Order Code RL30835
CRS Report for Congress
Received through the CRS Web
Elementary and Secondary Education:
Accountability and Flexibility
in Federal Aid Proposals
Updated September 6, 2001
Wayne Clifton Riddle
Specialist in Education Finance
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
Elementary and Secondary Education:
Accountability and Flexibility in Federal Aid Proposals
The 107th Congress is considering proposals to amend the Elementary and
Secondary Education Act (ESEA). Much of the debate over these proposals has been
focused on issues related to state and local accountability for, and flexibility in the use
of, federal aid funds. Current federal elementary and secondary education assistance
programs have a broad range of accountability requirements, including: targeting of
resources on specific “high need” pupil groups, localities, or schools; limitations on
the authorized uses of funds; fiscal accountability requirements, such as maintenance
of effort; procedural requirements, such as parental participation or equitable
treatment of pupils attending non-public schools; staff qualifications; reporting;
outcome; and evaluation requirements.
Beginning in 1994, several authorities have been adopted that provide expanded
flexibility in the use of federal aid. The 106th Congress adopted legislation that
modified and expanded eligibility for the Ed-Flex program, in which authority to grant
waivers is provided to state educational agencies, and provided a new authority for
small, rural local educational agencies (LEAs) to transfer funds among selected ESEA
programs. During the 107th Congress, the House and Senate have passed different
versions of H.R. 1, legislation to amend and extend the ESEA, with new forms of
both outcome accountability and flexibility authority. Both bills would expand
requirements for pupil assessment, and for standards for adequate yearly progress plus
performance-based awards and sanctions for schools, LEAs, and states. The House
version of H.R. 1 would also authorize all states and LEAs to transfer funds among
selected programs, and authorize a broader program consolidation authority for up
to 100 LEAs; while the Senate version would authorize up to seven states and 25
LEAs to eliminate a wide range of program requirements in return for increased
accountability in terms of pupil outcomes.
Debate over the optional performance agreement/grant consolidation proposals
in particular has sometimes been contentious, mainly because they would replace the
current relatively wide range of types of accountability provisions with a strategy of
accountability established almost totally on the basis of pupil achievement outcomes.
These proposals implicitly place substantial emphasis on adoption and implementation
by the states of challenging standards and assessments in order to establish a basis for
meaningful outcome accountability.
Supporters of proposals to increase state and LEA flexibility in the use of federal
aid argue that the current accountability requirements are unnecessarily burdensome
and rigid, and detract attention from the goal of increasing academic achievement.
In response, opponents of these proposals argue that aspects of accountability, in
addition to those related to outcomes, are important federal priorities, that many of
the non-outcome related accountability requirements may already be waived if
deemed burdensome, and that there is little assurance that state-determined
performance goals will be challenging.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Nature of Current Program Requirements/Accountability Provisions . . . . . . . . . 2
Current Provisions for Flexibility in the Use of Federal Aid . . . . . . . . . . . . . . . .
Ed-Flex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Case-by-Case Waiver Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
School-Level Flexibility: ESEA Title I Schoolwide Programs . . . . . .
Flexibility for Small, Rural LEAs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Current Federal K-12 Education Block Grant: ESEA Title VI . .
Legislation in the 107th Congress: H.R. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
New or Expanded Accountability Provisions . . . . . . . . . . . . . . . . . . . . . . . 8
Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Adequate Yearly Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Report Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consequences for Failure to Meet AYP Standards . . . . . . . . . . . . . . . 9
Performance-Based Bonuses and Sanctions . . . . . . . . . . . . . . . . . . . 10
New or Expanded Flexibility Authorities . . . . . . . . . . . . . . . . . . . . . . . . . 10
Transferability Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Local Flexibility Demonstration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Performance Agreement Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Major Proposals for Increased Flexibility and Accountability
in the 106th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Optional Performance Agreement/Grant Consolidation Proposals . . . . . .
Fund Transferability Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Flexibility for Rural LEAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ESEA Title VI Block Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Major Issues: Why Are Flexibility and Accountability the Focus of
Much of the Debate Over Federal K-12 Education Programs? . . . . . . . . .
Criticisms of Current Accountability Requirements and
Flexibility Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Criticisms of Current Flexibility Authorities . . . . . . . . . . . . . . . . . . .
Efforts to Increase Pupil Outcome Accountability Requirements . . . . . . .
Criticisms of Current Title I Outcome Accountability Provisions . . .
Can Accountability for Federal Aid Be Most Appropriately and
Effectively Established Through a Primary Reliance on
Outcomes or Through Multiple Forms of Accountability? . . . . .
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Elementary and Secondary Education:
Accountability and Flexibility
in Federal Aid Proposals
The 107th Congress is considering proposals to extend and amend the Elementary
and Secondary Education Act (ESEA). Much of the debate over these proposals has
been focused on issues related to state and local accountability for, and flexibility in
the use of, federal aid funds. This report provides an overview of current and
proposed provisions for state and local flexibility and accountability for the ESEA and
related federal programs. It will be updated to incorporate major new proposals and
legislative activity in the 107th Congress.1
It is important to begin this discussion by defining key terms. In this report,
“accountability” is defined broadly to include all major types of requirements which
must be met by state and local recipients of funds under federal K-12 education aid
programs. Such requirements, whether they derive from statutory provisions,
Department of Education (ED) regulations or similar guidance, are implicitly intended
to assure that federal aid funds are used in accordance with congressional intent and
program goals. Thus, the terms “current accountability provisions” and “current
program requirements” will be used interchangeably in this report. As is described
below, these current requirements may focus on several aspects of a program,
including, but not limited to, academic achievement outcomes for participating pupils.
This breadth of meaning is one source of occasional confusion in discussions of
accountability regarding the ESEA, especially since some observers tend to place
much greater emphasis on, or attach greater importance to, some forms of
accountability than others, and there are often multiple views regarding what precisely
are the goals of federal programs.
“Flexibility” is defined for purposes of this report as authority under which
federal program requirements, particularly restrictions on the use of federal aid, may
be waived by, or on behalf of, state or local aid recipients meeting certain eligibility
criteria, sometimes in return for meeting new accountability requirements related to
program outcomes. This includes provisions or proposals for consolidation of
multiple programs, or for transfer of funds among programs, so that funds may be
used for a broader range of activities or purposes than ordinarily would be allowed.
A basic question addressed (either explicitly or implicitly) by all proposals for
For general information on the status of ESEA reauthorization legislation and related issues,
see CRS Issue Brief IB10066, Elementary and Secondary Education: Reconsideration of the
Federal Role by the 107th Congress, by Wayne Riddle.
increased flexibility is what types of new accountability requirements (if any), often
expressed in terms of pupil achievement outcomes, must be met by state and local
grantees seeking increased flexibility in the use of federal funds.
It should also be noted that while terms such as “flexibility” and “accountability”
have essentially positive connotations, there may be negative aspects of these
concepts, at least in the view of some analysts, if only as a result of unintended
consequences. For example, according to this view, “flexibility” may result in less
targeting of limited federal aid on high need pupil groups, while “accountability”
provisions may be so numerous and detailed as to significantly reduce the effective
use of federal aid funds.
Nature of Current Program
Current accountability-related provisions in federal K-12 education assistance
programs include a broad range of activities, services, or outcomes which states, local
educational agencies (LEAs), and other aid grantees are expected to provide,
perform, or achieve with or in return for, federal grants, in order to show evidence
that program goals are being met. The varieties of accountability provisions in current
programs or proposals may be divided into the following general categories:
! Targeting of resources on specific “high need” pupil groups or types of
localities or schools,
! Limitations on the authorized uses of funds,
! Fiscal accountability, such as requirements that federal funds supplement, not
supplant, state and local resources,
! Procedural requirements, such as parental participation or equitable treatment
of pupils attending non-public schools,
! Staff qualifications,
! Reporting to parents and the general public of information on program
activities and their impact,
! Student achievement and other outcomes, and
The current ESEA includes aspects of each of these categories of accountability,
although only a few of the ESEA’s largest programs include accountability
requirements in all of these categories. Typically, current ESEA requirements are
most extensive in the categories of resource targeting, fiscal accountability, and such
procedures as parental participation and services to private school pupils. Current
limitations on the use of funds and evaluation are also often substantial, while
requirements in the category of staff qualifications are usually very limited.
