Digital interactions with government services have increased over time, particularly since the start of the coronavirus pandemic in March 2020. We learned through prior OIG work that some State educational agencies (SEA) were using digital wallet-related technologies and services (digital wallet) to help administer their Governor’s Emergency Education Relief Fund (GEER) and Emergency Assistance to Non-Public Schools (EANS) grants. However, there is limited public information regarding digital wallets and how or to what extent SEAs and local educational agencies (LEA) may be using them for their Federal education grants. For purposes of this review, we define “digital wallet” as a software-based process provided by a third-party vendor that facilitates the disbursement to or expenditure of Federal education grant funds by beneficiaries, such as teachers, students, families, and nonpublic schools. We performed this review to determine the extent to which SEAs and LEAs use digital wallets to facilitate the administration of U.S. Department of Education (Department) grant funds.
Forty-five SEAs responded to our survey regarding the use of digital wallets to facilitate the administration of Department grant funds. Twelve of those SEAs reported using digital wallets to help administer some of their Department grants during our review period, and three of these planned to continue using digital wallets in 2025. SEAs primarily relied on one digital wallet vendor to help administer their Department grant funds. That vendor, used by 11 of the 12 SEAs, was responsible for helping to administer more than 95 percent of the Department grant funds for which SEAs reported using digital wallets. SEAs used digital wallets almost exclusively for their pandemic relief Department grants, including the GEER, EANS, and Elementary and Secondary School Emergency Relief Fund (ESSER) grants. SEAs most commonly used digital wallets for automated direct deposit reimbursement or payment, built in controls for fund use, and tracking of funds; and several SEAs reported that they relied, at least partially, on their digital wallet vendors to help ensure that applicable Federal grant requirements were followed. According to the SEAs that responded to our survey, a small number of LEAs used digital wallets to help administer their Department grant funds during our review period. Only one SEA reported that its LEAs used digital wallets, and that SEA further reported that only 5 to 10 LEAs in the State used digital wallets. Although LEAs’ use of digital wallets appeared to be limited based on the survey results, the full extent of LEAs’ digital wallet usage is not known since 6 SEAs did not complete the survey and 15 of the 45 respondent SEAs reported that they did not know whether their LEAs used digital wallets to help administer Department grant funds.
Because our report presents information on digital wallets that SEAs provided through the survey, it does not include recommendations. This informational report provides insights into the extent of SEAs’ and LEAs’ use of digital wallets during our review period and their planned use of digital wallets in 2025, information that may be of interest to key stakeholders, including the Department, SEAs and LEAs, students and their parents, Congress, and the general public.
Pandemic Relief Aid Oversight