Bruman Legislative Office: 2007-07-22

Monday, July 23, 2007

Senate Passes Higher Ed Reconciliation Bill

Just before 1:00 AM on Friday, July 20, the Senate passed H.R. 2669, the College Cost Reduction Act, by a vote of 78-18. The bill, which cuts more than $18 billion in subsidies to student lenders, passed with no substantial amendments. The House passed its companion bill last week, with a slightly larger cut, so the bill now heads to conference. The main hurdle in the Senate centered on an amendment that would reduce the cuts by about $3 billion.

Sens. Richard M. Burr (R-NC) and Ben Nelson (D-NE) offered an amendment that would wipe out $2.4 billion of the lender subsidy cuts proposed in H.R. 2669, most of which would be redirected to aid student borrowers. The Senators argued, and some opponents conceded, that Congress could not be certain that the subsidy cuts would not force certain lenders out of the industry. Rather than take that chance, the two Senators felt the more prudent course of action would be to scale back the proposed cuts.

However, Sen. Edward Kennedy (D-MA), the bill’s sponsor, claimed the amendment would cut the $800-per-person Pell grant increase down to a $300 increase or less. The amendment would call for the difference to be made up using appropriations, but Sen. Kennedy pointed out that this is not a reliable approach because there is no requirement that these funds be provided. The amendment was defeated 61-36.

The bill now goes to conference, where reconciliation between the major differences will prove challenging for negotiators. The biggest difference is in the House bill, passed last week, which halves the interest rates on subsidized student loans, from 6.8% to 3.4%. This rate cut is part of House Democrats’ “Six for ’06” agenda that House Education and Labor Chairman George Miller (D-CA) seems unwilling to sacrifice.

While Sen. Kennedy is likely to be equally stubborn on Senate provisions, such as auctioning the right to offer federally backed PLUS loans to parents, the Senate measure has factors working in its favor. The President has already offered a veto threat on the House bill, while only expressing “serious concern” with the Senate bill. The fact that the White House has not threatened the Senate version, and in fact has offered to negotiate, gives Senate conferees the upper hand in negotiating with the House.

Resources:
Doug Lederman, "Senators Side With Students," Inside Higher Ed, July 20, 2007.
Libby George, “Private Lender Subsidy Cuts Hold Up,” CQ Today, July 20, 2007.
Stephen Langel, “Education Bill Overwhelmingly Passes Senate,” Congress Now, July 20, 2007.
Author: SAS

Competitiveness Bill Finally Ready For Conference

On Thursday, July 19, the Senate passed H.R. 2272, the 21st Century Competitiveness Act, by a voice vote after inserting the text of S. 761, the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education and Science (COMPETES) Act. The Senate passed S. 761 in April, a month before the House chose to combine various math and science proposals into one large omnibus bill (H.R. 2272). The bills will now head to conference, the first major step towards improving science, technology, engineering and mathematics (STEM) education.

Following the President’s announcement of his American Competitiveness Initiative in 2005, Congress began working on various ways to keep the U.S. competitive in the global market, with a specific focus on educating the next generation of research and technology leaders. H.R. 2272 is the first serious step Congress is taking towards achieving that goal. The Senate version would double the National Science Foundation’s (NSF) budget, from $5.6 billion in fiscal 2006 to $11.2 billion by fiscal 2011. The NSF contributes about 20% of all federal money awarded for basic research at U.S. universities. The House version of the bill reauthorizes the NSF at a total of $21 billion through fiscal 2010. It would also reauthorize the National Institute of Standards and Technology for the first time in more than a decade at a total of $2.5 billion through fiscal 2010.

At this point, no date is set for a conference between the two versions of the bill. The White House, as with the appropriations, has expressed concerns over the funding levels (seems to be a reoccurring theme) authorized in both versions. Unlike various other spending bills this year, the President has yet to threaten a veto, but he has made it clear that negotiations between the White House and Congress are necessary if the bill is to get past his desk untouched.

Resources:
Kathryn A. Wolfe, “Conference Sought on Bills to Bolster Competitiveness,” CQ Today, July 19, 2007.
Author: SAS

NCLB Reauthorization Update

The momentum behind the reauthorization of No Child Left Behind (NCLB) slowed this week. With the August recess looming on the calendar, staffs in the House Committee on Education and Labor have been working overtime to complete a comprehensive reauthorization bill before the break. Yet, the adequate yearly progress (AYP) negotiations have bogged the process down and, on Wednesday, the ranking member of the House Education Committee, Howard “Buck” McKeon (R-CA) stated that the legislation will not be ready until fall and that he will not support it unless it has the votes of the majority of Republican members. The education pundits who predicted a post-Presidential election 2009 reauthorization were, suddenly, all smiles.

Yet, that has not stopped Members of Congress from introducing important bills that will shape the final law. Last week, Senators Judd Gregg (R-NH) and Richard Burr (R-NC) introduced the first comprehensive bill for the reauthorization of NCLB, S. 1775, the “No Child Left Behind Act of 2007.” This week, Senators Joe Lieberman, (I/D-CT) and Mary Landrieu (D-LA) announced plans (not an actual bill yet) to introduce their comprehensive ESEA reauthorization bill, the "All Students Can Achieve Act."

According to a release by the Aspen Institute’s Commission on No Child Left Behind, who worked closely with Sen. Lieberman’s staff on the project, the soon to come Lieberman/Landrieu bill will advance many of the Commission’s priorities. The pending bill:

• Requires and funds the development of data systems to track individual student performance over time and to link that performance to teachers, programs and services. States with adequate data systems and plans for measuring effectiveness would be able to use growth models for determining AYP..
• Requires the equitable distribution of non-Federal funds within school districts; provides incentives for school professionals, through teamwork in the poorest schools, to make the greatest improvements in student performance; provides funds for out-of-district transfers to public schools for students without viable alternatives; provides equitable funding and flexibility under the Charter School Program.
• Authorizes the National Assessment Governing Board to develop voluntary American learning standards and assessments in reading, math and science while ensuring that the standards and assessments are aligned with life, college and workplace readiness skills. States may choose to adopt these standards and assessments.
• Distinguishes those schools needing intensive interventions, i.e. schools with a majority of students missing AYP, from schools missing AYP for less than half the student population.
• Eliminates the restructuring option that permitted “any other major restructuring of the school's governance” while a limit is provided on the percentage of schools required to implement comprehensive restructuring within a single school district in a given year.
• Would allow states and districts successful at meeting AYP and at measuring teacher effectiveness to have greater flexibility in transferring funds to the most critical areas they have within No Child Left Behind.