Requirements regarding outcomes and reporting are incompletely implemented and
are limited largely to ESEA Title I (Education for the Disadvantaged). These
outcome and reporting requirements are relatively new, arising primarily from the
1994 amendments which required states participating in Title I to develop or adopt
curriculum content standards, pupil performance standards, and assessments linked
to these, at least in the subjects of mathematics and reading/language arts. The
general deadline for states to develop and implement their standards and assessments
is the current (2000-2001) program year. Thus far, assessment “evidence” had been
submitted by all states, and ED has fully reviewed and formally responded to all but
four states plus the District of Columbia regarding the “evidence” they submitted on
their assessment systems. The assessments of 13 of these states have been fully
approved, those for four other states have been conditionally approved, while 24
states and Puerto Rico have requested and/or been granted timeline waivers, and five
have been asked to enter into compliance agreements.2
Current Provisions for Flexibility
in the Use of Federal Aid
While a number of requirements apply to the use of federal K-12 education aid,
as outlined above, all states and LEAs are given wide scope in other aspects of the use
of federal grants. Such matters as grade levels, subject areas, instructional techniques,
and staff have typically been left to state and local discretion. Exceptions to this
pattern have been relatively few — e.g., the requirement that most grantees under the
Bilingual Education Act (BEA) use bilingual instructional techniques — and have
applied largely to competitive programs that constitute a very small share of ESEA
In addition, especially in the period beginning in 1994, several authorities have
been adopted which allow the waiver of many types of federal K-12 program
requirements by, or on behalf of, states and LEAs. Each of them is limited with
respect to either the types of requirements which can or cannot be waived, the specific
ESEA and other programs affected, or the number of states which are currently
eligible. Some require waivers to be requested on a case-by-case basis, while others
offer “blanket” waiver authority. Further, some of these authorities require some
form of additional accountability in terms of pupil outcomes, while others do not.
In addition to two general types of waiver authorities, Ed-Flex and case-by-case,
an exceptional degree of school-level flexibility in the use of funds under several
federal programs is provided under the schoolwide program authority under ESEA
Title I, and a new authority for flexibility in small, rural LEAs was recently adopted
as part of FY2001 appropriations legislation for ED. These five types of special
flexibility are described below.
Ed-Flex. Under Ed-Flex, ED is authorized to delegate to eligible state
education agencies (SEAs) authority to waive a range of requirements under selected
ESEA programs, on behalf of LEAs or schools in that state. Ed-Flex authority was
initially authorized for up to six states in the 1994 Goals 2000: Educate America Act.
It was expanded to a maximum of 12 states in 1996 (P.L. 104-134). It was modified,
and the cap on the number of participating states was removed, by the Education
Flexibility Partnership Act of 1999 (P.L. 106-25).
See CRS Report RL30742, Assessment Requirements Under ESEA Title I: Implementation
Status and Issues, by Wayne Riddle.
The original Ed-Flex authority was granted to 12 states, and seven states (DE,
KS, MA, NC, OR, PA, and TX, four of which had authority under the original EdFlex legislation) have thus far been granted Ed-Flex status under the P.L. 106-25
authority. Participating states must commit themselves to waiving state, as well as
federal, requirements affecting LEAs and schools in the state. States must also meet
the requirements for adoption of curriculum content and pupil performance standards,
and assessments linked to these, under ESEA Title I. States are to monitor the
performance of LEAs and schools for which federal or state requirements are waived,
and submit annual reports on these outcomes to ED. Ed-Flex authority may be
granted to a state for up to 5 years.
The federal programs to which Ed-Flex applies are ESEA Titles:
I (Helping Disadvantaged Children Meet High Standards),
II (Dwight D. Eisenhower Professional Development Program),
III-A-2 (Technology for Education of All Students),
IV (Safe and Drug-Free Schools and Communities),
VI (Innovative Education Program Strategies),
VII-C (Emergency Immigrant Education Act), and
The Carl D. Perkins Vocational and Applied Technology Education Act
(Perkins Act). These include all of the ESEA programs which are administered
via SEAs and which allocate funds by formula (“state-administered
The types of requirements which may not be waived by Ed-Flex states, unless
the underlying purposes of the statutory requirements are otherwise met to the
satisfaction of the Secretary of Education, include those related to: (1) fiscal
accountability (e.g., requirements for LEAs or SEAs to maintain their level of
spending for specified educational services; to use federal aid only to supplement, and
not supplant, state and local funds for specified purposes; or to provide state and local
funding which is comparable in all schools of a LEA), (2) equitable participation by
private school pupils and teachers, (3) parental involvement in program activities and
services, (4) allocation of funds to states or LEAs, (5) certain ESEA Title I school
selection requirements, and (6) applicable civil rights requirements.
With the exception of statewide “blanket” waivers for which individual LEAs
need not apply, LEAs or schools requesting waivers in Ed-Flex states must apply to
their SEA, providing information analogous to that required for LEAs requesting
waivers directly from ED (see below). SEAs may not waive requirements applicable
to the SEAs themselves. In all cases, SEAs must be satisfied that “the underlying
purposes of the statutory requirements of each program or Act for which a waiver is
granted continue to be met.” Local waivers are to be terminated if student
performance has been inadequate to justify their continuation, or performance has
declined for 2 consecutive years (unless there are exceptional or uncontrollable
circumstances). States are required to submit annual reports on waivers they have
granted; beginning with the second annual report, information on the effects of
waivers on student performance must be included.
Case-by-Case Waiver Authorities. A second type of federal education
program flexibility authority consists of waivers that may be granted to SEAs or
LEAs on a case-by-case basis, directly by the Secretary of Education. While there are
at least three such authorities affecting K-12 education programs, the following
discussion will focus primarily on the most broadly applicable and frequently utilized
of these, which is in Title XIV, Part D of the ESEA. Under this provision, the
Secretary of Education is authorized to waive most requirements associated with any
program authorized by the ESEA. The waivers must be specifically requested, and
the proposal must include “specific measurable educational improvement goals and
expected outcomes” for pupils eligible to be served by the relevant programs.
In addition to the different scope of coverage (i.e., all ESEA programs under the
ESEA Title XIV case-by-case waiver authority versus only ESEA and related stateadministered programs under Ed-Flex), two types of requirements may not be waived
under the ESEA Title XIV case-by-case waiver authority (in addition to those which
cannot be waived under Ed-Flex): (1) prohibitions against consideration of ESEA
funds in state school finance programs, and (2) prohibitions against use of funds for
religious worship or instruction. At the same time, the restrictions on waiving ESEA
Title I school selection requirements under ED-Flex do not apply to the case-by-case
waiver authority in Title XIV, Part D. ESEA Title XIV has no authority analogous
to the Ed-Flex provision that additional requirements may be waived if the underlying
purposes of the statutory requirements continue to be met to the satisfaction of the
Waivers granted under the authority of ESEA Title XIV, Part D, may not exceed
3 years, except that they may be extended if the Secretary determines that the waiver
has contributed to improved pupil performance. In contrast, waivers are to be
terminated if the Secretary determines that pupil performance or other outcomes are
inadequate to justify continuation of the waivers. LEAs and SEAs which receive
waivers must submit annual reports that describe the effects of the waivers and
evaluate their impact on pupil performance, beginning the second year the waiver is
in effect. The Secretary is required to submit to Congress annual reports on the
effects and effectiveness of waivers that have been granted.
A second case-by-case waiver authority affects only schools participating in the
Public Charter Schools (PCS) program authorized by ESEA Title X, Part C. A
distinctive aspect of the PCS waiver authority (ESEA Section 10304(e)) is that none
of the limitations on types of requirements that may be waived, as listed above for EdFlex and the ESEA Title XIV waiver authority, apply to the PCS waiver authority.
Under the PCS authority, any requirement over which the Secretary of Education
“exercises administrative authority” may be waived, with the sole exception of
requirements associated with the definition of a charter school eligible to receive PCS
funds (ESEA Section 10310(1)). However, this authority has apparently not been
used, and therefore will not be discussed further in this report.
School-Level Flexibility: ESEA Title I Schoolwide Programs.
Schools participating in the ESEA Title I program at which 50% or more of the pupils
are from low-income families are eligible to conduct schoolwide programs with a very
broad and substantial degree of flexibility in the use of funds under almost all federal
education programs. In a schoolwide program, federal aid provided under Title I plus
almost all other federal K-12 education programs may be used to improve services to
all pupils, rather than limiting services to particular pupils deemed to be the most
disadvantaged. If they meet the intent and purposes of Title I and the other federal
programs, and address the needs of the programs’ intended beneficiaries, schoolwide
programs are exempted from regulations under Title I and most other programs, with
specified exceptions, such as regulations regarding health, safety, civil rights, parental
participation, services to private school pupils and teachers, or fiscal accountability.
