Important Information Regarding Early Aid Start Request (EASR) Submissions
Education Law §3602(6)(e)(3)(b) defines the timing of building aid payments. This section provides for the chapter 97 process outlined in current guidance under which aid on projects approved after July 1, 2011 may begin no earlier than eighteen months after approval and no earlier than the date of receipt by the commissioner of both the final Certificate of Substantial Completion (final CSC) issued by the architect or engineer and the Final Cost Report (FCR) for such project, whichever is later.
This provision of Education Law also allows for an “Early Aid Start” upon a finding by the commissioner that the district is unable to submit a final CSC or complete the FCR due to circumstances beyond the control of the district. Under these circumstances, districts may request that building aid begin in advance of district submission of the final CSC and/or FCR. Early Aid Start may not begin sooner than 18 months after the commissioner's approval date or submission of an SA-139, whichever is later, as detailed on page 6 of guidance linked above.
Requests may be granted by the commissioner only when delays are due to circumstances beyond the control of the district, such as an unusually complex project, however, not all such delays are eligible for an Early Aid Start. Early Aid Start Requests (EASR) have become more common since their implementation in 2011.
Early Aid Starts are not without risk, and districts should not submit an EASR unless the failure to receive aid in advance of the FCR and final CSC will create a significant hardship for the district. When an Early Aid Start is authorized, aid paid prior to receipt of the FCR is based on estimates of total costs at the time the EASR form is submitted. When final costs differ from estimates used as the basis for aid, the following possible outcomes ensue:
- If the estimated costs submitted with an EASR exceed the actual costs on the FCR, the difference will be subject to an overpayment recovery to be deducted from upcoming aid payments. Overpayment recoveries create unanticipated reductions in state aid payments and districts must carefully plan around this possibility created by EASR payments.
- If the estimated costs submitted with an EASR are less than actual costs on the FCR, supplemental payments will be placed on the prior year claims list, as required by EducationLaw §3604(5). Funds appropriated for the prior year claims list are provided in the order that each was approved for payment by the commissioner. When funding was last provided in the 2020-21 school year, the projected wait time was approximately 17 years for new claims. As of this posting, no funding has been appropriated in the state budget to satisfy new or existing claims on this list.
When Early Aid Start is authorized, timeliness in submitting the Final Cost Report becomes essential to mitigate these risks. The greater the time between the Early Aid Start and the receipt of the FCR, the greater the potential overpayment recovery or for supplemental funding to be placed on the prior year claims queue. This is particularly true for large, long, or complex projects where estimates are subject to greater revision.
These risks are mitigated with traditional chapter 97 projects. Among other requirements, aid does not begin until after the FCR is submitted. As a result, variance between the SA-139 and the FCR will not result in overpayment recoveries or additional funds placed on the prior year claims list.