CAP Looks at Local Control

While the Senate continues its deliberate drafting on Title I Part A and Title II Part A of No Child Left Behind (NCLB) Act, education pundits ponder the future federal role in education. It is all but certain that things will change, but how and when is quite speculative. Congressional Republican and Democratic leadership are both seeking a new approach without compromising the core principles of the law. This balancing act will be difficult and the challenge commands more focus than election year politics may allow. The quality of discussion in Congress, thus far in 2008, has been middling at best.

The discussion has been more interesting off Capitol Hill. For example, the American Enterprise Institute has been hosting many forum discussions of the changing federal role. On March 20th, the Education Sector is hosting a sold out forum on the evolving federal role in education, and, this week, the Center for American Progress released a thoughtful examination of the unique American “obsession with local control” in the new report Nationalize the Schools (… A Little)! It is significant that, despite the political orientation of these organizations, all are coalescing around a more nationalized system of education accountability, an accountability system quite unlike the current NCLB regime.

In Nationalize the Schools, Matt Miller makes his argument by providing the reader with a brief trip through history to identify the roots of local control. “A look at the history of local control as the organizing principle of schooling suggests that an approach that made perfect sense in the 1700s is crippling American education today.” It is crippling, in part, because there are 50 states and 15,000 school districts all setting their own standards and accountability measures, meanwhile the U.S. Department of Education (ED) is trying to coalesce these actions with NCLB’s objectives. It is not working, argues Miller.

In lieu of the current efforts, Miller suggests that the federal role should not be to micromanage the methods of accountability and interventions. ED should, instead, work with states to set rigorous national standards, increase the federal investment and provide a guaranteed baseline for funding per pupil, and to invest in research and development in order to promote innovation in teaching and learning techniques. Miller asserts, generally, that the new federal role must transcend the out-dated tradition of local control. He believes that ED needs to get serious about a new national role in standards and finance that will help the nation meet the challenges of today’s international economy.

The document is brief and, consequently, lacks many critical details, but was not designed for that purpose. Mr. Miller intended it to spark discussion in Washington and capture the attention of Congress. That is happening, albeit slowly, and it is an issue worth tracking in the coming months and years.

Resource:
Matt Miller, Nationalize the Schools (...A Little)! (Center for American Progress: March 2003), http://www.americanprogress.org/issues/2008/03/nationalize_the_schools.html.
Author: DAD

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ED’s Schoolwide Guidance Provides Key Insights

Last month, the U.S. Department of Education (ED) released long anticipated guidance on the fiscal aspects of schoolwide programs. Schoolwide programs, as we know them today, have been a part of Title I since at least 1994. Yet, the fiscal aspects of the schoolwide requirements have remained something of a mystery as state education agencies (SEAs), local education agencies (LEAs) and schools have struggled to implement compliant schoolwide programs.

Section 1114 of the Elementary and Secondary Education Act (ESEA) authorizes eligible schools to consolidate federal, state and local funds to upgrade the entire educational program of the school. A school is considered eligible if it has at least forty percent poverty and it completes a compliant schoolwide plan in accordance with section 1114.

ED’s new guidance finally provides insight into some of the trickiest schoolwide fiscal issues, such as the nature of consolidation, appropriate methods for accounting for consolidated funds and allowable charges in schoolwide programs. The guidance is included in the revised “Non-Regulatory Guidance on Title I Fiscal Issues” and is available at: http://www.ed.gov/programs/titleiparta/fiscalguid.doc.

1. What is consolidation?

According to the new guidance, consolidating funds in a schoolwide program simply means that the school treats identified funds as a single “pool” of money. In other words, the school must identify which programs are considered consolidated in its schoolwide plan and how much each program will contribute to the schoolwide pool. Those identified amounts will be considered the consolidated pool and must be used on allowable schoolwide activities.

The new guidance clarifies that schools do not need to literally combine their funds into a single account in their accounting systems. Rather, the term “pool” is used conceptually to indicate that the identified funds will be used to pay the costs of the schoolwide program without regard to the original source of those funds.

Because consolidation is a conceptual idea (as opposed to a literal combining of funds) the importance of identifying, in the schoolwide plan, the programs that will make up the consolidated pool becomes critically important. Only those funds that are specifically identified in the plan will be considered “schoolwide funds” subject to the schoolwide flexibility.

Unfortunately, identifying programs is easier said than done. Under Title I, Part A, LEAs are required to allocate funds to eligible schools. Thus, each school receives an allocation to support its school-level costs. Outside of Title I, Part A, however, most federal education programs do not contain a process for allocating funds to individual schools. Rather, SEAs allocate funds to LEAs for LEAs to spend in accordance statutory requirements. While LEAs may choose to allocate, or set-aside, some of its funds to pay allowable school-level costs, many LEAs spend the funds at the LEA level and provide services to schools.