Title I and other federal program funds must be used so that they supplement, and do
not supplant, other federal and non-federal funds that the school would otherwise
receive. Further, only commingling or flexibility in the use of funds is authorized with
respect to the IDEA in schoolwide programs; all of the IDEA’s programmatic
requirements must still be met.
There are relatively few additional requirements which schoolwide programs are
required to meet in return for this increased flexibility. The number of schoolwides
has grown rapidly in recent years, and most pupils served by Title I are now in
schoolwide programs. In addition, many of the Ed-Flex and other waivers granted
since 1994 have allowed schools below the 50% threshold to operate schoolwide
Flexibility for Small, Rural LEAs.
P.L. 106-554, Consolidated
Appropriations Act 2001, provides a new form of flexibility under which small, rural
LEAs may transfer funds among selected ESEA programs. Under this Rural
Education Achievement Program (REAP), LEAs with enrollment below 600 pupils
and in which all schools are rural may use any funds received under ESEA Titles II
(Eisenhower Professional Development Program), IV (Safe and Drug-Free Schools
and Communities), and VI (Block Grant) for activities under ESEA Titles I
(Education for the Disadvantaged), II, III (Technology), and IV.
Finally, a number of additional provisions have been adopted in recent years
which are sometimes cited as providing increased flexibility to states and LEAs.
These are not discussed in detail here because their potential impact is substantially
more marginal than those of the flexibility authorities described above, and/or their
impact is primarily in the area of administrative convenience. These additional forms
of flexibility include authority for consolidated SEA or LEA applications, plans, or
reports for a number of ESEA and related programs; authority to consolidate certain
funds used for SEA or LEA administration of federal programs; and authority to
transfer up to 5% of funds among ESEA programs (except Title I). These authorities
are provided in Parts B and C of ESEA Title XIV.
The Current Federal K-12 Education Block Grant: ESEA Title VI.
Finally, one individual ED program is worthy of mention in the context of special
forms of flexibility for states and LEAs in the use of federal aid funds — the ESEA
Title VI block grant program. Block grants are aid programs covering an
exceptionally wide range of educational activities and types of students, and providing
a great deal of flexibility to states and LEAs in using the funds. They are often
constructed through consolidation of a number of preceding programs that are more
limited in the purposes or activities they support. This program was first enacted in
1981 (P.L. 97-35) as Chapter 2, Education Consolidation and Improvement Act
(ECIA), which consolidated more than 40 previous federal programs. It was
amended most recently in 1994, under P.L. 103-382, as Title VI of the ESEA,
Innovative Education Program Strategies. Under Title VI, at least 85% of each state
grant must be allocated to LEAs, where funds are to be used for eight types of
“innovative education programs.”
The ESEA Title VI block grant initially reduced the number of federal education
programs. However, many new categorical programs were authorized in the years
immediately following adoption of Title VI, including some that were essentially
direct successors to programs initially consolidated into the block grant (e.g., aid for
magnet schools). The most recent study by ED of the program (Study of Educational
Resources and Federal Funding: Final Report, August 2000) found that 58% of
recipient LEAs used “a great deal” of their Title VI funds for instructional materials,
while 39% of LEAs used substantial funds for educational technology, and 34% of
LEAs for supplemental targeted academic services. Large LEAs were found to be
especially likely to use Title VI funds for teacher professional development services
and school-based improvement efforts. It was also reported that the primary factors
influencing decisions on the use of Title VI funds were long-term LEA plans and the
priorities of individual schools; and Title VI-funded resources or services were rarely
targeted at particularly high need pupils or schools.
Appropriations have declined significantly over the life of Title VI, from $442
million in FY1982, the first year of funding, to $385 million for FY2001. With
adjustment for inflation, this is a decline of approximately 50%. It might be said that
this reduction in the level of funding for Title VI ultimately limited the state and local
flexibility that the program was meant to enhance. Programs such as Title VI have
tended to receive less favorable treatment in funding than programs that could
demonstrate targeting of funds, or improved educational outcomes, for high need
pupil groups, and there have been few constituencies promoting increased funding for
the program, in spite of the popularity of Title VI with state and local education
officials. Limited information on the effects of Title VI services may also have
reduced incentives to maintain the program’s funding level. A final note regarding
ESEA Title VI — in ED appropriations acts for FY1999-2001, funds have been
appropriated under this Title for class size reduction, school renovation, and other
activities which are not specifically authorized under the ESEA. Since these are not
part of the ESEA statute, and are not block grants, they will not be discussed further
in this report.
Legislation in the 107th Congress: H.R. 1
The 107th Congress is considering proposals to amend and extend the ESEA.
On June 14, 2001, the Senate passed its version of H.R. 1, the “Better Education for
Students and Teachers (BEST) Act,” while the House passed its version of H.R. 1,
the “No Child Left Behind Act of 2001,” on May 23. A conference committee is
currently developing a compromise version of this legislation. As is discussed below,
the House and Senate versions of H.R. 1 contain a number of provisions regarding
accountability and flexibility in ESEA programs.
New or Expanded Accountability Provisions
Assessments. Both versions of H.R. 1 would expand current Title I
assessment provisions by requiring states to assess all pupils in reading and
mathematics each year in grades 3-8, and to develop standards in science, in addition
to current requirements to develop standards plus assessments in reading and
mathematics. Both versions would also generally require states, with selected
exceptions, to participate in annual administration of National Assessment of
Educational Progress (NAEP) 4th and 8th grade reading and mathematics tests, with
costs paid by the federal government. They would require pupils who have been in
U.S. schools for at least 3 years to be tested (for reading) in English. Finally, both
versions of H.R. 1 would authorize grants to states for assessment development and
administration at $400 million for FY2002 and “such sums as may be necessary”
In addition, the House version of H.R. 1 (only) would: allow states to participate
in other independent assessments meeting certain criteria as a substitute for
participation in NAEP; authorize one-time awards to states which implement the
expanded assessment requirements more expeditiously than required; require states
to annually assess the English language proficiency of their limited English proficient
(LEP) pupils; allocate state assessment development grants for FY2002, with 50% of
these funds to be allocated equally among the states and 50% to be allocated in
proportion to school-age (5-17 years) population; and authorize a study of the effects
of testing on students.
The Senate version of H.R. 1 would: not allow states to administer alternative
tests as a substitute for participation in NAEP, but would allow the smallest (in
population) states to participate in NAEP tests only once every 2 years; require states
to adopt standards and assessments in science, plus standards, but not assessments,
in history; make the expanded testing requirements contingent upon appropriation of
specified amounts for state test development grants (a minimum of $370 million for
FY2002); allocate state assessment development grants with each state to initially
receive $3 million and remaining funds to be allocated in proportion to public school
enrollment in grades 3-8; require assessments to be of “adequate technical quality,”
and authorize grants to states for the development of high quality assessments; direct
the General Accounting Office to conduct a study of the costs to states of complying
with the Title I assessment requirements; authorize a National Academy of Sciences
evaluation of the impact of high stakes pupil tests; and authorize grants to states and
LEAs for development of enhanced assessment instruments.
Adequate Yearly Progress. Under both versions of H.R. 1, a key concept
in the proposals for expanded accountability based on pupil outcomes is “adequate
yearly progress” (AYP): state standards embodying expectations for increased
academic achievement by all pupils. These standards are to serve as the basis for
identifying schools and LEAs where performance is inadequate, so that these
inadequacies may be addressed first through provision of increased support and,
ultimately, “corrective actions.” Under the House version of H.R. 1, AYP standards
would apply specifically to economically disadvantaged pupils, LEP pupils, pupils
with disabilities, pupils in major racial and ethnic groups, as well as all pupils, in each
public school, LEA, and state. AYP standards must provide for each pupil in the state
to reach at least the proficient level of achievement by a target year that cannot be
more than 12 years after enactment. For a school to meet AYP standards, 95% or
more of relevant pupils must be assessed.
