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Education Stimulus

Friday News Roundup: Week of November 29-December 3

December 3, 2010

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

Louisiana Colleges and Universities Consider Fee, Tuition Increases to Cover Decreasing Aid

New Mexico Budget Forecast Bleak Despite Uptick in State Tax Revenue

Washington Governor Wants Special Legislative Session

Louisiana Colleges and Universities Consider Fee, Tuition Increases to Cover Decreasing Aid

Louisiana Governor Bobby Jindal this week met with the state’s higher education Board of Regents to discuss potential cuts to the state’s higher education budget. Louisiana is facing a projected $1.6 billion shortfall in its fiscal year 2012 budget and Governor Jindal is set to meet with various state officials in the coming weeks to formulate plans to balance the budget without raising taxes. The colleges and universities are in a particularly precarious position as they will no longer have $290 million in federal stimulus funds, which expire after this year, to help prop up their budgets. In his meeting with the Board of Regents, Governor Jindal said he was open to the idea of allowing the public colleges and universities to raise tuition and fees. He stipulated that in the event of a tuition and fee hike, institutions of higher education would have to improve academic performance. More here…

New Mexico Budget Forecast Bleak Despite Uptick in State Tax Revenue

Despite slightly higher than expected tax revenues, New Mexico officials are bracing for a difficult budget negotiation for the coming 2012 fiscal year. According to the state’s Finance and Administration Secretary Dannette Burch, state revenues are about 1 percent higher than expected in the current fiscal year, leaving the state with $56 million more than previously expected. Instead of distributing that money in the current fiscal year to roll back cuts that were made previously, Burch says the state will reserve the funds to help balance the budget in 2012, when federal stimulus funds – which amount to $215 million in the current year’s budget – are no longer available. More here…

Washington Governor Wants Special Legislative Session

Washington Governor Chris Gregoire this week announced that she would like to call a special legislative session to deal with a projected $385 million budget shortfall in the current 2011 fiscal year. Democrats in the state legislature are less eager for a special session, saying that there are ways to patch the current budget without a special session. While Governor Gregoire has the authority to call a special session without the consent of the state legislature, she had hoped to come to an agreement with lawmakers on the agenda for the 30-day session ahead of time, leaving more time for actual budget negotiations. Along with cuts to the state’s subsidized medical care programs, Governor Gregoire’s proposal for the special session would include reductions to levy equalization payments, which help K-12 school districts that have low property tax collections. Governor Gregoire says that in order to save enough money by the end of the current fiscal year, her cuts would have to be enacted by December 12th. More here…

Conflicting Priorities under the American Recovery and Reinvestment Act

December 2, 2010

Bellwether Education Partners this week released a report, Conflicting Missions and Unclear Results: Lessons from the Education Stimulus Funds. The report examines how states and school districts used federal stimulus funds from the American Recovery and Reinvestment Act of 2009 (ARRA) and how federal lawmakers could have made their priorities clearer to stimulate reform. The authors found that, absent clear guidance from federal lawmakers and the U.S. Department of Education, many states and school districts simply used the funds to fill holes in their budgets from lagging state aid and property tax collections instead of investing in new funding structures and other reforms encouraged in the law.

When federal lawmakers passed the ARRA in February of 2009, their two stated goals for education related funds were to allow states to save teacher and educator jobs and to stimulate reform. They hoped that by tacking reform priorities onto the $100 billion in education-related federal stimulus funds, they could ensure that states and districts would use the funds to reexamine their funding structures as a whole and invest in reforms.

However, according to the report, a lack of clarity in the law and timeliness in the guidance that followed left states and school districts uncertain about how to use the funds, especially those provided through the $48.6 billion State Fiscal Stabilization Fund (SFSF). With a few notable exceptions discussed in the report, most states and school districts simply used the funds to fill budget holes, saving existing education jobs and continuing the status quo. Those school districts that bucked this trend – like Boston, MA, Charlotte-Mecklenburg, NC, and Prince George’s County, MD – all had strong district leaders who were already interested in reform.

