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Maximize Fiscal Flexibility:
Consolidated Administration, Transferability, Waivers, and
Schoolwide Programs
Leigh M. Manasevit, [email protected] Brustein & Manasevit, PLLC
Spring 2012 Forum
Remembrance of Things Past . . .• March 3, 2011 letter from Secretary Duncan to Governors
• “The New Normal”
• Focus on the effective, efficient and responsible use of federal funds
• Reminder of flexibilities around since 1994!
2
Consolidated Administration
• Combine administration for all NCLB programs
• NOT non-administrative activities • Single Cost Objective• If you work 100% on NCLB consolidated
administration, then do semi-annual certification
4
Prerequisites
• LEAs =• Need approval of the
SEA• SEA must set % cap for
administration, OR use “necessary and reasonable amount”
• SEAs = • Need to demonstrate
that majority of operating expenses come from non-federal sources
5
Transferability- LEAs not ID SI• May transfer up to 50% of funds under:• Title II, Part A (Teacher Training)• Title II, Part D (Enhancing Education through Technology• Title IV (Safe and Drug Free)• Title V (Innovative Programs)• ED Tech State Grants
• Transfer to Title I, Part A or any of the above programs
• Increases the base on which calculating set asides7
Transferability – LEAs ID for SI
• Transfer up to 30%
• May only use for school improvement activities (Section 1003 or 1116)
8
Transferability – How to use it• Notify SEA
• Modify local plans (submit to SEA within 30 days)
• Consult with private school officials
9
USDE Invitation to Submit Waivers – ARRA Funds
• In 2009 after ARRA• Relief from set-asides
expanding w/ ARRA $• Relief from carry over
limitations• Relief from 14-day
notice• Allow SES in year 1• Allowing ID
LEAs/schools to be SES providers
11
Waiver Resources• Statute – NCLB Section 9401
• Guidance – • Title I, Part A – July 2009
• Maintenance of Effort – See program statutes
13
NCLB -What may be waived?
The Secretary may grant a waiver of any ESEA statutory or regulatory provision EXCEPT:
Allocation or distribution of funds to SEAs, LEAs or other recipients of ESEA $ComparabilitySupplement not supplantEquitable services to private school studentsParent involvementCivil rights
14
What can be waived? (cont.)
Secretary may waive any provision, EXCEPT:
Charter school requirements (Title V)Prohibitions regarding state aid (Section 9522); using funds for religious purposes (Section 9505)Selection of eligible school attendance areas under 1113, unless % low income students is less than 10% below the lowest eligible school
15
What must be included in waiver request?1. Identify federal program affected;2. Identify particular statutory or regulatory provision;3. Describe how waiver will increase quality of instruction and
improve academic achievement;4. Identify the specific measurable educational goals for each
school year and method used to measure;5. How waiver will assist in meeting those goals;6. How schools will continue to provide assistance to targeted
populations; and7. Evidence that notice & comment rules are met
16
Notice & Comment rules• For SEA request:• Notice and reasonable opportunity to comment for all LEAs• Submit any LEA comments to USDE• Notice to public in customary manner
• For LEA request:• Notice to public in customary manner• Submit to SEA for comment• Submit SEA comments to USDE
17
“ESEA Flexibility” September 23, 2011
• 10 provisions subject to waiver1. 2013-2014 timeline –
develop new ambitious AMO’s2. School improvement consequences: LEA not
required to take currently required improvement actions in Title I Schools
3. LEA improvement identification: not required to identify for improvement LEA that fails 2 consecutive years
4. Rural LEAs• Small Rural School Achievement or Rural and
Low Income program• Flexibility regardless of AYP status 19
Waivers5. Schoolwide
Operate as schoolwide regardless of 40% poverty threshold if• SEA identified as a priority or focus school with
interventions consistent with turnaround principles
6. School Improvement• 1003a funds to serve any priority or focus school
if SEA determines school in need of support7. Reward Schools
• Rewards to any reward school if the SEA determines appropriate 20
Waivers8. HQT improvement plans
LEA that does not meet HQT no longer must develop an improvement plan Flexibility in use of Title I and II funds
LEA-SEA develop “more meaningful” evaluation and support systems which eventually will satisfy the HQT requirement
SEA still must ensure poor and minority children not taught at higher rates by inexperienced, unqualified or out-of-field teachers 21
Waivers
9. Transferability Up to 100%, same programs
10. SIG 1003g awards for any priority school
22
Waivers
Optional #11◦21st Century Community Learning Centers
support expanded learning time during school day
23
Schoolwide: Legal Resources• Statute: Section 1114
• Regulations: 34 CFR 200.25-200.29
• Federal Register Notice, July 2, 2004 www.ed.gov/legislation/FedRegister/other/2004-3/070204a.html
• Non-Regulatory Guidance:Designing Schoolwide Programs Guidance: March 2006www.ed.gov/policy/elsec/guid/ designingswpguid.doc
26
• Non-Regulatory Guidance:“Title I Fiscal Issues” February 2008
(replacing May 2006)www.ed.gov/programs/titleiparta/ fiscalguid.doc • Consolidating funds in schoolwide programs,
MOE, SNS, Comparability, Grantbacks, Carryover
Schoolwide Programs: Basic Requirements• Consolidate federal, state, and local funds to upgrade the
entire educational program.