Under the Senate version, AYP standards would also have to be established for
each school, LEA, and the state overall. They must apply specifically to economically
disadvantaged pupils, LEP pupils, pupils with disabilities, migrant pupils, pupils in
major racial and ethnic groups, and pupils by gender, as well as all pupils, in each
public school, LEA, and state, although states may combine results for these groups
into a single formula. Further, an alternative form of AYP standard may be selected
by states, under which a state, LEA, or school must achieve an increase of at least one
percentage point in the percentage of students meeting the proficient level of
performance in reading and math for each of the pupil groups noted above (other than
the gender and migrant status groups). AYP standards must provide for each pupil
in the state to reach at least the proficient level of achievement within 10 years. For
a school to meet AYP standards, 95%+ of relevant pupils must be assessed.3
Report Cards. Both versions of H.R. 1 would establish new or expanded
requirements for reporting to parents and the public on state, LEA, and school
performance and teacher quality in schools. Under both bills, these “report cards”
would be required to provide, at a minimum, for each LEA and school, information
on pupil achievement levels, the percentage of pupils tested, other indicators used to
determine AYP, school graduation and dropout rates, teacher qualifications, and
identification of schools and LEAs which fail to meet AYP requirements.
Consequences for Failure to Meet AYP Standards. Under the House
version of H.R. 1, LEAs would be required to identify schools which fail to meet
AYP standards for 1 year. Such schools and LEAs are to receive technical assistance.
States and LEAs must adopt one or more of a limited number of corrective actions
if schools fail to improve 1 year after being identified for program improvement.
Public school choice options must be offered to pupils of all schools identified for
corrective action, unless prohibited by state law. If a school fails to meet AYP
requirements after 2 years in corrective action (1 year if no measurable progress is
made), the school must undergo “restructuring” — one of a limited number of actions
must be taken, and pupils from low-income families in the school must be given an
opportunity to obtain supplemental educational services from a provider of choice.
Costs for supplemental services would be limited to 40% of the school’s Title I grant
per low-income pupil. Comparable provisions apply to LEAs which fail to meet AYP
standards. Finally, states would be required to establish a single accountability system
for Title I and general purposes.
Under the Senate version of H.R. 1, LEAs would also identify for school
improvement all schools which fail to meet AYP standards for 1 year, with such
schools to receive technical assistance. If an identified school fails to meet the state’s
For additional information on this topic, see CRS Report RL31035, Adequate Yearly
Progress Under the ESEA: Provisions, Issues, and Options Regarding House and Senate
Versions of H.R. 1, by Wayne Riddle.
AYP standards for a second consecutive year, pupils in the school would be offered
the choice to attend other public schools not so identified, unless such options are
prohibited by state or local law, or there are capacity constraints. States and LEAs
must adopt corrective actions if schools fail to improve 2 years after being identified
for program improvement. One of a limited number of actions (implementation of
alternative governance mechanisms such as reopening as a charter school,
replacement of relevant school staff, or application of a new curriculum) must be
taken with respect to schools identified for corrective action. If such a school fails to
meet AYP requirements for 3 consecutive years after identification, public school
choice options must be offered with none of the constraints noted above, and all
pupils eligible to be served under Title I pupils must also be offered the choice of
obtaining supplemental instructional services from a provider other than their school.
Costs for supplemental services are limited to the school’s Title I grant per lowincome pupil, and no school may lose more than 15% of its total Title I grant.
If, during the year following identification for corrective action, a school still fails
to meet AYP standards, it would be “reconstituted,” defined as replacement of all
school staff, reopening as a charter school, or implementation of alternative
governance arrangements. Some of these requirements may be waived for certain
rural LEAs and/or if supplemental services providers are not “reasonably available
geographically.” Comparable provisions apply to LEAs which fail to meet AYP
standards. Finally, states must establish a single accountability system for Title I and
Performance-Based Bonuses and Sanctions. In addition to provisions
specific to ESEA Title I (see above), both versions of H.R. 1 would authorize bonus
payments to states which are especially successful in improving the academic
achievement of economically disadvantaged pupils and pupils from racial and ethnic
minority groups, as well as all pupils and LEP pupils. States would distribute these
funds to schools on the basis of the same criteria. In addition, the Senate version of
H.R. 1 would authorize a separate series of bonus grants directly to schools which
have made the greatest progress in the education of economically disadvantaged
pupils, and awards for other activities other than the activities such as character
education and the identification and recognition of exemplary schools and programs
such as Blue Ribbon Schools.
New or Expanded Flexibility Authorities
In addition to current flexibility authorities, described above, both versions of
H.R. 1 would reduce the ESEA Title I schoolwide program eligibility threshold to
40%, and would explicitly reauthorize, in essentially its current form, the special
flexibility authority for rural LEAs, currently authorized by P.L. 106-554 (described
in the next major section of this report). Further, the Senate version of H.R. 1 would
explicitly reauthorize the current Ed-Flex and case-by-case ESEA waiver authorities
without substantial modification, while the House version would not explicitly amend
these provisions, implicitly leaving them in place. The net effect would be to continue
these authorities in essentially their current form in both cases, except that the Senate
version would extend the Ed-Flex authority through FY2008 (rather than FY2004
under P.L. 106-25).
The House or Senate versions of H.R. 1 would also authorize three new forms
of flexibility authority, as described below.
Transferability Authority. The House version of H.R. 1 contains a new
authority (as ESEA Title VII, Part B) for states and LEAs to transfer funds among
several ESEA state-administered formula grant programs. The programs potentially
affected by this provision are ESEA Titles I (Improving the Academic Performance
of the Disadvantaged), II (Preparing, Recruiting, and Training Quality Teachers), IVA (Innovative Programs), V-A (Supporting Violence and Drug Prevention and
Academic Enrichment), and V-B (Enhancing Education Through Technology), except
that funds could only be transferred into, and not away from, ESEA Title I.
States could transfer up to 50% of the program funds over which they have
authority, except for administrative funds. Thus, states could not transfer either any
of the funds they are required to suballocate to LEAs or funds reserved for state
administration. Most LEAs could transfer up to 50% of the funds they receive under
the affected programs. However, LEAs identified as needing improvement (because
they failed to meet AYP requirements) could transfer only up to 30% of their grants
under the affected programs, and only if the funds were used for school/LEA
Under this authority, unlike the two proposals described immediately below, all
program requirements would continue to apply to the transferred funds, and all of the
affected programs would continue to exist in places where the authority is exercised,
since no state or LEA could transfer more than 50% of its funds out of any program.
Local Flexibility Demonstration. The House version of H.R. 1 would
further authorize (as ESEA Title VII, Part C) a local flexibility demonstration under
which 100 LEAs would be permitted to consolidate funds from a group of ESEA
programs. During the first 3 years, no more than two LEAs per state could receive
this flexibility authority; afterward, if fewer than 100 LEAs receive the authority, the
limitation on the number of participating LEAs per state would be lifted. In order to
qualify, LEAs must meet state AYP standards and submit to the U.S. Secretary of
Education a proposed performance agreement developed in consultation with local
parents and educators. Performance agreements would cover a 5-year period, and
describe how the consolidated funds will be used to support the educational priorities
of the LEA and state, meet the general purposes of the affected programs, improve
achievement, and reduce achievement gaps among groups of pupils.
The programs affected by this local flexibility demonstration authority include
all of the programs subject to the transferability authority described above except
ESEA Title I. Participating LEAs would be allowed to consolidate funds under the
affected programs and use them for any educational purpose authorized under the
ESEA (i.e., not just the activities authorized by the programs whose funds may be
consolidated). Participating LEAs could use no more than 4% of the funds under the
affected programs for administration. Unlike the transferability authority described
above, no program requirements would apply to the use of these consolidated funds,
except requirements related to civil rights and equitable participation by private school
pupils and staff.
Participating LEAs would be required to submit annual reports on their use of
funds consolidated under this demonstration authority. They would lose their
authority if they failed to meet the goals of their performance agreements, or if they
failed to meet AYP standards for 3 consecutive years. If LEAs substantially met the
goals established in their agreements, their authority would be renewed for another
5-year term. Thus, under this authority, the performance requirements for
participating LEAs (other than those that would be applicable to all LEAs under H.R.
1) are the performance goals to be proposed by applicant LEAs to the Secretary of
Education, and the sanction for failure to meet the terms of the agreement would be
loss of the authority after 3-5 years.
In comparison to the performance agreement authority in the Senate version of
H.R. 1 (see below), this local flexibility demonstration authority is more limited in the
range of programs potentially affected, but more broad in the types of current
program requirements that would be waived for participating LEAs, and has relatively
fewer specific performance requirements or sanctions for failure to meet those
requirements. In terms of the scope of potential participation, only the Senate
provision would allow for entire states to participate (up to seven), while the House
provision would allow more individual LEAs to participate (100 vs. 25). In either
case, the scale of potential participation could be relatively small or large, depending
on the population size of specific LEAs and states that qualify.
