How to work around jsx-a11y/no-static-element-interactions restriction?

For those who are looking for a workaround, use role="presentation" in your tag.

Here's how you could revise the markup to be semantically appropriate and get the onclick off the <li>

<li key={faqKey} className={styles.entry}>
  <h3>
    <button type='button' onClick={handleExpandFn}>
      <span className={`icon-next ${questionClassname}`} />
      <span className={styles['question-text']}>{faqEntry.question}</span>
    </button>
  </h3>
  <div className='add_a_panel_class_name_here'>
    {faqEntry.answer}
  </div>
</li>

So with the above: the <h3> will make the titles of the FAQs easily searchable by screen reader users that are navigating by headings

placing the <button> inside of the <h3> gives you the appropriate element to attach a click event to (you want to use a button here because you're toggling state. an <a> should be used if you were going to a new page. You also don't need to add a tabindex to a button as they are inherently focusable).

There are some additional steps you'd likely want to implement, using ARIA expanded and controls attributes on the button, but the above should get you to a good base for moving beyond your error.