The consequences of distrust
Why the Fiscal Requirements of Federal Education Policy Hinder Effective School District Management and What to Do About It

The Consequences of Distrust

Download PDF
American education might be the least “locally controlled” local government function. The American people generally believe that their local school boards or mayors are directly responsible for school performance, yet other levels of government exert vast amounts of influence over schools through regulations and funding requirements. The federal government, for example, generally accounts for a relatively small share of the money available to primary and secondary schools and school districts—usually less than 10 percent—but federal regulations detailing how such funds are spent significantly impact the behavior of state and local school leaders.

One of the most visible federal grants to local school districts is Title I, Part A (Title I) of the Elementary and Secondary Education Act of 1965, which directs funding to school districts based on the number and concentration of students living in poverty within their borders. Allocation formulas to states and districts contained in Title I also take into account the concentration of poverty, statewide average per pupil expenditures, and local costs, among other factors.

The original intent of ESEA was to provide “compensatory” educational funding in order to meet the additional needs of students living in poverty. Over time, Title I funding has become a critical funding stream for high-poverty schools and districts. Much of the current debate around the reauthorization of ESEA is focused on nonfinancial policies, such as how to hold schools and school districts accountable for better educating their students and how to ensure that districts provide all students with high quality teaching. Other provisions of the law under discussion are public school choice, which requires districts to provide parents with other school options when their zoned school fails to make progress, and supplemental education services, which requires districts to contract with external vendors to provide additional academic services for students in low-performing schools.

This report, however, examines a very different aspect of Title I—its fiscal requirements and the sometimes problematic impact such requirements have on the management of school districts. In the pages that follow we first describe the key fiscal requirements and guidelines governing the distribution of roughly $15 billion dollars in Title I appropriations and the reasoning behind each of these requirements. We focus, in particular, on the highest-impact requirements such as maintenance of effort, comparability, and supplement-not-supplant, as well as some of the intradistrict allocation rules. Next, we explore some of the unintended consequences the current fiscal requirements can have for the strategic use of resources at both the district and the school level.

We then examine the resulting budgeting and compliance regimes that have developed in many high-poverty districts as a result of Title I fiscal requirements and other categorical program requirements.

Our analysis leads us to a set of recommendations for changes to both the statutory and regulatory requirements of Title I. Overall, we suggest increased flexibility in the fiscal requirements coupled with strategic accountability for results. We also recommend that federal regulators invest in helping local districts and states with the infrastructure required for thoughtful, strategic management of funds.The goal of this paper is to help policymakers think through how Title I fiscal and reporting requirements could be modified to improve school district management functions and, ultimately, to better meet the original intent of the law—serving the needs of high-poverty students.

Also Visit
AEIdeas Blog The American Magazine

What's new on AEI

image The money in banking: Comparing salaries of bank and bank regulatory employees
image What Obama should say about China in Japan
image A key to college success: Involved dads
image China takes the fight to space
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Event Registration is Closed
Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.