1. Introduction to Title I Fiscal Requirements Presented by Kristen Tosh Cowan, Esq. Brustein & Manasevit, PLLC ktoshcowan@bruman.com Spring Forum 2011

2. Overview 1) LEA-to-School allocations 2) Set asides 3) Equitable Services allocation 4) Carryover 5) Comparability 6) Reauthorization Predictions 2

3. Resources-- Allocations Statute Section 1113 Regulations 34 CFR §200.77-78 Non-regulatory Guidance August 2003 3

4. Resources – Cross-cutting “Title I Fiscal Issues” Feb 2008 www.ed.gov/programs/titleiparta/ fiscalguid.doc Consolidating funds in schoolwide programs, MOE, SNS, Comparability, Grantbacks, Carryover 4

5. LEA-to-School Allocations “Ranking and Serving” Rules 1) Identify Eligible Schools 2) Rank Schools in Order of Poverty 3) Serve Schools Strictly in Accordance with Rank 5

6. STEP 1: IDENTIFY ELIGIBLE SCHOOLS 6

7. Eligible School Attendance Areas Percentage of children from low-income families who reside in area.... AT LEAST AS HIGH AS.... percentage of children from low-income families in LEA 7

8. LEA Discretion: Eligibility “35 Percent Rule” May designate as eligible Must still serve in order 8

9. LEA Discretion: Eligibility “Grandfathering” option Continue if served last year But, only continue for one year 9

10. 5 Poverty Measures: 1. Census data 2. Free and reduced lunch 3. TANF 4. Medicaid eligibility 5. Composite of above 10

11. STEP 2: RANK ELIGIBLE SCHOOLS IN ORDER OF POVERTY 11

12. Ranking and Serving Exceeding 75% poverty Strictly by poverty Without regard to gradespan At or below 75% poverty May rank by gradespan 12

13. Exception: NO Rank & Serve if Small LEA exclusion If <1000 students One school at each gradespan 13

14. STEP 3: SERVE SCHOOLS STRICTLY IN ORDER OF RANK 14

15. Allocation to Schools BUT first, calculate set-asides Allocate to schools based on total # of students from low income families residing in area (including nonpublic) Discretion on amount of PPA Higher PPAs must be in higher schools on ranked list 15

16. Allocations given without regard to schoolwide or targeted assistance model Title I funding...... To school based on poverty... To student based on academics

17. “125 Percent” Rule If serve any school <35% Then PPAs for all schools must be at least 125% of LEA’s PPA under Title I allocation Entire LEA Title I-A Grant # of low income on census 17

18. EXAMPLE: $1,000,000 total Title I grant 2,000 poverty students = $500/ student PPA If serve school <35% poverty, $500 x 1.25 = $625 PPA 18

19. Exception: Rank & Serve “Skip” school, if: 1. Comparability met 2. Receiving supplemental state/local funds used in Title I-like program 3. Supp. State/local funds meet or exceed amount would be received under Title I Still count and serve nonpublic in area 19

20. Title I Set-Asides

21. LEA MUST reserve specific percentage: 20% choice transportation and SES 1% parental involvement 10% professional dev (if LEA ID) 21

22. LEA MUST reserve but not specific percentage: Administration (public and private) Homeless Neglected & delinquent 22

23. LEA MAY reserve: Incentives to teachers in ID schools (<5%) Professional development “other authorized activities” Summer school Preschool Districtwide program 23

24. CAUTION: DON’T CIRCUMVENT “RANKING AND SERVING” RULES!

25. Calculating % set asides Take off entire LEA grant Transferability: Includes transferred amounts Carryover: Does not include carry over (apply % only in first year available) 25

26. Example Title I, Part A = $500,000 Transferred $30,000 from Title II Carried over $50,000 from prior year Each % set aside applies to $530,000 26

27. Funds for Supp Ed Services and Choice Transportation Amount equal to 20% of LEA allocation (unless lesser amount needed) To pay transportation for choice To satisfy all requests for SES services Both 27