The new bills are critical because they lay the framework for the coming reauthorization debates. Also, as all policy watchers knew heading into this year, the Commission’s focus on teacher effectiveness will be a critical part of the coming debates, and now the Commission has Senators Lieberman and Landrieu in their camp. While Representative McKeon may have slow-tracked the process, this should have the effect of fast tracking everyone’s efforts shape the early tone of the debates.

Resources:
Commission’s Recommendations for Reauthorization Included in Senate ‘All Students Can Achieve’ Bill, Commission on No Child Left Behind, July 18, 2007.
Michael Sandler, “McKeon Lays Down Marker for Education Law Renewal,” CQ Today, July 16, 2008.
Author: DAD

House Panel Passes 2007 Farm Bill

After a three-day markup, the House Agriculture Committee passed H.R. 2419, the 2007 Farm Bill, by a voice vote. Some major changes in the bill include country of origin labels on all meat products, and a provision that bans farmers with more than $1 million in annual adjusted gross income from collecting government subsidies. This and other changes to subsidy programs will save $226 billion over five years, Peterson said, helping the bill meet House budget rules.

For schools, a mild expansion of the Fresh Fruit and Vegetable Program (FFVP) can be considered both good and bad news. After the Subcommittee on Operations, Oversight, Nutrition and Forestry held its markup, the FFVP expansion carried into 50 schools in every state, contingent on $100 million in offsets. The initial Chairman’s mark included this expansion, but it did not make it through the full committee markup. The manager’s amendment, offered on Tuesday, scales back the expansion and authorizes funds through 2012, rather than relying on contingent funding. The new proposal would authorize $70 million for expanding the program into 35 schools in each state. Any additional available funds would be distributed to states based on population.

The bill may go to the House floor next week, depending on where the various appropriation bills stand. Many members wish to offer various amendments, though it is unclear if the House Rules Committee will send the bill to the House floor under an open rule (which allows unlimited amendments) or whether it will only rule on a few amendments in order for debate. While some of the crop and commodities provisions may be subject to debate, there does not seem to be any real dissent to the FFVP expansion, so any change would likely increase the expansion. After passing the House, action may stall since the Senate committee has not even started considering the bill. Although the House Committee approval marks a significant step to final passage, there is still a long way to go before the 2007 Farm Bill reaches the President’s desk.

Resources:
Catharine Richert, “Farm Policy Critics Vow House Floor Challenge as Panel Approves Bill,” CQ Today, July 19, 2007.
Charlene Carter, “House Ag Finally Approves Farm Bill, Including Country-of-Origin Labeling Requirements for Meat,” Congress Now, July 20, 2007.
Author: SAS

Senate Panel Passes SCHIP Proposal

On Thursday, July 19, the Senate Finance Committee passed the Children's Health Insurance Reauthorization Act, finally bearing results from the ongoing debate on the State Children’s Health Insurance Program (SCHIP). While leaders in both chambers failed to add SCHIP reauthorization as an amendment to the fiscal year 2007 (FY07) continuing resolution and the FY07 supplemental appropriations bill, Finance Committee chairman Max Baucus (D-MT) and ranking member Chuck Grassley (R-IA) have finally brokered a deal along more moderate terms. However, the story is far from over, as the bill must survive a floor vote before facing down a threatened Presidential veto.

SCHIP, which provides health insurance for about 6 million children from low-income families that are not poor enough to qualify for the larger Medicaid program, is considered by many to be the most important health legislation that Congress will take up this year. The bill expands the program by $35 billion over five years, far short of the $50 billion authorized under the FY08 joint budget resolution. The committee bill will use a tax increase on cigarettes, from $.39 to an even $1, to offset the increase. Chairman Baucus claims that the increase will expand the program to cover an additional 10 million uninsured children. Despite opposition from the extreme right and left of each party, the Committee passed the bipartisan deal.

The proposal faces contentious debate on the Senate floor. Some liberals in the majority feel the expansion is too mild. Sen. John Kerry (D-MA) has pledged to bring an amendment to the floor that will increase the expansion to the $50 billion agreed to in the budget resolution. House leaders have also announced their intentions to pass a $50 billion increase. On the other side of the spectrum, fiscal conservatives feel the expansion is too extreme. President Bush, who proposed only a $5 billion increase, has already promised to veto the bill, unless Congress draws back the funding increase. Congress and the White House find themselves at odds over funding levels on nearly every spending bill for FY08, putting the SCHIP proposal on very thin ice.

Resources:
Deb Riechmann, “Bush Threatens to Veto Insurance Measure,” Associated Press, July 18, 2007.
Stephen Langel, “SCHIP Clears Major Hurdle, but Compromise With White House Considered Unlikely,” Congress Now, July 19, 2007.
Timothy R. Homan, “Senate Panel Approves Renewal of Health Insurance Program for Children,” CQ Today, July 19, 2007.
Author: SAS

FY08 House Appropriations

On late Thursday night (7/19), the House passed H.R. 3043, the Labor-HHS-Education appropriations bill for the fiscal year 2008 (FY08) by a vote of 276-140. The bill provides $151.6 billion in discretionary spending, including an additional $975 million for No Child Left Behind programs.

The House spent two and a half days debating many amendments that attempted to remove earmarks, shift money within the bill or provide new funding to particular programs and projects. Demonstrating his frustration with the process, Appropriations Committee Chairman Obey (D-WI) offered an amendment to strike project requests from the legislation. He called it the "put up or shut up" amendment, stating that he was tired of having the committee serve as a “punching bag" for the press corps. The amendment was rejected and the debate continued.

The President has stated that he will veto the bill if it exceeds his appropriations request and it does that by $12 billion. "The President has got the right to initiate spending bills,” said the President. “They've got the right to decide how much money is spent. If they overspend or if they try to raise your taxes, I'm going to veto their bills."

Thursday night’s vote was 14 votes short of the 290 votes required to override a Presidential veto. That means that the Democratic leadership will have to consider strategic alternatives if the President vetoes the bill. One option is to include the Labor-HHS-Education bill as part of an omnibus package consisting of multiple spending bills, making it very difficult for the President to veto such a large amount of funding and even more difficult for members of Congress to sustain a veto.

