maintenance of effort, comparability, and supplement/supplant pafpc march 2014

Maintenance of Effort, Comparability, and

Supplement/Supplant

PAFPC March 2014

www.ed.gov/programs/titleiparta/ fiscalguid.doc

This guidance covers these areas: Maintenance of Effort (MOE) Comparability Supplement not Supplant Carryover Grantbacks

USDE Title I Fiscal Guidance (May 06)

Maintenance of EffortLegal Authority:

NCLB: Section 9521

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

MOE: The NCLB Rule

Need to compare final financial data◦ PDE Uses Annual Financial Report (AFR)

Compare “immediately” PFY to “second” PFY

EX: To receive FY2005 funds (available July 2005), compare FY2004 (2004-05) to FY2003 (2003-04)

MOE: Preceding Fiscal Year

“Expenditures from state and local funds for free public education”

Administration; instruction; attendance and health services; pupil transportation services; operation and maintenance of plant; fixed charges; and net expenditures to cover deficits for food services and student body activities

Expenditures Included

Funds from federal government Community services; capital outlay; debt

service; or supplemental expenditures made as a result of a Presidentially declared disaster

Expenditures Excluded

MOE: Failure

ESEA: If LEA fails MOE, SEA must reduce amount of allocation in the exact proportion by which LEA fails to maintain effort below 90%.

Reduce all applicable NCLB programs, not just Title I

Aggregate expenditures

Amount per student

SY 04 1,000,000 6,100

SY05 – must spend 90%

900,000 5,490

05 –Actual amount

850,000 5,200

Shortfall -50,000 -290

Percent shortfall/ reduction -5.6% -5.3%**

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

Years after Failure

USDE Secretary may waive if:◦ Exceptional or uncontrollable circumstances such

as natural disasterOR◦ Precipitous decline in financial resources of the

LEA

MOE: Waiver

ComparabilityLegal Authority:

Title I Statute: §1120A(c)

An LEA may receive Title I Part A funds only if it uses state and local funds to provide services in Title I schools that, taken as a whole, are at least comparable to the services provided in non-Title I schools.

If all are Title I schools, all must be “substantially comparable.”

Currently demonstrated by staff/pupil ratios.

General Rule- §1120A(c)

Compare: Average of all non-Title I schoolsto Each Title I school Average of all non-title I schools=10:1 Title I schools:-Lincoln: 10:1 Washington: 9:1 Madison: 11:1

Jefferson 12:1

How to measure in a district with non-Title I buildings

Compare: Average of one or more of the lowest

poverty Title I schools to each higher poverty Title I school

Lincoln 30% poverty, Washington 50%, Madison 55%, Jefferson 60% Chose only Lincoln as the comparison school

Lincoln 30%, Washington 32%, Madison 55%, Jefferson 60%, chose both Lincoln and Washington as the comparison schools

How to measure in a district with all Title I buildings

Basis for Evaluation

• grade-span by grade-span or • school by school (district-wide basis)

“Old Method”

USDE School Level Expenditure report – 44 percent of Title I schools spend fewer state/local dollars on teachers and other personnel compared with non-Title I schools.

Poor kids are getting fewer education dollars than their wealthier peers.

Over 4,000 districts examined as a result of ARRA

Updates

USDE. Results indicate Comparability is “broken.”

Complete report found at http://www2.ed.gov/rschstat/eval/title-i/school-level-expenditures/school-level-expenditures.pdf

The biggest (but not only) culprit: teacher salary differentials

Updates

Currently, PA examines comparability only using staff to student ratios, regardless of salary costs.

Duncan “in far too many places, Title I is filling budget gaps rather than being used to close achievement gaps.”

Updates

Guidance: Must be annual determination (old) Review for current year and make

adjustments for current year. (new) Budget for upcoming year and make

adjustments in current year, if needed. Assurances are due November 15. eGrants changes were made in 12/13.

Timing Issues

Federal Funds Private Funds Need not include unpredictable changes in

student enrollment or personnel assignments that occur after the start of a school year

Exclusions

Administrators (principals and assistant principals)

Art Teachers Classroom Teachers Guidance Counselors Librarians Music Teachers Physical Education Teachers Project Directors (Non-federally funded) Psychologists Social Workers Speech Therapists

Who is “instructional staff”

Bus Monitors Consultants Crossing Guards Maintenance Staff Security Staff Federally paid Staff

Not included…

Bilingual Teachers Special Education Title I “Like” Staff Teachers Aides (instructional)

Although the LEA has the discretion to count or not count these types of staff, it must be done consistently across the grade spans being compared.

Optional staff…

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

New calculation 2012-2013

Pre-K expenditures. Central office costs (including cost center

2818). Charter School Tuition. Alternative Education Programs (if

enrollment is District Wide only). Summer School expenditures (if

enrollment is District Wide only). Federal expenditures.

