Senate committee wrestles with $2.7 billion in DOE unspent CIP funds as school facilities bill advances

The Senate Committee on Education spent more than an hour pressing the Department of Education over long‑running capital improvement project backlogs and reporting issues as it considered HB2345, a bill that would transfer localized deferred‑maintenance functions and positions from DOE to the School Facilities Authority (SFA).

Committee members repeatedly told DOE officials they wanted concrete accounting for unspent and obligated CIP dollars. Chair Kim cited DOE’s own facilities portal figures, saying the department’s reported unspent CIP balance rose from $2.4 billion in 2023 to $2.7 billion as of Jan. 7, 2025. "How can we move forward if we can't even come to an agreement with where the funds are at?" the chair said.

The department’s deputy superintendent for operations, Jesse Suki, said the department maintains deferred‑maintenance lists and a six‑year plan that requests roughly $200 million per year for deferred maintenance, and that it has prioritized projects in coordination with complex‑area superintendents and principals. Suki also said some discrepancies stem from different ways of counting line items, obligated funds and projects in planning versus construction phases.

SFA witnesses and outside speakers described a multi‑summer pause in construction as a major driver of the backlog. Ricky (SFA) told the committee that when construction seasons were missed for several summers, obligations accumulated into a much larger backlog and contractor escalation and change orders compounded the costs.

Members pressed the DOE on three practical risks: (1) lapsing appropriations that leave projects unfunded, (2) contract escalation and change‑order exposure that raises final costs, and (3) a tracking system that staff described as "not current," complicating a contract‑level reconciliation of obligations, encumbrances and lapses. DOE acknowledged the reporting and data‑access issues and pledged to deliver updated worksheets and reconciled numbers to the chair’s office by Monday following the hearing.

The committee advanced HB2345 with the chair’s recommendations and technical amendments, with members noting the need for continued oversight and more transparent, contract‑level reporting before larger appropriations are approved.

The committee’s next step is to monitor the updated DOE reporting and to seek details about contracts that are encumbered but not completed, escalation exposure and projected lapses of appropriations.