On the Senate side, the Labor-HHS-Education bill is not expected to go to the floor until after the August recess. On June 21, the Senate Appropriations Committee approved the FY08 Labor-HHS-Education Appropriations bill. The Senate bill allocates more than $152 billion for Labor-HHS-Education, $9 billion more than the President requested, and about $1 billion less than the House Subcommittee.

Resources:
Scott Cox, “Appropriations Roundup and Outlook,” Gallery Watch, July 20, 2007.
Scott Cox, “House Nearing Final Vote on Labor-HHS-Education Legislation,” Gallery Watch, July 19, 2007.
Author: DAD

Senate Panel Reaches First Agreement on SCHIP

Debate on the State Children’s Health Insurance Program (SCHIP) continued this week as members of the Senate Finance Committee announced an agreement on Tuesday, July 10, for expansion of the program. House and Senate leaders have carried on negotiations for most of this session regarding the program, but have consistently failed to reach a consensus. While the Finance Committee announcement marks the first significant agreement on SCHIP expansion, it falls significantly short of the $50 billion increase Democrats agreed to in the fiscal year 2008 joint budget resolution.

SCHIP is a state-federal insurance program covering about 6 million children and about 600,000 adults. It is intended to cover children of low-income families not poor enough to qualify for the larger Medicaid program. Under the bipartisan agreement, the expansion would cost $35 billion over five years, funded with a $.61 increase to the $.39 federal cigarette tax, to an even $1 per pack. Although committee leaders reached an agreement, the proposal may be too small an expansion to suit some Democrats and too expensive for many Republicans. Finance Committee Chairman Max Baucus (D-MT) has scheduled a markup on the legislation for Tuesday, July 17.

President Bush proposed a far smaller increase for SCHIP combined with tax deductions or credits for middle-income families to help them buy health insurance. If the White House feels the increase is too extreme, any bill that comes out of the Finance Committee may find itself on a long list of bills with veto threats levied against it. The President already stated his intention to resist the proposal, though he has not publically threatened a veto at this point. Sen. Gordon H. Smith (R-OR), an architect of the agreement, is attempting to defend the proposal against criticism from the White House.

Resources:
Alex Wayne, “Senators’ Deal on SCHIP Could Be Tough Sell,” CQ Today, July 10, 2007.
Alex Wayne, “Senate Republicans Challenge Bush on SCHIP,” CQ Today, July 12, 2007.
Author: SAS

House Passes Higher Education Reconciliation Bill

On Wednesday, July 11, the House passed H.R. 2669, the College Cost Reduction Act, by a vote of 273 to 149. The reconciliation bill, mandated in the fiscal year 2008 joint budget resolution, cuts $19 billion in federal subsidies to student lenders over five years, while increasing grants for needy students and halving interest rates on federally backed loans with the savings. The bill would also create nine new entitlement programs, including grants for students who become public school teachers, loan forgiveness for certain public-sector employees, income-contingent loan repayment, grants for certain minority-serving institutions and matching grants for companies’ philanthropic efforts to improve college access and retention. Democrats and Republicans engaged in impassioned debates over the entitlement programs and subsidy cuts over the course of two hours on the House floor.

After debating the underlying bill, which increases the maximum Pell grant to $5,200 over five years, cuts interest rates on subsidized student loans in half to 3.4 percent and increases the federally backed loan limit for undergraduate studies by $7,500, to $30,500, Rep. Howard “Buck” McKeon (R-CA), the ranking Republican on the House Education and Labor Committee, brought a substitute amendment up for debate. The substitute would have reduced subsidies in the loan programs and invested most savings in the Pell Grant program by providing increases of $350 in 2008 and $100 each year thereafter. After sixty minutes of heated discussion, the amendment was defeated, 189-231.

“This bill is disguised to reduce the federal deficit, but it creates nine new entitlement programs,” Rep. McKeon stated. Citing a cost of $32 billion after five years, Rep. McKeon noted that President Bush has pledged to veto the bill as it stands. However, the Bush administration proposed cutting lender subsidies earlier this year, so there is still a small chance the bill may become law. In the time it takes for the Senate to pass their version of the bill and go to conference, Congressional leaders have ample time to reach an agreement over the entitlements.

Resources:
Jennifer Bendery, “House Passes Student Aid Bill, Despite White House Veto Threat,” Congress Now, July 11, 2007.
Diana Jean Shemo, “House Passes Overhaul Plan on Student Aid,” New York Times, July 12, 2007.
Author: DAD, SAS

House Panel Passes Labor-HHS-Education Spending Bill

On Wednesday, July 11, the House Appropriations Committee marked up the fiscal year 2008 (FY08) Labor-HHS-Education Appropriations bill. The $152 billion bill, one of many held up in the House due to earmark concerns, is now ready for the House floor, almost a month behind schedule. Its passage will not be easy. Of all FY08 appropriations bills, Republican Jerry Lewis (R-CA) has labeled this one “veto bait” because spending in the House bill tacks on nearly $12 billion to the president’s budget request and exceeds the Senate counterpart by more than $2 billion.

The $152 billion bill includes an additional $975 million for No Child Left Behind programs. The markup included three successful education amendments:

1. Congressman James Walsh (R-NY): $335 million to State Special Education Grants (IDEA), which was offset by cutting unexpended funds from the Labor Department’s Training and Employment Services Fund.
2. Congressman John Peterson (R-PA): $25 million to increase funding for adult education and career and technical education basic state grants.
3. The manager’s amendment, introduced by House Appropriations Chairman David Obey (D-WI), which outlines priority spending projects selected from what he said was a total of over 3,400 spending requests.

The House Rules Committee is scheduled to draft the rules for debate on the bill on Monday, July 16, so the bill should reach the House floor sometime next week. As of now, there is no set schedule for the Senate to address the bill. Democrats have promised to have all twelve appropriations bills passed before October 1, the beginning of the next fiscal year. This gives Congress three weeks before the month-long August recess, and nearly four weeks in September to pass and go to conference on all the remaining bills and possibly overcome a Presidential veto.

The President has pledged to veto any legislation that goes too far over his spending requests. The Labor-HHS-Education bill is, as noted by Representative Jerry Lewis, certainly a prime candidate, exceeding the President’s request by almost $12 billion. If the President does veto the bill, the Republic Study Committee claims to have the more than the 145 votes necessary to sustain a veto, meaning appropriators will have to go back to square one and vote on new levels more agreeable to the President.