The report’s authors find several lessons in their findings for future investments in education reform. Pointing to the $4.35 billion Race to the Top (RttT) program that is part of the ARRA, they note that even a relatively small investment can have dramatic effects on education reform across the country if the goals are clear and specific. The RttT clearly defined what states needed to do to be eligible for these funds, whereas the SFSF included vague reform priorities without specific parameters. Future legislation should include clear and concise priorities, and acknowledge that reform and stimulus can be competing priorities.

The authors also note that it may be more helpful in future legislation to define what states cannot use funds for, rather than how funds can be used. By clearly stating that the federal funds cannot be used to continue programs and policies that are ineffective, legislators could force recipients to invest in new ideas.

In addition, the report suggests that federal education policies should encourage states and districts to address the way K-12 education is funded. In many school districts, property tax revenues have been used to cover increasing costs for education. With the crash of the housing market, this is no longer a viable option. Instead of plugging the holes left in education budgets, federal funds should be used to develop a new, more sustainable funding structure.

Since its passage in 2009, the ARRA has helped states and school districts fill holes in their budgets caused by the economic downturn. However, it has not been as successful in helping school districts implement reforms and cut existing programs that aren’t working. With states and school districts facing the upcoming expiration of ARRA funds and staring the much-discussed funding cliff in the face, many will now have to face the unpleasant realities that ARRA funds allowed them to escape until now.

Uncertain Future for Education Technology Grants

November 30, 2010

Earlier this month, the State Educational Technology Directors Association (SETDA) released a report, ARRA Investments in Technology, Innovation, and K-12 Reform. The report examines how states are using $650 million in Enhancing Education through Technology Program (EETT) funds provided by the American Recovery and Reinvestment Act of 2009 (ARRA). The authors found that states and school districts have been slow to spend the ARRA EETT funds because of uncertainty over the program’s future in 2011 and beyond.

EETT was authorized in 2002 under Title II, Part D of the Elementary and Secondary Education Act. Its purpose is to improve academic achievement through the use of technology in K-12 schools and to ensure that all students are technologically literate by the end of eighth grade. States and school districts can use funds to purchase technology and software to have in classrooms. They can also pay for professional development for teachers and school leaders to gain a better understanding of how to use student assessment data and other tools to hone teaching techniques.

Funds for the program are distributed to states based on their share of Title I funding. Under the original law, state education agencies can reserve up to 5 percent of EETT funds for administrative and technical assistance, and must distribute the rest to local education agencies (LEAs), half according to the Title I formula and half through a grant competition. However, guidance from the U.S. Department of Education (ED) in July 2009 – several months after the ARRA was passed – strongly encouraged states to use 100 percent of the ARRA EETT funds for competitive grants. Only 25 states were able to devote all ARRA EETT funds to a competitive grant process. The rest had already begun to distribute funds and were thus unable to change all their funds to competitive grants.

But the funding situation for EETT in 2011 and beyond is somewhat uncertain. In fiscal year 2009, Congress provided the EETT with $270 million in funding plus a one-time infusion of $650 million in federal stimulus funds through the ARRA that are available through the end of fiscal year 2011. In fiscal year 2010 the program received only $100 million in annual appropriations, and President Obama did not request funding for the program in his fiscal year 2011 budget request. Instead, the program would be folded in with other federal programs aimed at improving instruction and academic standards under a larger competitive grant program. While no information is available on how the House Appropriations Subcommittee on Labor, Health and Human Services, and Education would fund EETT in fiscal year 2011, the appropriations bill passed out of the Senate Subcommittee funds it at $100 million. With no omnibus spending bill approved in Congress for fiscal year 2011, states can’t be sure what to expect in the current fiscal year.

