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Federal Updates from Washington, D.C.�March 2026

Tiffany Kesslar, Esq.

tkesslar@bruman.com

The Bruman Group

www.bruman.com

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TIFFANY KESSLAR, ESQ.

Represent State and local educational agencies
What we cover:

EDGAR, UGG, GEPA, etc.
Education Programs, including ESEA, IDEA, Perkins, School Nutrition, Head Start, Federal Financial Aid, etc.

How we can help:

General consulting services and support
Develop/review grants policies and procedures
Internal control testing / mock audits
Training and workshops (in person or virtually)
Audit resolution and defense
Administrative appeals, etc.

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DISMANTLING THE DEPARTMENT �OF EDUCATION

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IMPROVING EDUCATION OUTCOME BY EMPOWERING PARENTS, STATES, AND COMMUNITIES

(a) The Secretary of Education shall, to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities while ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely. – EO, March 20, 2025

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DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) 1953-1979

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THE DEPARTMENT OF EDUCATION ORGANIZATION ACT (PUBLIC LAW 96-88) OCTOBER 17, 1979

Outlines which ED offices and staff are required by law
There shall be in the Department, for example:

Assistant Secretaries of OESE, Post Secondary, OCTAE, OSERS, Civil Rights and related offices and staff
Inspector general, general counsel

Outlines limits to Secretary to reorganize, move, discontinue or transfer functions vested by statute
Items not listed/ discretionary, within Secretary’s authority

Statutes Vesting ED with Authority:

Impact Aid (1950)
HEA (1965)
ESEA (1965)
GEPA (1968)
Rehabilitation Act (1973)
IDEA (1975)

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ACTIONS SINCE JANUARY 2025

Multiple reductions of force

March 11, 2025

Reduced ½ ED workforce
Preliminary injunction lifted by Supreme Court – Terminations went into effect.

October 10, 2025

Paused due to preliminary injunction
Terminations reversed due to FY Budget Bill

Terminations of discretionary awards
Numerous interagency agreements to transfer programs.

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TRANSFER OF PROGRAMS�

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DOD

DOJ

DOI

State Dept

HHS

DOL

EDGAR

BIE

Treasury

UGG

State laws

Local laws

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INTERAGENCY AGREEMENTS (IAAs)

9 IAAs to Date

ED’s New IAA website: https://www.ed.gov/about/initiatives/returning-education-states

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May 21, 2025

OCTAE 🡪 DOL

September 30, 2025

OESE/Postsecondary 🡪 DOL
Indian Education 🡪 Interior

TBD?

OSERS/OSEP 🡪 HHS?

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OESE IAA

ED executed such an Interagency Agreement with DOL on

September 30, 2025

Applies to: The Elementary and Secondary Education Act (ESEA)

Does not include Indian and Native American Programs which have been transferred to the Department of the Interior.

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INTERAGENCY AGREEMENT TERMS

Lead Office – DOL Employment and Training Administration (ETA)

Will “carry out the following activities” with ED

Admin of ESEA Programs

Title I, A; N&D, Migrant, Title II, A, Title III,A, SSAE, 21stCCLC, Charter School Programs, Rural, Magnet, Impact Aid, Education of Homeless and Youth, Consolidated Grant

Implementation of programs…
Execute monitoring visits to ensure discretionary grantee’s compliance
Technical assistance to OESE staff
Assistance in managing and coordinating contracts, program admin, etc. for OESE staff
Monitoring states’ drawdowns of funds to help ensure grant funds do not lapse and are used to provide career and technical education programs

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IAA TERMS (CONT.)

USED will

Provide management and leadership in accordance with the ED Org Act
Coordinate and partner and liaison with representatives of other agencies (OIG, IRD, GAO, etc.)
Single audit resolution
Manage and coordinate HR
Oversee EEO programs
Monitor internal controls and risk assessments for programs
Develop program notices for Federal Register
Review annual performance and fiscal reports
Issue annual grant awards to states
Execution of budgets
…“and all other activities statutorily required.”

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PUSHBACK ON INTERAGENCY AGREEMENTS?