Exclusions

English language instructional costs. Special education (including gifted and OT/PT). Transportation. Food Services. Capital expenditures (LEA capitalization

threshold).Be prepared to justify any other exclusion and keep all documentation on file.Personnel costs defined as objects 100 and 200.

Exclusions, cont.

“New Method”

www.education.state.pa.us and click on the eGrants link at the left of the page.

Then click on the Division of Federal Programs link at the left of the screen.

Enter your Login ID and password, then click on the “Consolidated Application” link.

At the main Consolidated Application page you’ll see the link for Comparability towards the bottom of the screen.

How to access the Data Sheet and Assurance page

“Supplement not Supplant” is the basis for the use of all federal funds administered via the Division of Federal Programs.

“In general, an LEA and its schools may use Title I, Part A funds only to supplement, and in no case supplant, the funds that would, in the absence of the Title I, Part A funds, be available from non-Federal sources for the education of students participating in Title I programs.”

There are two kinds of supplanting violations, programmatic and fiscal.

Supplement/Supplant

Targeted Assisted – program level supplanting. “Reasonable and necessary.” Very situationally dependent.

“Required by Law, Prior year, and non-Title I students receiving same services with non-Federal funds” tests.

- Exclusion: ESEA waiver activities.“An LEA that is using Title I, Part A funds to

implement elements of its SEA’s flexibility request that are required by State law or regulations would

not violate the “required by law” presumption of supplanting.”

Supplement/Supplant

Schoolwide – fiscal level supplanting only, but must meet “intents and purposes.” School must receive all the state and local funds it would otherwise need to operate in the absence of Federal funds. Meeting comparability is a strong initial indicator of not supplanting in SW.◦ Includes routine operating expenses such as

building maintenance and repairs, landscaping and custodial services

Schoolwide

The Title I statue takes a different approach in schoolwides in an effort to drive comprehensive reforms and approaches in high-poverty schools

Instead of making sure Title I delivers “extra” programs and services…We look at the amount of state and local money a schoolwide school receives to make sure its all the money it would get if it did not also receive federal funds

The goal is to make sure Title I schools, in the aggregate, get extra money – they then have flexibility in how they spend their money

What is different in schoolwide?

Depending on its needs, a schoolwide programs school could spend Title I to:• Implement a stronger curriculum• Implement an early warning system• Extend the school day or school year• Reorganize class schedules to increase teacher planning time• Revamp the school’s discipline process• Hire additional teachers• Reorganized classes to promote personalized learning• Implement career academies• Implement school safety programs• Attendance, school climate, and anti-bullying efforts.

Taking a step back, what could schoolwide look like?

Title I funds are supposed to supplement state and local efforts

Three presumptions of supplanting:◦ Mandated by state/local law

◦ Paid for with state/local funds in prior year

◦ Same services paid for with the Title I for Title I students and state/local funds for non-Title I students

Historically, compliance has been reviewed programmatically, by defining the programs and services school districts will deliver with the state and local funds

Under the approach, Title I funds are typically limited to separate add-on services

Why doesn’t schoolwide look that way now?

Example 1:• A school district conducts a technology audit,

which shows Title I schools have computer labs, but non-Title 1 schools do not

• The district reduces state/local allocations to Title I schools in order to redirect state/local money to non-Title I schools so they can by computer labs

What does this look like in practice?

Result • The school district violates the supplemental

funds test because Title I schools are deprived of state and local funds because they receive Title 1

Example 1 (cont)

Example 2:• A school district meets the supplemental funds

test• State and local resources have declined, forcing

school leaders to make tough decisions about what to keep and what to cut

• Most schools decide not to cut teaching positions

• Title I schools use Title I funds to retain teacher FTEs, while non-Title I schools do so with state/local funds

What does this look like in practice?

Result ◦ This scenario does not violate the supplemental

funds test (but is likely to get scrutinized) ◦ The supplemental funds test looks at the overall

level of resources going into a school, and not for supplementary services

◦ Here, the Title 1 Schools have extra resources non-Title I schools do not have

The non-Title1 schools had to cut other costs in order to retain the teacher FTEs with state and local funds, cuts Title 1 schools did not have to make. Title 1 Schools should be getting something extra with the extra dollars they have flowing into the school

Example 2 (cont)

All costs charged to Title 1 in a schoolwide program must be:◦ Consistent with the school’s needs◦ Reasonably designed to improve student

outcomes◦ Necessary and reasonable◦ Meets intent and purposes◦ Educationally related

So what is the control to ensure Title 1 funds are spent responsibly?

Title I should be used to close achievement gaps, not budget gaps.

Total amount of federal funds are supplemental Does the district have a federally neutral funding

formula for school allocations? Were building allocations reduced? If so, how and

which ones. If Comparability was required, how close did they

make it by? Do expenditures match SW plans and do they meet

an educational need. Finally, examine previous year actual per-pupil

expenditures

Supplanting in Schoolwide Buildings

◦ Instruction – yes◦ Instructional support – probably yes◦ Administration – possibly yes◦ Operational – no

What is “educational need”?

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

Closing thoughts