1. 1 Michigan Association of State and Federal Program Specialists “Recent Enforcement and Compliance Issues” Traverse City, Michigan November, 2007 Leigh Manasevit Brustein & Manasevit 3105 South Street Washington, DC 20007 lmanasevit@bruman.com (202) 965-3652

2. 2 Recent USDE Enforcement and Monitoring Actions: How LEAs may be impacted

3. 3 Heightened Enforcement 1. Standards and Assessments 2. Choice and SES 3. Fiscal Requirements

4. 4 Enforcement: 1) Standards and Assessments “The heart of NCLB” Penalty: Withhold 25% of State Admin – Redirected to LEAs 23 states “approval pending” – 4-8 states likely lose admin – PA = “approval expected” = no penalty Biggest challenge: Testing LEP and students with disabilities

5. 5 Testing LEP Students: “newly arrived” and residual inclusion Final regulation (Sept 2006): www.ed.gov/legislation/FedRegister/ finrule/2006-3/091306a.html www.ed.gov/legislation/FedRegister/ finrule/2006-3/091306a.html New guidance: www.ed.gov/policy/elsec/guid/lepguidance.doc www.ed.gov/policy/elsec/guid/lepguidance.doc

6. 6 Enforcement: 2) School Choice and SES Enforcement decisions driven by participation numbers Nationally, SEAs directed to ramp up enforcement Targeted USDE monitoring – 17 regularly scheduled plus 5 more states

7. 7 Enforcement: 3) Fiscal Issues Separate monitoring visits (Title III) Procurement – Competitive bidding? Equipment – Imposing “equipment” rules on “supplies” – Inventory – Where is laptop? Where is PDA? Contracts – Sufficient detail in contracts and invoices?

8. 8 Monitoring Findings 2006-2007 Frequent: Services to Eligible Private School: Students – Parents – Teachers Public Control and Oversight Especially with TP Contractors -Consultation -Complaint Process -Affirmations -Set-Asides

9. 9 Monitoring Findings – 2006-2007 Frequent:  Parental Involvement  Policies meet statute  Right to Request Qualifications  Notification Actions Lack Elements and Timeliness

10. 10 Monitoring Findings 2006-2007 Frequent: Setasides Improperly Calculated – Especially Privates SES

11. 11 Monitoring Findings 2006-2007 Frequent – Fiscal Especially Supplanting

12. 12 Monitoring Findings Ohio Nevada New Jersey Missouri Rhode Island Washington 2006-2007

13. 13 Recent USDE Enforcement and Monitoring Actions: How Michigan LEAs may be impacted

14. 14 Who might come knocking? USDE Program Office (SASA; OSEP) – Routine monitoring – Special focused monitoring USDE Office of Inspector General (Audit; Investigative Unit) PA Department of Education Single Auditors

15. 15 Enforcement and Monitoring State Administered Programs Federal states States districts

16. 16 Enforcement Tools (EDGAR) If material failure to comply with term of an award in statute or regulation, assurance in plan or application, notice of award “or elsewhere,” awarding agency may: Temporarily withhold funds pending correction Disallow all or part of cost Suspend or terminate current award Withhold further awards “Take other remedies”

17. 17 Heightened Enforcement 1. Standards and Assessments 2. Choice and SES 3. Fiscal Requirements

18. 18 Enforcement: 1) Standards and Assessments “The heart of NCLB” Penalty: Withhold 25% of State Admin – Redirected to LEAs 23 states “approval pending” – 4-8 states likely lose admin – PA = “approval expected” = no penalty Biggest challenge: Testing LEP and students with disabilities

19. 19 Testing LEP Students: “newly arrived” and residual inclusion Final regulation (Sept 2006): www.ed.gov/legislation/FedRegister/ finrule/2006-3/091306a.html www.ed.gov/legislation/FedRegister/ finrule/2006-3/091306a.html New guidance: www.ed.gov/policy/elsec/guid/lepguidance.doc www.ed.gov/policy/elsec/guid/lepguidance.doc