The SETDA report indicates that states had only drawn down 23 percent of ARRA EETT funds by the end of school year 2009-10, but notes that this does not account for funds that are in the process of being spent but have yet to be drawn down from ED accounts, so the true amount is likely higher. However, the report points out that many states intended to reserve these ARRA funds for the 2010-11 school year in anticipation of significantly reduced federal support for EETT.

With the future of federal support for EETT uncertain, states are encouraging LEAs to create sustainability plans that rely on sources other than the federal government for the future of their technology programs. LEAs are also finding one-time uses for the ARRA funds, including purchasing equipment and software, developing digital content, creating professional development programs for educators, and building a knowledge base for educational technology. These uses of funds do not require a sustained investment from states or the federal government.

The Continuing Resolution, a temporary spending bill passed by Congress in September to extend fiscal year 2010 funding levels into fiscal year 2011 in the absence of an approved appropriations bill, is set to expire on Friday. Save for a last minute reauthorization of the Elementary and Secondary Education Act in the next couple of weeks, it seems likely that Congress will fund EETT at $100 million for fiscal year 2011 – the same amount as in 2010. As EETT ARRA funds run out at the end of 2011, however, states and school districts will face a significant drop in funding, assuming the program continues to exist. With the long-term future of federal support for EETT in jeopardy, we’ll be interested to see how states and LEAs use their remaining ARRA EETT funds.

Education Jobs Funds on the Move, Sort of

November 18, 2010

A couple months ago, Ed Money Watch discussed the status of the Education Jobs Fund, which provides $10 billion in formula-based federal grant aid that is distributed to states based on their school age and total population. At that time, 47 states and the District of Columbia had been approved for the funds, though none of them had actually drawn down and disbursed any of their allocations. Luckily, there has been some movement with the Education Jobs Fund since mid-September.

According to data reported by the states on their usage of the Education Jobs Fund, states had received $1.2 billion of the $8.9 billion in awarded funds as of November 8th, 2010. Interestingly, states reported actually spending $8.1 million more than they received. This is because Wisconsin reported spending $8.1 million though it has actually received $0 from the Education Jobs Fund. This is somewhat common practice because states can receive federal funds on a reimbursement basis after expenditures have been made.

Only four states besides Wisconsin have reported receiving or spending any Education Jobs Funds. These include California, Connecticut, Georgia, and Illinois. California has spent and received the greatest proportion of its funds – 88.9 percent of its total $1.2 billion allocation. Georgia has received and spent the second most at 49.0 percent of its $322.3 million allocation. Connecticut and Illinois, on the other hand, have barely scratched the surface of their allocations with spending at barely 1.0 percent of their allocations. The Northern Mariana Islands have also spent 12.7 percent of their $8.3 million allocation. According to the states, these expenditures are supporting 21,653 jobs.

According to the data, Texas, Wyoming, and South Carolina have not been awarded any Education Jobs Funds. Based on information from the U.S. Department of Education website, Secretary Duncan has not approved Texas’ application for the funds because the Governor could not guarantee a certain level of education funding to comply with the maintenance of effort provision. South Carolina has also not applied for the funds because it does not qualify due to previous cuts in its higher education budget. However, as we discussed in a post last week, Wyoming has submitted and received approval for its Education Jobs Fund application. Perhaps ED just has yet to include Wyoming on any of its spreadsheets.

It’s been about three months since the Education Jobs Fund was signed by the president. Under normal circumstances, it would be pretty impressive that states had already spent 13.8 percent of available funds. But the vast majority of those expenditures can be attributed to California, a state that has wasted no time in expending its Education Jobs Funds and State Fiscal Stabilization Funds. Without including California’s Education Jobs Fund allocation and expenditures, states have spent only 2.2 percent of the funds, a pretty dismal amount given the purported urgency of the funds.

So, what’s the hold up? As we’ve discussed before, the Education Jobs Funds came too late for many states and school districts to make major hiring decisions before the school year started. Similarly, these decisions are often held up by slow bureaucratic processes in the state legislature, school board, and district offices. But now that the money is available to states, and many have claimed that they need it desperately, we expect and hope that expenditures will pick up at the start of the new school semester in January.