Another possible option is to include the Labor-HHS-Education bill as part of an omnibus package consisting of multiple spending bills, making it exceptionally difficult for the President to veto that much funding for government programs and operations, and even more difficult for members of Congress to sustain a veto. Democratic leaders are likely to employ whatever tactics they deem necessary in order to live up to their campaign promises to pass all FY08 spending bills on time.

Resources:
Autumn Campbell, “House Appropriators Hike Labor-HHS Spending,” Congress Now, July 11, 2007.
Authors: DAD, SAS

Senate Republicans Introduce NCLB Reauthorization Bill

On Thursday, July 12, Senators Judd Gregg (R-NH) and Richard Burr (R-NC) introduced the first comprehensive bill for the reauthorization of the No Child Left Behind Act (NCLB). S. 1775, the No Child Let Behind Act of 2007, preserves much of the existing accountability system and includes recommendations made by the U.S. Department of Education, the Education Trust, the Council of Great City Schools, the Hispanic Education Coalition, the Business Coalition for Student Achievement, and the Commission on No Child Left Behind.

Notably, the bill:

• Maintains the goal that all children reach grade-level proficiency by 2014;
• Allows for differentiated consequences to ensure that schools where a majority of students are not performing at grade-level are treated differently from schools where a small segment of the school population is not meeting state standards;
• Expands the U.S Department of Education’s growth model program to all 50 states;
• Provides greater flexibility, focus, and resources to help schools with special populations;
• Accelerates access to supplemental tutorial services so parents can choose between sending their child to another public school or accessing tutorial services in the same year;
• Authorizes a new “money follows the child” program that provides financial assistance to districts that permit Title I dollars to follow the child to the public school of his or her choice;
• Requires states to establish a rigorous high school graduation rate by 2011, based on the National Governors Association Graduation Counts Compact;
• Maintains the current definition of highly qualified teachers and emphasizes alternative certification, incentive, differential, and performance and merit pay; and
• Requires states and school districts to implement a plan to ensure that low-income and minority children are as likely to be taught by highly qualified teachers as their peers in more affluent schools.

The Senator’s staff distributed the bill on late Thursday evening with no press conference and little coordination among the other Senators working on NCLB reauthorization bills. Nor was there consultation with staff in the Committee on Education and Labor, who were not aware that it would be introduced. It is believed that Senator’s Gregg staffers worked closely with the U.S. Department of Education to draft this bill. We are in the process of researching the underlying political alliances as well as reviewing the 361 page bill in its entirety. In the coming days we will provide an assessment of how this bill will influence the political strategy for the other pending major reauthorization bills.

Resources:
“Burr Introduces No Child Left Behind Reauthorization,” Senator Richard Burr, Press Releases, July 12, 2007.
Author: DAD

Statewide Longitudinal Data Systems Grants Awarded

On Monday, July 2, the Institute of Education Sciences in the U.S. Department of Education awarded $62.2 million in grants to 13 state education departments for the design and implementation of statewide longitudinal data systems. The grants range from $3.2 million to $6 million and extend for three years. The grantees are expected to submit annual and final reports on the status of the development and the implementation of these systems.

Awardees of the data system grants, and their three-year totals, are:

• Nebraska, $3.5 million;
• North Carolina, $6.0 million;
• Kansas, $3.8 million;
• Colorado, $4.2 million;
• Nevada, $6.0 million;
• Virginia, $6.1 million;
• Indiana, $5.2 million;
• Utah, $4.6 million;
• New Hampshire, $3.2 million;
• Arizona, $6.0 million;
• District of Columbia, $5.7 million;
• Maine, $3.2 million;
• Oregon, $4.7 million.

The grants are authorized by the Educational Technical Assistance Act of 2002, Title II of the statute that created the Institute of Education Sciences.

Source: “13 States Win $62.2 Million in Grants for Longitudinal Data Systems in 2007 Grant Competition, June 28, 2007,” National Center for Education Statistics, July 2, 2007.

NCLB Reauthorization Progresses

Congress was out of session while members of Congress celebrated the 4th of July in their home districts, staffers in the House Committee on Education and Labor were working overtime to draft new language for No Child Left Behind (NCLB) based on the more than 100 proposals and 13 hearings held before the House Committee this year.

According to discussions with informed staffers, the negotiations are moving along and there is hope to produce a bill by the middle of July, and possibly as early as next week. That will be a challenge for at least two reasons. First, the House education staffers are attempting to make many technical changes to the law in a short time frame, and some report that much work remains. But, even if they manage to strike a promising balance between accountability and flexibility, the emerging election politics make the introduction of anything but a well vetted and supported bill a risky political move. If, for example, Chairman George Miller introduced a vastly more demanding bill, he would certainly encounter push-back from the federalist Republicans who signed onto Representative Peter Hoekstra’s (R-MI) H.R. 1539, the Academic Partnerships Lead Us to Success Act, which would return the authority for education reform back to the states and effectively negate NCLB. He would also face opposition from the House freshman Democrats who are very critical of the law’s current requirements.

Beginning to address political challenge, Chairman Miller recently sent out a memo to House freshman that solicits their feedback on a variety of critical matters including growth models, targeted interventions, funding flexibility, highly qualified teachers and more. (See the accompanying file to this edition of the Update). Mr. Miller hopes that this outreach will facilitate party unity behind the reauthorization, but that is uncertain.

Given the political and technical challenges, the Democratic leadership could shift their strategy from a comprehensive reauthorization to a short-term piecemeal legislative process. This approach would buy the education committees more time to address the law’s technical matters and to develop the political coalitions that the final passage will require. But regardless of the evolving strategy, Chairman Miller will still introduce a bill in the coming weeks, which will generate a torrent of debate on the reauthorization of NCLB this summer.

Resource: Stephan Langel, “House Lawmakers Push for No Child Left Behind Legislation by August,” Congress Now, 7/5/2007.
Author: DAD

ED Expands Growth Model Program

On Tuesday, July 3, the U.S. Department of Education (ED) expanded the growth model pilot to include Alaska and Arizona, which are immediately approved to use a growth model for the 2006-2007 school year. The pilot program now includes eight fully approved states and one conditionally approved state. According to a department spokeswoman, no additional states will be considered for the program.