Performance Agreement Authority. The Senate version of H.R. 1
contains a performance agreement authority (as ESEA Title V, Part F) under which
a limited number of states and individual LEAs could eliminate a wide range of
program requirements under several ESEA programs. This is a substantially more
limited version of the optional performance agreement/grant consolidation proposals
considered by the 106th Congress (see the following major section of this report).
Potential Scope. The performance agreement authority could be granted to
a maximum of seven states plus 25 LEAs in non-participating states. Individual LEAs
would have to notify, but would not be required obtain permission from, their state
in order to participate. At the same time, individual LEAs in participating states could
request a waiver to opt out of a statewide performance agreement.
Outcome Accountability. The additional element of outcome accountability
required of participating states and LEAs (beyond what is required of all states and
LEAs under H.R. 1) is that they must exceed AYP goals by a statistically significant
amount. This would mean that achievement gains in excess of those required under
state AYP standards must be sufficiently large that they are unlikely to have resulted
from random variations in pupil achievement scores. While statistically significant,
such an amount would not necessarily be large, especially in a state or LEA with a
large pupil population.
Allocation of Funds. Under the performance agreement authority, states
could reallocate funds among LEAs to a limited degree, with particular constraints
regarding Title I grants. Participating states and LEAs would be required to allocate
ESEA Title I funds to LEAs and schools in accordance with all regular requirements
unless the state or LEA develops an alternative allocation mechanism that would
“better target poverty or educational need.” A specific standard for such “better
targeting” is provided in the case of allocation of funds to LEAs: the alternative
formula must provide a higher percentage (presumably of the state total allocation)
of funds than the statutory formulas to each LEA meeting the Concentration Grant
eligibility criteria (15% or 6,500). LEAs meeting these criteria are not necessarily
“high poverty” LEAs — approximately 51% of all LEAs, with approximately 84%
of all school-age children in poor families, are in LEAs meeting one of these criteria.
The significance of this standard depends primarily on whether recent patterns,
as opposed to the provisions of both versions of H.R. 1, characterize the allocation
of ESEA Title I-A funds in general. As is discussed in detail in other CRS
publications (CRS Report RL30491, Education for the Disadvantaged: ESEA Title
I Allocation Formula Provisions; CRS Report RL30492, Education for the
Disadvantaged: Allocation Formula Issues in ESEA Title I Reauthorization
Legislation; and CRS Issue Brief IB10029, Education for the Disadvantaged: ESEA
Title I Reauthorization Issues), four different formulas are authorized for the
allocation of ESEA Title I-A funds, although only two of them — Basic and
Concentration Grants — have ever been funded. Both versions of H.R. 1 would
provide that appropriations above the FY2001 level be allocated as Targeted Grants,
a third (unfunded) formula that would generally allocate higher shares of funds (in
comparison to the currently funded Basic and Concentration Grants) to LEAs with
the highest numbers or percentages of school-age children from poor families.
However, similar provisions in current law have been overridden in appropriations
legislation each year since 1995.
If recent patterns were to continue — i.e., the Targeted Grant formula remains
unfunded, and allocations in general are substantially affected by high hold harmless
rates — an alternative formula that meets the specific standard for better targeting
under the performance agreement authority provisions of the Senate version of H.R.
1 would be at least as targeted on relatively high poverty LEAs as current allocation
patterns. In other words, as long as only the Basic and Concentration Grant formulas
are actually funded, the only actual targeting (in the sense of providing increased
grants per formula child to LEAs with relatively high numbers or percentages of such
children) is through the Concentration Grant formula, and the standard for an
alternative intra-state Title I formula would, by definition, target poverty at least as
well as that. Alternatively, if Targeted Grants were funded, as both versions of H.R.
1 attempt to require, then the statutory formulas for allocation to LEAs would target
poverty concentrations better — i.e., provide higher shares of the state’s Title I-A
grants to LEAs with the highest percentage or number of children from poor families
— than the amendment’s standard for an alternative formula, because the Targeted
Grant portion of funds would provide more funds to each state’s highest poverty
LEAs than would be guaranteed under this amendment.
With respect to the allocation of ESEA Title I-A funds to schools within LEAs,
no specific standard is provided for alternative allocation methods. It would
presumably be left to the discretion of the U.S. Secretary of Education to determine
whether an alternative method better targeted “poverty or educational need” among
schools within LEAs. There is also no provision for targeting on concentrations of
LEP or recent immigrant pupils (with respect to funds from the Bilingual or
Immigrant Education programs that might be included in performance agreements).
For non–Title I, Part A, programs, funds must be allocated so that they serve
“high concentrations of children from low-income families at a level proportional to
or higher than the level that would occur without such consolidation.” Thus, states
would still have a great deal of flexibility in allocating the funds from programs other
than Title I, Part A, including such programs as Bilingual/Immigrant Education.
However, again with the exception of the Bilingual and Immigrant Education
programs, these funds are not sharply targeted on high need (poor, limited English
proficient, or recent immigrant) pupils currently.
One general constraint that would apply to the allocation of funds under
performance agreements is that in participating states, LEAs would have to be
guaranteed to receive any projected continuation awards under affected programs
with multi-year discretionary/competitive grants. However, since this would apply
only to programs where funds are currently allocated to states by formula but within
states through discretionary/competitive means (or perhaps also programs that are
now competitive but would become formula grants under H.R. 1, such as Bilingual),
the effect would be limited.
Authorized Uses of Funds. Funds could be used for activities authorized
under any of the combined programs. While broad, this is more narrow than under
the optional performance agreement/grant consolidation bills of the 106th Congress,
under which funds could have been used for any educational purpose allowed under
state law. SEAs could use up to 1%, and LEAs up to 4%, of the funds under
consolidated programs for administration.
Most requirements regarding uses of funds in Title I, Part A schoolwide and
targeted assistance programs would apply (with the schoolwide eligibility percentage
reduced to 35%), as would the Title I requirements regarding standards, assessments,
accountability, and parental involvement. In addition, program requirements related
to equitable participation by private school pupils and staff, civil rights, teacher
quality, development of English language proficiency among limited English proficient
pupils, and certain other specific program requirements would continue to apply.
Applicable Programs. The authority would apply to most state-administered
formula grant programs authorized by the ESEA, including such programs as
Bilingual/Immigrant Education. Excluded state formula grants include the Migrant,
Neglected/Delinquent, and Reading First programs.
Fiscal Accountability. The two main general fiscal accountability
requirements, maintenance of effort (MOE) and supplement/not supplant, would
apply. The MOE requirement for the state as a whole, at 100% of previous year
spending, would be more strict than existing MOE requirements for the ESEA (which
are 90%). However, in a participating state, MOE would apply only to state source
revenues, with no MOE applicable to local source revenues in such states. In
addition, the Title I comparability requirement would not apply.
Sanctions. If a state or LEA met its requirements to exceed AYP standards
by a statistically significant amount, its performance agreement would be renewed for
an additional 5-year period. If a participating state or LEA failed to meet AYP
standards for 2 consecutive years, or failed to meet its performance goal of exceeding
AYP for 3 consecutive years, its flexibility authority would be terminated. In
addition, if a state failed to meet its performance goal of exceeding AYP for 2
consecutive years, and students who are racial and ethnic minorities, and economically
disadvantaged students, failed to make statistically significant progress, the amount
of funds the SEA could use for administrative expenses (under the performance
agreement) would be reduced by 30%. Other sanctions for states are already
provided for all states under the Senate version of H.R. 1. Thus, there are few
sanctions for states or LEAs failing to meet their performance goals other than loss
of their flexibility authority.
Major Proposals for Increased Flexibility and
Accountability in the 106th Congress
The 106th Congress considered several proposals to increase flexibility for states
and LEAs under K-12 education aid programs in the context of legislation to
reauthorize the ESEA. Two of these were enacted, and are discussed above: P.L.
106-25, which modified and expanded eligibility for the Ed-Flex program, and P.L.
106-554, which included a new authority for small, rural LEAs to transfer funds
among selected ESEA programs. The following section discusses other relevant bills
which were actively considered (i.e., reported by a committee of, and/or passed by,
the House or Senate) by the 106th Congress: optional performance agreement/grant
consolidation proposals, transferability proposals, additional rural flexibility proposals,
and amendments to ESEA Title VI.