If a schoolwide program school does not receive a distinct allocation, how should it identity the funds to be consolidated? In 2004, ED released a notice on schoolwide programs that clarified consolidation also extends to services, materials, and equipment purchased with federal funds and provided to a schoolwide program school.

Thus, schools should identify the services, materials and equipment they receive from the LEA as part of the schoolwide pool in order to make them part of the schoolwide program. Schools may need assistance from their LEAs to identify which services, materials and equipment were purchased with federal funds and are eligible for consolidation.

2. How do you account for consolidated funds?

The new guidance provides several examples of how an LEA may account for funds in a schoolwide pool.

One option is to charge costs proportionally among the programs that make up the schoolwide pool. In other words, the program funds earmarked for the schoolwide pool may be used for any allowable schoolwide activity. Allowable schoolwide costs are then charged back to the contributing programs on a proportionate basis. In other words, if Title I, Part A contributed ten percent of the funds in the consolidated pool, 10 percent of the expenditures from the pool would be charged back to Title I, Part A.

Another option is to charge costs sequentially. In other words, charge costs to state and local funds first, and then to federal programs until those funds are exhausted. Charging costs to state and local funds first ensures SEAs and LEAs stay in compliance with federal cash management rules.

If consolidated funds remain unexpended at the end of the year, ED recommends that LEAs credit the unspent funds back to the contributing programs on a proportional basis.

3. What are allowable costs and how do schoolwide programs prove that funds were spent on allowable costs?

One of the most important clarifications in the guidance concerns the concept of allowable activities in a schoolwide program. Under section 1114, eligible schoolwide program schools may consolidate their federal, state and local funds to upgrade the “educational program” of the school. A schoolwide program school must identify its educational needs in the schoolwide plan by conducting a comprehensive needs assessment and describing the specific strategies it will use to upgrade the educational program in accordance with section 1114. The new guidance clarifies that federal funds contributed to a schoolwide pool may only be used on the educational activities described in the schoolwide plan. Further, costs charged to federal funds must be consistent with the federal cost principles set out in Office of Management and Budget (OMB) Circular A-87.

Thus, in order to be allowable, a cost paid with federal funds in a schoolwide program must be: (1) related to an educational activity that is included in the schoolwide plan; and (2) consistent with federal cost principles.

Federal funds cannot be spent on operational costs such as building maintenance and repair, landscaping, and custodial services. These costs are per-se non-educational; thus, they are not allowable.

This again highlights the importance of the schoolwide plan. Costs are only allowable to the extent they are linked to the educational needs and strategies identified in the plan. It is important to ensure a schoolwide plan is sufficiently detailed to include the educational costs the school will charge to the schoolwide pool and that the school’s budget is well aligned to the schoolwide plan.

The process of proving that a school has spent federal funds on allowable costs depends on how the school has chosen to consolidate its funds:

• If a school consolidates federal, state and local funds, the school does not need to trace its federal expenditures to allowable schoolwide costs. Once federal funds are consolidated with state and local funds they lose their identity as federal funds; thus, they do not need to be tracked to allowable educational costs. However, the school must demonstrate that, in the aggregate, there are sufficient state and local funds to pay for all of the non-educational costs charged to the schoolwide pool. Because federal funds lose their identity in this situation, any employee working exclusively on schoolwide activities and whose salary is charged to the schoolwide pool is not required to maintain any time and effort records.

This distinction between educational and non-educational costs is an important clarification. Title I, Part A contains a supplement not supplant provision, which generally means that Title I funds must be used only to provide additional services, staff, programs, or materials that could not be provided by the SEA or LEA absent the federal funds. In other words, federal funds normally cannot be used to pay for services, staff, programs, or materials that would otherwise be paid with state or local funds. ED has clarified that this restriction applies in schoolwide program schools, but that to demonstrate compliance an LEA simply must ensure that a schoolwide program school receives all of the state and local funds it would receive if it were not a Title I school.


The new guidance provides an additional nuance to this supplanting analysis. Under the new guidance, an LEA must not only provide a school with all of the state and local funds it is entitled to receive, it must ensure the school receives sufficient state and local funds it would otherwise need to operate the school in the absence of federal funds. Thus, LEAs will need to implement a methodology for identifying operational expenses within a schoolwide program school and ensure there are sufficient state and local funds in the schoolwide pool to pay for those expenses.

• If a school only consolidates its federal funds, and does not include any state or local money in the schoolwide pool, it is required to demonstrate the federal funds were spent on educational activities by tracing all costs charged to the pool to a specific allowable educational activity. Employees working exclusively on schoolwide activities and whose salaries are charged to the schoolwide pool must maintain a semi-annual certification. An employee who works on schoolwide and other activities must maintain a monthly personnel activity report.

• If a school operating a schoolwide program does not consolidate its Title I, Part A funds with any other federal, state or local funds, it is required to demonstrate the Title I funds were spent on educational activities by tracking all costs charged to Title I, Part A to a specific allowable educational activity.