NEA Encourages Move to Growth Models for AYP

November 16, 2010

This week, the National Education Association (NEA) added its voice to a group of organizations calling for relief from the regulations of the No Child Left Behind Act (NCLB), the most recent version of the Elementary and Secondary Education Act (ESEA). The NEA and other groups (like the American Association of School Administrators and the National School Boards Association) are calling on the U.S. Department of Education (ED) to ease regulations under the law, giving schools, districts, and states increased flexibility as they await reauthorization.

Citing increased financial pressure on school districts caused by the economic recession, the NEA letter suggests eight ways for ED to relax regulations without compromising the original intent of NCLB. Currently, these regulations place several restrictions on school districts such as requiring 100 percent of students to score proficient or above on NCLB tests by the 2013-14 school year or 100 percent of teachers in classrooms to be considered “highly qualified.” The fourth recommendation in their letter caught our eye. It suggests that ED “expedite the invitation and approval of valid and reliable growth models to measure changes in student performance.” This proposal would enable all states to use student growth models instead of achievement levels to determine whether their schools meet Adequate Yearly Progress (AYP).

Currently, states use assessments developed under NCLB guidelines to test students’ math and reading proficiency in each grade in a given year and determine AYP status. Under this model, a school does not reach AYP if a certain percentage of any subgroup of students does not score proficient or above in a specific grade or subject matter. Progress or growth does not currently factor in to AYP determinations. Many have argued that this system doesn’t adequately measure student achievement because it does not recognize gains in student learning, only whether or not a certain percentage of students have reached a somewhat arbitrary goal. Under a growth model system, AYP would be determined at least in part by growth in student learning throughout the year, allowing educators to measure the degree to which students have made achievement gains in that time span.

ED has already begun to invest in the development of growth models in the states. ED started an NCLB growth model pilot program in 2005. States that had showed progress under the original AYP system were eligible to apply to the pilot program, which would allow them to incorporate growth models into their AYP determinations. Eight states were approved to participate in the growth model pilot program in the first school year, and seven more states were added in subsequent school years for a total of 15 participating states. According to a 2010 ED report on the original eight states in the pilot program, the use of growth models in AYP determinations lead to more schools making AYP each year. The effect was especially great in high-poverty schools (about an 8 percent increase in the number of schools meeting AYP when growth models are used, versus 3 percent in low-poverty schools). According to the report, this could help states and school districts target efforts at schools where both proficiency and growth are low.

Additionally, growth models play a significant role in Race to the Top, a new $4.4 billion federal competitive grant program to encourage state reform efforts. One of the four areas of focus in the Race to the Top (RttT) grant competition was “building data systems that measure student growth and success, and inform teachers and principals about how they can improve instruction.” As a result, several states included plans to integrate student growth models into their teacher assessment systems in their winning applications. For example, Florida will use past research on value-added analysis and the expertise of a special committee to build a measure of student growth as part of its state assessment system. School districts in Florida that are participating in Race to the Top will integrate the student growth model into their teacher and principal assessment systems. Teachers will be able to access their own student growth data through a new data portal that will also be created through the Race to the Top grant.

Both the RttT and the NCLB growth model pilot program have laid a solid foundation for states to develop meaningful growth models. And the Obama Administration made clear in its “Blueprint for Education Reform” that a measure of student growth should be included in the reauthorization of ESEA. No doubt, growth models will play a significant role in educational assessment in the coming years, particularly as the research is more refined and states become more familiar and comfortable with using them. Until ESEA is reauthorized by Congress, however, adjustments to NCLB regulations will just tinker around the edges of a flawed piece of legislation. We hope Congress prioritizes tackling ESEA in the coming months so that growth models and other important reforms can be implemented soon.