Optional Performance Agreement/Grant Consolidation
This relatively new type of proposal combines elements of traditional block
grants and the Ed-Flex concept. During the 106th Congress, two basic variations of
this category of proposal were embodied in H.R. 2300, the “Academic Achievement
for All Act,” as passed by the House, and two different authorities under S. 2, the
Educational Opportunities Act, as reported by the Senate Committee on Health,
Education, Labor, and Pensions.
Under H.R. 2300, up to 10 states, or individual LEAs in non-participating states
(if the state does not object) might have chosen to administer one or more specified
programs under a performance agreement, whereby most of the statutory and
regulatory program requirements would not apply. The programs to which this
proposal applied were the federal elementary-secondary education aid programs
administered through formula grants to the states (“state-administered programs”),
including the Perkins Act, but excluding the Individuals with Disabilities Education
Act (IDEA). Current program requirements regarding civil rights, participation of
private school pupils and teachers, and certain fiscal accountability and ESEA Title
I-A requirements regarding standards and assessments would have continued to apply.
Otherwise, funds under the affected programs could have been used for “any
educational purpose permitted by State law.”
Performance agreements under H.R. 2300 would have covered a 5-year period,
and would have included: (a) a description of how funds would be used “to advance
the educational priorities of the state, improve student achievement, and narrow
achievement gaps between students;” (b) state-established student performance goals
that “considered” changes in the performance in each LEA and school, and required
increased performance by all pupil groups while reducing achievement gaps among
pupils of different groups (by race, ethnicity, sex, English proficiency status, and
socioeconomic status); (c) if ESEA Title I-A were included in the performance
agreement, provisions meeting the current standards, assessment, accountability, and
corrective action requirements of that program; and (d) provision for annual reporting
of student performance data and information on how federal funds were used to meet
the terms of the performance agreement.
Under H.R. 2300, state grants would have been determined under current
allocation formulas, but funds could have been allocated within states as determined
by the state legislature and Governor (or other entity responsible for education policy
under state law), except that if ESEA Title I-A were included, LEAs would have
continued to receive at least the amount of funds which they received under that
program for the last year preceding implementation of the performance agreement.
In any case, requirements regarding the allocation of funds to schools within LEAs
under ESEA Title I-A and other programs would no longer apply. States or LEAs
substantially meeting their goals would have been eligible for extension of their
performance agreement for additional 5-year terms. If a state failed to meet at least
50% of its goals, it would have been subject to a 50% reduction in its federal
administrative grants for 2 years. Alternatively, a participating state or LEA which
reduced by 25% or more the gaps between its highest and lowest scoring population
groups in the percentage of pupils at the “proficient” level would have been eligible
for bonus funds.
Key aspects of H.R. 2300 included: (a) authority for participating states or
LEAs to combine funds from affected programs and use them for any educational
purpose under state law; (b) certain types of program requirements that cannot be
waived currently, such as requirements regarding allocation of funds to or within
LEAs, would have been waived under H.R. 2300; (c) outcome accountability
requirements would have been more specific and extensive than those under Ed-Flex,
although still essentially defined by the states; (d) bonus grants would have been
authorized for states that reduced achievement gaps among groups of pupils, while
states that failed to meet outcome goals would return to the standard program
requirements and might have experienced a reduction in state administration funds.
The other 106th Congress legislation in this category on which action occurred,
S. 2, would have provided two different authorities under which federal education
program requirements might be eliminated in return for outcome-based accountability.
First, S. 2 included a “performance agreement” authority which was essentially the
same as that of H.R. 2300, except that it would have been available in up 15 states
(rather than 10), the Perkins Act would not have been subject to consolidation, and
participating states would have been required to reduce achievement gaps between
the highest and lowest scoring pupil groups by at least 10% and to use funds to serve
“disadvantaged schools and school districts.”
Second, S. 2 included a separate, somewhat less flexible “performance
partnership” optional grant consolidation authority, which differed from the first
authority in S. 2 in the following respects: (a) there would have been no limit on the
number of states which could participate; (b) current ESEA Title I-A formulas would
have continued to apply to the allocation of funds to LEAs and in general to schools
as well (with the same degree of flexibility in this process which is now allowed in EdFlex states); (c) the Safe and Drug-Free Schools program would not have been
subject to consolidation; (d) all states would have been eligible for bonus awards
based on performance gains on National Assessment of Educational Progress (NAEP)
tests; (e) all current provisions with respect to services for pupils and staff of private
schools would have continued to apply; (f) an illustrative list of broad purposes for
which funds may be used would have been provided; and (g) participating states
would have been required to comply with all current requirements regarding fiscal
accountability and parental involvement.
Fund Transferability Proposals
H.R. 4141, the Education Opportunities to Protect and Invest in Our Nation’s
Students (Education OPTIONS) Act contained authority for states and LEAs to
transfer funds among selected ESEA programs. The programs affected by the
authority would have been the ESEA state-administered formula grant programs,
except that funds could have been transferred only into, and not away from, ESEA
Title I-A. States might have transferred all of the program funds over which they had
authority, except for administrative funds. LEAs might have transferred up to 35%
of funds they receive without obtaining state permission, and all funds under such
programs if their state approved. This was a broader version, in terms of affected
programs and eligible states or LEAs, of the kind of transferability proposal which
was enacted (under P.L. 106-554) for small, rural LEAs.
Special Flexibility for Rural LEAs
In addition to the relatively limited authority described earlier, H.R. 2 and S. 2,
106th Congress, included proposals to provide small and/or high-poverty rural LEAs
with increased flexibility in their use of federal aid funds. These proposals addressed
concerns that formula-based program allocations to rural LEAs are often so small that
they can be of meaningful size and scope only if combined. The main difference
between these proposals and the provisions enacted under P.L. 106-554 is that the
former would have affected a larger number of rural LEAs because eligibility would
have been based on poverty rates as well as enrollment size.
ESEA Title VI Block Grant
The 106th Congress also acted upon legislation which would have extended and
amended the current ESEA Title VI block grant program. H.R. 4141 would have
revised the authorized uses of funds by LEAs to delete a general reference to school
reform activities and to add: professional development and hiring of teachers; single
gender schools and classrooms; community service programs; youth entrepreneurship
education; consumer, economic, and personal finance education; public school choice
programs; and school-based mental health services. H.R. 4141 would also have
provided that 100% of all state Title VI grants above the FY2000 level must be
allocated to LEAs. S. 2 would also have extended and increased the authorization for
the current Title VI block grant. The authorized uses of funds by LEAs would have
been expanded to include: teaching improvement; parental and community
involvement; recruitment and training of certified teachers; same gender schools and
classrooms; service learning activities; and school safety programs. School reform
and charter schools would no longer have been included on the list of activities
authorized for LEAs.
Major Issues: Why Are Flexibility and
Accountability the Focus of Much of the Debate
Over Federal K-12 Education Programs?
There are at least two overarching reasons why flexibility and accountability are
major legislative issues with respect to ESEA and other federal K-12 education
programs. First, some analysts have criticized current accountability requirements as
being too extensive and thereby restricting the use of federal aid to an undesirable
degree, thereby reducing its effectiveness. These analysts also tend to criticize the
current flexibility authorities as being too limited to adequately address this problem.
Second, there is widespread general interest in ways to increase accountability
in elementary and secondary school systems throughout the nation, and debate over
accountability mechanisms in the states and LEAs is being extended to federal
programs as well. The focus of this concern about increasing accountability has been
primarily, although not solely, on pupil achievement outcomes. This theme has
incorporated concerns about the adequacy, potential effectiveness, and
implementation timing thus far of the existing outcome accountability requirements
of the largest federal program (ESEA Title I); as well as criticisms of a primary
reliance on outcome accountability requirements in optional grant
consolidation/performance agreement (partnership) proposals.
Criticisms of Current Accountability Requirements
and Flexibility Authorities
Advocates of increased state and local flexibility in the use of federal K-12
education aid funds — especially supporters of the two optional performance
agreement/partnership and grant consolidation proposals discussed above — have
argued that the current multifaceted mixture of accountability requirements is
unnecessarily burdensome for states, LEAs, and schools, reduces their ability to
design and implement effective instructional approaches in important ways, and
hampers pursuit of what they consider to be the most important goal of the ESEA —
increasing the academic achievement of participating pupils. Thus, their proposals
would have exempted participating states and LEAs from most of the accountability
requirements which are not directly related to outcomes, while adding new outcome
accountability requirements for states overall. At the same time, several analysts
defend the current range of accountability requirements as embodying important
national priorities, and are concerned that even the current flexibility authorities have
insufficient accountability provisions and have been used largely for purposes that
have not been proven to increase program effectiveness.