20. 20 Year 1 (“newly arrived” = <12 months) Exempt from reading/ language arts test Must take English proficiency to count in 95% Years 2 & 3Test in “language and form most likely to yield accurate data” (i.e., native lang), “to the extent practicable” Years 4 & 5Must give read/ lang arts in English, except on case-by- case basis Years 6+Must give read/ lang arts in English

21. 21 What happened in Virginia in spring 2007? English proficiency test cannot be used for language arts test (aligned to standards) Virginia districts objected to testing some LEP students using grade level language arts assessments USDE threatened to withhold entire Title I amount from LEAs LEAs gave in

22. 22 Enforcement: 2) School Choice and SES Enforcement decisions driven by participation numbers Nationally, SEAs directed to ramp up enforcement Targeted USDE monitoring – 17 regularly scheduled plus 5 more states

23. 23 Choice/ SES What is being scrutinized? 1. Participation rates 2. How much of 20% used 3. Notices to parents

24. 24 Enforcement: 3) Fiscal Issues Separate monitoring visits (Title III) Procurement – Competitive bidding? Equipment – Imposing “equipment” rules on “supplies” – Inventory – Where is laptop? Where is PDA? Contracts – Sufficient detail in contracts and invoices?

25. 25 “Lax” Enforcement? Highly Qualified Teachers NCLB: All teachers HQ by 2005-06 NO state met deadline! ED will refrain from enforcement during 06-07 as long as “good faith effort” and revised plan Not scheduled to monitoring until Fall 07

26. 26 Monitoring Findings 2006-2007 Frequent: Services to Eligible Private School: Students – Parents – Teachers Public Control and Oversight Especially with TP Contractors -Consultation -Complaint Process -Affirmations -Set-Asides

27. 27 Monitoring Findings – 2006-2007 Frequent:  Parental Involvement  Policies meet statute  Right to Request Qualifications  Notification Actions Lack Elements and Timeliness

28. 28 Monitoring Findings 2006-2007 Frequent: Setasides Improperly Calculated – Especially Privates SES

29. 29 Monitoring Findings 2006-2007 Frequent – Fiscal Especially Supplanting

30. 30 Monitoring Findings Ohio Nevada New Jersey Missouri Rhode Island Washington 2006-2007

31. 31 Ranking and Serving Schools under Section 1113

32. 32 Resources Statute – Section 1113 Regulations – 24 CFR §200.77-78 Non-regulatory Guidance – August 2003

33. 33 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

34. 34 Residency Model OR Enrollment Model

35. 35 5 Poverty Measures: 1. Census data 2. Free and reduced lunch 3. TANF 4. Medicaid eligibility 5. Composite of above

36. 36 Same measure for – ID eligible areas – Ranking areas – Determining allocations for school – (Choice priority) – (SES eligibility) Not for SWP eligibility

37. 37 Ranking and Serving Exceeding 75% poverty – Strictly by poverty – Without regard to gradespan At or below 75% poverty – May rank by gradespan

38. 38 Serve strictly in order of rank!

39. 39 Allocation to Schools After set-asides Allocate to schools based on total # of low income residing in area (including nonpublic) Discretion on amount of PPA – Higher PPAs must be in higher schools on ranked list – No regard to SWP or TAS

40. 40 “125 Percent” Rule If serve any school <35% Then PPAs for all schools must be at least 125% of LEA’s PPA under Title I allocation – Entire LEA Title I-A Grant # of low income on census

41. 41 Exceptions: Eligibility “35 Percent Rule” – May designate as eligible – Still serve in order

42. 42 Exceptions: Eligibility Grandfather – Continue if eligible and served last year – Only one year

43. 43 Exception: Rank & Serve “Skip” school, if: 1. Comparability met 2. Receiving supplemental state/ local funds used in Title I-like program 3. Supp. state/ local funds meet or exceed amount would be received under Title I Still count and serve nonpublic in area

44. 44 Exception: Rank & Serve Small school exclusion – If <1000 students

45. 45 Title I Set-Asides

46. 46 LEA Reservations: Must reserve: 20% choice/ SES * (also could be taken from schools or other sources) – “amount equal to”; – “unless lesser amt needed” 1% parental involvement 10% prof dev (if LEA ID)

