure the student received it. No one wanted any student to have an excuse to say, ‘I can’t be in class,”’ Soares said.

California’s colleges reported spending slightly more than $800,000 of relief money on computers, tablets and related hardware for students in 2020, according to an EdSource analysis of federal data. That figure is expected to increase as colleges make more purchases and update their reports, officials said.

Colleges worked together at times to leverage better prices. Some community colleges used a program called CollegeBuys to make joint purchases. Purchasing officers at CSU campuses held remote meetings, looking for bargains.

At Palo Verde, computer mouses, backpacks built for laptops, internet hot-spot devices and Chromebooks flowed into the college. In all, the college spent $51,000 for the equipment, records show.

Staff quickly delivered the gear to students’ homes. Their semester was saved.

Palo Verde ranks next to last among the state’s 115 brick-and-mortar community college campuses in the federal money it is receiving, a little more than $3 million. The district reimbursed itself for the equipment from the first round of federal money.

Rather than using the free federal money for computers, the Oakland-based Peralta Community College District bought 9,000 laptops at a cost of $3.5 million for students at its four colleges, tapping $2.7 million from a local bond measure and $808,000 from a state grant, leaving the federal money to be spent elsewhere, spokesman Mark Johnson wrote in an email.

Peralta used its relief money “primarily” for personal protective equipment-related expenses, stipends and student aid, Johnson wrote. Overall, the district’s four colleges are scheduled to receive just more than $65 million. About $4 million of it, Johnson said, will be used to forgive student debt.

State records show that Peralta’s four colleges, like nearly every community college in the state, received large amounts of PPE (personal protective equipment) from the state Office of Emergency Services at no cost. Paul Feist, a spokesman for state Chancellor Elloy Oakley, said the state supply met “a very large portion” of the colleges’ needs.

Johnson said Peralta bought its own PPE “at a time when it was very difficult to get and very vital to protecting” the district. “It was only later in the pandemic that free PPE became available.”

Little review

Of the more than $9.5 billion coming into California, the biggest chunk, just less than $4.2 billion, will go to community colleges, with nearly $2.8 billion to California State University campuses and a little more than $1.3 billion to University of California campuses. These numbers do not include other Covid aid received by university medical centers and research programs.

The federal dollars flow directly from Washington to colleges, with public-college money bypassing the three systems’ central offices.

Private, nonprofit colleges can expect $911 million.

UC and the community college system have no plans to audit how the money is spent at individual campuses, spokespersons said. Federal law “does not provide us with the responsibility or authority to do audits on these funds,” said Feist, the spokesman for the community college chancellor.

The CSU system routinely audits all federal money it receives and will include the pandemic funds in those reports, spokesman Michael Uhlenkamp said.

But individual colleges do have some reporting duties. Schools spending more than $750,000 of federal money in a year must submit an annual audit of the funds to the U.S. Department of Education, according to a March letter sent to colleges.

Schools that spend less must retain documentation on their spending for three years in case the federal Government Accountability Office later decides to individually audit or investigate, Tiwanda Burse, a deputy assistant education secretary, wrote colleges. All colleges are required to also submit annual reports on the spending, but details are scant.

Records show that 4,476 colleges of all kinds across the country received relief money, including 3,386 that got enough to qualify for an audit. It is unclear if the department will have the capacity to review what is filed.

In the reports required of the colleges, use of the federal money is dumped into broad categories, like “campus safety and operations,” or “providing reimbursements for tuition, housing, room and board, or other fee refunds,” and the ubiquitous “other” category.

There are no requirements that receipts for purchases, invoices or anything showing where the money was actually spent are posted. State law requires public colleges to provide those types of documents only on request, a process that can take months.

Private colleges face no such requirement, even when spending public dollars.

Some for-profits turned down aid

In California, 167 colleges, most of them small for-profit schools, received less than $750,000 in total funding from the December 2020 round of funding and face no auditing.

At least 31 were beauty schools. But many others didn’t even ask for relief money, said Fred Jones, a lawyer and lobbyist for the Professional Beauty Federation of California, a trade group.

They cited “the paperwork nightmare” in applying for the money and fear of getting entangled in the federal bureaucracy, Jones said, even though the government urged them to pursue funding, so their students could receive emergency grants.

Jones said beauty school owners “were concerned that students may have to pay back some of this money if they were ever audited, or even schools might be responsible. Government officials were reaching out to our schools pitching this new program, so it struck many as odd.”

California’s most prestigious private university also didn’t take money.

Stanford, with an endowment of nearly $28 billion, announced in April 2020 it was declining $38 million in federal aid, so it could be spent elsewhere.

“This crisis represents an existential threat for many of the smaller colleges and universities that are such a critical part of the fabric of higher learning in the United States,” Stanford officials said in a statement. “We believe strongly in the importance of keeping these institutions viable in order to provide access to higher education for as many students as possible.”

Every public college in the state accepted the money.

As they spend it down, a government transparency expert said officials at those schools must remember they are publicly accountable for its use.

“Public institutions have to be held to a higher standard,” said David Snyder, executive director of the First Amendment Coalition, a nonprofit group based in Marin County. Transparency helps prevent “waste, fraud and abuse,” he said, and “helps ensure these institutions are spending money wisely.”

U.S. Rep. Mark DeSaulnier, D-Concord, a member of the House Education and Labor and Government Oversight and Reform committees, called the pandemic emergency a “once in a hundred-year event.” It was Congress’ clear intention that the first round of money, part of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, passed in March 2020, be used in the spirit of emergency relief.

“My expectation was that it be spent quickly and appropriately, but also that it might not be,” he said in an interview.

There have been discussions in Congress, “especially from Republicans,” that too much aid was given, DeSaulnier said. Now, “as we come out of the emergency, we expect people to cooperate in the spirit that we use these monies responsibly. We’re going to have to stay on this.”

EdSource data journalist Daniel J. Willis and web designer Justin Allen contributed to this story.

Tomorrow: How one California campus, the statewide leader in Covid aid, starts spending its millions.

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