Maintenance of Effort, Comparability, and Supplement/Supplant PAFPC March 2013

USDE Title I Fiscal Guidance (May 06) fiscalguid.doc This guidance covers these areas: Maintenance of Effort (MOE) Comparability Supplement not Supplant Carryover Grantbacks

Maintenance of Effort Legal Authority: NCLB: Section 9521

MOE: The NCLB Rule LEA may receive funds only if SEA finds the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds from preceding year is not less than 90% for second preceding year.

MOE: Preceding Fiscal Year Need to compare final financial data –PDE Uses Annual Financial Report (AFR) Compare “immediately” PFY to “second” PFY EX: To receive FY2005 funds (available July 2005), compare FY2004 ( ) to FY2003 ( )

Expenditures Included “Expenditures from state and local funds for free public education” Administration; instruction; attendance and health services; pupil transportation services; operation and maintenance of plant; fixed charges; and net expenditures to cover deficits for food services and student body activities

Expenditures Excluded Funds from federal government Community services; capital outlay; debt service; or supplemental expenditures made as a result of a Presidentially declared disaster

MOE: Failure ESEA: If LEA fails MOE, SEA must reduce amount of allocation in the exact proportion by which LEA fails to maintain effort below 90%. Reduce all applicable NCLB programs, not just Title I

Aggregate expenditures Amount per student SY 041,000,0006,100 SY05 – must spend 90% 900,0005, – Actual amount 850,0005,200 Shortfall-50, Percent shortfall/ reduction-5.6%-5.3%**

Years after Failure SEA uses 90% of the prior year amount rather than the actual expenditure amount

MOE: Waiver USDE Secretary may waive if: –Exceptional or uncontrollable circumstances such as natural disaster OR –Precipitous decline in financial resources of the LEA

Comparability Legal Authority: Title I Statute: §1120A(c)

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. If all are Title I schools, all must be “substantially comparable.” Currently demonstrated by staff/pupil ratios.

How to measure in a district with non-Title I buildings Compare: Average of all non-Title I schools to Each Title I school Average of all non-title I schools=10:1 Title I schools: -Lincoln: 10:1 Washington: 9:1 Madison: 11:1 Jefferson 12:1

How to measure in a district with all Title I buildings Compare: Average of one or more of the lowest poverty Title I schools to each higher poverty Title I school Lincoln 30% poverty, Washington 50%, Madison 55%, Jefferson 60% Chose only Lincoln as the comparison school Lincoln 30%, Washington 32%, Madison 55%, Jefferson 60%, chose both Lincoln and Washington as the comparison schools

Basis for Evaluation grade-span by grade-span or school by school (district-wide basis)

“Old Method”

Updates USDE School Level Expenditure report – 44 percent of Title I schools spend fewer state/local dollars on teachers and other personnel compared with non-Title I schools. Poor kids are getting fewer education dollars than their wealthier peers. Over 4,000 districts examined as a result of ARRA

Updates USDE. Results indicate Comparability is “broken.” Complete report found at i/school-level-expenditures/school-level- expenditures.pdf i/school-level-expenditures/school-level- expenditures.pdf The biggest (but not only) culprit: teacher salary differentials

Updates Currently, PA examines comparability only using staff to student ratios, regardless of salary costs. Duncan “in far too many places, Title I is filling budget gaps rather than being used to close achievement gaps.”

Unions are Split NEA favors closing the “loophole” while AFT opposes. Is having the same number of staff in Title versus non-Title inequitable? Will this mean forced transfers to meet new requirements? Not if we get a head start.

Timing Issues Guidance: Must be annual determination (old) Review for current year and make adjustments for current year. (new) Budget for upcoming year and make adjustments in current year, if needed. Assurances are due November 15. eGrants changes were made in 12/13.

Exclusions Federal Funds Private Funds Need not include unpredictable changes in student enrollment or personnel assignments that occur after the start of a school year

Who is “instructional staff” Administrators (principals and assistant principals) Art Teachers Classroom Teachers Guidance Counselors Librarians Music Teachers Physical Education Teachers Project Directors (Non-federally funded) Psychologists Social Workers Speech Therapists

Not included… Bus Monitors Consultants Crossing Guards Maintenance Staff Security Staff Federally paid Staff

Optional staff… Bilingual Teachers Special Education Title I “Like” Staff Teachers Aides (instructional) Although the LEA has the discretion to count or not count these types of staff, it must be done consistently across the grade spans being compared.

New calculation An LEA must first attempt to demonstrate comparability by showing that its combined state and local per-pupil expenditures (including actual personnel and actual non-personnel expenditures) in each Title I school, using prior year financial data, are at least 90% of the average combined state and local per-pupil expenditures for its non-Title I schools.

Exclusions Pre-K expenditures. Central office costs (including cost center 2818). Charter School Tuition. Alternative Education Programs (if enrollment is District Wide only). Summer School expenditures (if enrollment is District Wide only). Federal expenditures.

Exclusions, cont. English language instructional costs. Special education (including gifted and OT/PT). Transportation. Food Services. Capital expenditures (LEA capitalization threshold). Be prepared to justify any other exclusion and keep all documentation on file. Personnel costs defined as objects 100 and 200.

“New Method”

How to access the Data Sheet and Assurance page and click on the eGrants link at the left of the page. Then click on the Division of Federal Programs link at the left of the screen. Enter your Login ID and password, then click on the “Consolidated Application” link. At the main Consolidated Application page you’ll see the link for Comparability towards the bottom of the screen.