47. 47 LEA Reservations (cont): No % specified Administration (public and private) Private school students Homeless Neglected & delinquent Incentives to teachers in ID schools (<5%) Professional development “other authorized activities”

48. 48 Calculating % set asides Take off entire LEA grant Transferability: – Includes transferred amounts Carryover: – Does not include carry over (apply % only in first year available)

49. 49 Example Title I Part A = $500,000 Transferred $30,000 from Title V Carried over $50,000 from prior year Apply %s to $530,000

50. 50 5% for Teacher and Paraprofessional Qualifications

51. 51 Teacher and Paraprofessional Qualifications WAS: Use at least 5%, unless lesser amount needed NOW: Deadline of 2005-06 for all teacher and paraprofessionals to be qualified

52. 52 Informal Guidance from ED: No longer mandated (But, is it even allowable cost?)

53. 53 1% for Parental Involvement

54. 54 Parent Involvement Reserve at least 1% 95% of 1% to schools If reserve >1%, still only need to distribute 95% of first 1% to schools But ALL reserved subject to equitable participation for private school students

55. 55 Equitable Service for Private School Students

56. 56 Deriving Instructional Allocation General Formula: Based on number of: 1. Private school students 2. From low-income families 3. Who reside in Title I-participating public school attendance areas

57. 57 Calculating Allocation for Instruction: 1. Rank public school areas: highest to lowest 2. Identify participating areas 3. Calculate PPA for each area 4. Calculate allocation amount for each area must including nonpublic low-income # 5. Reserve nonpublic amount PPA x # of nonpublic low-income in each area

58. 58 Private school students also must get equitable share of some set-asides Off the top for districtwide instruction Off top for parental involvement Off top for professional development

59. 59 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)

60. 60 Example LEA reserves $500,000 for districtwide reading initiative Of all low-income in LEA residing in participating attend areas, 5% are private 5% of $500,000 to private allocation

61. 61 Applies to: Summer school After school programs Reading coaches DOES NOT APPLY TO: Supplemental educational services (20%) Preschool (unless state law defines preschool as “elementary”)

62. 62 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)

63. 63 LEA must conduct parental involvement and professional development for families and teachers of participating nonpublic students: – in conjunction w/ LEA or – independently

64. 64 Example LEA reserves 1% of $500,000 allocation for parental involvement, or $5,000. Of all low-income families residing in participating attend area, 5% are private. Then 5% of $5,000 used for families of participating private school students.

65. 65 Poverty Data 5 options: 1. Data from same source 2. Survey, with extrapolation 3. Comparable data from different source 4. Proportionality 5. Correlated measure

66. 66 Proportionality – Applying low-income % of each public school attendance area to number of private school children who reside in that area Correlated measure – Determining the proportional relationship betw/ two sources and applying that ratio to known source or private school students.

67. 67 Poverty Data: Guidance Preferred method: Same source (FRPL) BUT – Legis and regs say equally available May used >1 method – Use comparable income levels – No duplication

68. 68 Collect Annually or Biennially Purpose: to reduce burden Subject to consultation Not necessary to have uniform procedure for all private schools

69. 69 Distributing the Funds Two options: 1) Pooling: pool the funds to use for students with greatest educational need anywhere in LEA; or 2) School-by-School: funds follow child to private school for educationally needy child in that school

70. 70 Program Specific Fiscal Requirements: Supplement not Supplant MOE Comparability Carryover Consolidated Administration

71. 71 Title I Fiscal Guidance (May 06) www.ed.gov/programs/titleiparta/ fiscalguid.doc Maintenance of Effort (MOE) Comparability Supplement not Supplant Carryover Consolidating Funds in Schoolwide Grantbacks

72. 72 Maintenance of Effort Legal Authority: NCLB: Section 9521

73. 73 MOE: The NCLB Rule 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 not less than 90% for second preceding year.