The states and their approval dates include:
1. North Carolina (May 2006)
2. Tennessee (May 2006)
3. Delaware (November 2006)
4. Arkansas (November 2006)
5. Florida (June 2007)
6. Iowa (May 2007)
7. Ohio (Conditional, May 2007)
8. Alaska (July 2007)
9. Arizona (July 2007)

All applicant states had to meet the bright-line principles required to participate in the growth model program. Those principles require that the applicants, at least:
• Ensure that all students are proficient by 2014 and set annual state goals to ensure that the achievement gap is closing for all groups of students;
• Set expectations for annual achievement based upon meeting grade-level proficiency and not upon student background or school characteristics;
• Hold schools accountable for student achievement in reading/language arts and mathematics;
• Ensure that all students in tested grades are included in the assessment and accountability system, hold schools and districts accountable for the performance of each student subgroup, and include all schools and districts;
• Include assessments, in each of grades 3 through 8 and high school, in both reading/language arts and mathematics that have been operational for more than one year and have received approval through the NCLB standards and assessment review process for the 2005-06 school year. The assessment system must also produce comparable results from grade to grade and year to year;
• Track student progress as part of the state data system; and
• Include student participation rates and student achievement as separate academic indicators in the state accountability system.

Resources:
Alyson Klein, “U.S. OKs Pilot ‘Growth Models’ for Last 2 States,” Education Week, July 3, 2007.
“Secretary Spellings Approves Additional Growth Model Pilots for 2006-2007 School Year,” Press Release, U.S. Department of Education, July 3, 2007.
Author: DAD

Appropriations Schedule

When Congress comes back on July 9, the House Appropriations Committee will not take up the appropriations bills immediately. The Committee will return to the spending bills the week of July 16. That gives the House three weeks to pass all of its fiscal 2008 spending bills before the August recess, as Democratic leaders have vowed to do. The Senate Appropriations Committee passed its bill on June 21.

The outlook, however, is not promising. To pass all of its appropriation bills, Congress must report every remaining bill out of committee, pass the bills through their respective chambers, go to conference, and get past the White House, which has threatened vetoes on bills that substantially exceed the President’s requested funding levels. These bills do just that. The House bill provides $151.5 billion for Labor-Health and Human Services (HHS)-Education, which is $10.6 billion more than the White House requested. That includes $61.7 for the U.S. Department of Education (ED), which is $5.4 billion above the President’s request. The Senate bill also proposes more than $152 billion for the Departments of Labor, HHS and Education or more than $10 billion more than the President’s request.

House Republicans claim they have enough votes to sustain a veto, which means that Congress could finish every bill before August and then have nearly four weeks in September to reconsider any bill that the President vetoes. Yet, the more time efficient end-of-year-choice may be to combine multiple bills into one large omnibus appropriations package, a procedure that Democrats once condemned Republicans for using.

Author: DAD

Revamping Section 5201 of No Child Left Behind

On June 28th, Representative Charles Boustany (R-LA) introduced H.R. 2904, the Charter School Program Enhancement Act of 2007. The bill would amend section 5201 of No Child Left Behind (NCLB) and significantly bolster the development and replication of successful charter schools.

Notably the bill would:
• Continue support for charter start-ups;
• Provide greater support for the expansion and replication of successful charter models;
• Strengthening the Education Secretary's ability to use grant selection criteria to encourage improvements in state charter laws;
• Allow charter school authorizers to serve as grant administrators in addition to state education agencies;
• Allow the Secretary of Education to allocate funds between the Charter Schools Program and State Facilities Incentive Grants Program; and
• Create a national dissemination program to encourage the sharing of charter schools’ best practices among public schools across the nation.

The bill includes many proposals that are important to the charter school community, such as greater support for the expansion and replication of successful charter models. The bill also includes provisions that are sure to infuriate charter school critics. For example, the bill would allow the Secretary of Education to exclude applications from states with charter laws that “limit the number of charters in the state” or “the percentage of students who may attend charter schools” or “limit, in any other way the Secretary considers material, the ability of the state to use charter schools to serve students in the state.”

To be sure, the bill will face scrutiny but the strength of the co-sponsors suggests that its language will become (and may already be) an important part of the NCLB reauthorization discussion. The co-sponsors include Rep. Michael Castle (R-DE), Rep. Luis Fortuno (R-PR), Rep. Peter Hoekstra (R-MI), Rep. Carolyn McCarthy (D-NY, Rep. Howard McKeon (R-CA).

Resources:
“The Charter Schools Program Enhancement Act of 2007,” National Alliance for Public Charter Schools, June 29, 2007.
“H.R. 2904, To amend the Elementary and Secondary Education Act of 1965 to reauthorize the laws relating to public charter schools to improve academic achievement of all students,” The Library of Congress, THOMAS, June 28, 2007, http://thomas.loc.gov/home/gpoxmlc110/h2904_ih.xml.
Author: DAD

NCLB Reauthorization Speculation Continues

There was much speculation on the reauthorization of the No Child Left Behind Act (NCLB) this week. On Monday, June 25, President Bush advocated for a 2007 reauthorization at the Presidential Scholars White House event. He stated his willingness to amend the law, but retained his commitment to accountability. “I know some members and senators have got concerns about the law, and we're more than willing to talk about flexibility. But there is no compromise when it comes to setting high standards and measurement.”

The “concerns about the law” referenced by President Bush are prevalent among Democrats in Congress and, more troubling for the President, among Republicans as well. After losing control of Congress last November, the Republicans are trying to re-define the party by returning to some of their pre-NCLB tenets. That means returning responsibility for education reform back to states, and Representative Peter Hoekstra (R-MI) began that endeavor in March by introducing H.R. 1539, the Academic Partnerships Lead Us to Success Act (A-Plus), a bill that allows states to opt out of NCLB and consolidate their federal funding. The bill has secured 60 co-sponsors to date.

This week, the Washington Post made it clear that the “concerns about the law” also extend to former administration officials. On Tuesday, the Post ran an article detailing the lack of support for the current law among former administration officials, with focus on Eugene W. Hickok, a former Deputy Secretary in the U.S. Department of Education (ED). Hickok and other former administration officials said they supported the law when it was first put in place because it targeted the achievement gaps between privileged and disadvantaged students, but that the law is too rigid and the federal role too expansive.

While the week’s NCLB activity made the political tension more public, it did not affect the timeline. Staffers in the House Committee on Education and Labor are still trying to complete a bill to introduce before the end of July. They are meeting frequently on the matter, but it is not clear if they will make that deadline. The Senate education committee staffers have yet to begin work on the reauthorization. They hope to begin at the end of July and produce a bill by the fall, but by then election politics could soil all that urgent work. It is becoming conventional wisdom in Washington that Congressional Republicans have little to gain by supporting an on-time reauthorization. They can either support their unpopular President and the Democratic leadership of the education committees or delay the matter and expose it to the trials of the 2008 election cycle. As the election season approaches, the latter option appears to be growing more appealing to the Republicans.