Resource:
Non-Regulatory Guidance: Title I Fiscal Issues (United States Department of Education: Revised February 2008), http://www.ed.gov/programs/titleiparta/fiscalguid.doc.

Author: SLK

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ED Releases New Title I Fiscal Guidance (2/8/2008)

This week, the U.S. Department of Education (ED) issued non-regulatory guidance regarding various Title I fiscal issues. This non-regulatory guidance updates Section E of the Title I fiscal issues guidance released in May 2006 and addresses consolidating funds in schoolwide programs. In addition to revising the introduction to Section E, this guidance adds several new questions that clarify the purpose for consolidating funds in a schoolwide program, provides more detail on what it means to consolidate funds in a schoolwide setting, and describes how an LEA might account for State, local, and Federal funds that are consolidated in a schoolwide program. This guidance does not impose any requirements beyond those that the law specifies.

Any requirements referred to in this guidance are taken directly from the statute and the Title I regulations, with citations provided throughout. The examples shown in this revised guidance illustrate possible ways to account for Federal funds in a schoolwide setting and do not constitute endorsement of the processes shown or imply that there is a requirement to use those processes. The guidance in this document supersedes all prior non-regulatory guidance issued by ED concerning Title I fiscal issues

You can view the new guidance at: http://www.ed.gov/programs/titleiparta/fiscalguid.doc.

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NCLB: Monitoring the Regulatory Route (1/11/2008)

On Monday, President Bush was in Chicago urging Congress to revive the reauthorization of the No Child Left Behind Act (NCLB), but not to “weaken the accountability system” or else he will veto the bill. It was such non-negotiable encouragement for Congress that the speech elevated the discussion of an anticipated third course of action: effecting change through regulatory or administrative measures. Prior to the President’s speech in Chicago, U.S. Secretary of Education Margaret Spellings laid out the contingency plan if Congress fails to act in 2008. “We hope they will [reauthorize the law in 2008]. But if they don't, I'll take administrative steps at the Department, as I have in the last three years, to start to work on some of these matters.” She repeated this position at her Thursday Newsmaker Luncheon speech on the National Press Club. She stated that “Congress has had over a year to consider these reforms, but students and teachers need help now. So if Congress doesn't produce a strong bill quickly, I will move forward.”

The administrative steps Spellings referred to are not clear, but they likely begin with what the U.S. Department of Education (ED) has the authority to do. ED can certainly expedite the expansion of the growth model pilot program since that is already underway and ED could more aggressively monitor implementation, particularly around choice and supplemental educational services provisions, a priority for ED. The range of other administrative actions is limited, practically, by the limited scope of ED’s legal authority to makes changes to the law and by the near certain political resistance ED will encounter to any significant initiatives. Much remains unknown, and we will continue to monitor and analyze these matters as they develop.

Resources:
Maria Glod, “Congress is Urged to Enhance ‘No Child’ Law,” Washington Post, January 8, 2008, http://www.washingtonpost.com/wp-dyn/content/article/2008/01/07/AR2008010701823.html
“Press Gaggle by Tony Fratto and Secretary Margaret Spellings,” The White House, News & Policies, Office of the Press Secretary, January 7, 2008, http://www.whitehouse.gov/news/releases/2008/01/20080107.html.
“U.S. Secretary of Education Margaret Spellings Discusses No Child Left Behind, Priorities for 2008 During Remarks at National Press Club in Washington, DC,” United States Department of Education, http://www.ed.gov/print/news/pressreleases/2008/01/01102008.html.
Author: DAD

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Sixth Circuit Keeps NCLB Suit Alive (1/11/2008)

On Monday, the United States Court of Appeals for the Sixth Circuit kept the National Education Association’s (NEA) lawsuit against the No Child Left Behind Act (NCLB) alive. By a two-to-one ruling, the court reversed the judgment of the U.S. District Court for the Eastern District of Michigan and remanded the case, School District of the City of Pontiac, et al. v. Secretary of the United States Dep’t of Educ., No. 05-2708 (6th Cir. January 7, 2008), back to district court for further proceedings.

The Court found that the District Court improperly dismissed the case for failure to state a claim. On appeal, the majority found that the Plaintiffs had stated a sufficient claim: that states are not liable for the costs of complying with mandates under NCLB in excess of the federal funding provided because 20 U.S.C. § 7907(a), the "Unfunded Mandates Provision" (UMA), is vague enough to violate the Spending Clause of the United States Constitution.

The requirement, cited by the District Court, states that “when Congress attaches conditions to a state’s acceptance of federal funds, the conditions must be set out unambiguously.” The Court, citing, in part, a 2003 memorandum prepared by Brustein & Manasevit for the National Conference of State Legislatures, found that the law’s unclear language may have led state officials to believe that the state was not liable for the costs of implementation not covered by the federal funding.