Not really!
ED “shall support staffing levels necessary to fulfill its statutory responsibilities including carrying out programs, projects, and activities …in a timely manner.”
2026 Budget included a Joint Explanatory Statement expresses “concern” about IAAs, requests biweekly briefings from ED

Offers tacit permission to conduct IAAs
Implies the only issue is Congress being out of the loop
JES is not binding

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OCTAE/OPE PROCESS – SEPTEMBER 2025

OCTAE implementation started Sept 2025

Move to new “GrantSolutions” system

Information sent at the last minute giving short notice on plans
Proper banking information not delivered until the last minute
Short period of funding unavailability

Employees starting to move from ED to DOL

This is a “detail” – they still work for ED
But may have DOL email addresses?
Reports say staff are confused about when they’re going and what they need to bring

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OCTAE/OPE PROCESS – OCTOBER 2025

Shutdown October 1 – November 12, 2025

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OCTAE /OPE PROCESS – NOVEMBER 2025

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https://www.govexec.com/management/2026/01/education-begins-moving-out-employees-even-congress-says-it-lacks-authority/410806/

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OCTAE/OPE PROCESS – NOV 2025 (CONT.)

An “after action report” obtained by trade press says:

“The size and scope of OCTAE's programs are miniscule [sic] compared to other [Education Principal Operating Components] and programs… Larger formula grants and competitive grants are going to be much more difficult to migrate.”
ED should “seek to provide 'creature comforts' to employees to help ease the transition, according to its report, such as ensuring they have parking spots at their new locations."
“Career staff will see how much we care through our actions in ensuring their personal needs are met during the transition.”
“Care must be taken to create the narrative that we are eliminating points of slippage and friction that result from similar programs being administered across multiple federal agencies, which causes states to replicate duplicative administrative state agency postures to engender support from the field,” Education said in its report.

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OCTAE/OPE PROCESS – DECEMBER 2025

Since October 1, the joint agencies have successfully processed nearly 800 payment requests from 43 unique states and territories and onboarded all grantees to DOL’s GrantSolutions and Payment Management System, which is the payment management and grant system used by the majority of all federal agencies.

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https://www.ed.gov/about/news/press-release/us-department-of-education-and-us-department-of-labor-celebrate-successful-implementation-of-workforce-development-partnership#:~:text=Background:,after%20the%20transition%20process%20began

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OCTAE/OPE PROCESS – JANUARY 2026

Began moving ED staff to Labor

40-50 employees
“Do your work at Labor”
“Detailed workers will not be provided parking at Labor, so Education has instead hired vans to run twice per day to shuttle them between the Education building—where employees will maintain their parking spots—and Labor’s.

If the shuttle time does not align with their scheduled work hours, employees may have to spend part of their day working at Education before taking the shuttle over to Labor.”

When working on still-active, existing grants from prior years, however, employees detailed to Labor will still have to tap into Education’s own software, one Education official said. They will use the HHS application only for newly awarded grants

https://www.govexec.com/management/2026/01/education-begins-moving-out-employees-even-congress-says-it-lacks-authority/410806/

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OCTAE/OPE PROCESS – FEBRUARY 2026

While staffers have been told they are allowed to use their old workstations, many have elected to make the trek to their new offices — even when their identification cards didn’t initially work at the Labor building.

Had to use DOL’s visitor entrance, their ED-issued laptops — couldn’t connect to the wireless network without a technical workaround.

“It’s like having a supervisor who wants you to fail,” one federal worker told POLITICO.

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OCTAE/OPE PROCESS – MARCH 2026

60 ED employees detailed to Labor

Described labor offices as “unsafe and in disrepair”

Water is leaking from ceilings
Mold in kitchen
Failed HVAC system
Insect traps filled with dead bugs
Dead rodents in the walls

Union rep – calling to immediately address these hazardous conditions and to end these unlawful agreements so the employees can return to ED

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SO THEN HOW WILL OESE TRANSITION GO?

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OESE TRANSFER TO DOL

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OESE TRANSFER TO DOL *

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~$27.9 billion

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HHS PAYMENT MANAGEMENT SERVICES

EDGAR and the UGG still apply!!