Current aid programs have generally been focused on specific student population
groups with special needs (e.g., educationally disadvantaged pupils or pupils with
limited English language proficiency), priority subject areas (e.g., mathematics or
science), or specific educational concepts or techniques (e.g., charter schools). These
forms of federal aid were adopted because of a perception that many states and LEAs
were unable or unwilling to adequately address these national needs or priorities.
While such “categorical” program structures assure that aid is directed to the priority
population or purpose, critics assert that the targeted programs may have unintended
consequences which reduce their effectiveness. Specific complaints are often focused
on the following types of requirements: (a) prohibitions against commingling of funds
under different federal programs with each other or with state and local revenues; (b)
restrictions on the use of resources purchased with federal program funds for
activities other than those conducted under that program; (c) requirements that aid
be targeted on certain types of pupils or schools; (d) eligibility thresholds for special
forms of flexibility (e.g., ESEA Title I schoolwide programs); and (e) limitations on
instructional approaches under programs such as the Bilingual Education Act (ESEA
From a local perspective, these requirements may sometimes seem to be
unnecessarily inflexible, especially in relatively low enrollment LEAs which may
receive small grants under each of a variety of federal programs. While a categorical
approach directs federal aid at high need pupil groups under several of the largest ED
programs, it may have undesirable effects, such as: fragmentation of services to
children, with challenges for coordinating special program instruction with regular
instruction; inefficient use of resources, that may remain unused when not required
by special needs pupils; treatment of partial needs when a more coherent focus on the
whole child and her/his entire instructional program might be more effective; or
instruction of pupils in separate settings, when this might not be the most effective
instructional technique. The traditional federal categorical approach has been
criticized as leading to fragmented instruction, and a focus in implementation more
on targeting resources and inputs than on improving achievement and other outcomes
for pupils. Difficulties may also arise from efforts to implement federal programs in
states and LEAs with widely varying educational policies and demographic
Efforts to provide greater flexibility with less targeting may allow states and
LEAs to use federal aid in ways they deem to be most productive, and with minimum
regulatory or administrative staff “overhead.” Such an approach might be consistent
with the small (7%) average federal share of K-12 education revenues, and the
argument that most educational innovations in recent years have been generated
through state and local initiatives, not targeted federal programs.
At the same time, increased flexibility may dilute the impact of federal funding
on educational needs of national concern, reducing assurances that aid will be used
to meet national objectives or goals. Restrictions on the use of instructional resources
to the pupils eligible to be served, as well as requirements to target aid on pupils and
schools with the greatest incidence of poverty, are intended to focus limited federal
funds on those with the greatest needs. If fiscal accountability requirements may be
waived, federal grants may not result in a net increase in educational resources in
some states or LEAs.
Criticisms of Current Flexibility Authorities. There have been three basic
themes of criticism of the current flexibility authorities: (1) they are too limited to be
of major value to states and LEAs; (2) they are used infrequently, and largely for
purposes which are not clearly linked to educational improvement; and (3) the
additional accountability requirements associated with them are ambiguous and little
Limitations of Current Flexibility Authorities. The current flexibility
authorities are restricted in important respects. While broad in terms of the potential
uses of funds and federal programs covered, the ESEA Title I schoolwide program
authority is limited to the school level, and only relatively high poverty schools may
generally qualify. The case-by-case waiver authorities are limited by the necessity of
submitting individual requests to the U.S. Secretary of Education. The Ed-Flex
authority applies only to the state-administered formula grant programs, not to
discretionary or competitive grant programs. Most importantly, there are several
types of requirements which cannot be waived under any of these authorities.
The authors of a recent General Accounting Office (GAO) report (Elementary
and Secondary Education: Ed-Flex States Vary in Implementation of Waiver
Process. HEHS-99-17) found that the current flexibility authorities do not address
the main regulatory burdens of states and LEAs, which are associated with the IDEA,
the Americans with Disabilities Act, child nutrition program administration, and
environmental requirements (e.g., underground storage tanks and asbestos removal).
SEA staff in some states think Ed-Flex is of limited value, because of the relatively
few programs and requirements that may be waived. In contrast, SEA staff in other
states think its usefulness extends beyond specific use of the authority, through
creating a “climate that encourages innovation and flexibility.”
Purposes for Which Flexibility Has Been Used. While proponents of
increased flexibility in federal education programs often argue that waivers can
remove federal regulatory barriers to local educational reform and initiative, the
waivers have to date been used for relatively few purposes, some of which are not
clearly related to innovation or reform. The current flexibility authorities have been
most often used thus far to waive the following requirements: (1) the minimum lowincome pupil percentage threshold for ESEA Title I schoolwide program eligibility;
(2) within-LEA targeting of Title I funds on schools with the highest number or
percentage of pupils from low-income families; (3) deadlines for adoption and
implementation of standards and assessments under ESEA Title I; and (4) the
minimum percentage of funds under the Eisenhower Professional Development
Program (ESEA Title II) which must be devoted to the subjects of mathematics and
While schoolwide programs offer a great deal of flexibility to use funds under not
only Title I but also most other federal programs in ways that might not ordinarily be
allowed, it has been questioned whether schools with relatively low percentages of
their pupils from low-income families should be granted this authority. If schools with
relatively low poverty rates receive permission to operate schoolwide programs, the
scope of these programs might be limited (since the size of a school’s Title I grant is
based on its number of children from low-income families), and it may be very difficult
for such a modest program to focus significant resources on the (presumably smaller)
population of low-achieving pupils in the school. Further, no systematic evidence is
available that schoolwide programs are more effective than more traditional Title I
programs in improving the education of disadvantaged pupils.
The use of waivers to maintain or expand the number of schools participating in
Title I would tend to disperse Title I funds among an increased number of relatively
low-poverty schools, reducing the concentration of funds on high poverty schools.
As noted above, Ed-Flex places restrictions on, but does not prohibit, waivers
regarding ESEA Title I school selection. Finally, the use of waivers to delay meeting
deadlines for implementing ESEA Title I standard and assessment requirements
arguably undercuts the most substantial existing outcome accountability requirement;
and waiving the Eisenhower program minimum percentage provision would lessen
support for educational improvement in the national priority subject areas of
mathematics and science.
Limited Accountability Under Current Flexibility Authorities. A
potential area of weakness that has been noted in the basic concept of educational
flexibility is whether the accompanying new forms of accountability — based on pupil
outcomes — will be an adequate substitute for more traditional forms of regulation,
or will provide evidence of the effectiveness of waivers that have been granted.
Systematic data are not yet available on the trends in pupil achievement in LEAs or
schools that have been granted federal program waivers or schoolwide program status
under current authorities.
When available, these data will be based on the individual standards,
assessments, and overall accountability systems used in the various states. Therefore,
their nature and significance are likely to vary widely, depending on the stage of
evolution of each state’s accountability system and how challenging are the state’s
pupil performance standards. There are also questions of how much improvement,
or what other goals, would be sufficient to justify the waiver of different specific
requirements. A recent GAO study (see above) found that the current Ed-Flex states
differ substantially in the clarity and specificity of their outcome goals related to the
granting of waivers; five of the original 12 Ed-Flex states had set no specific
objectives at all for LEAs or schools being granted waivers, and only one of the states
had established outcome objectives that were specifically linked to the LEAs, schools,
and pupils affected by the waivers. The GAO study further concluded that ED
oversight of Ed-Flex implementation by the states was very limited, involving mostly
just the collection of annual reports from the states with highly varying degrees of
detail in the information they provide. An additional issue is that any assumed
linkages between waivers granted and changes in the level of pupil achievement are
likely to be questionable.
In response to the criticisms of current flexibility authorities outlined above,
supporters of these authorities point to the conclusions regarding the impact of EdFlex stated in a 1998 report from ED (Goals 2000: Reforming Education to Improve
Student Achievement, Appendix B. April 30, 1998). According to this report, Ed-
Flex authority has supported standards-based reform in the affected states in three
! Ed-Flex “facilitates the coordination of programs and strengthens the planning
process,” by encouraging LEAs and schools to develop instructional programs
without regard to the perceived constraints of many standard federal or state
! Ed-Flex “provides the opportunity for States to streamline the administration
of programs” by reducing paperwork deemed unessential to meeting basic
purposes of federal programs.
