ESSER Fund Allowable Uses for EdTech Purchases

The federal government sent schools nearly $190 billion across three rounds of COVID-19 relief. A significant portion of that funding went directly to educational technology: laptops, hotspots, learning management systems, curriculum platforms, and adaptive equipment. Districts purchased these tools under intense pressure to keep students learning during closures, hybrid schedules, and rapid shifts to remote instruction. Now that the spending windows are closing, compliance questions remain active and consequential. Auditors are reviewing whether purchases were documented, justified, and tied to the pandemic-response purpose the statute required.

Understanding ESSER compliance for EdTech requires more than confirming that technology appears on the list of authorized uses. Each purchase must pass a four-part federal test, satisfy Uniform Guidance cost principles, and be supported by written documentation connecting the expenditure to COVID-19 response. State education agencies have added their own interpretive layers on top of the federal rules, which means a purchase that passes the federal test can still generate a state audit finding. Districts that received ESSER funds through Title I formulas, meaning those serving higher concentrations of students from low-income families, received proportionally larger allocations and face proportionally larger exposure if documentation is missing. This post walks through what the statute authorizes, where EdTech purchases commonly fail the compliance test, and how to build a documentation record that holds up to scrutiny.

Why the compliance question still matters

ESSER funds were created specifically to help schools prevent, prepare for, and respond to COVID-19. That purpose is not background context. It is the legal test every expenditure must pass.

Three rounds flowed through federal legislation. ESSER I came from the CARES Act in March 2020, roughly $13.2 billion. ESSER II arrived with the CRRSA Act in December 2020, about $54.3 billion. ESSER III, also called ARP ESSER, launched in March 2021 with about $122 billion. The IDRA's 2024 brief documents all three rounds and the statutes behind them.

Money went from the U.S. Department of Education to state education agencies, which were required to pass at least 90 percent to local education agencies using Title I formulas. Districts with more students from low-income families received proportionally more. If a district spent ESSER money on EdTech and cannot demonstrate the pandemic connection, it faces audit findings and possible clawback. Those risks do not disappear when the spending window closes.

The four-part test every ESSER purchase must pass

Allowability under ESSER is not a simple yes-or-no determination. It is a four-part test, and an EdTech purchase can fail on any component even if the general category appears on the list of named uses. The Idaho State Department of Education's ESSER guidance draws from federal rules and states the four requirements directly. First, the use must be intended to prevent, prepare for, or respond to COVID-19, including its impact on student social, emotional, mental health, and academic needs. Second, the use must fall under one of the 20 authorized uses written into the statute. Third, it must be permissible under the Uniform Guidance, 2 CFR Part 200. Fourth, it must be necessary and reasonable for the ESSER award, under 2 CFR 200.403 through 200.404.

The South Carolina Department of Education's ESSER training makes the same point: all allowable use questions must satisfy all four requirements simultaneously. Being listed as an authorized category is necessary but not sufficient. The "necessary and reasonable" requirement is where EdTech purchases most commonly fail. Duplicative devices, overlapping software licenses, or a tool with no documented instructional rationale can all fail that standard even when the general category is authorized. Written justification tying each purchase to COVID-19 response is required, particularly where the connection between the expenditure and the pandemic is indirect.

Where EdTech sits in the 20 authorized uses

EdTech is one of the 20 named authorized uses. The statutory language is broad enough to cover hardware, software, connectivity, assistive technology, and adaptive equipment, but the wording carries specific conditions. Authorized use number 13, from the Idaho SDE's ESSER guidance, reads: "Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the LEA that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and students with disabilities, which may include assistive technology or adaptive equipment."

The conditions embedded in that language matter. The technology must serve students of the LEA, not general administrative infrastructure. It must aid "regular and substantive educational interaction" between students and their classroom instructors. That is a functional test, not just a category check. The explicit inclusion of low-income students and students with disabilities puts equity considerations directly into the authorization language.

Other authorized uses open additional EdTech pathways. Use number 12 covers planning for, coordinating, and implementing activities during long-term closures, including providing technology for online learning to all students. Use number 15 covers summer learning and afterschool programs, and their online delivery can include EdTech tools. Use number 16 addresses lost instructional time through evidence-based activities. Uses 1 through 5 authorize activities under ESEA, IDEA, AEFLA, Perkins V, and McKinney-Vento, each of which supports EdTech-adjacent work. Cybersecurity also qualifies: the South Carolina DOE's training cites ED FAQ A-21, noting that protecting digital infrastructure helps schools prepare for future closures and satisfies the COVID-connection requirement.

