Maintenance of Effort, Comparability, and Supplement/Supplant

PAFPC April 2013

USDE Title I Fiscal Guidance (May 06)

• www.ed.gov/programs/titleiparta/ 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 (2004-05) to FY2003 (2003-04)

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 04 1,000,000 6,100

SY05 – must spend 90%

900,000 5,490

05 –Actual amount

850,000 5,200

Shortfall -50,000 -290

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 http://www2.ed.gov/rschstat/eval/title-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 2012-2013

• 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

• www.education.state.pa.us 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.

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.

SOME ALLOWABLE USES UNDER SCHOOLWIDE AUTHORUTY

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

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 it’s 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 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 charged to Title 1 in a schoolwide program must be:– Consistent with the school’s needs – SWP.– Reasonably designed to improve student

outcomes.– Necessary and reasonable.– Educationally related***

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?