28. If no SES, then 20% on choice If no choice, then 20% on SES If both, then minimum of 5% for choice, 5% for supp services, and 10% for either 28

29. Credit for “Parent Outreach” Allow limited amount of funds for “parent outreach” to count toward 20% Capped at 0.2% of LEA Part A grant May spend more for outreach, but only 0.2% counts toward 20% EX - $1 million LEA grant; 20% = $200,000 0.2% = $2,000 can count toward $200,000 29

30. What costs count as “parent outreach”? Parent notices, communication through the media, internet, and community, displaying information on LEA’s website, and parent fairs Allowance, not a requirement 30

31. “Amount equal to 20%” May use Title I, Part A; school improvement (sect. 1003); ARRA transferability State, local, or private funds 31

32. If use Title I Funds, from where? Off the top of LEA allocation OR from individual school allocations? Both permitted If school in corrective action or restruct, <15% 32

33. Use 20% “unless a lesser amount is needed” How do you know if less is needed? 33

34. To spend less than 20%, LEA must: 200.48(d)(2)(i) 1. Partner, to extent practicable, with outside groups (CBO, FBO, etc.) 2. Send timely, accurate notice to parents 3. Ensure SES sign-up forms given directly to all eligible students/ parents 4. Ensure SES sign-up forms made widely available through broad dissemination (Internet, other media, public agencies) 34

35. 5. Provide (at a minimum) two enrollment windows at separate points in school year of sufficient length 6. Ensure SES providers are given access to school facilities, using a fair, open and objective process, on same basis as others 35

36. Does LEA need SEA’s permission before reallocating the 20%? NO! 36

37. LEA must document and notify SEA! Before reallocating remainder of 20%, LEA must: Maintain records demonstrating it has met criteria Notify the SEA that it met criteria Notify SEA of amount of remainder it intends to spend on other allowable activities 37

38. SEA monitors 20% compliance through: (200.48(d)(3)) Regular monitoring (on multi-year cycles) Ensure 6 criteria are met More frequent monitoring For LEAs that have spent “significant portion” of 20% on other activities AND subject of “multiple complaints, supported by credible evidence,” regarding implementation of choice or SES SEA must complete its review by the beginning of the next school year 38

39. Consequences for non-compliance 200.48(d)(4) If SEA finds LEA did not meet all 6 criteria, then LEA must in the subsequent year: Spend amount equal to the remainder of 20% in the subsequent year on choice/ SES, in addition to new 20%, OR Meet all 6 criteria and obtain permission from the SEA before spending less than full 20% in subsequent year. 39

40. How to reallocate? If took school allocations, then reallocated to those schools Subject to equitable participation of private school students 40

41. Set Aside for Parent Involvement For LEAs with Part A allocations >$500,000 1% minimum reserved Proportional amount to private students 95% of remainder to schools 5% of remainder kept at LEA 41

42. Equitable Services for Private School Students

43. 43 Equitable Services: Deriving Allocation General Formula: Based on number of: 1. Private school students 2. From low-income families 3. Who reside in Title I-participating public school attendance areas

44. 44 Calculate Allocation for Instruction: 1. Identify eligible school attendance areas 2. Rank in order of poverty 3. Strictly serve in rank order (i.e., ID who is “Participating Public School”) 4. Calculate PPA for each area 5. Derive allocation amount for each area must include nonpublic low-income # 6. Reserve nonpublic amount PPA x # of nonpublic low-income students who reside in participating public sch area

45. 45 Reservation for districtwide instruction If LEA reserves for “districtwide instructional programs for public elementary and secondary” Then proportional amount goes to nonpublic 34 CFR sect 200.64(a)(2)(i)(A)

46. 46 Example LEA reserves $500,000 for districtwide reading initiative Of all low-income in LEA residing in participating attend areas, 5% are private 5% of $500,000 to private allocation

47. 47 Applies to: Summer school After school programs Reading coaches DOES NOT APPLY TO: SES/ Choice (20%) Preschool

48. 48 Reservation for teachers and families If LEA reserves funds for parental involvement or professional development Then proportional amount to nonpublic 34 CFR sect 200.65(a)

49. 49 Example LEA reserves 1% of $500,000 allocation for parental involvement, or $5,000. Of all low-income families residing in participating attend area, 6% are private. Then 6% of $5,000 used for families of participating private school students.