Why this guidance? The schoolwide program model is a powerful school improvement tool, but is rarely implemented to its full potential because of confusion over “supplement not supplant” Federal law sets a different test for schoolwide program schools, but it is rarely applied Implementing this different test could radically change how schools and districts spend Title I finds, and how states oversee spending, so state, district and school staff will need guidance and support

Taking a step back, what could schoolwide look like? Depending on its needs, a schoolwide programs school could spend Title I to: Implement a stronger curriculum Implement an early warning system Extend the school day or school year Reorganize class schedules to increase teacher planning time Revamp the school’s discipline process Hire additional teachers Reorganized classes to promote personalized learning Implement career academies Implement school safety programs And so much more......

Why doesn’t schoolwide look that way now? Title I funds are supposed to supplement state and local efforts Three presumptions of supplanting: –Mandated by state/local law –Paid for with state/local funds in prior year –Same services paid for with the Title I for Title I students and state/local funds for non-Title I students Historically, compliance has been reviewed programmatically, by defining the programs and services school districts will deliver with the state and local funds Under the approach, Title I funds are typically limited to separate add-on services

What is different in schoolwide? The Title I statue takes a different approach in schoolwides in an effort to drive comprehensive reforms and approaches in high-poverty schools Instead of making sure Title I delivers “extra” programs and services We look at the amount of state and local money a schoolwide school receives to make sure its all the money it would get if it did not also receive federal funds The goal is to make sure Title I schools, in the aggregate, get extra money – they then have flexibility in how they spend their money

What does this look like in practice? Example 1: A school district conducts a technology audit, which shows Title I schools have computer labs, but non- Title 1 schools do not The district reduces state/local allocations to Title I schools in order to redirect state/local money to non- Title I schools so they can by computer labs

Example 1 (cont) Result The school district violates the supplemental funds test because Title I schools are deprived of state and local funds because they receive Title 1

What does this look like in practice? Example 2: A school district meets the supplemental funds test State and local resources have declined, forcing school leaders to make tough decisions about what to keep and what to cut Most schools decide not to cut teaching positions Title I schools use Title I funds to retain teacher FTEs, while non-Title I schools do so with state/local funds

Example 2 (cont) Result –This scenario does not violate the supplemental funds test (but is likely to get scrutinized) –The supplemental funds test looks at the overall level of resources going into a school, and not for supplementary services –Here, the Title 1 Schools have extra resources non-Title I schools do not have »The non-Title1 schools had to cut other costs in order to retain the teacher FTEs with state and local funds, cuts Title 1 schools did not have to make. Title 1 Schools should be getting something extra with the extra dollars they have flowing into the school

So what is the control to ensure Title 1 funds are spent responsibly? All costs changed to Title 1 in a schoolwide program must be: –Consistent with the school’s needs –Reasonably designed to improve student outcomes –Necessary and reasonable

What does this look like in practice? A school district conducts a technology audit to prepare for new computer-based assessments aligned to common core. The audit reveals a Title 1 school’s newly purchased computers do not meet test security requirements –While a Title 1 school could, in theory, use Title 1 to prepare for new state assessments, in this case upgrading new computers may not be a necessary or reasonable use of funds

Teeing up the next steps Getting schools to schoolwide status: –This guidance deals only with the supplemental funds test and how that affects the use of funds in a schoolwide –It does not address other schoolwide requirements such as conducting a comprehensive needs assessment, or completing a schoolwide plan –Many states already have guidance on these issues If so, will this be incorporated into the existing guidance, or will it be a standalone document? If not, will the state develop such guidance?

Next steps (cont.) Use of funds: –ED guidance supports a broad range of activities that could be supported with Title 1 in a schoolwide program –Does the state want to provide state-specific guidance on use of funds? Are there specific kinds of costs the state wants to promote? Are there specific kinds of costs the state does not want to see?

Next Steps (cont.) Burden reduction opportunities: –Use of funds in a schoolwide is driven by a school’s needs assessment and plan –Do schools already go through a needs assessment and planning process that can satisfy schoolwide requirements? –SIG related process? –State developed process? –Accreditation process? –Chartering process? –District developed process?

Next Steps (cont.) State Oversight: –What do these changes mean for how the state will oversee school-level planning and spending? –What’s the best way to balance oversight responsibilities, burden and effective administration Increased oversight at the front end (using the application process)? Using existing process to help monitor fed rules (reimbursement, financial reports, etc.)? Revamp back–end monitoring?

Next Steps (cont.) Supplemental funds test: o What might this test look like in your state? o What concerns might people have over this guidance? o What would be the best way to address those concerns?

Supplement/Supplant Targeted Assisted – program level supplanting. “Reasonable and necessary.” Very situationally dependent Schoolwide – fiscal level supplanting only, but must meet “intents and purposes.” School must receive all the state and local funds it would otherwise need to operate in the absence of Federal funds. The per-pupil comparability calculation assures this. –Includes routine operating expenses such as building maintenance and repairs, landscaping and custodial services

Can Title I $ be used for basic operational expenses? If only federal combined – –No, must be for educational needs If federal and non-federal combined – –No, but impossible to determine which is federal –Be sure sufficient state and local funds allocated to school to meet basic operational needs

What is “educational need”? Not addressed in guidance –Instruction – yes –Instructional support – probably yes –Administration – possibly yes –Operational – no

Closing thoughts The SWP is VERY important! Targeted versus SWP which is better?