74. 74 MOE: Preceding Fiscal Year Need to compare final financial data Compare “immediately” PFY to “second” PFY EX: To receive FY2005 funds (available July 2005), compare FY2004 (2004-05) to FY2003 (2003-04)

75. 75 Expenditures Included “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

76. 76 Expenditures Excluded Funds from federal government Community services; capital outlay; debt service; or supplemental expenditures made as a result of a Presidentially declared disaster

77. 77 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

78. 78 Aggregate expenditures Amount per student SY 041,000,0006,100 SY05 – must spend 90% 900,0005,490 05 – Actual amount 850,0005,200 Shortfall-50,000-290 Percent shortfall/ reduction -5.6%-5.3%**

79. 79 Years after Failure SEA uses 90% of the prior year amount rather than the actual expenditure amount

80. 80 MOE: Waiver USDE Secretary may waive if: – Exceptional or uncontrollable circumstances such as natural disaster OR – Precipitous decline in financial resources of the LEA

81. 81 Comparability Legal Authority: Title I Statute: §1120A(c)

82. 82 General Rule- §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.”

83. 83 Timing Issues Guidance: Must be annual determination YET, LEAs must maintain records that are updated at least “biennially” (1120A(c)(3)(B)) Review for current year and make adjustments for current year

84. 84 Written Assurances 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”

85. 85 May also meet through... 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)

86. 86 How to measure?? Compare: Average of all non-Title I schools to Each Title I school

87. 87 Basis for evaluation: – grade-span by grade-span or – school by school

88. 88 Exclusions: Federal Funds Private Funds

89. 89 Exclusions: Need not include unpredictable changes in students enrollment or personnel assignments that occur after the start of a school year

90. 90 Exclusions: LEA may exclude state/ local funds expended for: Language instruction for LEP students Excess costs of providing services to students with disabilities Supplemental programs that meet the intent and purposes of Title I Staff salary differentials for years of employment

91. 91 Who is “instructional staff”? Consistent betw/ Title I and non-Title I Teachers (art, music, phys ed), guidance counselors, speech therapists, librarians, social workers, psychologists Paraprofessionals – up to SEA/ LEA – Only if providing instructional support – ED urges NO!

92. 92 Supplement Not Supplant Legal Authority: Check program statute!

93. 93 Supplement not Supplant Federal funds must be used to supplement and in no case supplant state and local resources “What would have happened in the absence of the federal funds??”

94. 94 Presumptions of Supplanting (A-133 Compliance Supplement) Presume supplanting occurred if federal funds used to provide services that:  Were required to be made available under other federal, state, or local laws;  Provided with non-federal funds in prior year;

95. 95 Presumption of Supplanting 3. Were provided to participating children, if those same services provided with non- federal funds to non-participating children

96. 96 Exception: 1120A(d) 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.

97. 97 Presumption Rebutted! If SEA or LEA demonstrates it would not have provided services if the federal funds were not available NO non-federal resources available this year!

98. 98 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

99. 99 Supplanting in a Schoolwide Fiscal analysis only Use Title I funds only to supplement the amount of funds that would, in the absence of federal funds, be made available from non-federal sources for the school.

100. 100 Corrective Action and Restructuring GAO Report September 2007 2005-2006 – 2790 Schools Higher percentage are poor and minority http://www.gao.gov/cgi-bin/getrpt?GAO-07-1035

101. 101 GAO Report Estimate: – 6% of schools – no corrective action – 1/3 no new actions when status moved – 40% in Restructuring – No Required Actions

102. 102 GAO Report California Illinois Michigan New York Pennsylvania 60% of schools in Corrective Action or Restructuring, but 30% of Title I Schools

103. 103 GAO Report: Recommends ED Should:  Provide guidance as to when Districts may continue previous corrective actions  Obtain information from States on specific actions implemented  Assure LEA’s are providing technical assistance

104. 104 Corrective Action and Restructuring: Center on Education Policy July 2007 Report Assisting Schools in Improvement http://www.cepdc.org/index.cfm?fuseaction=documen t.showDocumentByID&nodeID=1&DocumentID=207

105. 105 Corrective Action and Restructuring: Center on Education Policy July 2007 Report % of Districts with schools in improvement – steady Reading First generally rates as effective Districts rated own policies as important contributions to improvement: less enthusiastic about State/Federal Policies NCLB actions viewed as helpful but Districts lack $$ Districts call for revision of subgroup policies, especially ELL & SWD 4% Setaside – SI – Not Enough

106. 106

107. 107 QUESTIONS??

108. 108 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. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.