Introduction to Title I, Part A

Fiscal Requirements

Presented by Kristen Tosh Cowan, Esq.

ktoshcowan@bruman.comBrustein & Manasevit, PLLC

Fall Forum 2011

Overview 1) LEA-to-School allocations2) Set asides3) Equitable Services allocation 4) Carryover 5) MOE6) Comparability7) Supplement not Supplant8) Reauthorization Predictions

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Valuable Legal Resource

“Title I Fiscal Issues” Feb. 2008www.ed.gov/programs/titleiparta/ fiscalguid.doc

Consolidating funds in schoolwide

programs, MOE, SNS, Comparability, Grantbacks, Carryover

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LEA-to-School Allocations

“Ranking and Serving” Rules 1) Identify Eligible Schools 2) Rank Schools in Order of

Poverty 3) Serve Schools Strictly in

Accordance with Rank

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STEP 1: IDENTIFY ELIGIBLE SCHOOLS

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Eligible School Attendance Areas

Percentage of children from low-income families who reside in area . . .

AT LEAST AS HIGH AS . . .

percentage of children from low-income families in LEA

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LEA Discretion: Eligibility

“35 Percent Rule” May designate as eligible Must still serve in order

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LEA Discretion: Eligibility

“Grandfathering” option Continue if served last year But, only continue for one year

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5 Poverty Measures:

1. Census data2. Free and reduced lunch3. TANF4. Medicaid eligibility5. Composite of above

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STEP 2: RANK ELIGIBLE SCHOOLS IN ORDER OF POVERTY

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Ranking and Serving Exceeding 75% poverty

Strictly by poverty Without regard to gradespan

At or below 75% poverty May rank by gradespan

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Exception: NO Rank & Serve if

Small LEA exclusion If <1000 students

One school at each gradespan

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STEP 3: SERVE SCHOOLS STRICTLY IN ORDER OF RANK

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Allocation to Schools NOTE: first, reserve set-asides

Allocate to schools based on total # of students from low income families residing in area (including nonpublic)

Discretion on amount of PPA Higher PPAs must be in higher schools on

ranked list

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Allocations given without regard to schoolwide or

targeted assistance model

Title I funding . . . . . . To serve school based on

poverty. . . To serve student based on

academics

Title I Set-Asides

LEA MUST reserve specific percentage:

20% choice transportation and SES 1% parental involvement 10% professional development (if LEA ID)

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LEA MUST reserve but not specific percentage: Administration (public and private) Homeless Neglected & delinquent

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LEA MAY reserve:

Incentives to teachers in ID schools (<5%)

Professional development “other authorized activities”

Summer school Preschool Districtwide program

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CAUTION:

DON’T CIRCUMVENT “RANKING AND

SERVING” RULES!

Funds for Supp Ed Services and Choice Transportation

Amount equal to 20% of LEA allocation

(unless lesser amount needed) To pay transportation for choice To satisfy all requests for SES

services Both

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Credit for “Parent Outreach” Allow limited amount of funds for

“parent outreach” to count toward 20% Capped at 0.2% of LEA Part A grant May spend more for outreach, but only

0.2% counts toward 20% EX. – $1 million LEA grant;

20% = $200,000 0.2% = $2,000 can count toward

$200,000

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What costs count as “parent outreach”?

Parent notices, communication through the media, internet, and community, displaying information on LEA’s website, and parent fairs

Allowance, not a requirement

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Use 20% “unless a lesser amount is needed”

How do you know if less is needed?

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To spend less than 20%, LEA must: 200.48(d)(2)(i)

1. Partner, to extent practicable, with outside groups (CBO, FBO, etc.)

2. Send timely, accurate notice to parents

3. Ensure SES sign-up forms given directly to all eligible students/parents

4. Ensure SES sign-up forms made widely available through broad dissemination (Internet, other media, public agencies) 25 25

5. Provide (at a minimum) two enrollment windows at separate points in school year of sufficient length

6. Ensure SES providers are given access to school facilities, using a fair, open and objective process, on same basis as others

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Does LEA need SEA’s permission before reallocating the 20%?