“Defend the Spend”

Delays
Logistical concerns and higher burden

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EO: IMPLEMENTING THE PRESIDENT’S "DEPARTMENT OF GOVERNMENT EFFICIENCY" COST EFFICIENCY INITIATIVE

“Defend the Spend” is a U.S. government initiative, from the Department of Government Efficiency (DOGE) under the Trump administration

Requires detailed, upfront justifications and receipts for federal grant fund draws to increase transparency and prevent misuse
So far, it has caused significant payment delays, backlogs, and confusion for grantees in healthcare, research, and social services by adding redundant review layers to already monitored funds.

It aims to stop questionable spending (like luxury items with COVID relief funds) by forcing agencies to justify routine payments,
Already complaints that it hinders essential services and is overly burdensome, leading to calls for risk-based streamlined oversight

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FROM THE COUNCIL ON GOVERNMENT RELATIONS

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https://www.cogr.edu/sites/default/files/FINAL%20Infographic%20and%20Appendix.pdf

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WHAT’S NEXT

Transfer of OESE

New contacts?
Timing

Confirmed move funds over to Labor by July 1!

Closure of ED?

Must involve Congress!

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(Note: not paid with federal Funds)

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WHAT DO WE DO?

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WHAT DOES THIS MEAN FOR GRANTEES?

Potential delays in funding /reimbursements

Potential for delays for final allocations and other grant amounts
Delays in discretionary grant competitions/awards
Reimbursement delays
Length may differ by state agency

Potential delays in communication from ED

New guidance or response to questions for technical assistance

Less active monitoring/enforcement

But doesn’t eliminate grantee responsibility to comply with federal rules
Still have to do reporting and get single audits

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WHAT CAN YOU DO?

Document decision-making and internal policies and procedures (as well as efforts to seek answers from ED)
Don’t forget regular monitoring/ audits
Keep collecting data for reporting purposes, and document any decisions made on parameters (as well as efforts to seek answers from ED)
Build wiggle room into budgets to accommodate last minute changes

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School Choice

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TYPES OF SCHOOL CHOICE OPTIONS

Available funding depends on the school choice options.

Public school choice (transferring within district schools)
Parent choice of services
Charter Schools
Virtual Schools
Government funding for parents/families
Private Schools

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SCHOOL CHOICE FUNDING

School choice programs generally provide government funding that parents can use to pay for educational expenses such as private school tuition, homeschooling costs, tutoring, special education services, etc.
Different types of school choice funds:

Federal grants: Charter school grants, school improvement, ESEA, etc.
Direct payments: The government pays the parents directly (vouchers)
Tax credits: Parents can take tax credits for tuition payments
Scholarships: Nonprofit organizations may offer scholarships to parents
Education savings accounts: The state sets aside money in individual accounts for students

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STATES WITH SCHOOL CHOICE PROGRAMS��(includes education savings accounts, vouchers, and tax-credit scholarship programs)

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RECENT PROPOSED BILLS

H.R. 833 Educational Choice for Children Act (2025)

A tax credit bill that would fund scholarships for students to cover K-12 education in public and private schools.

S. 1810 Universal School Choice Act (2025)

A bill to provide tax credits for donations to scholarship granting organizations

S. 311 Achieving Choice in Education Act (2025)

Would amend the IRS code of 1986 to provide tax incentives for education.

H.R. 2275 Support Children Having Open Opportunities for Learning of 2025 or the SCHOOL Act of 2025 (2025)

A bill that allows some ESEA and IDEA funds to follow the student

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ONE BIG, BEAUTIFUL BILL TAX CREDIT PROGRAM

Allows individuals to receive up to $1,700 in tax credits for donating to nonprofit scholarship-granting organizations (SGOs)

SGOs can then distribute scholarships for educational expenses like private school tuition, tutoring, transportation, special education services, homeschooling

Families earning up to 300% of their area’s median income are eligible for scholarships

Example – Mean income $91,000 = Eligible up to $270,000
But States must opt in and can establish its own restrictions/requirements

Program scheduled to begin on January 1, 2027;

Regulations expected from Treasury Dept. Treasury issued notice for comment on Nov. 25; accepting comments until Dec. 26 (not the proposed regs yet). Does NOT impact Title I or any other education formula programs

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STATES OPTED IN TO BBB TAX CREDIT (AS OF SEPT 2025)

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CHARTER SCHOOL PROGRAM GRANTS

All CSP grants are awarded by ED competitively

Multiple grants available to support charter schools

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SCHOOL CHOICE LETTER �(MARCH 31, 2025)

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SCHOOL CHOICE LETTER (MARCH 31, 2025)

Highlights the Direct Student Services optional 3% State set-aside (Sec. 1003A)
Competitive grants to LEAs

“While a State cannot direct or limit the use of these funds by LEAs, the State could establish priorities to award these funds to LEAs that align with the State’s priorities and goals.”

