Office of Federal and State Accountability Fun with Funds Flexibility with Federal Funds Supplement, not Supplant

Federal Funds – Flexibility and Collaboration Many look at federal funds as being in separate silos. We should look at how flexibility in state and federal funds may allow them to work together. Knowing the rules allows for flexibility and collaboration.

Flexibility in Using Federal Funds Federal funds are to be used to supplement state and local funding. How would your district look without federal funding? Look across all of your funding streams to determine what flexibility might exist. There is state funding flexibility provided by proviso. There is federal flexibility under ESSA (Every Student Succeeds Act).

Flexibility in Using Federal Funds Transferability of funds among ESSA programs Some or all of Title II and Title IV, Part A funds may be transferred into the following: Title I Parts A, C, D, Title II Part A – Supporting Effective Instruction Title III Part A – English Language Acquisition Title IV Part A – Student Support and Academic Enrichment Grants Title V Part B – Rural and Low Income School Grants There are conditions and considerations such as equitable service considerations and receiving fund requirements before an LEA transfers funds. The funds may be accounted for in the originating fund.

Flexibility in Using Federal Funds Consolidation of federal administrative funds is useful for a district that has a person or several folks that do nothing but administer federal programs. An LEA may consolidate federal funds for program administration. Any administrative caps must be met and a total administrative budget determined. Look at program and administrative costs to define your administrative budget. Program costs do not have to be included in the administrative budget. Instructional coaches would be a program cost. At least 50% of the LEA budget must be from state and local sources. There are several ways in accounting for the funds and in drawing from GAPS. The OFSA has the forms to use for consolidation.

Flexibility Associated with Title I Schoolwide Projects Title I Schoolwide Project Schools offer the greatest flexibility for the use of federal and state and local funds. Consolidation of federal funds in a Schoolwide Project offers considerable flexibility. State flexibility through budget proviso also allows blended or braided funding. The new Title I supplement, not supplant may allow even more flexibility in schoolwide projects. Contact us for additional information and the “devil in the details”.

ESSA Supplement, Not Supplant According to federal guidance: LEAs may use Title I funds only to supplement or to increase the level of funds that would, in the absence of Title I funds, be made available from non-federal sources for the education of students participating in Title I programs.

Supplement, Not Supplant Another way to look at SNS is to question whether the LEA would be able to meet state requirements for public education without federal funds. What would districts and schools be required to offer in the absence of any federal funding? (for example – the state required Defined Minimum Program for elementary, middle, and high schools) Title I funds (and most federal funds) should be used in addition to state and/or local funding and not in the place of state or local funding. Title I funds may not be used to meet other federal requirements (Title III*, IDEA, etc.).

How to Determine if Activities are Supplemental Testing for Presumptions of Supplanting: Is it required by the state, district, or federal statute or regulation? Are the same services provided for in non-Title I schools or for students with (non-supplemental) state/local funds? Were these activities paid for in prior years with state/local funds?

Other Questions to Consider Are the Title I schools receiving similar services which are provided for by state/local funding as non-Title schools? Are Title I schools receiving their “fair share”? Are the Title I schools being treated comparably (similar positions, technology, etc.)?

Supplanting Defense/Rebuttals Similar Title I-like activity is funded in a non-Title school with supplemental funding, such as one of the following: This is generally known as the “exclusion” rule to supplement, not supplant. State At-Risk Funding Discretionary Grant Possibly, other funds that all schools are not eligible for An example might be an afterschool program funded with Title I funds at Title I schools and funded with state At Risk funding at non-Title I schools.

Supplanting Defense/Rebuttals Activities were funded in prior year with state/local funds. However, the state/local funds used to pay for activities were reduced/eliminated, and during budget prioritization, the activities are to be eliminated. Document in Board agendas, minutes, etc. Document via directives from the state (funding levels, allocations, etc.) Budget reports/meetings

Supplanting Defense/Rebuttals Activities required by local, state, or federal statute This presumption of supplanting is almost always not rebuttable. The presumption is that in the absence of federal funding, the district/school would be required to do the activity anyway. Basic ESOL programs would be a good example of a program that districts would have to provide in the absence of any federal funding.

Supplemental Title I Activities Common supplemental uses of Title I funds: Decreasing class size (below state requirements) Providing extra supplies/materials Providing additional professional development Extending learning time (before/after school or summer school) Funding extra support services - nurses, guidance counselors, etc. The greatest flexibility for use of Title I funds is in the schoolwide project.

ESSA SNS ESSA has provided a new way to view Title I SNS for LEAs. The SNS rule is still in force, but compliance may be viewed differently. For compliance with the new view of SNS, an LEA would demonstrate that the method it used to allocate local and state funds to each school ensures that Title I served schools receive their fair share of local and state funding. [As a note, the new SNS for Title I does not apply to other parts of ESSA; their SNS is defined in ESSA – similar to what was in No Child Left Behind (NCLB).]

ESSA SNS The SEA will monitor the district’s methodology. The SEA will ask each LEA for the methodology it will use to comply with SNS and will be asked to complete an assurance and/or a local policy to demonstrate compliance. The SEA would monitor compliance using a variety of “tests”. The SEA could look at district Maintenance of Effort, Comparability, the district method for distributing local and state funds, district and school budgets that reflect a staffing formula and a weighted per pupil allocation for instruction, and compliance with the Defined Minimum Program. Other indicators could be used based upon discussions with districts. With direction from the districts, auditors, etc., the SEA would develop monitoring tools.

ESSA SNS The statute says ESSA SNS should be implemented by December 2017. The United States Department of Education (USED) has given an extension until the 2018-19 school year. The SCDE will begin monitoring SNS for the 2018-19 school year. For Title I schoolwide project schools, activities funded with Title I would allow for greater flexibility. Activities would still have to meet the test of an allowable cost, and the school plan would need to meet all of the elements of schoolwides in ESSA. Title I district set-asides would probably be gauged by the three presumptions. Title I emphasizes funding to eligible schools, not to district run programs.

ESSA SNS There are many questions to be answered regarding the new Title I SNS and what monitoring would look like. The OFSA has written a draft “white paper” on SNS. Over the course of the next several months, our office will work with stakeholders to help design a workable monitoring system. I believe we should have our methods in place before there are new USED regulations on SNS. Districts should design their 2018-19 budgets with the understanding that the new SNS will be in effect.

Contact Information: Please contact my office if you are looking at flexibility with the use of federal funds. Please contact my office if you wish to comment upon, review, or help design the new Title I SNS. Roy Stehle Director of Federal and State Accountability 803-734-8118 rstehle@ed.sc.gov