Resources:
“President Bush Congratulates Presidential Scholars, Discusses No Child Left Behind Reauthorization,” The White House, In Focus, June 25, 2007, http://www.whitehouse.gov/infocus/education/.
Amit Paley, “Ex-Aides Break with Bush on ‘No Child,’” The Washington Post, June 26, 2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/06/25/AR2007062501897.html.
Author: DAD

Congress Calls for Investment in Early Education

On Wednesday, June 27, the U.S. Joint Economic Committee held a hearing on "Investing in Young Children Pays Dividends: The Economic Case for Early Care and Education." The House and Senate also joined to introduce S. 1374 and H.R. 2859, the Prepare All Kids Act. The week’s focus on early education underscored the recent push towards investing in young American’s education at the earliest age possible. Members of Congress and early education advocates all seem to agree that investing in education at younger ages is a good way to help ensure that future generations are healthy and prosperous.

Wednesday’s hearing included witness testimony from:
• Dr. James Heckman, Nobel Prize-winning professor of economics from the University of Chicago;
• Kansas Governor Kathleen Sebelius;
• Harriet Dichter, Deputy Secretary at the Pennsylvania Office of Child Development and Early Learning; and
• Douglas Besharo, Director of the American Enterprise Institute’s Social and Individual Responsibility Project.

Research indicates that non-scholastic, social factors are vital in determining a child’s success in school. A landmark study that followed children in the Perry Preschool Program in Michigan found that for every dollar invested in that program, $17 were saved in other costs, including those for crime, welfare and education. Dr. Heckman testified that while the No Child Left Behind Act (NCLB) focuses on measuring early cognitive ability through achievement test scores in the fourth grade, a range of other factors spur success in school and later in life, including socio-emotional skills that promote motivation, self-confidence and tenacity.

To show their support for proposals and suggestions offered from the panel, members of the committee touted that joint effort in introducing the Prepare All Kids Act. Sen. Robert Casey (D-PA), introduced the bill in May, while Reps. Carolyn Maloney (D-NY), Allyson Schwartz (D-PA), and Maurice Hinchey (D-NY) introduced the House version on Tuesday. The bill works to provide at least one year of high-quality pre-kindergarten education to all children and free for the neediest low-income children, as the bill targets children from families at or below 200 percent of the federal poverty level, about $40,000 for a family of four. The programs will use a research-based curriculum that supports children’s cognitive, social, emotional and physical development, as well as individual learning styles.

Resources:
Frank Wolfe, “Congress presses investments for pre-K programs,” Education Daily, June 28, 2007.
Author: SAS

WIA Reauthorization Hearing

On Thursday, June 28, the House Education and Labor Committee held its first hearing in a series on the reauthorization of the Workforce Investment Act (WIA), “Recommendations to Improve the Effectiveness of Job Training.” Subcommittee on Higher Education, Lifelong Learning, and Competitiveness Chairman Rubén Hinojosa (D-TX) was joined by fellow Democrats John Tierney (MA), John Yarmuth (KY), and Bobby Scott (VA), and Ranking Member Ric Keller (R-FL) and, briefly, Howard “Buck” McKeon (R-CA).

The panelists included:
• Dr. Sigurd Nilsen, Director, Education, Workforce and Income Security Issues Government Accountability Office (GAO);
• Dr. Rachel Gragg, Federal Policy Director, The Workforce Alliance;
• Ms. Evelyn Ganzglass, Director, Workforce Development Center for Law and Social Policy;
• Dr. Sandra Baxter, Director, National Institute for Literacy;
• Mr. Wes Jurey, President and CEO, Arlington Texas Chamber of Commerce;
• Mr. Bruce Ferguson, Jr., President and CEO, Worksource.

The entire panel endorsed the critical role of the law’s training services in the emerging global economy, but recognized that the law required improvement. Three corrective themes were common. First, and possibly most important, the reauthorized law must have data that are more accurate about the enrolled job seekers. As stated by Mr. Nilsen and detailed in the June 28 GAO report, Workforce Investment Act: Additional Actions Would Further Improve the System: “We have little information at a national level about what the workforce investment system under WIA achieves.

Outcome data does not provide a complete picture of WIA services.” Second, there should be less focus on infrastructure funding and more on training, and the law should provide more flexibility regarding the sequence of training and the ability to target funds on programs that are specific to particular regional industry needs. Third, WIA’s funding should be simplified and more flexible in order to create more innovative practices and to promote the sharing of successful practices among the training centers.

The hearing was the first in a series of House hearings scheduled for July. The remaining dates are not yet scheduled. We will continue to monitor WIA reauthorization as it progresses.

Resources:
“Workforce Investment Act: Recommendations to Improve the Effectiveness of Job Training,” U.S. House of Representatives, Committee on Education and Labor, Hearings, June 28, 2007, http://edworkforce.house.gov/committee/hearings.shtml.
Author: DAD

Appropriations Behind Schedule

As Congress heads into the July 4th recess, House Majority Leader Steny Hoyer (D-MD) is not happy with the lack of progress the House is making with the fiscal year 2008 (FY08) appropriations bills. As of this point, the House has passed only six of the twelve spending bills, far short of Hoyer’s promise to have all bills passed before the week-long July 4th recess. In addition, five of the six remaining bills have not even been reported out of committee. Although the Senate appears to be moving along on schedule, delays in the House could spell trouble for the new Democratic majority.