States could award points in competitive process for activities that it believes or has evidence the activity will provide parents the most choices and maximize the impact of these funds

https://www.ednc.org/wp-content/uploads/2025/03/OESE-Letter-to-State-Chiefs-Title-1-Part-A-Guidance-March-31-2025-.pdf

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DIRECT STUDENT SERVICES PRIMER

Reiterates allowable activities from ESEA:

Academic/CTE coursework aligned to academic / industry standards
Credit recovery;
Post-secondary instruction and examination costs, including Advance Placement and International Baccalaureate test fees;
Transportation to another public school for students in CSI schools (only if not using Title I-A funds for this purpose);
High Quality Academic Tutoring.

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ISN’T THIS NCLB’S SUPPLEMENTAL EDUCATION SERVICES?

Similarities

States must compile a list of providers, monitor effectiveness and remove if provider is unsuccessful.
Families select providers

Differences

Broader allowable uses
LEA decides if they will offer tutoring (but statute requires the SEA to ensure that each LEA “is able to provide an adequate number of high-quality academic tutoring options” (implying that inclusion is mandatory).

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LETTER ON ESEA SCHOOL CHOICE INITIATIVES (CONT.)

Notes flexibility for school choice options under schoolwide/targeted assistance programs:

Schools operating schoolwide programs “could choose to implement a program that … allows parents to choose the best activity to meet their child’s educational needs.”

Must be consistent with needs assessment and SW plan

“A school could identify a range of dual enrollment opportunities, academic tutoring programs, and career and technical education activities that are available for students and let parents select the best option for their child.”
LEA may use homeless reservation to serve those students and provide these choices to parents

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SCHOOL CHOICE LETTER �(JUNE 26, 2025)

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LETTER ON USING SCHOOL IMPROVEMENT TO EXPAND SCHOOL CHOICE (JUNE 26, 2025)

Focuses on areas within school improvement where States/LEAs can expand parental choice and offer public school choice

Suggests States could prioritize LEA applications that provide a menu of options for students that allow parents to choose the best activity to meet their child’s educational needs

A State could determine those LEAs are demonstrating the strongest commitment to use its ESEA section 1003(a) funds to support the lowest-performing schools and improve achievement.

https://www.ed.gov/media/document/dear-colleague-letter-parental-choice-schools-identified-support-and-improvement-june-26-2025-110290.pdf

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LETTER ON USING SCHOOL IMPROVEMENT TO EXPAND SCHOOL CHOICE (CONT.)

LEA can offer school choice to students enrolled in CSI school to transfer to a non-CSI identified school served by LEA

LEA can use up to 5% of I-A allocation to pay for extra costs of transporting those students*
Must be consistent with state law and general choice provisions.

An LEA can use 1003(a) funds to offer public school choice for students to transfer from a CSI, TSI, or ATSI school as part of its support and improvement plan.

1003(a) funds can also be used to provide parents with information about their public school choice options.

*If an LEA reserves the 5% noted above, it may not use 1003(a) funds for this purpose.