The lone judge in dissent was not convinced. He wrote that a trained state administrator would know that federal appropriations are subject to change from year to year. Therefore, the dissent determined, a reasonable state administrator would interpret the language to imply that the state would be responsible for complying with NCLB even if it received less than the full amount of funding authorized under the law. The law is an appropriate exercise of congressional authority under the Spending Clause because, in part, compliance has never been contingent on full federal funding.

The 6th Circuit, after finding that the Plaintiffs’ claim was valid under NCLB, reversed the District Court’s decision to dismiss the case and remanded the case back for further proceedings. A new trial date will now be set and the plaintiffs will get the opportunity to move forward with their law suit against the U.S. Department of Education.

Resource:
School District of the City of Pontiac v. Secretary of the United States Department of Education, No. 05-2708 (6th Cir. January 7, 2008), http://www.ca6.uscourts.gov/opinions.pdf/08a0006p-06.pdf.
Authors: DAD, SAS

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Growth Model Pilot: Another Round

Now that the reauthorization of the Elementary and Secondary Education Act (ESEA) has stalled in Congress, it is certain that piecemeal legislation and regulatory work will begin to address the critical issues left unchanged by the delay. Changes to sections 1111 and 1116 are sure to come as thousands of schools across the nation begin to march down the seven year cascading consequences of the current law. What those bills or regulation will be is not certain, but the U.S. Department of Education’s (ED) opening of the growth model pilot may be the first of many new “bridge” initiatives. The “bridge” initiatives are those actions that carry the current law from now until the time the reauthorization is completed, which may be, as mentioned above, in early 2009 or later.

On Friday, ED sent a letter to the chief state school officers inviting them to submit yet another round of growth model proposals. The 10 state pilot program now has 9 state participants. ED will remove the 10 state cap and accept all states that meet the pilot’s bright-line principles. Yet, it is those rules and not the cap that has constrained the pilot. 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.

In addition to meeting these principles, states must also be raising overall achievement and closing the achievement gap, ensuring that parents have timely and accessible information regarding choice and supplemental educational services and are improving teacher quality and providing parents and the public with accurate information on the quality of the local teaching force. All proposals are due by February 1.
Author:
DAD

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Report Shows States Circumventing NCLB Policies

The reauthorization of the Elementary and Secondary Education Act (ESEA) will not happen this year. Senator Kennedy (D-MA), The Chairman of the Senate Committee on Health Education Labor and Pension (HELP), removed the matter from the Senate’s overbooked 2007 end of the year agenda. This allows advocates and Congressional staff to take time to consider the law’s next reiteration, so the advocacy that happens from now until the beginning of next year will likely play an important role in informing that deliberation.

One of the first reports to fill that space comes from Kevin Carey of the Education Sector, the Pangloss Index: How States Game the No Child Left Behind Act. The report, named after the character in Voltaire’s Candide who insisted that we live in the best of all possible worlds, is a damming chronology of how, according to Carey, the Alabama Department of Education, with illustrative examples from Birmingham City Schools, was able to secure waivers from the U.S. Department of Education (ED) that eviscerated the law’s intent. The report takes the reader from 2001 to 2007 and details the waivers granted by ED.

These waivers, claims Carey, allowed Alabama to demonstrate academic progress under NCLB, but the reality was very different. Despite the well-publicized statements of progress made by the state superintendent and the Birmingham City School Board, their test scores were not praise worthy. The state was not truly improving in its academic achievement and Birmingham City Schools’ population continued to decline because parents sought better schools for their children. Alabama was merely successfully gaming the system, and ED was a conspirator because it granted the waivers.

In response, Carey recommends that Congress require ED to grant less waivers and make the process more manageable, that the reauthorized law be more specific about acceptable statistical behavior, and that the reauthorized law promote shared standards in order to reduce the profusion of state by state accountability gaming. The report argues that the law’s mechanisms and approach are correct -- but that it runs counter to the sentiment now emerging in Washington.

The more fashionable opinion, a judgment based on unscientific and personal discussions, is that the law has been trying to do too much all at once and that it is a Rube Goldberg structure that combined the political civil rights moralism of the 60s with unrealistic goals and ineffective behavior modification tools. As such, it is not working and, if it is to succeed, Congress will have to restructure the law completely. Small tweaks, the kind argued for by Carey, will not do. Yet, this debate, between tweaking and fundamental revision, rages on and it gives Members of Congress and their staff plenty to think about over Thanksgiving and well into the next year(s).

Resources:
Kevin Carey, The Pangloss Index: How States Game the No Child Left behind Act (Education Sector: November 2007), http://www.educationsector.org.
Author: DAD

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OIG Title I Audit

The U.S. Department of Education’s (ED) Office of Inspector General (OIG) released a final audit report questioning the way a local education agency (LEA) spent Title I funds. The audit was issued on October 9, 2007 and is available on the OIG’s website at: http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a02g0020.pdf.