Throughout the 2006 midterm elections, the Democrats pointed out the Republican majority consistently failed to pass all appropriation bills before the beginning of the new fiscal year, leading to a number of omnibus bills and continuing resolutions. The Democrats promised to succeed where the Republicans had failed. The Democrats got off to a rocky start when they decided to pass one final continuing resolution for fiscal year 2007 (FY07) appropriations bills, though they blamed the former Republican majority for failing to finish work on the FY07 bills before the new majority took control. The bill passed and the Democrats declared victory, and prepared to move on the FY08 issues.
Although it took Congress longer to pass the FY08 budget resolution than Democratic leaders planned, the ball started rolling and the new majority seemed to be on its way to fulfill one of their biggest campaign promises. However, when Republicans began to complain about the earmark timetable that House Appropriations Chairman David Obey (D-WI) set up, the clouds began to form. The storm finally broke as the Appropriations Committee postponed its markup of the Labor-HHS-Education bill. As the earmark debate created additional barriers for bills already on the House floor, Chairman Obey decided to send bills back to committee, such that each bill can come to the House floor with all earmarks already attached. This put the remaining bill into a holding pattern until the first few bills are reconsidered.
When Congress comes back on July 9th, the House Appropriations Committee is scheduled to work on the Labor-HHS-Education bill, as well as all the other remaining bills. This gives appropriators four weeks to finish as much as they can before the month-long August recess begins on Sunday, August 5th. To pass all of the appropriation bills, the Congress must report every remaining bill out of committee, pass the bills through their respective chambers, go to conference, and get past the White House, which has threatened vetoes on bills that go too far over the President’s requested funding levels. House Republicans claim they have enough votes to sustain a veto, which means even if Congress can finish every bill before August, it will have about four weeks in September to reconsider any bill that the President vetoes. The final choice may be to combine multiple bills into one large omnibus appropriations package, a tactic that Democrats once condemned Republicans for using. The outlook at this point is not promising.
Author: SAS

Supreme Court Rules on Racial Factors in School Enrollment

On Thursday, June 27, 2007, the Supreme Court, in a 5-4 vote, rejected integration plans in Louisville, KY and Seattle, WA school districts stating that the plans violated constitutional guarantees of equal protection.

Federal appeals courts had upheld both plans after some parents sued. The Bush administration took the parents’ side, arguing that racial diversity is a noble goal but can be sought only through race-neutral means. The Louisville case grew out of complaints from several parents whose children were not allowed to attend the schools of their choice. The Seattle school district said it used race as one among many factors and relied on it only at the end of a lengthy process in allocating students among the city's high schools. Seattle suspended its program after parents sued.
Chief Justice John G. Roberts, Jr., who delivered the opinion of the Court stated, “[t]he way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” Justices Antontin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito, Jr. also concurred in part.
Justice Kennedy stated, in a separate concurring opinion, that while he agreed with the decision, he disagreed with that reasoning and that race may be a component of school plans designed to achieve diversity. “A district may consider it a compelling interest to achieve a diverse student population,” Kennedy said, "[r]ace may be one component of that diversity.”
Justice Stephen Breyer, in a dissent joined by Justices David Hackett Souter and Ruth Bader Ginsburg, said Roberts’ opinion undermined the promise of integrated schools that the court laid out 53 years ago in its landmark decision in Brown v. Board of Education. Justice John Paul Stevens filed a separate dissent and called the Chief Justice's reliance on Brown to rule against integration “a cruel irony.”
Justice Clarence Thomas, the Court's only black member, wrote a separate opinion endorsing the ruling and taking issue with the dissenters' view of the Brown case. “What was wrong in 1954 cannot be right today,” Thomas said. “The plans before us base school assignment decisions on students' race. Because ‘our Constitution is colorblind, and neither knows nor tolerates classes among citizens,’ such race-based decision making is unconstitutional.”
“The last half century has witnessed great strides toward racial equality, but we have not yet realized the promise of Brown. To invalidate the plans under review is to threaten the promise of Brown.” Breyer stated in his dissent. “This is a decision that the Court and the Nation will come to regret.”
Resources:
Parents Involved in Community Schools v. Seattle School Dist. No. 1, et al., located at http://www.supremecourtus.gov/opinions/06pdf/05-908.pdf
http://www.insidehighered.com/news/2007/06/28/supreme
http://hosted.ap.org/dynamic/stories/S/SCOTUS_SCHOOLS_RACE?SITE=LABAT&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2007-06-28-10-41-05
Author: TRW

Audit Report Questioning Fiscal Flexibility in Schoolwide Programs

On June 20, 2007, the U.S. Department of Education’s Office of Inspector General (OIG) released a blockbuster audit report questioning long-standing guidance on the way states and school districts should document financial information in schoolwide programs. The audit is available on the U.S. Department of Education’s (ED) website at: http://www.ed.gov/about/offices/list/oig/auditreports/a05g0031.pdf

OIG audited a school district to determine if the district complied with financial accountability requirements under the No Child Left Behind Act (NCLB) programs. The objective of the audit was to determine if costs were allowable under the program, necessary, reasonable, allocable and spent in accordance with approved budgets. During the audit, OIG concluded the district did not provide appropriate time and effort records showing how much time employees spent on various cost objectives. Some of these employees worked on schoolwide activities in schoolwide programs.
The State (which is ultimately responsible for audit resolution in state-administered programs) objected, noting that funds lose their character as state or federal funds in schoolwide programs. Therefore, it would not make sense to require schoolwide employees to maintain documentation of their time and effort. The state pointed to ED’s Non-Regulatory Guidance on Designing Schoolwide Programs (March 2006), which states:
Schoolwide program schools use Title I funds to meet the needs of all students in the school, as determined through a comprehensive needs assessment. Individual students are not identified as eligible to participate. No distinctions are made between staff paid with Title I funds and staff who are not.
The State argued that if there is no distinction between staff supported with federal funds and staff that are not, it does not make sense to require employees to keep documentation of which programs they work on.
OIG rejected this argument, noting the schoolwide schools did not actually consolidate their funding in their accounting systems. The OIG states that “funds were accounted for in the same way whether or not the individual was employed by a schoolwide or non-schoolwide school.” Without evidence that the school district used an accounting method to consolidate schoolwide program funds at its schoolwide schools, OIG found no basis to distinguish between schoolwide and non-schoolwide costs.
OIG questioned $210,000, but estimated the total amount of unsupported costs might be as high as $2,360,000. OIG recommended that ED’s Office of Elementary and Secondary Education determine the full amount of unsupported costs and require the State to repay that amount.
This audit report highlights longstanding confusion over the extent of fiscal flexibility available in a schoolwide school. Although ED has encouraged schoolwide schools to “consolidate” their funding (and, in fact, NCLB requires states to lift all barriers to the consolidation of schoolwide funds and to encourage school districts to consolidate schoolwide funding), it has never provided clearly written guidance on what consolidation means. In May 2006, ED released Non-Regulatory Guidance on Title I Fiscal Issues attempting to clarify the consolidation requirement by introducing the notion of a “single account.” The guidance provides:
A school operating a schoolwide program that consolidates in a single account and uses, in a schoolwide program, funds from other Federal education programs administered by the Secretary (except Reading First) is not required to maintain separate fiscal accounting records, by program, that identify the specific activities supported by those program funds. The school must, however, maintain records that demonstrate that the schoolwide program, considered as a whole, addresses the intent and purposes of each of the Federal education programs whose funds were consolidated to support it.
From the start, however, this guidance raised more questions than it answered because it never explained what a “single account” is, or what steps a school must take in order to consolidate funds into a single account.
ED has been particularly inconsistent in how it treats time distribution in schoolwide programs. In guidance issued under the Improving America’s Schools Act of 1994, the predecessor to NCLB, ED stated that employees working exclusively on schoolwide activities do not need to maintain any time and effort records. This guidance was written by ED’s Office of Elementary and Secondary and Education. Yet, ED’s Office of the Chief Financial Officer (OCFO) later advised that a schoolwide program represents a single cost objective; accordingly, semi-annual certifications must be kept. The OCFO’s position was also reflected in the OMB Circular A-133 Compliance Supplement. This conflict was supposed to be clarified by ED’s May 2006 fiscal guidance, in which ED stated that schoolwide schools consolidating their funds into a single account are not required to maintain any time and effort records, while schools not consolidating their funds into a single account must follow the rules of time distribution set out in OMB Circular A-87. Without an explanation of what a “single account” is, it is difficult to understand the practical implications of this guidance. Further, it remains unclear whether a schoolwide program constitutes a “single cost objective” if a school does not consolidate its funds into a single account.
This audit finding may finally force a confrontation over what it means to consolidate funds in a schoolwide program and what practical implications that has for financial operations. Although the finding only specifically addresses time and effort certification, this issue impacts the documentation of any costs associated with a schoolwide program, as well as other financial management issues such as procurement, inventory management, cash management and record keeping. Ultimately, it is up to ED’s Office of Elementary and Secondary Education to determine whether to sustain the audit findings.
This audit also underscores ED’s overall focus on fiscal issues. It is our understanding that OIG is performing a number of financial accountability audits around the country.
Our firm has contacted the OIG and OCFO to get clarification on the policy interpretations underlying this audit report. We plan to address the issue of consolidated funding in a schoolwide program in great detail at trainings this fall, including AEFFA in October and our Forum in November. We will keep you posted on any additional information we receive from ED on this very important issue.
Author: SLK