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OTHER RECENT �ESEA GUIDANCE

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GUIDANCE ON THE USE OF FEDERAL GRANT FUNDS TO IMPROVE EDUCATION OUTCOMES USING ARTIFICIAL INTELLIGENCE (AI) (JULY 22, 2025)

Outlines how AI may be used across key educational functions and affirms that such uses are allowable under existing federal education programs

The Department affirms the following principles for all AI-related educational initiatives:

Educator-led, ethical, accessible, transparent and explainable
Data-protective (comply with privacy laws like FERPA)

https://www.ed.gov/media/document/opepd-ai-dear-colleague-letter-7222025-110427.pdf

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LETTER ON ESEA FLEXIBILITY (JULY 29, 2025)

Highlights various areas of flexibility under ESEA:

Innovative Assessment and Accountability Demonstration Authority
State discretion with respect to high schools (rank and serve)
Transferability (Sec. 5103)
Consolidation of funds for State administration
Waiver authority in Sec. 8401

https://www.ed.gov/media/document/dear-colleague-letter-esea-flexibility-and-waivers-july-29-2025-110440.pdf

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EQUITABLE SERVICES LETTER (AUGUST 21, 2025)

Emphasizes consultation requirements for Title I equitable services
Encourages States to provide a guide/rubric to private school officials and LEAs to make the consultation process more efficient
Reminds LEAs of parent and family engagement responsibilities for non-public schools
Suggests LEAs build a menu of options for activities that private school parents can choose from
https://www.ed.gov/media/document/dear-colleague-letter-equitable-services-school-choice-guidance-august-21-2025-110531.pdf

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UPCOMING UNIFORM GUIDANCE UPDATES

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POTENTIAL UGG UPDATES

No set timeframe provided.
Streamline requirements
Align with current Executive Orders
Risk focus

Reduce risks of improper payments, misuse of payments or funds not being used to assist program beneficiaries

Pre-award focus by federal agencies

Must conduct a preaward review of applications to ensure that specific excluded populations/initiatives are not included in applications

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POTENTIAL UGG UPDATES (CONT.)

Focus on Outcomes not Outputs

An outcome addresses what the actual benefits or changes are under a grant, such as increased research knowledge or reduced unemployment v. output (number served, etc.).
Federal agencies are expected to request information that “can truly identify their [expected] grant outcomes upfront when they submit their applications.”
The federal government also will place more emphasis on data and statistics.

[Aligns with EDGAR inclusion of continuous improvement requirements!]

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POTENTIAL UGG UPDATES (CONT. )

Terminations

More concrete language on terminations (including termination for convenience)

Removal of small business preferences for minority-owned, women-owned, veteran-owned, etc.)
Technology and Artificial Intelligence

Expanded use of AI
Focus on data analytics, making sure proper data is utilized
Plan to use more chatbots.
Recipients seeking assistance from a federal agency can use piloted software to ask a question to the chatbot, which is aided by AI
Agency officials will still be available if needed.

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SO, WHAT DO WE DO?

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FOCUS ON OUR PROGRAMS AND INCREASING ACHIEVEMENT!

Ensure program allowability
Comprehensive needs assessment
Evaluation of programs
Data quality
Data analytics
Stay Updated on Final Changes!

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SUBGRANTEE REPORTING REQUIREMENTS

A State may require a subgrantee to submit reports in a manner and format that assists the State in:

Complying its state reporting requirements (34 CFR 76.720)
Carrying out other responsibilities under the program,
Engaging in periodic review and continuous improvement of the State’s plan, and
Supporting the subgrantee in engaging in periodic review and continuous improvement of the subgrantee’s plan.
34 CFR 76.722

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GRAPH TO REVIEW

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MILK CONSUMPTION AND DIVORCE CORRELATION

Artificial Intelligence Correlation:

As milk consumption decreased, people became less lactose intolerant.
This led to fewer cases of dairy-related tummy aches, reducing overall irritability in marriages.
Plus, with less milk being poured, there were fewer opportunities for milk-related kitchen arguments. And as we all know, a household free of lactose-fueled bickering is a recipe for marital bliss.
So, drink your milk, save a marriage – it's udderly ridiculous but apparently, there's whey to happiness!

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(NEW) PERFORMANCE RECORDS

A grantee must keep records of significant project experiences and results
The grantee must use the records under paragraph (a) to—

Determine progress in accomplishing project objectives;
Inform periodic review and continuous improvement of the project plans; and
Revise those project objectives, if necessary.

34 CFR 76.732

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Q & A

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DISCLAIMER

This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with The Bruman Group, PLLC and, therefore, carries none of the protections under the D.C. Rules of professional conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at The Bruman Group, PLLC does not create an attorney-client relationship with The Bruman Group, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.

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