Wyoming and the Education Jobs Fund

November 10, 2010

In August of 2010, President Obama signed into law the Education Jobs Fund, a $10 billion in grant aid to help state governments prevent K-12 teacher layoffs. State governments had to submit applications for the funds by September 9, 2010, and most applied immediately with two exceptions – Wyoming and South Carolina. South Carolina was not eligible for the funds in the first place because it had made cuts in its higher education budget last year.[1] Wyoming Governor Dave Freudenthal decided not to apply for the funds even though his state was eligible, because he did not believe the state had laid off enough teachers to justify the funds. Additionally, the U.S. Department of Education (ED) turned down the Governor’s request to use the funds for school construction projects. Then, on October 6, 2010, Wyoming submitted its application for the funds to the U.S. Department of Education (ED) with the Governor’s signature on it, and ED has obligated $17.5 billion in Education Jobs Funds to the state. What happened?

According to guidance released by the U.S. Department of Education, if a governor declines Education Jobs Funds, ED will distribute the funds to school districts via another state entity. In Wyoming’s case, the Department of Public Instruction stepped up to the plate and volunteered to administer the program.

Wyoming’s Department of Public Instruction (DPI) submitted the Education Jobs Fund to the U.S. Department of Education after ED agreed to work with DPI officials to submit the necessary materials and ensure a smooth roll out of funds. In turn, Governor Freudenthal signed the maintenance of effort assurance part of the application, guaranteeing that Wyoming will maintain certain levels of K-12 and higher education spending in the coming fiscal years. It appears that there is no animosity between DPI and the Governor’s office surrounding this Education Jobs Fund process.

School districts had to submit letters of intent to apply for the funds to the DPI by October 15, 2010 so officials could reallocate any funds that districts did not want. Once Wyoming has determined which school districts are interested in the Education Jobs Fund monies and has recalculated allocations to school districts accordingly, the state will distribute an actual application to school districts. After individual district applications are approved, school districts will begin to draw down funds. Though the funds will reach Wyoming school districts later than most districts across the country, the funds will be available through the end of fiscal year 2012. In the end, the distribution of Education Jobs Funds in Wyoming will be the same as if the Governor had signed off on the funds from the very beginning.

Check back with Ed Money Watch for more news on the Education Jobs Fund as it is distributed to school districts.

[1] The Education Jobs Fund maintenance of effort provision requires states to maintain certain levels of fund for K-12 and higher education. Because South Carolina had previously cut funding for higher education below the minimum level allowed under the provision, it could not apply for Education Jobs Funds.

Exploring the ARRA 4th Quarter Jobs Numbers

November 4, 2010

Since President Obama signed the American Recovery and Reinvestment Act of 2009, states and other recipients of the federal funds have had to comply with fairly rigorous data and reporting requirements. At the end of every fiscal quarter, recipients would compile and submit data to the federal government on funds received and expended under each program funded by the ARRA. For education programs, this included Title I and Individuals with Disabilities Education Act grants and the State Fiscal Stabilization Fund, among other programs. Additionally, recipients had to report how many jobs had been saved or created by those expenditures in each fiscal quarter. This information is meant to estimate the degree to which spending from the ARRA has actually stimulated the economy and created jobs. In turn, the federal government posts the recipient data online via Recovery.gov, a website created purely to report ARRA data. Though recipient data is often flawed, it has become an important resource for tracking the progress of ARRA.

As we’ve discussed before, however, the recipient data is a slog to get through. Data are difficult to interpret, overwhelmingly large in scope, and hard to pare down if you are only interested in specific information or programs. Luckily, for those interested in the Department of Education programs, ED has been kind enough to create reports that summarize the expenditure and jobs numbers by program and by state for each fiscal quarter. Unfortunately, ED has not yet made those reports available online for the most recent fiscal quarter (see past reports here).