The purpose of the audit was to determine if the LEA spent Title I funds on allowable costs. The OIG cited multiple concerns, including the failure to maintain time and effort records documenting the time employees spent on Title I programs, a failure to properly allocate salary charges, a failure to adequately track property purchased with Title I funds and to ensure such property was used only for Title I purposes, and violations of Title I’s supplement not supplant restrictions. Not surprisingly, the OIG determined the LEA lacked sufficient internal controls to ensure federal funds were spent appropriately.

Based on the OIG’s findings it would be easy to conclude the LEA had serious and systemic problems in its management of federal funds. However, on closer inspection the issues raised by the OIG, while certainly signs of non-compliance, are not all that unusual. The most interesting aspects of the audit report are: (1) the OIG’s comments regarding internal control systems; and (2) the legal authority the OIG relied on to justify its conclusions.

Internal Controls

One of the OIG’s primary concerns was the LEA’s failure to ensure transactions were properly approved. For example, the LEA authorized work to commence under contracts that had not been approved by the School Board. All of the questioned contracts were ultimately approved; however, approval was sometimes granted two or three months after work began.

Most people can agree that failure to obtain required Board approval is a significant lapse in internal control; however, some of the other “internal control” violations cited by the OIG are not as obvious. In some cases the LEA could not produce original documentation supporting procurement transactions because several boxes stored at a warehouse were damaged. The LEA could provide electronic versions; however, since those versions did not show the approval signatures the OIG could not verify whether the transactions were properly approved. Similarly, the OIG criticized the LEA’s practice of retaining invoices to prove items were received as opposed to maintaining “receiving reports.” The invoices had been signed by the school principals as certification that the items were received but because district policy required particular “receiving reports” the OIG rejected the invoices. This focus on the importance of approvals is consistent with monitoring findings issued by the Office of the Chief Financial Officer’s (OCFO) Internal Control and Evaluation Group when it participated in recent Title I monitoring visits. Both the OIG and the OCFO have identified the requirement to have transactions reviewed and approved by an independent and appropriate official as a key factor in ensuring federal funds are spent on allowable costs.

One other interesting concern the OIG raised was the LEA’s failure to update its operational policies and procedures. The LEA maintained a governance manual, but the manual had not been updated since 1991. Because the manual was out of date it was not effective in providing standards for the control of LEA operations.

These “internal control” findings are extremely important. As we have previously reported, ED has begun to assess “risk” levels in the states. One of the factors ED uses to assess risk is audit and monitoring findings that reveal internal control deficiencies. Findings such as the ones detailed in the audit report have the potential of increasing ED’s perception of risk levels in the state.

Legal Authority

To support its conclusions the OIG primarily relied on Office of Management and Budget (OMB) Circular A-87 and the OMB Circular A-133 Compliance Supplement. OMB Circular A-87 sets out the federal cost principles that apply to all costs charged to federal grants. In particular, A-87 requires costs to be adequately documented; thus, the OIG concluded that, “to be allowable under Federal awards, costs must be adequately documented.”

The OMB Circular A-133 Compliance Supplement sets out guidance to auditors in conducting the required annual audit for entities that spend more than $500,000 in federal funds in a year (also known as the “single audit”). Part 6 of the Compliance Supplement provides a description of the components of an internal control system and provides examples of good controls over federal funds. Part 6 of the Compliance Supplement is available at: http://www.whitehouse.gov/omb/circulars/a133_compliance/07/pt6.pdf.

What is interesting about the OIG’s reliance on these documents is not that they are inapplicable, but that the OIG did not rely on the Education Department General Administrative Regulations (EDGAR). Regulations typically have higher precedential value than OMB Circulars, and EDGAR requires both proper documentation and sufficient internal controls over federal funds as part of a sound financial management system. In recent months there has become increasing confusion about what grants management standards ED is applying to LEAs in state-administered programs such as Title I.

Rather than relying on EDGAR some ED offices are relying on state and local policies and procedures, as well as the general statements in the OMB Circulars, to evaluate LEA compliance with grants management requirements. This appears to be based on a 1988 policy statement that federal agencies should defer to states in state-administered programs when it comes to setting the standards that apply to LEA-level financial management, procurement and inventory management systems. Whether the OIG is intentionally deferring to this policy statement is unclear, but the failure to cite to EDGAR is a departure from the OIG’s normal practice when auditing fiscal issues.

The good news is that Brustein & Manasevit plans to cover all of the issues raised in this audit report in more detail at its Fall Forum in Clark County Nevada. We will have sessions on EDGAR, OMB Circular A-87, time distribution, internal controls, risk management, and preparing for audits. We will also have representatives from ED and the OIG in attendance. Hopefully, some of the lingering questions raised by this audit will be addressed then. More information about our Forum is available at: http://www.bruman.com.