• Ensure all children meet standards, particularly those most at risk.
• Requirement:• 40% poverty• Schoolwide plan
What federal programs can be consolidated?
Federal Register, July 2, 2004
All formula (non-competitive) ◦ Except Reading First
Consolidate, but with caveats -◦ Includes IDEA - up to cap (but not exempt from programmatic
requirements)◦ Migrant; Indian Ed restrictions on consultation
• All discretionary (competitive)• Still must comply with application• Need not account separately for specific expenditures
• ED only (no School Lunch, Head Start)
Recordkeeping in SWP School operating SWP that
consolidates is not required to maintain separate fiscal accounting records, by Federal program, that ID the specific activities supported by each program’s funds.
Guidance: Three scenarios# 1: Consolidate federal, state, and local# 2: Consolidate only federal# 3: Do not consolidate Title I with other federal, state, and local (nothing consolidated)
32
What does it mean to consolidate funds?• Title I Fiscal Issues Guidance E-2 and E-3• Treat funds like a “single pool of funds”• Lose individual program identity• School has one flexible pool of funds• “Use to support any activity of the schoolwide
program without regard to which program contributed the specific funds used for a particular activity”
What does it mean to consolidate funds? (cont.)LEA does not literally need to combine funds in a
single account or pool with its own accounting code
“Pool” is used “conceptually”◦ See Title I Fiscal Issues Guidance p. 51, footnote 2
IMPORTANT: Identify in SWP PLAN: “consolidated” programs and the amounts consolidated from each!
What about state limitations on consolidation?• NCLB Section 1111(c)(9) and (10):
• Each State plan shall contain assurances that - Each SEA must “encourage schools to consolidate funds from Federal, State, and local sources in their schoolwide programs”, and . . .
“Each State plan shall contain assurances that – the SEA will modify or eliminate State fiscal and accounting
barriers so that schools can easily consolidate funds from other Federal, State, and local sources for schoolwide programs”
What if the LEA consolidates federal, state, and local?? Title I Fiscal Issues Guidance Question
E-8
“When Title I, Part A funds are consolidated with State and local funds . . . they lose their identity.”
No distinction between federal and non-federal.
For Formula Grants
Meet “Intents and Purposes” A school that consolidates federal
funds with state and local is not required to meet most of the statutory and regulatory requirements of the specific federal programs applicable at the school level. ◦Not required to ID particular children
or provide supplemental services.
Must meet “intents and purposes” of program.
For Discretionary / Competitive Grants
• Must still carry out all activities described in application.
• But do not need to account separately for specific expenditures of the discretionary grant funds.
Can the LEA consolidate only federal in a SWP?• Yes. Title I Fiscal Issues Guidance E-4• Single Federal consolidated pool• “From an accounting perspective, the funds from
the contributing Federal programs lose their individual identity when they become part of a consolidated schoolwide pool and would be accounted for as part of that pool rather than by the individual programs that contribute to the consolidated schoolwide pool.”
On what activities can consolidated Federal funds be used?
1. Activities to address the “educational needs” of the school: • Identified by needs assessment• Articulated in SW Plan• Meet “intents and purposes” of federal programs• Title I Fiscal Issues Guidance E-5, etc.
What is “educational need”?• Not addressed in guidance
• B&M best guess:• Instruction – yes• Instructional support – probably yes• Administration – possibly yes• Operational – no
On what activities can consolidated Federal funds be used?
2. OMB Circular A-87 applieso “Cost Principles for State, Local and Tribal
Governments”o Applies to all federal funds – not education specifico General: “necessary and reasonable”o Specific: Allowability of salaries/wages (time and
effort records), equipment, alcohol
Scenario #3:What if there is NO
consolidation at all?
Only Title I supports the plan. How must Title I $ be used?
If Title I is not consolidated with other federal, state, and local, then how must the LEA use Title I funds?
Title I Fiscal Issues Guidance E-71.On the “educational needs” of school◦ Identified in needs assessment◦Articulated in SW Plan
2.OMB Circular A-87 applies
If Title I not consolidated (cont.)
• All kids may participate
• Need not be supplemental
• ** “Must account for and track the Title I funds separately, identifying the activities the Part A funds support”
Under #3, what about other federal programs?