Hardware, software, and connectivity requirements differ

The three categories named in the statute each require different documentation, and treating them identically creates audit vulnerability.

Hardware means laptops, tablets, and Chromebooks. This category has the most direct connection to student instructional access. Documentation should identify which students received devices, confirm that those students are served by the LEA, and explain how the devices supported instruction during pandemic disruption. The statute explicitly names low-income students and students with disabilities, so demonstrating that device distribution served those populations strengthens the COVID-connection justification.

Software covers learning management systems, curriculum platforms, diagnostic tools, and SEL programs. The "regular and substantive educational interaction" requirement is most actively contested in this category. Software that directly supports student-teacher interaction qualifies more clearly than software that operates independently of teacher involvement. Mental health software and SEL platforms have a secondary statutory anchor under use number 14, which authorizes mental health services. For software used within the 20 percent learning-loss set-aside, documentation of the ESSA evidence tier is required.

Connectivity means broadband access, wifi hotspots, and internet service. The statute names it explicitly, and it is among the most clearly pandemic-responsive expenditure categories because remote learning could not function without it. Documentation should identify which student populations gained access, describe the barriers that created the connectivity gap, and explain how that access enabled instruction. The E-rate program provides ongoing federal funding for connectivity independent of ESSER and is worth understanding for sustainability planning as ESSER funds close out.

Assistive technology qualifies under multiple statutory anchors

Assistive technology and adaptive equipment are explicitly included in the ESSER EdTech authorization. Authorized use number 13 includes "assistive technology or adaptive equipment" within the hardware, software, and connectivity language, so these purchases do not require a separate categorical justification. Use number 2 covers "any activity authorized by IDEA," which means assistive technology that qualifies under IDEA also qualifies under ESSER, giving districts a dual statutory basis. Use number 8 provides a third anchor by covering activities that address the unique needs of students with disabilities.

Documentation for assistive technology purchases should connect each item to the student's IEP or identified need and to the disruption of services the pandemic caused. Both elements reinforce the COVID-connection requirement. Districts should also plan for continuity: IDEA compliance obligations do not expire when ESSER funding ends. If assistive technology was funded through ESSER, the district needs a plan for how those services continue under IDEA or other funding sources.

The 20% set-aside requires a stricter evidence standard

ARP ESSER required districts to reserve at least 20 percent of their allocation for learning-loss mitigation through evidence-based interventions. EdTech used within that set-aside must meet an evidence standard that does not apply to general EdTech purchases made from the remaining 80 percent. The South Carolina DOE's training states the requirement: reserve at least 20 percent to address the academic impact of lost instructional time through evidence-based interventions, targeting ESEA subgroups, students experiencing homelessness, and children in foster care. Allowable uses within the set-aside include afterschool programs, summer school, extended day and year programs, and high-dosage tutoring. EdTech tools that are components of those programs can qualify when they meet the evidence standard.

"Evidence-based" in this context means the ESSA evidence tiers. Districts using EdTech products within the set-aside need to document the tier classification of each product. That documentation is a compliance requirement, not a best practice. EdTech purchased from the general 80 percent can support learning-loss goals without meeting the evidence-tier standard. The stricter requirement applies only to funds designated within the 20 percent set-aside. The South Carolina training notes that evidence-based is further defined in FAQ A-10, so districts should consult current U.S. Department of Education FAQs for the applicable definitions.

Common EdTech spending patterns that fail compliance

Several common EdTech expenditure patterns fail the compliance test not because the general category is unauthorized but because the Uniform Guidance cost principles are not satisfied. The Idaho SDE's guidance identifies advertising and public relations costs as unallowable under 2 CFR 200.421. Vendor marketing fees or promotional tools bundled into EdTech contracts may be disallowed on that basis. ESSER funds also cannot serve as matching funds for other federal programs. The South Carolina DOE's training cites Updated FAQ E-11.a from December 2022: the CARES, CRRSA, and ARP Acts do not provide authority to use ESSER funds as a match, with a narrow exception for AmeriCorps.