Author: SLK

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Census Conundrums

This week, the Center on Education Policy (CEP) Released Title I Funds -- Who's Gaining, Who's Losing: School Year 2007-08 Update. The report reviews the funding for states and districts for the federal Title I, Part A programs for the school year 2007-08 and highlights the trouble caused by the combination of flat funding levels, the mandatory state reservation of funds for school improvement activities, the hold harmless condition of that reservation and the impact of the fluctuating annual poverty count updates on the distribution of Title I-A funds.

For school year 2007-08, the total appropriation for Title I-A grants to local educational agencies (LEA) was $12.8 billion, which is an increase of $124 million over the previous year’s funding. Of that funding, each state is supposed to set aside 4% of the total dollars allocated by the U.S. Department of Education (ED) to districts in the state to carry out the activities under school improvement, corrective action and restructuring under section 1116(b); and 95% of the 4% must go directly to the LEAs. State educational agencies (SEAs), then, can reserve 5% of the 95% to carry out their responsibilities under sections 1116 and 1117 and to provide statewide technical assistance and support to LEAs. Yet, there is a catch: the 4% reservation “shall not decrease the amount of funds each local educational agency receives […] below the amount received by such local educational agency […] for the preceding fiscal year.” (Section 1003(e)). In short, the low funding levels for school year 2007-08 restricts the SEA ability to set aside the 4% and that, in turn, strains the ability of the LEAs and SEAs to provide the necessary school improvement services.
It gets worse. The report observes that the amounts of Title I-A general funding that some states and school districts receive have fluctuated from year to year due to annual updating of Census estimates of the number of children in poverty. The swings have been dramatic ranging from a 30.4% increase in Title I-A funding in Wisconsin to a 13.8% decrease in funding in Hawaii.
Indeed, many LEAs and SEAs have brought these matters to the attention of Congress by requesting that Title I-A receive funding that is commensurate to its expectations, that Congress continue to appropriate separately and substantially for school improvement. The report’s support of these positions is important but not novel. The CEP report, however, is unique in that it is one of the first to propose, publicly, a national solution to the volatility created by the annual Census estimates of the number of children in poverty: To require the U.S. Department of Education (ED) and the U.S. Census Bureau to thoroughly review the accuracy of these estimates and to consideration other options, such as using the average of the two most recent Census estimates to calculate LEA grants. The idea is a welcomed contribution to a technically difficult matter.
Resource:
Title I Funds -- Who's Gaining, Who's Losing: School Year 2007-08 Update (Center on Education Policy: August 2007), www.cep-dc.org.
Author: DAD

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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

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NCLB Negotiations

On Monday, Secretary Spellings continued her charm offensive for the reauthorization for the No Child Left Behind Act (NCLB). She met with the “Big 4” in the Dirksen Senate Office Building, including Senator Edward Kennedy (D-MA), ranking member Mike Enzi (R-WY), Representative George Miller (D-CA) and ranking member Howard McKeon (R-CA). According to the Washington education intelligentsia, Secretary Spellings continued to advocate for the Administration’s Blueprint, with particular emphasis on the core principles, including:

On Monday, Secretary Spellings continued her charm offensive for the reauthorization for the No Child Left Behind Act (NCLB). She met with the “Big 4” in the Dirksen Senate Office Building, including Senator Edward Kennedy (D-MA), ranking member Mike Enzi (R-WY), Representative George Miller (D-CA) and ranking member Howard McKeon (R-CA). According to the Washington education intelligentsia, Secretary Spellings continued to advocate for the Administration’s Blueprint, with particular emphasis on the core principles, including:
• All students reading and doing math at or above grade level by 2014;
• Annual assessments and disaggregation of data to close the achievement gap;
• Qualified teachers in core academic subjects in every classroom; and
• Timely information and options for all parents.
The Blueprint advocacy was expected, but it was the unexpected apple-shaped cookies with “NCLB ASAP” icing that won the day. Conversation, we are told, was chirpy but even the cookies may not have impacted political equation. Both parties are in the process of defining themselves for the rapidly coming 2008 elections. The Republican leadership is coalescing around more state based autonomy and their pre-NCLB principles. The Democratic leadership is working to secure a united and effective voting record, showing that they are not a “do-nothing” Congress as many coined their predecessors in the 109th Congress. Neither trend bode well for the bipartisan coalition required to amend and reauthorize the law.
Meanwhile, the House and Senate education committee staff are sifting through the more than 130 NCLB recommendations, vetting their priorities and trying to craft language that strikes a workable balance between greater state autonomy and improved technical accountability requirements, which may take longer than they hoped.
Resources:
Building on Results: A Blueprint for Strengthening the No Child Left Behind Act (U.S. Department of Education: January 2007), http://www.ed.gov/policy/elsec/leg/nclb/buildingonresults.html

Next time you are in Washington, DC and visiting us in Georgetown, try Furin’s iced cookies. If reauthorization occurs in 2007, these cookies may be the reason, http://www.furins.com/catering_desserts.html.
Author: DAD

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Congress Focuses on Flexibility Under NCLB

Last Thursday, the Committee on Education and Labor’s subcommittee on early childhood and elementary and secondary education held a hearing on the flexibility required by No Child Left Behind (NCLB). “Many state and local educators have told us that while they strongly support the law’s goals and the discussion about accountability that it has fostered, better flexibility would help them to reach those goals,” said subcommittee chairman Dale Kildee (D-MI).