Congress Passes HEA Extension

On Wednesday, June 27, the Senate passed S. 1704, a 30-day extension for the Higher Education Act (HEA), which is set to expire on Saturday. The House, which had passed its own four-month extension earlier this session, followed suit and passed the Senate extension so the bill can go to President Bush before the Saturday deadline. The extension will run through July 31, 2007. Considering the week-long recess next week, this leaves Congress with less than a month to complete work on the HEA reauthorization.

Last week, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously passed its HEA bill. The Senate bill, S. 1642, increases the amount of information that schools and lenders must provide students about their loans. The bill will also ban lenders from providing school financial aid officials with perks such as student aid assistance in order to be on schools’ “preferred lender” lists. The measure would shorten the form that students must complete for financial aid and would direct the U.S. Department of Education (ED) to track tuition increases and assess the drivers behind increasing college costs, putting schools on notice that the government is concerned about rapid tuition increases. The Senate has not scheduled time for a floor debate for the reauthorization, and the House Education and Labor Committee has not marked up its own reauthorization, so there is still a lot of work to do.
Although the House has not moved on to HEA reauthorization, both Congressional panels passed a higher education reconciliation bill, as directed by the joint budget resolution Congress passed in May. The Senate bill cuts federal subsidies to lending companies by as much as $19 billion. The bill will channel most of those savings to student aid and ease repayment rules for borrowers. It also creates a new entitlement funding stream for Pell grants that would not be subject to the annual appropriations process. The bill intends to boost the maximum Pell grant by more than $1,000, to $5,400 by 2011. The bill would establish new "Promise Grants" for the neediest Pell recipients, cap student loan repayments at 15% of discretionary income and offer loan forgiveness for some public-service employees. The House passed a similar measure earlier this month, though neither chamber has considered their bills on their respective floors.
Resources:
Libby George, “House Clears Temporary Extension of College Aid Law,” CQ Today, June 28, 2007.
Author: SAS

More Focus on Internal Controls in OMB Circular A-133 Revision

The Office of Management and Budget (OMB) published a revision to OMB Circular A–133 “Audits of States, Local Governments, and Non-Profit Organizations” in Tuesday’s (6/26/07)Federal Register. The revision updates terminology and definitions related to internal controls and simplifies reporting requirements to the Federal Audit Clearinghouse (FAC).

The revisions to the internal control terminology align OMB Circular A-133 standards with changes in the Statement on Auditing Standards issued by the American Institute of Certified Public Accountants (AICPA) and the Government Accountability Office’s revisions to Government Auditing Standards. Rather than requiring auditors to identify reportable conditions over internal controls, the revised OMB Circular A-133 will require auditors to classify findings as a “control deficiency,” “significant deficiency” or “material weakness.” The definition of each of these categories is available at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-12320.pdf. In addition, OMB announced the release of AICPA Auditing Interpretation No. 1 of Statement on Accounting Standard No. 112, entitled “Communicating Deficiencies in Internal Control Over Compliances in an Office of Management and Budget Circular A-133 Audit.” The Interpretation is available at: www.aicpa.org.
Starting on January 1, 2007, the auditee is no longer required to submit multiple copies of the reporting package to the FAC. Instead, only one copy is necessary, except for Part III, item 8, which states that all required agencies receive a copy of the package.
As a practical matter, these revisions may lead to an increase in the number of internal control findings reported in single audits. They may also change how auditors determine which programs to audit and how to determine an auditee’s overall risk-level. This could have a significant impact on recipients of federal education grants. As we have previously reported, the U.S. Department of Education (ED) has become increasingly concerned about managing risk levels in state and local education agencies. It has developed a scorecard to assess risk levels across the country and has begun to visit states to discuss risk mitigation strategies. Ultimately, ED plans to use its assessments to determine who to monitor when, and how closely to scrutinize state and local practices. Although we do not know precisely what criteria ED uses as part of its risk determination, ED officials have stated they review single audit findings – especially findings related to internal controls.
These revisions apply to audits of fiscal years ending on or after December 15, 2006. OMB invites interested parties to submit comments by August 27, 2007. Instructions for submitting comments are available at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-12320.pdf.
Author: TRW, SLK

Subscribe to: Posts (Atom)