Magazine article Policy Brief Series (Hamilton Project)

Increasing Targeting, Flexibility, and Transparency in Title I of the Elementary and Secondary Education Act to Help Disadvantaged Students

Magazine article Policy Brief Series (Hamilton Project)

Increasing Targeting, Flexibility, and Transparency in Title I of the Elementary and Secondary Education Act to Help Disadvantaged Students

Article excerpt

Title I of the Elementary and Secondary Education Act (ESEA) of 1965 is the U.S. Department of Education's (ED's) largest program, providing funding to school districts that have high concentrations of child poverty. In a new Hamilton Project policy proposal, Nora Gordon discusses the targeting, flexibility, and transparency in the current Title I program. Local Title I administrators, who are charged with using these funds to help low-income students, receive inconsistent guidance on permissible uses of Title I funds and face an unpredictable audit process. In addition, due to provisions such as the small state minimum and hold harmless requirements, Title I funding allocations are also difficult to predict and do not target the school districts most in need of the funds.

To address this problem, Gordon proposes a series of reforms that ED and Congress would carry out to improve Title I. Under Gordon's proposal, ED would encourage more-effective local use of funds by improving and disseminating Title I guidance, helping states use existing flexibility for compliance with guidelines, and taking steps to improve the audit process. Congress would also simplify Title I allocations by streamlining the formulas and removing restrictive provisions. Together, these reforms would refocus Title I funds on their original antipoverty intent and improve school districts' ability to predict annual Title I funding levels-in turn allowing districts to utilize the funds for more effective and innovative programs.

The Challenge

Although most educational spending comes from state and local sources, the federal government sends some funds to states in order to fill gaps and address critical problems. In 1960, Title I of the Elementary and Secondary Education Act (ESEA) was adopted to provide funding to school districts that serve low-income students in order to increase school spending and improve student outcomes and school quality. However, local use of the funds is perceived as highly restricted. In addition, federal allocation of the funds follows a complex and opaque set of formulas.

District Use of Title I Funds

In addition to generating revenue locally, school districts receive funds from a variety of state and federal programs, including Title I. Districts may exercise significant control in how schools may spend their Title I funds. In order to prevent abuse of the funds, Congress added a requirement that states use the funds for additional spending rather than merely to replace existing spending ("supplement, not supplant" requirement) in 1970. In practice, up until the most recent reauthorization of ESEA as the Every Student Succeeds Act (ESSA), this meant districts could not use Title I funds to buy things that were bought for other schools with other funds, bought in previous years with other funds, or mandated by state or local law. School districts generally hire Title I directors to coordinate use of Title I funds and navigate the complex state and federal rules on permissible uses of the funds.

Despite multiple lengthy federal guidance documents on permissible uses of funds, permissible activities depend on local circumstances which means local officials have many unanswered questions. State education agency (SEA) and local education agency (LEA) officials also have the option to further restrict how schools may spend Title I funds. As an example of the difficulty of deciphering federal guidance, LRP Publications offers a host of Title I products, including a $250 CD with a ninety-minute audio presentation, "Title I Compliance: Strategies to Boost Internal Controls and Minimize Audit Risk," and summarizes audit results for its paid subscribers.

The audit process is key to understanding Title I. Though rare in practice, LEAs and SEAs are subject to loss of funds if audits reveal significant fiscal compliance issues; this is particularly problematic for Title I directors because of inconsistency in audit quality. …

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