Fiscal Accountability Requirements That Apply to Title I-A of the Elementary and Secondary Education Act (ESEA)

Fiscal Accountability Requirements That Apply to Title I-A of the Elementary and Secondary Education Act (ESEA)

May 16, 2016
Fiscal Accountability Requirements That Apply to Title I-A of
the Elementary and Secondary Education Act (ESEA)
The Elementary and Secondary Education Act (ESEA) was
met it for the five immediately preceding fiscal years, the
comprehensively reauthorized by the Every Student
LEA would not have its funding reduced. Second, “a
Succeeds Act (ESSA; P.L. 114-95) on December 10, 2015.
change in the organizational structure of the local
The Title I-A program is the largest grant program
educational agency” was added as an additional example of
authorized under the ESEA and is funded at $14.9 billion
exceptional or uncontrollable circumstances for which the
for FY2016. Title I-A of the ESEA authorizes aid to local
Secretary may grant a waiver of the MOE requirements.
educational agencies (LEAs) for the education of
disadvantaged children. Title I-A grants provide
Supplement, Not Supplant
supplementary educational and related services to low-
SNS provisions were added to the ESEA in the 1970 ESEA
achieving and other students attending pre-kindergarten
Amendments (P.L. 91-230). SNS requires that Title I-A
through grade 12 schools with relatively high
funds be used so as to supplement and not supplant state
concentrations of students from low-income families.
and local funds that would otherwise be provided to Title I-
A schools. The ESSA made several changes to the SNS
A long-standing principle of federal aid to K-12 education
provisions with respect to the determination of SNS.
is that federal funding should add to, not substitute for, state
and local education funding. With respect to the ESEA, this
SNS Prior to Enactment of the ESSA
goal is embodied in three types of federal fiscal
For Title I-A schools operating targeted assistance
accountability requirements: (1) maintenance of effort
programs (i.e., programs in which supplemental educational
(MOE), (2) supplement, not supplant (SNS), and (3)
services are provided to specific students), SNS provisions
comparability. To receive Title I-A funds, an LEA must
prohibit states or LEAs from using Title I-A funds to
meet all three fiscal requirements (ESEA Section 1118).
supplant state and local funds. State or local funds
expended for programs that meet the intent and purposes of
Maintenance of Effort
Title I-A do not have to be included in SNS determinations.
Further, no LEA is required to provide services under Title
MOE requirements have been included in the ESEA since
I-A through a particular instructional method or in a
its enactment in 1965. In general, the MOE requirements
particular instructional setting in order to demonstrate
apply to LEAs, not states, and are enforced by state
compliance with the SNS provisions.
educational agencies (SEAs). MOE requires that LEAs
provide, from state and local sources, a level of funding
In practice, supplanting may be difficult to define
(either aggregate or per pupil, whichever is more favorable
operationally, in part because it may depend on knowing
to the LEA) in the preceding year that is at least 90% of the
what states or LEAs might have done in the absence of
amount provided in the second preceding year for public
federal funding. According to U.S. Department of
elementary and secondary education. In other words, an
Education (ED) policy guidance, “any determination about
LEA will generally not meet the MOE requirement if
supplanting is very case specific and it is difficult to
education funding from state and local sources decreases by
provide general guidelines without examining the details of
more than 10% from year to year.
a situation.” There are three conditions under which it is
generally presumed that SNS violations have occurred:
If an LEA fails to meet the MOE requirement, Title I-A
funding would be reduced proportionally, based on the
1. An LEA used Title I-A funds to provide
extent to which the requirement is not met. For example, if
services that the LEA was required to
state and local public K-12 education expenditures in the
make available otherwise under federal,
preceding year are equal to 85.5% of the amount for the
state, or local law;
second preceding year—that is, 95% of the required 90%
level—then the Title I-A grant would be reduced by 5%.
2. An LEA used Title I-A funds to provide
When this occurs, the required level of spending for the
services that the LEA provided with non-
succeeding year’s calculation is based on the full 90% level
federal funds in the prior year(s); or
of expenditures, not the actual level of spending. Further,
3. An LEA used Title I-A funds to provide
the MOE requirement can be waived by the Secretary in
services for children participating in a
cases of “(1) exceptional or uncontrollable circumstances,
Title I program that the LEA provided
such as a natural disaster; or (2) a precipitous decline in the
with non-federal funds to children not
financial resources of the local educational agency.”
participating in Title I.
A second set of SNS provisions apply to Title I-A schools
The ESSA modified the MOE provisions in two ways.
that operate schoolwide programs. Schoolwide programs
First, if an LEA fails to meet its MOE requirement but had
are generally authorized under Title I-A if the percentage of
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Fiscal Accountability Requirements That Apply to Title I-A of the Elementary and Secondary Education Act (ESEA)
low-income students served by a school is 40% or higher.
requires that a comparable level of services be provided