The Witnesses included:
• Jack Jennings, President of the Center on Education Policy;
• Rick Melme, Secretary, South Dakota Department of Education;
• The Honorable Kathleen Straus, President, Michigan State Board of Education;
• Carol Johnson, Superintendent, Memphis City Schools; and
• Chester E. Finn, Jr., President, Thomas B. Fordham Foundation.
The common theme among the panelists was to move the reauthorization toward a new federal and state relationship where the U.S. Department of Education (ED) continues its focus on academic accountability while implementing the law with more deference to state innovation. Secretary Rick Melme posited that “Congress must continue to hold states accountable for improving student achievement and closing the achievement gap, while also providing [states] with the flexibility needed to implement innovative models for accomplishing these vital national goals.” Checker Finn echoed this sentiment with a mantra that has been a cornerstone of the Fordham Foundation for years: to be tight about the ends and loose about the means, strict about academic outcomes, but flexible about the means of delivery.
Ranking Member Howard “Buck” McKeon (R-CA) used the hearing to introduce H.R. 2577, the State and Local Flexibility Improvement Act, a bill that would provide considerable funding flexibility. The bill would allow states and districts to transfer all of their funding from other federal grants, such as Safe and Drug Free Schools, 21st Century Community Learning Centers, education technology and teacher quality, into Title I. Any money that is transferred would still be subject to Title I requirements. The purpose behind the bill, according to sponsors, is to help ensure that money is not diverted from poor students, a criticism of other Republican proposals. H.R. 2577 would also:
• Allow states to waive some statutory or regulatory requirements, consolidate federal education programs, and use an alternative method for making allocations to local school districts (instead of the current formula), but only if the new proposal targets more money to the highest-poverty schools and districts;
• Lower the poverty threshold for schools to create schoolwide Title I programs; and
• Allow states to develop and use growth models to calculate adequate yearly progress (AYP).
The bill exemplifies the shift in Republican policy back to more traditional conservative ideals. Republicans have been shifting their priorities to allow greater flexibility, less federal control, and an emphasis on supplemental education services and school choice. Although the bill will gain a majority of Republican support, it is unlikely to gain much support from Democrats. Democratic leaders, such as Rep. George Miller (D-CA) and Sen. Edward Kennedy (D-MA), who were architects of the original legislation, will not support any bill that they believe will take the teeth out of NCLB. As such, this bill will likely only serve as a marker for the Republican’s reauthorization identity. Greater flexibility will be the battle cry for Republicans as reauthorization language is drafted.
Resources:
Sarah Sparks, “McKeon Proposes Transferability Plan,” Education Daily, June 7, 2007.
Author: DAD, SAS

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ED Invites More States to SES Pilot Program

On Wednesday, the U.S. Department of Education (ED) sent a letter to chief state school officers inviting more states to apply for participation in the supplemental educational services (SES) pilot program. The pilot grants states flexibility to offer SES to students in the first year of school improvement. States that wish to participate in this flexibility for the 2007-08 year must submit their proposals to ED by Wednesday, June 20. Only states may apply directly to the ED for this flexibility. Local educational agencies (LEAs) may not apply directly to ED.


In the 2005-06 school year, Secretary Spellings granted four LEAs in Virginia the flexibility to offer SES to students one year early in exchange for the LEAs and the State meeting a set of implementation conditions. In the 2006-07 school year, Secretary Spellings expanded the pilot by adding LEAs in Alaska, Delaware, Indiana and North Carolina.
ED is also piloting an SES program that allows large districts to be eligible to serve as SES providers. Chicago Public Schools and Boston Public Schools were the first urban districts to enter into this flexibility agreement with the Department in the 2005-2006 school year and the Anchorage School District and Hillsborough County Public Schools, Florida, joined the pilot in the 2006-07 school year.
Resources:
“Dear Colleague” letter regarding the pilot program allowing districts to offer SES to students in schools in year 1 of improvement, Office of Innovation and Improvement, United States Department of Education, May 30, 2007.
Author: DAD

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Guidance on the September 2006 LEP Regulations

On Tuesday, the U.S. Department of Education released new guidance on regulations regarding assessment and accountability for recently arrived and former limited English proficient (LEP) students, “Assessment and Accountability for Recently Arrived and Former Limited English Proficient (LEP) Students.”
This guidance provides a summary of the September 2006 regulations related to assessment and accountability for recently arrived and former LEP students. It addresses questions that may help clarify how state educational agencies (SEAs) and local educational agencies (LEAs) can implement the provisions included in the regulations.