However, in the absence of the ED report, the Recovery.gov website does have some higher level information available that paints a picture of the degree to which ARRA is saving or creating jobs. According to recipient reported data, spending under ARRA-funded Department of Education programs saved or created 337,306 jobs in the 4th quarter of federal fiscal year 2010 (July 1, 2010 through September 30, 2010). This is a little more than half of the total jobs saved or created by ARRA over the same time period – 671,607 jobs total. Compared to data from the 3rd quarter of the fiscal year, however, the most recent jobs numbers fall a little short – 454,300 jobs were saved or created by education ARRA programs in the 3rd quarter. This makes sense, however, because the 4th quarter primarily encompasses the summer months during which schools are not in session and expenditures are lower.

Unsurprisingly, State Fiscal Stabilization Funds (SFSF) under the Education Stabilization grants saved or created the most jobs of any program, education or otherwise – 168,180 jobs in the 4th fiscal quarter. The Education Stabilization grants provided $39.8 billion to states to fill gaps in K-12 and higher education funding, comprising one of the largest singe programs in the ARRA. State Fiscal Stabilization Fund Government Services grants saved the second most jobs at 59,868 in the 4th quarter. These funds can be used to support government programs like public safety and Medicaid in addition to public education.

Interestingly, though SFSF Education Stabilization grants saved or created the most jobs in the 3rd quarter, Individuals with Disabilities Education Act (IDEA) grants saved or created more jobs than SFSF Government Services grants. Again, this distinction can be attributed to the school year calendar, which mostly falls during the 1st, 2nd, and 3rd fiscal quarters, but not the 4th. Because Government Services grants got to other expenditures besides education, they are more likely to be used during the summer than IDEA grants.

As one would expect, the largest states saved or created the most jobs using ARRA education funds, with one exception. Florida reported saving or creating the most jobs using education ARRA funds in the 4th quarter – 47,109 of the total 61,725 jobs saved or created in the state. New York came in second with 30,978 jobs and Texas in third with 29,895 jobs. Though one would expect California to have the highest job numbers because it is the largest state, California spent most of its ARRA education funds prior to the 4th fiscal quarter. As a result, it reports saving or creating 17,997 jobs.

In total, the Department of Education has paid out $64.9 billion of the nearly $100 billion available for education programs under the ARRA. According to recipient data, these funds save or create between 300,000 and 400,000 jobs each fiscal quarter depending on whether school is in session. As these funds begin to run out, particularly in states like California that used them quickly, school districts will begin to rely on the more recently-passed Education Jobs Fund to keep these positions open. We impatiently await the release of the Department of Education’s quarterly jobs report to get a better sense of where these jobs are coming from and how long they are likely to last.

Key Challenges in Implementing Race to the Top

October 28, 2010

In late August, 2010, the U.S. Department of Education announced the winners of Phase Two of the Race to the Top grant competition. Including the two winning states from Phase One, 11 states and the District of Columbia have been awarded $4 billion in federal grants to implement extensive education reform plans. But ever since the final winners were announced, education stakeholders have expressed concerns about the actual implementation of the proposed programs in each state’s grant applications: Do states have the capacity to do what they promised? Will the Department hold them accountable? Will student performance play a significant role in tracking the success of the grants?

An American Enterprise Institute report, Competitive Grant Making and Education Reform, by Paul Manna explores some of these concerns as it discusses Race to the Top’s “Current Impact and Future Prospects.” In the report, Manna suggests that the Race to the Top grant process has been a mixed bag thus far. The scoring process was transparent and Secretary of Education Arne Duncan stuck to his promise to honor the outcomes of the reviewer scoring process rather than supersede the outcomes with political selections. At the same time, however, the states that received grants may not have been the best positioned to implement their proposals and applications were lengthy and difficult to evaluate objectively.

Moving forward, the key to Race to the Top’s success will be in ensuring high quality implementation of the grant proposals. Given that some states may not have the capacity to fully implement their proposals – Manna goes as far as to suggest that some states might have over-promised assuming they would not be held accountable – Secretary Duncan and ED must be willing to withhold funds from states that attempt to water down or ignore aspects of their grant proposals. Both the threat of withheld funding and the actual act of recapturing funds from derelict states should be enough to compel states to comply with their proposals to the fullest extent possible. Indeed, we know that money is a strong motivator for states – the Race to the Top competition itself caused states to enact policy changes that had previously been politically impossible.