Procurement process failures create independent compliance risk. Noncompetitive bidding for EdTech contracts, particularly with vendors that lacked established track records, has been identified by auditors as a systemic vulnerability in ESSER spending. Auditors reviewing late-liquidation spending are aware that pandemic urgency drove process shortcuts and they specifically look for procurement documentation gaps. Natural disaster costs have a limited exception: ESSER can cover them only to the extent the damage increased pandemic transmission risk or impaired in-person learning, and written justification connecting the cost to that specific harm is required. That affirmative documentation obligation applies wherever the COVID connection is indirect or where the expenditure could be characterized as an ordinary capital expense.

State guidance adds requirements beyond federal rules

Federal ESSER rules establish the compliance floor. State education agencies then add interpretive guidance, monitoring expectations, and documentation requirements. A purchase that satisfies the federal four-part test may still generate a finding in a state review.

The California Department of Education publishes an ESSER III FAQ with state-specific positions on allowable uses. Districts in California must satisfy both the federal requirements and the CDE's own FAQ guidance. The South Carolina DOE's ESSER training, delivered by outside legal counsel at The Bruman Group in March 2023, demonstrates how states actively interpret federal rules and how those interpretations vary across jurisdictions. Districts should locate their own state education agency's ESSER FAQ and monitoring guidance. The federal statute and Uniform Guidance define the outer boundary, but state monitoring determines what gets flagged in practice.

Documentation that survives an audit review

The difference between a defensible ESSER EdTech purchase and an audit finding frequently comes down to documentation quality rather than what was purchased. For each purchase category, districts should prepare a written memo that addresses each component of the four-part test. The COVID-connection narrative should be specific: identify which students were served, describe the instructional need, explain how the pandemic created or worsened that need, and connect the specific tool or device to that need.

For hardware, documentation should cover the student population receiving devices, the equity rationale, and the distribution process. For software, it should address the instructional function the tool serves, the teacher-student interaction it supports, and, for anything within the 20 percent set-aside, the ESSA evidence tier. For connectivity, it should describe which student populations gained access, what barriers existed, and what instruction the access enabled. For assistive technology, documentation should reference the relevant IEP provisions and connect the purchase to the pandemic disruption of services.

Procurement records are a separate and independent documentation requirement. Competitive bidding files, vendor vetting records, and contract documentation all matter independent of the substantive justification for the purchase. The South Carolina training specifically requires written justification wherever the COVID connection is indirect, and auditors apply heightened scrutiny to any expenditure where that connection requires explanation.

Late-liquidation rules haven't relaxed compliance standards

Late-liquidation extensions allow districts to continue spending on qualifying purchases after the original obligation deadline. The extension does not modify the compliance requirements that apply to those purchases. The four-part test and documentation obligations remain fully in force.

Guidance published in July 2025 confirmed that all state agencies and school districts may continue using ESSER funds through March 2026. That is a defined window, and districts should verify current U.S. Department of Education guidance before initiating new purchases. Late-liquidation status means spending continues on already-committed funds after the obligation deadline has passed. Districts should confirm with their state agency what "committed" means for purchase orders, contracts, and delivery timelines. The extension applies to committed funds and does not authorize new purchases in categories that would not have qualified before the original deadline. ESSER I and ESSER II are effectively closed for most districts. ESSER III late liquidation is the active window. Auditors reviewing late-liquidation spending apply additional scrutiny because the urgency context that characterized the original pandemic period no longer applies.

Replacement funding streams after ESSER closes

The federal funding streams that follow ESSER each carry categorical constraints that are narrower than ESSER's pandemic-response framing. E-rate continues to fund broadband connectivity and related infrastructure and is the fifth-largest source of federal funding for K-12 schools. Its rules come from the FCC rather than the Department of Education, and it operates as a distinct compliance environment with its own eligibility and documentation requirements. Title IV-A, the Student Support and Academic Enrichment grants, includes EdTech as an allowable use within categories tied to well-rounded education, safe and healthy students, and effective use of technology. Those categories are more restrictive than ESSER's authorization. IDEA covers assistive technology and special education services independently. Districts that funded disability-related EdTech through ESSER should map those tools to IDEA authorizations for continuity planning. Title I funds educational programs for low-income students and can support some EdTech in that context, under ESEA rules and cost principles rather than ESSER rules.

Each federal funding stream requires the same foundational compliance discipline: identify the statutory authorization, satisfy the applicable cost principles, and document the connection between the purchase and the program's stated purpose. Districts that built rigorous ESSER documentation have established practices that transfer directly to other federal programs. The records they created also establish a documented history of educational need that supports EdTech investment under subsequent funding sources.