50. Carryover General Rule: May carryover up to 15% of Title I, Part A Reallocated by state if exceeds Waiver 50

51. Use of Carryover Funds Flexible 3 Options: 1. Put back in LEA formula & redistribute 2. Designate for particular LEA activities 3. (Allow school to retain) Cannot use in ineligible school 51

52. 3 Pillars of Fiscal Accountability 1. Maintenance of Effort 2. Supplement not Supplant 3. Comparability

53. Heightened Federal Scrutiny on Comparability!! Common finding of USDE Program Reviewers Many serious findings in OIG Audits Focus of “equity” initiatives 53

54. General Rule - §1120A(c) An LEA may receive Title I, Part A funds only if it uses state and local funds to provide services in Title I schools that, taken as a whole, are at least comparable to the services provided in non-Title I schools. Reasonable variance is ok (10%) 54

55. If all are Title I schools, all must be “substantially comparable.” Reasonable variance ok (>10%) 55

56. Timing Common Finding! Guidance: Must be annual determination Review for current year and make adjustments for current year 56

57. Written Assurances LEA must file with SEA written assurances of policies for equivalence: LEA-wide salary schedule Teachers, administrators, and other staff Curriculum materials and instructional supplies Must keep records to document implemented and “equivalence achieved” 57

58. Demonstrate “equivalence achieved” through: Student/instructional staff ratios; Student/instructional staff salary ratios; Expenditures per pupil; or A resource allocation plan based on student characteristics such as poverty, LEP, disability, etc. (i.e., by formula) Need only meet under 1 approach 58

59. How to measure?? Compare: Average of all non-Title I schools to Each Title I school 59

60. For example: Using student/ instructional staff ratios Average of all non- Title I schools = 10:1 Title I schools: Lincoln: 10:1 Washington: 9:1 Madison: 11:1 Jefferson: 12:1 60

61. Basis for evaluation: Compare: Grade-spans Large schools Small schools 61

62. Does not apply if LEA has: Only 1 school Only 1 school at each gradespan 62

63. Exclusions: Federal Funds Private Funds 63

64. Exclusions: Need not include unpredictable changes in students enrollment or personnel assignments that occur after the start of a school year 64

65. Exclusions: LEA may exclude state/ local funds expended for: Language instruction for LEP students Excess costs of providing services to students with disabilities Supplemental programs that meet the intent and purposes of Title I Staff salary differentials for years of employment 65

66. Who is “instructional staff”? Consistent between Title I and non-Title I Teachers (art, music, phys ed), guidance counselors, speech therapists, librarians, social workers, psychologists Paraprofessionals – ED: up to SEA/ LEA 66

67. How to calculate in a SWP? Problem (theoretically): Cannot exclude state and local funds Cannot identify teachers paid with state and local funds Use (non-federal) expenditures per student 67

68. How to calculate with charter schools? Charters must be included (if not independent LEAs) Problem: No LEA control over staffing Use (non-federal) expenditures per student 68

69. How will Reauthorization impact Title I Fiscal Requirements?

70. Reauthorization Predictions Comparability Close loophole of excluding salary differential to reflect seniority Move to measuring non-federal expenditures/ student Supplement not Supplant Change to reviewing total amount of funding, not individual expenditure? 70

71. Reauthorization Predictions Choice/ SES – Unlikely 20% minimum mandate One option of many Target to underperforming subgroup Financial incentives for teachers and students 71

72. Reauthorization Predictions No significant changes to: Ranking & serving rules Equitable services Consolidating funds in schoolwides Time & effort 72

73. This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. 73