Strict accountability will be of particular importance in states where new governors or political parties will take control after the elections next week. ED must strive to maintain the integrity of the winning Race to the Top applications even in the face of state administrations that do not agree with them.

Manna also stresses that Secretary Duncan and ED must ensure that states stay focused on improving academic achievement in addition to completing the tasks set out in their applications. Unfortunately, the Race to the Top application process did not place a heavy emphasis on student performance – only 30 of the 500 points in the application focused on academic achievement; the rest were based on the quality of the proposed plan and compliance with various capacity and legislative requirements.

Shifting the focus from compliance to student performance will require some heavy lifting from ED, which is notorious for compliance-based practices. Most major grant programs out of ED, like Title I and IDEA, require extensive compliance tasks like reporting data, filling out applications, and maintaining services. While these programs do have accountability measures, local and state administrators spend significant time filling out forms to continue to receive funds. ED must find some way to change this structure to ensure that states are both complying with their applications and ultimately focusing on student performance as the final goal.

On the whole, Manna’s report clarifies the many challenges ED is likely to face as the Race to the Top process continues. Implementation will not be easy, particularly with a changing political climate and on-going financial issues. And if Congress does choose to continue to program in fiscal year 2011 with an additional appropriation (the most recent versions of both the House and Senate 2011 appropriations bills suggest this is possible) they will have to start the process all over again in a few months. Race to the Top’s success depends on strict implementation and thorough, performance-based evaluation. Here’s hoping ED is up to the task.

OMB Releases Updated Guidance on Stimulus Reporting Requirements

October 7, 2010

Since the President signed the American Recovery and Reinvestment Act of 2009 (ARRA) more than a year and a half ago, recipients of the spending portion (as opposed to tax benefits) of the $862 billion in federal funds distributed under the law have been required to fulfill strict reporting requirements. Though these reporting requirements have been somewhat controversial, they represent one of the most significant efforts undertaken by the government to track federal funds. Late last month, the Office of Management and Budget (OMB) released new guidance on those requirements to make them more clear and to ensure the information that gets collected is more complete and transparent. OMB also confirmed that new federal funds provided through the recently passed Education Jobs Fund are subject to the same reporting requirements as ARRA funds.

At Ed Money Watch, we’ve had concerns about ARRA reporting all along. Thus far, we have found that the current reporting rules do not allow for detailed information on local uses of funds and provide inadequate space for state government’s to report their data. Additionally, the U.S. Department of Education (ED) has further weakened the reporting system by providing states with generic language intended to simplify the reporting process. These issues mean that much of the data on ARRA spending reported by states and local school districts lacks the level of specificity originally intended.

The new OMB guidance addresses many of the issues we’ve noticed in the past. While the new guidance does not require every sub-recipient (school districts and institutions of higher education) to submit their own detailed reporting information, it does require states to collect and report this information as a prime recipient under the “Quarterly Activities/Project Description for Prime and Sub-recipients” field. As we under stand it, this means that the public will be able to better tell how ARRA funds under a specific program are being used across the state. However, it will still be difficult under the revised rules to determine how each sub-recipient is using its specific funds. It is also unclear whether the current reporting system provides enough space for prime recipients (state governments) to report this information.

We are also glad to see that the new guidance strengthens quality control measures in the reporting system. Currently, all federal departments reviews recipient reported data for the programs they oversee. The new guidance instructs these agencies (like ED) to label reports as having “Significant Errors” or “Material Omissions” if descriptions of awards are misleading or unclear. Additionally, grantees submitting incomplete or misleading reports would be required to correct them after the fact.