NO!

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LEA must document and notify SEA!

Before reallocating remainder of 20%, LEA must:

Maintain records demonstrating it has met criteria

Notify the SEA that it met criteria Notify SEA of amount of remainder

it intends to spend on other allowable activities

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Set Aside for Parent Involvement

For LEAs with Part A allocations >$500,000

1% minimum reserved Proportional amount to private

students 95% of remainder to schools 5% of remainder kept at LEA

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Equitable Services for Private School Students

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Equitable Services:Deriving Allocation

General Formula: Based on number of:

1. Private school students 2. From low-income families3. Who reside in Title I-participating

public school attendance areas

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Calculate Allocation for Instruction:

1. Identify eligible school attendance areas2. Rank in order of poverty3. Strictly serve in rank order (i.e., ID who is

“Participating Public School”)4. Calculate PPA for each area5. Derive allocation amount for each area

must include nonpublic low-income #

6. Reserve nonpublic amount PPA x # of nonpublic low-income students who

reside in participating public sch area

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Reservation for districtwide instruction

If LEA reserves for “districtwide instructional programs for public elementary and secondary”

Then proportional amount goes to nonpublic

34 CFR sect 200.64(a)(2)(i)(A)

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Example

LEA reserves $500,000 for districtwide reading initiative

Of all low-income in LEA residing in participating attendance areas, 5% are private

5% of $500,000 to private allocation

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Applies to: Summer school After school programs Reading coaches

DOES NOT APPLY TO: SES/Choice (20%) Preschool

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Reservation for teachers and families

If LEA reserves funds for parental involvement or professional development

Then proportional amount to nonpublic

34 CFR sect 200.65(a)

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Example LEA reserves 1% of $1,000,000

allocation for parental involvement ($10,000).

Of all low-income families residing in participating attendance area, 6% are private. Then 6% of $10,000 used for families of participating private school students ($600).

Carryover

Carryover

General Rule: May carryover up to 15% of Title I, Part A

Reallocated by state if exceeds

Waiver by SEA once every 3 years NOTE: FY 2009 flexibility

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Use of Carryover Funds

Flexible 3 Options:

1. Put back in LEA formula & redistribute2. Designate for particular LEA activities3. (Allow school to retain)

Cannot use in ineligible school

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3 Pillars of Fiscal Accountability

1. Maintenance of Effort2. Supplement not

Supplant3. Comparability

Maintenance of Effort

Most Directly Affected by Declining Budgets

The combined fiscal effort per student or the aggregate expenditures of the LEA

From state and local funds

From preceding year must not be less than 90% of the second preceding year

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MOE: The NCLB Rule

Need to compare final financial data Compare preceding FY to second

preceding FY

EX: To receive FY 2011 funds (available July 2011), compare preceding FY (2009-10) to second PFY (2008-09)

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MOE: Preceding Fiscal Year (PFY)

MOE: Failure under NCLB

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

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Aggregate expenditures

Amount per student

FY 08 1,000,000 6,100

FY09 – must spend 90%

900,000 5,490

09 –Actual amount

850,000 5,200

Shortfall -50,000 -290

Percent shortfall** reduction in all ESEA programs

-5.6% -5.3%**

USDE Secretary may waive for State Exceptional or uncontrollable

circumstances such as natural disaster

OR Precipitous decline in financial

resources of the LEA47

MOE: Waiver

July 2009 Draft Non-Regulatory Guidance SEA may apply for waiver on

behalf of LEAs http://www.ed.gov/policy/gen/leg/recovery/programs.html

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ComparabilityMay not be affected by declining

non-federal revenue, if treat all schools equally

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.”