The September 2006 regulations on assessment and accountability for recently arrived and former LEP students can be found at: http://www.ed.gov/legislation/FedRegister/finrule/2006-3/091306a.html.
Resources:
Assessment and Accountability for Recently Arrived and Former Limited English Proficient (LEP) Students, U.S. Department of Education, May 29, 2007, http://www.ed.gov/policy/elsec/guid/lepguidance.doc.

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Iowa and Ohio Join the Growth Model Pilot

On Thursday, The U.S. Department of Education (ED) announced approval of two more growth models states, Ohio and Iowa, bringing the pilot total to seven or the ten available pilot openings.

Iowa is immediately approved to use the growth model for the 2006-2007 school year. Ohio's growth model is approved on the condition that the state adopt a uniform minimum group size for all subgroups, including students with disabilities and limited English proficient students, in AYP determinations for the 2006-2007 school year.
All participants must abide by ED’s “bright-line” principles for the growth models:
• 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:
“Secretary Spellings Approves Additional Growth Model Pilots for 2006-2007 School Year,” U.S. Department of Education, Press Release, May 24, 2007, http://www.ed.gov/news/pressreleases/2007/05/05242007.html

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NAEP History and Civics Scores Rise

On Wednesday, the National Center for Education Statistics (NCES) released data from the 2006 U.S. History and U.S. Civics National Assessment of Educational Progress (NAEP) in grades 4, 8, and 12. History scores rose in all three grade levels, but civics scores rose only among 4th graders. This is good news for Secretary Margaret Spellings and the U.S. Department of Education (ED), who are constantly defending the No Child Left Behind (NCLB) requirements for math and science, when critics claim the focus is taking away from other subjects, like history and social studies.

“While critics may argue that NCLB leads educators to narrow their curriculum focus, the fact is, when students know how to read and comprehend, they apply these skills to other subjects like history and civics, and the result is greater academic gains,” Spellings said. The rise in U.S. History scores is important for ED, especially at the 12th grade level, where students are consistently testing at flat or declining levels on math and science. While Spellings may be able to use this data to deflect criticism of NCLB’s math and science focus, the debate is far from over.

On the U.S. History test:

· 70% of 4th graders performed at the basic level or better, meaning some of them scored at proficient or advanced levels. That is up from about 66% in 2001. 4th graders who can work at the basic level should understand the symbolism of the Statue of Liberty, for example.

· Among 8th graders, 65% performed at the basic level or better, up from 62% in 2001. 8th graders working at that level can typically identify slave states on a map.

· While there has been an increase in 12th-grade history scores — a rare occurrence on National Assessment of Educational Progress tests — the results are still not seen as great news. Just 47% know at least basic-level history, up from 43% in 2001. Seniors working at the basic level should be able to explain the historical context of Supreme Court decisions.

· There was no change in the percentage of students performing at or above the "proficient" level, at any grade level. About 20% reached that mark in the 4th and 8th grades, as did 14% of high school seniors.

In U.S. Civics:

· 73% of 4th graders performed at the basic level or higher — up from 69% in 1998. 4th graders working at the basic level know that only citizens can vote in the United States.

· 70% of 8th graders could do basic work or better in civics — the same percentage as in 1998. 8th graders demonstrating basic knowledge should be able to identify the term limit for the president.

· 66% of 12th graders scored at the basic level or higher, also the same as the 1998 results. A student whose performance falls in that category should be able to identify a leadership position in Congress.

· About a quarter of 4th and 8th graders rated "proficient" or better, and almost a third of seniors did.

You can view both NAEP reports at http://nces.ed.gov/nationsreportcard/.

Resources:
Sam Dillon, “Students Gain Only Marginally on Test of U.S. History,” New York Times, May 17, 2007.
Stephen Sawchuk, “NAEP History Scores Rise in 3 Grades,” Education Daily, May 17, 2007.
Author: SAS

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Eight States Advance for Growth-Model Pilot

A panel of experts will review eight states’ applications to participate in the Department of Education’s experiment with a new way of calculating adequate yearly progress, or AYP, under the No Child Left Behind Act



Secretary of Education Margaret Spellings has forwarded the proposals to the peer-review panel formed to evaluate the quality of the latest round of applications in the growth-model project.

Under the pilot project, states receive approval to define AYP based on methods that track students’ academic growth over time. The standard accountability system under the federal law requires states to make AYP calculations by comparing the test scores of groups of students against the students in the same grade during the previous year.

The panel will review applications from Alaska, Arizona, Hawaii, Iowa, Nevada, New Hampshire, Ohio, and Pennsylvania.

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