In these schools, Title I-A funds may be used to improve
with state and local funds in Title I-A schools compared
the academic achievement of all students in the school (as
with non-Title I-A schools prior to the receipt of Title I-A
opposed to only serving students with the greatest academic
funds. No changes were made to the comparability
needs). Schools operating schoolwide programs are
provisions by the ESSA.
required to use Title I-A funds to supplement the amount of
funds that would, in the absence of Title I-A funds, be made
The statutory language states that an LEA will be
available from non-federal sources for the school.
considered to have met this requirement if the LEA has
filed a written assurance with the SEA that it has
According to guidance provided by ED, it is generally an
established and implemented (1) an LEA agency-wide
LEA’s responsibility, and not the school’s, to ensure the
salary schedule; (2) a policy to ensure equivalence among
SNS requirement is met and that a school operating a
schools in teachers, administrators, and other staff; and (3)
schoolwide program receives all the non-federal funds it
a policy to ensure equivalence among schools in the
would receive if it were not a Title I-A schoolwide
provision of curriculum materials and instructional
program. That is, an LEA cannot reduce the amount of state
supplies.
or local funds provided to a school because it is operating a
schoolwide program. In its 2008 guidance, ED stated that
However, in making a determination regarding
an LEA should be able to demonstrate through its regular
comparability, there is a statutory prohibition against LEAs
procedures for distributing funds that state and local funds
using staff salary differentials for years of employment
are distributed “fairly and equitably” to all schools without
when determining expenditures per pupil from state and
regard to the receipt of federal education funds. In 2015,
local funds or instructional salaries per pupil from state and
ED provided additional guidance with respect to
local funds. That is, actual teacher salaries cannot be used
demonstrating SNS in schoolwide programs, noting that the
in the determination of comparability. (Some opponents of
SNS requirement for schoolwide programs “is simply that
this provision refer to this as the “comparability loophole.”)
the school receive all non-Federal funds it would receive if
In practice, this means that when LEAs are making
it did not receive Title I funds.” In that guidance, ED
comparability determinations, they are prohibited from
provided examples of how an LEA might allocate non-
making these determinations using actual per-pupil
federal funds to demonstrate that Title I-A funds were
expenditures.
supplemental (e.g., weighted-per-pupil funding formula)
and specified instances in which the use of Title I-A funds
Prohibition Related to the Use of Per-
would likely not be supplemental even if an LEA used one
Pupil Expenditures
of the sample methodologies to distribute funds.
The ESSA maintained an ESEA provision that applies to all
programs authorized under Title I, including Title I-A. This
provision states: “Nothing in this title shall be construed to
SNS Following Enactment of the ESSA
mandate equalized spending per pupil for a State, local
Under the ESSA, the SNS provisions that apply to Title I-A
educational agency, or school.” This provision appears to
were altered. Essentially, the ESSA eliminated the first set
clarify that per-pupil expenditures in Title I-A schools do
of SNS provisions (three conditions) discussed above that
not have to be equal to the per-pupil expenditures in a non-
apply to targeted assistance schools. In their place, the
Title I-A school for an LEA to meet the SNS or
ESSA applied to all Title I-A schools SNS provisions that
comparability requirements.
are similar to those that are currently applied to schoolwide
programs. More specifically, the ESSA added statutory
Department of Education Guidance
language specifying that LEAs are not required to identify
The following ED materials provide guidance on fiscal
that an individual cost or service supported with Title I-A
accountability issues.
funds is supplemental.
U.S. Department of Education, Title I Fiscal Issues:
In addition, the ESSA requires that an LEA demonstrate
Maintenance of Effort; Comparability; Supplement, Not
that the methodology used to allocate state and local funds
Supplant; Carryover; Consolidating Funds in Schoolwide
to Title I-A schools ensures that the school receives all of
Programs; and Grantback Requirements, February 2008,
the state and local funds it would have received in the
http://www2.ed.gov/programs/titleiparta/fiscalguid.pdf.
absence of Title I-A funds. The statutory language does not
establish a standard or requirement regarding how to
U.S. Department of Education, Dear Chief State School
demonstrate that a Title I-A school receives all of the state
Officer Letter on Schoolwide Programs, July 3, 2015,
and local funds it would have received in the absence of
http://www2.ed.gov/policy/elsec/guid/
Title I-A funds. It also prohibits the Secretary from
eseatitleiswguidance.pdf.
prescribing the specific methodology used by an LEA to
meet this requirement.
Rebecca R. Skinner, Specialist in Education Policy
Comparability
IF10405
Comparability provisions were first included in statute in
the 1970 ESEA Amendments (P.L. 91-230). Comparability

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Fiscal Accountability Requirements That Apply to Title I-A of the Elementary and Secondary Education Act (ESEA)

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https://crsreports.congress.gov | IF10405 · VERSION 2 · NEW