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General Rule- §1120A(c)

Guidance: Must be annual determination

Review for current year and make adjustments for current year

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Timing Issues

LEA must file with SEA written assurances of policies for equivalence: LEA-wide salary schedule Teachers, administrators, and other

staff Curriculum materials and

instructional supplies Must keep records to document

implemented and “equivalence achieved”

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Written Assurances

Student/instructional staff ratios; Student/instructional staff salary

ratios; Expenditures per pupil; or A resource allocation plan based

on student characteristics, such as poverty, LEP, disability, etc. (i.e., by formula)

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How to show equivalence achieved?

Compare: Average of all non-Title I

schools to each Title I school

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How to measure??

Average of all non-Title I schools10:1

For example: Using student/ instructional staff ratios

Title I schools: Lincoln: 10:1 Washington: 9:1 Madison: 11:1 Jefferson: 12:1

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Basis for evaluation:

by similar grade-spans

or by similar size school

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Exclusions:

Federal Funds Private Funds

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Exclusions: Need not include

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

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Staff salary differentials for years of employment

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Exclusions: LEA may exclude state/local funds expended for:

Consistent between Title I and non-Title I

Teachers (art, music, physical education), guidance counselors, speech therapists, librarians, social workers, psychologists

Paraprofessionals – up to SEA/LEA

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Who is “instructional staff”?

Supplement Not Supplant

Federal funds must be used to supplement and in no case supplant state and local resources

Supplement not Supplant

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“What would have happened in the

absence of these federal funds??”

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Auditors’ Tests for Supplanting

OMB Circular A-133 Compliance Supplement

#1: Provided with non-federal funds in prior year

Auditors presume supplanting occurs if federally funded services were . . . .

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Presumption Rebutted! If SEA or LEA

demonstrates it would not have provided services if the federal funds were not available

NO state or local resources this year!

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What documentation needed?

Fiscal or programmatic documentation to confirm that, in the absence of fed funds, would have eliminated staff or other services in question

State or local legislative action

Budget histories and information

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1. Actual reduction in state or local funds

2. Decision to eliminate service/position was made without regard to availability of federal funds (including reason decision was made)

Documentation must show:

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#2. Required to be made available under state or local laws

Auditors presume supplanting occurs if federal funds were used to provide services . . .

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USDE assumes state and local officials will work to find a way to comply with a state-mandated requirement.

“While it is conceivable that an SEA or LEA could demonstrate that its loss of revenue is so great that it cannot meet a legal requirement, we believe that it typically would be extremely difficult to do so”

“The bar for rebutting this presumption is very high”

Letter from Asst. Secretary Melendez to Leigh Manasevit, January 2011.

Can you rebut this presumption?

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#3. Title I funds used to provide service to Title I students, and the same service is provided to non-Title I children using non-Title I funds.

Auditors presume supplanting occurs if . . .

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Exclusion of Funds:

SEA or LEA may exclude supplemental state or local funds used for program that meets intents and purposes of Title I, Part A

EX: Exclude State Comp Ed funds

Exception: 1120A(d)

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Supplanting in a schoolwide program

Statute 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. E-18 in schoolwide guidance

The actual service need not be supplemental.

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Supplement not Supplant

How will Reauthorization impact Title I Fiscal Requirements?

Reauthorization Predictions

Based on the “Harkin” Bill in Senate

Rank and Serve Priority to serve high schools

must use feeder pattern

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Reservations “Early childhood education and care” Homeless – needs assessment,

transportation, liaison, support services

Choice/SES – Not mandated for all ID schools, but one option

Financial incentives for teachers and students

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Reauthorization Predictions

Comparability Move to measuring non-federal

expenditures/student (personnel & nonpersonnel)

Eliminate loophole of excluding salary differential to reflect seniority

LEA must submit to SEA school level expenditure data

Beginning in 2015-201678

Reauthorization Predictions

Supplement not Supplant Better explanation of schoolwide

approach

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Questions??

This presentation is intended solely to provide general information and does not constitute legal advice. Attendance at the presentation or later review of these printed materials 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.

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