• Not addressed in Title I guidance• B&M: Must meet all requirements of those other federal programs
Supplement not Supplant
• Section 1114(a)(2)(B): Title I must supplement the amount of funds that would, in the absence of Title I, be made available from non-federal sources.• Title I Fiscal Issues Guidance E-18
• The actual service need not be supplemental
SNS: • Guidance: School must receive all the state and local
funds it would otherwise need to operate in the absence of Federal funds
• Includes routine operating expenses such as building maintenance and repairs, landscaping and custodial services
Can Title I $ be used for basic operational expenses?• Title I Fiscal Issues Guidance E-8• If only federal combined –• No, must be for educational needs
• If federal and non-federal combined –• Impossible to determine which is federal• Be sure sufficient state and local funds allocated to
school to meet basic operational needs
Components of the SW Plan 1) Identify reform strategies, aligned with the needs assessment, that are
research-based and provide opportunities for all children to meet the State’s proficient or advanced levels of academic achievement;
2) Provide instruction by highly qualified teachers;
3) Offer high-quality, ongoing professional development;
4) Create strategies to attract highly qualified teachers;
5) Create strategies to increase parental involvement;
5) Develop plans to assist preschool students through the transition from early childhood programs to local elementary school programs;
6) Identify measures to include teachers in decisions regarding the use of academic assessments;
7) Conduct activities to ensure that students who experience difficulty attaining proficiency receive effective, timely, additional assistance; and
8) Coordinate and integrate Federal, State and local services and programs. Identify what funding sources are being consolidated
Components of the SW Components of the SW Plan (cont.)Plan (cont.)
How to Report Expenditures? “Use any reasonable basis”
Proportional basis• Example: If 25% of combined funds are from Title I, then report
25% of expenditures as Title I expenditures
Proportional Basis (or “any other reasonable method”)• Use for identifying:• Carryover• Amount of unused non-federal funding• MOE• Comparability• Reporting expenditures back to State or USDE• State Per Pupil Expenditure (SPPE)• Title I, Part A ARRA Reporting
Carryover• Rule:
• Section 1127: Not more than 15% of the LEA’s Title I, Part A allocation will remain available for obligation in the second year
• SEA may waive once every 3 years
Carryover in a SWP• Title I Fiscal Issues Guidance E-22• How to calculate 15% limitation?• Based on 15% of LEA’s Part A allocation
• How to calculate amount left over at school level?• Look at $ left over in school pot – if Title I contributed 10%, then
10% of remaining funds are Title I, Part A
ESEA Maintenance of Effort• RULE:
• Section 9521: LEA may receive ESEA funds only if the combined fiscal effort per student or the aggregate expenditures across LEA from non-federal funds from preceding FY was not less than 90% of the second preceding FY
Maintenance Of Effort in SWP• Title I Fiscal Issues Guidance E-20• Must exclude federal funds• Identify proportion of federal contribution, and allocate
expenditures to federal in same proportion• EX: If federal programs contributed 25%, then 25% of
expenditures attributed to federal and excluded
Comparability• RULE:
• Section 1120A: LEA may receive Title I funds only if nonfederal funds are used to provide services in Title I schools that are at least comparable to services in non-Title I schools
• Often measured by student/instructional staff ratios or salary ratios
Comparability in SWP• Title I Fiscal Issues Guidance E-19 (refers to B-6)• Must exclude federally-paid instructional staff• Identify proportion of federal contribution -- assume same
percentage of instructional staff in school was paid with federal funds and exclude from comparability determination
Time and Effort Rules
•Depends on the extent of consolidation of federal, state, and local funding.
•Key Concept: Schoolwide Plan is a single cost objective.• per Sandy Brown at NASTID, Jan. 2011
Schoolwide Time RecordsIf LEA/school consolidates . . . .
Then must keep . . .
All federal, state, and local funds No time and effort records
Federal only (“Consolidated federal pot”)
Semi-annual – if works ONLY on SWP Plan (single cost objective)Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives)
Nothing (only Title I funds SWP) Semi-annual – if works ONLY on SWP Plan (single cost objective)Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives)
SAFE: Under Full Consolidation
IF:• Works 100% on SWP Plan• Paid 100% from consolidated pool that includes all federal,
state, and local programs
THEN:• No records are required. No distinction between federal and
nonfederal.
SAFE: Under Federal Consolidation
IF:• Works 100% on SWP Plan• Paid 100% from consolidated federal pool
THEN:• Do semi-annual certifications• “I spent 100% of my time on SWP”
SAFE: Under No Consolidation
IF: Works 100% on SWP Plan Paid 100% from Title I, Part A (no consolidation)
THEN: Do semi-annual certifications “I spent 100% of my time on SWP”
72
A verbal “OK” from USDE: IF: Works 100% on SWP Plan Paid 50% from Title I Part A and 50% from non-federal
money (no consolidation)
THEN: Keep semi-annual certification – “I spent 100% of my time
on SWP Plan”◦ (per S. Brown – working on 1 cost objective - could have
been funded 100% from Title I Part A, if had enough resources)
SAFE:IF:• Works 50% on SWP Plan and 50% on Reading First (not included
in Plan)• Paid 50% from Title I, Part A and 50% from Reading First
THEN:• Keep monthly PARs• “I spent 50% of my time on the SWP Plan and 50% on Reading
First”
This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. 76