! Ed-Flex “supports the use of resources in a way that can, together with the
implementation of standards-based approaches, lead to increased student
achievement and reduction in the gap in achievement between different
populations” by shifting oversight focus away from inputs or procedures and
However, given the very limited amount of data showing improved pupil
achievement outcomes in states, LEAs, or schools to which current forms of flexibility
have been granted, and particularly the early stage of evolution of Ed-Flex
implementation, these conclusions by ED should presumably be considered to be
Efforts to Increase Pupil Outcome Accountability
While some forms of accountability have long been implemented in states and
LEAs, there has recently been increasing emphasis on accountability mechanisms in
general, and outcome accountability policies in particular. As almost all states have
adopted curriculum content and pupil performance standards in core subject areas,
and have adopted or are adopting assessments linked to these standards, many of
them are establishing policies which respond to school and LEA performance on these
assessments out of continuing concern about increasingly visible inadequate
performance by at least some schools and LEAs.
Large numbers of states and LEAs are implementing such policies as: (a)
financial and other rewards to especially successful LEAs, schools, and teachers; (b)
identification of schools and LEAs which fail to meet performance expectations,
provision of technical assistance to these, and ultimately the application of sanctions
to schools and LEAs which fail to improve significantly after being identified; (c)
publication of “report cards” with information on the characteristics and performance
of schools, LEAs, and states; (d) “disaggregation” of performance data — i.e.,
reporting of results not only for pupils overall but also separately for major
demographic groups — for schools and LEAs, often with goals of improving
performance for each pupil group and reducing achievement gaps among groups; and
(e) provision of options to attend different schools (public or occasionally private) to
pupils attending schools where performance is inadequate. In some states and LEAs,
these policies are integrated into a comprehensive “accountability system,” which may
also include the accountability requirements under the current ESEA Title I statute.
Criticisms of Current Title I Outcome Accountability Provisions.
Accountability is also a major focus of debate regarding the ESEA because of
concerns regarding the adequacy and implementation status of current pupil outcome
requirements under ESEA Title I. Some analysts have argued that the current Title
I outcome accountability requirements should be modified to: (a) apply to states
overall, in addition to LEAs and schools; (b) include more substantial authority for
financial rewards to especially effective schools, LEAs, and states; (c) give states
fewer options to delay meeting implementation deadlines; (d) require state standards
of “Adequate Yearly Progress” for participating pupils, schools, and LEAs to be more
specific, detailed, and challenging; (e) require states and LEAs to take at least one of
a limited range of corrective actions with respect to schools and LEAs which fail to
meet performance standards, and to offer public (or sometimes also private) school
choice options to pupils attending all such schools; (f) assess the reading/language arts
achievement of pupils in English if they have attended United States schools for at
least 3 years; (g) require states to establish standards and assessments in science, as
well as mathematics and reading/language arts; and (h) integrate Title I and stateinitiated accountability requirements and standards into a single system.
Can Accountability for Federal Aid Be Most Appropriately and
Effectively Established Through a Primary Reliance on Outcomes or
Through Multiple Forms of Accountability? Finally, much of the recent
debate over the federal role in K-12 education has been centered on the question of
whether accountability for federal K-12 education programs should be established
primarily on the basis of pupil achievement and other outcomes, or whether it should
continue to be based on a broad mixture of outcome (for programs such as ESEA
Title I) and numerous other forms of accountability.
One argument in favor of basing accountability for ESEA grants primarily on
pupil outcomes is that the current mixture of accountability requirements is
unnecessarily burdensome for states, LEAs, and schools, reduces their flexibility in
important ways, and detracts focus from what many consider to be the most important
goal of these programs — increasing the academic achievement of participating
pupils. A focus primarily on outcomes, it is argued, including a specific focus on
outcomes for disadvantaged pupils, would clarify the intent of federal programs to
improve pupils’ academic performance, while maximizing state and local flexibility in
choosing the most effective means of reaching that goal. While the standards,
assessments, and goals of this outcome accountability system would be determined
by the states themselves, this is also true of existing and proposed outcome
accountability provisions of ESEA Title I, and may be the only feasible option in our
system of state and local primacy in educational policy, governance, and especially
Although it is not fully clear how some of them might be interpreted, the
outcome accountability requirements in the performance partnership/agreement
proposals were relatively detailed, were to be based on pupil performance standards
which were consistent throughout the life of the performance agreement, and were
to include increased performance by all pupil groups while reducing achievement gaps
among pupils of different groups. Thus, the outcome accountability requirements
considered not only aggregate achievement trends, but also the relative performance
of many groups of disadvantaged pupils who have been the focus of ESEA programs.
In addition, as noted earlier, states or LEAs which included Title I, Part A in their
performance agreements or partnerships would have been required to continue
meeting the outcome accountability requirements of that program.
While opponents of the performance agreement/partnership proposals might
agree that increasing pupil achievement outcomes is the most important single goal
of the ESEA, there are at least three major criticisms of a primary emphasis on
outcome accountability. First, a number of the ESEA requirements other than those
related to outcomes, if deemed to be burdensome by grantees, may be waived under
Second, opponents of the performance agreement/partnership proposals have
argued that aspects of accountability other than those related to outcomes — such as
the targeting of aid on high-need pupils, schools, and LEAs — are very important
federal accountability priorities in themselves. A focus primarily on outcomes would
eliminate types of accountability requirements currently considered by many to be
basic elements of the federal role in K-12 education. Some of the performance
partnership/agreement proposals of recent years would remove virtually all federal
direction over the use of federal funds under the affected programs, including most
ESEA requirements to target funds on high need LEAs or schools. However, such
flexibility would be substantially constrained under the provisions embodied in the
House and Senate versions of H.R. 1.
Third, opponents of the performance agreement/partnership proposals have
argued that there are weaknesses in specific aspects of the outcome accountability
provisions of these proposals: (a) while rapidly evolving, the systems of standards
and assessments in many states are insufficiently developed to serve as the primary
basis of accountability for federal aid programs; (b) standards, assessments, and
performance goals would be selected by the states, with no guarantee that
performance goals will be substantial or challenging — and while this is also true of
the current ESEA Title I outcome accountability requirements, those requirements
must shoulder a lesser burden of responsibility because they are used in tandem with
many other types of accountability requirements; (c) the new outcome accountability
provisions under these proposals would require only that the performance of all pupils
would increase, and achievement gaps among major demographic groups of pupils
would decrease, for the state as a whole, not for individual LEAs or schools; (d) the
sanctions for states which fail to meet their performance goals are very limited; (e) the
implications of some basic elements of the outcome accountability requirements are
ambiguous — e.g., the provision that they must “consider” changes in the
performance of each LEA and school; and (f) the performance agreement proposal
provides for a formal review only after 5 years.
For Additional Reading
CRS Report RL30393, Academic Achievement for All Act (Straight A’s Act) —
Background and Analysis, by Wayne Riddle.
CRS Report RL31035, Adequate Yearly Progress Under the ESEA: Provisions,
Issues, and Options Regarding House and Senate Versions of H.R. 1, by Wayne
CRS Report RL30742, Assessment Requirements Under ESEA Title I:
Implementation Status and Issues, by Wayne Riddle.
CRS Report RL30621, Aspects of Accountability in ESEA Title I and Other
Education Proposals in the 106th Congress, by Wayne C. Riddle.
CRS Report RL30942, Educational Testing: Bush Administration Proposals and
Congressional Response, by Wayne Riddle.
CRS Issue Brief IB10066, Elementary and Secondary Education: Reconsideration
of the Federal Role by the 107th Congress, by Wayne C. Riddle and James
CRS Report RL30921, ESEA Reauthorization Proposals: Comparison of Major
Features of the House and Senate Versions of H.R. 1, by Wayne Riddle, et al.
CRS Report 98-676, Federal Elementary and Secondary Education Programs: EdFlex and Other Forms of Flexibility, by Wayne C. Riddle.
General Accounting Office. Block Grants: Characteristics, Experience, and Lessons
Learned. February 1995. GAO/HEHS-95-74.
Ruskus, Joan, et al. How Chapter 2 Operates at the Federal, State, and Local
Levels. Prepared for the U.S. Department of Education. 1994.
U.S. Department of Education. Planning and Evaluation Service. Study of
Educational Resources and Federal Funding: Final Report. August 2000.