State education leaders have for months wondered what it would cost to walk away from the millions of “strings-attached” federal education dollars Utah gets, and a new audit offers the clearest picture yet.
The audit calculated a simple question: How much does Utah spend in state dollars in order to unlock those federal funds? The answer, according to nonpartisan public-sector auditing firm GPP Analytics, is a fraction of what it ends up receiving in return.
“It is spending $8 million to get $800 million,” said Julian Metcalf, a project manager with GPP Analytics, when he presented the 34-page report to the Utah State Board of Education (USBE) Dec. 4. That number can vary, but it’s typically about $8 million to $12 million in order to secure between $500 million and $800 million, the audit found.
Federal education dollars — also known as “Title funds” — primarily support at-risk students, including students with disabilities, low-income students and students of color.
The money helps offset the extra costs of educating higher-need students. It comes with spending rules set by the Every Student Succeeds Act (ESSA), which also sets requirements for reporting, accountability and student performance.
Meeting these requirements comes at a cost — one that Utah lawmakers and education leaders have said they worry may outweigh the benefits, Deputy Superintendent Scott Jones previously told The Salt Lake Tribune.
That’s why USBE commissioned the $120,000 audit in June.
Where does the state money go?
The $8 million to $12 million Utah would save each year if it were to reject the hundreds of millions it receives federally only amounts to the state spending that can’t be recovered.
In actuality, Utah spends roughly five to seven times that annually to unlock federal education dollars, but most of that money is reimbursed.
The audit specifically looked at Utah’s state spending in fiscal 2022-23 through fiscal 2024-25, when Utah received between $598 million and $838 million in federal funds.
During that period, Utah spent roughly $45.5 million to $61 million annually, but the state was reimbursed roughly $37.4 million to $50.6 million.
Any “unrecovered costs” stemmed from functions that support federal programs, such as assessments, data reporting and legal activities. The audit noted they are difficult to recover due to “rule limitations and technical constraints.”
They are also difficult to itemize or track precisely, Metcalf told state board members last week, since they often cover indirect or incidental tasks that benefit multiple programs rather than a single, clearly defined expense.
“There is no reasonable way to attribute it to the program level, because of what’s tracked and trackable,” Metcalf said. “There’s limitations of what the current data can tell us about how the ancillary costs relate to very specific programs.”
Even though these costs can’t be broken down exactly, the $8 million to $12 million also includes indirect expenses the state incurs to comply with civil rights laws tied to federal funding, most notably: Title VI, which prohibits discrimination based on race, color, or national origin; Title IX, which prohibits sex- and gender-based discrimination; and the Americans with Disabilities Act, which prohibits discrimination against disabled people.
“When USBE’s staff time and activities are tracked and recorded, they are generally tracked by unit or project, and not by the specific civil rights mandate that prompted each task,” the audit explained.
The report excluded costs associated with “Maintenance of Effort” (MOE), a common separate requirement when receiving federal funding.
In education, for instance, that requirement ensures that even when federal funds are available, schools must maintain state and local funding for low-income students (at least 90% of what they spent the year prior).
The audit was instead limited to what it costs USBE to administer federal programs, including the time it takes USBE workers to physically complete all required federal and state reporting requirements.
There are about ten times more federal reports to finish, but the audit noted state-required reports take about three times longer to complete.
How federal dollars impact Utah’s total public education budget
The audit comes after USBE leaders in September sent a letter urging Utah’s state and federal leaders to support repealing ESSA.
They instead favor President Donald Trump’s vision for education “block grants” — lump sums of federal cash that states can use more freely. Opponents say the move stands to reserve fewer federal dollars for students who need more support.
Federal dollars make up a relatively small portion of Utah’s overall education budget — about 7% for the current fiscal year, or $598.7 million of the total $8.6 billion budget, according to the state’s website.
But when broken down by program, their impact becomes much greater.
Roughly a third of funding for the state’s at-risk students comes from Washington. Federal money also accounts for 19% of special education spending, and nearly 86% of the costs for school breakfast, lunch and other child nutrition programs.
Districts with high populations of economically disadvantaged students also more heavily rely on federal funds. Nearly 30% of San Juan School District’s revenue for the 2023-24 school year came from federal sources, for instance, compared to Park City’s 1.8% that same year, according to a report by the Utah State Board of Education.
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