Finally, the new guidance warns agencies like ED that distribute the ARRA funds against encouraging grantees to use generic language for their narrative descriptions. Prime recipients (states) would be required to write more detailed and specific descriptions of their projects, providing more useful information about how ARRA funds are being spent. According to OMB, members of the general public should be able to understand the grant’s purpose, activities, and outcomes through the description provided under the “Award Description” and “Quarterly Activities/Project Description for Prime and Sub-recipients” fields.

While the new OMB guidance addresses many of the issues we highlighted in the reporting of stimulus spending data, it still is imperfect for reporting information on education spending. School districts and institutions of higher education had almost total control over how the ARRA education funds were actually spent. Requiring states, as the prime recipients, to do the bulk of the reporting has obscured important details on how sub-recipients spent the funds. And with the new Education Jobs Fund, which provides an additional $10 billion that will be tracked through this system, we will likely lose more valuable information due to this flawed system. That said, the new guidance does provide some assurance that state-level reporting will include more and better information on ARRA and Education Jobs Fund spending.

Check back with Ed Money Watch as states begin to tackle this newest iteration of federal ARRA reporting.

ARRA SLDS Grants Off to a Slow Start

October 5, 2010

The American Recovery and Reinvestment Act of 2009 (ARRA) included $250 million for Statewide Longitudinal Data Systems (SLDS) grants, a competitive federal grant program that provides three-year grants to states to help build and improve their data systems. These data systems are used for school and district accountability purposes, as well as to better understand how state and local inputs affect individual student achievement. At the end of May 2010, the U.S. Department of Education distributed the SLDS funds to 20 states through in grants ranging from $5.1 million for Ohio to $19.7 million for New York. In the four months since then, however, it does not appear that many of the recipient states have done much to spend this money and implement their SLDS grant proposals.

According to Department of Education data on ARRA funds outlaid under the SLDS grant program, states have only spent $1.5 million, or 0.6 percent, of the $250 million that they have been awarded. Arkansas accounts for most of the SLDS funds that have been outlaid. As of September 24, 2010, Arkansas had drawn down $1.4 million of its total $9.8 million grant, 14.6 percent. Kansas had drawn down the next highest amount of its grant – approximately $25,000 of its $9.0 million grant, or 0.3 percent. Illinois, Massachusetts, Minnesota, and Oregon have each spent approximately 0.1 percent of their grants, while the remaining 14 states have spent less than 0.1 percent (and in many cases 0.0 percent) of their SLDS funds.

What has been the hold up for these states in getting their SLDS grants under way?

It is likely that many states were waiting to find out whether they also received Race to the Top grants before they began to implement their SLDS grants. The Race to the Top grant application required states to plan significant changes to their existing data systems including building capacity to link teachers to students or better integrate data into everyday instruction. These plans would have to be integrated into their SLDS plans before work on either could begin, which could take significant planning. In fact, a recent Ed Week article notes that some states wrote their Race to the Top applications without consulting their SLDS directors or considering how their existing data systems would fit into their proposals.

For states that did win Race to the Top grants, which were awarded in late August, they may be taking time to better integrate the two plans before they begin work. States that did not win Race to the Top, but were counting on the funds to implement their SLDS goals like Colorado, may be taking time to reassess their plans and use their SLDS funds more effectively.

It’s also possible that some states are taking time to staff up before they begin major work on their SLDS grants. Though most states already have permanent staff that work on their data systems, SLDS proposals may require new staff with particular expertise or retraining for existing staff on new software or hardware.

Hopefully, the 20 states that won SLDS grants under the ARRA will begin to ramp up activity and start spending down their grants soon. These data systems have the power to provide real concrete information on what is and is not working in our schools for these students. The improvements outlined in many of these grants represent important advancements to state education data systems, particularly as states and schools begin to explore ways to use these systems to improve instruction in the classroom.

To find out more about how this recent round of SLDS grants will affect early education data, read the Early Education Initiative’s new paper Many Missing Pieces.

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