Maximize Fiscal Flexibility: Consolidated Administration, Transferability, Waivers, and Schoolwide Programs

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Maximize Fiscal Flexibility Consolidated
Administration, Transferability, Waivers, and
Schoolwide Programs

• Leigh M. Manasevit, Esq.
• lmanasevit_at_bruman.com
• Brustein Manasevit, PLLC
• Spring 2012 Forum

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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!

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Consolidated Administration under NCLB

• For those wearing multiple hats

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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

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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

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Transferability

• In the unlikely event you have more federal
  resources than you really need

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Transferability- LEAs not ID SI
W

• 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 asides

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Transferability LEAs ID for SI
W

• Transfer up to 30
• May only use for school improvement activities
  (Section 1003 or 1116)

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Transferability How to use it

• Notify SEA
• Modify local plans (submit to SEA within 30 days)
• Consult with private school officials

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Waivers

• Possible relief in absence of ESEA reauthorization

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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

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• Problem with Waivers?
• Lack of Transparency!!

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Waiver Resources

• Statute NCLB Section 9401
• Guidance
• Title I, Part A July 2009
• Maintenance of Effort See program statutes

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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
• Comparability
• Supplement not supplant
• Equitable services to private school students
• Parent involvement
• Civil rights

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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

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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 and
7. Evidence that notice comment rules are met

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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

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ED Announcementon Waivers
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ESEA Flexibility September 23, 2011

• 10 provisions subject to waiver
• 2013-2014 timeline
  develop new ambitious AMOs
• School improvement consequences LEA not required
  to take currently required improvement actions in
  Title I Schools
• LEA improvement identification not required to
  identify for improvement LEA that fails 2
  consecutive years
• Rural LEAs
• Small Rural School Achievement or Rural and Low
  Income program
• Flexibility regardless of AYP status

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Waivers

• Schoolwide
• Operate as schoolwide regardless of 40 poverty
  threshold if
• SEA identified as a priority or focus school with
  interventions consistent with turnaround
  principles
• School Improvement
• 1003a funds to serve any priority or focus school
  if SEA determines school in need of support
• Reward Schools
• Rewards to any reward school if the SEA
  determines appropriate

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Waivers

• 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

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Waivers

• Transferability
• Up to 100, same programs
• SIG
• 1003g awards for any priority school

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Waivers

• Optional 11
• 21st Century Community Learning Centers support
  expanded learning time during school day

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Consolidating Funds in Schoolwide Programs

• Balancing Flexibility with Responsible Planning

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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/2004-3/07
  0204a.html

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• Non-Regulatory Guidance
• Designing Schoolwide Programs Guidance March
  2006
• www.ed.gov/policy/elsec/guid/ designingswpguid.doc
  

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• 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

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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

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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

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• All discretionary (competitive)
• Still must comply with application
• Need not account separately for specific
  expenditures
• ED only (no School Lunch, Head Start)

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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 programs funds.

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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)

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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

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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!

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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 . . .

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• 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

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Scenario 1 Consolidating Federal, State, and
Local Funds
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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.

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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.

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Examples of meeting Intents and Purposes

• See Federal Register Notice July 2, 2004

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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.

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Scenario 2 Consolidating Only Federal Funds
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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.

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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.

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What is educational need?

• Not addressed in guidance
• BM best guess
• Instruction yes
• Instructional support probably yes
• Administration possibly yes
• Operational no

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On what activities can consolidated Federal funds
be used?

• 2. OMB Circular A-87 applies
• Cost Principles for State, Local and Tribal
  Governments
• Applies to all federal funds not education
  specific
• General necessary and reasonable
• Specific Allowability of salaries/wages (time
  and effort records), equipment, alcohol

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Scenario 3What if there is NO consolidation at
all? Only Title I supports the plan. How must
Title I be used?
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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-7
• On the educational needs of school
• Identified in needs assessment
• Articulated in SW Plan
• OMB Circular A-87 applies

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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

50
Under 3, what about other federal programs?

• Not addressed in Title I guidance
• BM Must meet all requirements of those other
  federal programs

51

• Supplement not Supplant in Schoolwide Programs

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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

53
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

54
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

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Schoolwide Planning Requirements

1. Comprehensive Needs Assessment
2. Plan
3. Annual evaluation

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Components of the SW Plan

• Identify reform strategies, aligned with the
  needs assessment, that are research-based and
  provide opportunities for all children to meet
  the States proficient or advanced levels of
  academic achievement
• Provide instruction by highly qualified teachers
• Offer high-quality, ongoing professional
  development
• Create strategies to attract highly qualified
  teachers
• Create strategies to increase parental
  involvement

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Components of the SW Plan (cont.)

• Develop plans to assist preschool students
  through the transition from early childhood
  programs to local elementary school programs
• Identify measures to include teachers in
  decisions regarding the use of academic
  assessments
• Conduct activities to ensure that students who
  experience difficulty attaining proficiency
  receive effective, timely, additional assistance
  and
• Coordinate and integrate Federal, State and local
  services and programs. 
• Identify what funding sources are being
  consolidated

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The Mechanics of Consolidation
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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

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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

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Carryover

• Rule
• Section 1127 Not more than 15 of the LEAs
  Title I, Part A allocation will remain available
  for obligation in the second year
• SEA may waive once every 3 years

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Carryover in a SWP

• Title I Fiscal Issues Guidance E-22
• How to calculate 15 limitation?
• Based on 15 of LEAs 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

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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

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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

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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

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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

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Time and Effort Documentation in Schoolwide
Programs
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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

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Schoolwide Time Records
If 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)
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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.

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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

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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

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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)

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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

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Questions?
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