You asked for information about new state and local school district flexibility authority under the federal Elementary and Secondary Education Act reauthorization (ESEA - P. L. 107-110). You were especially interested in how states and districts qualify for the new programs.

SUMMARY

The new federal act allows the secretary of education to grant authority to up to seven states and up to 150 local school districts to consolidate funds from several different federal education programs and use them for any educational purpose the act authorizes. The programs are called State-Flex and Local-Flex. Of the 150 school districts, 70 must be in the seven State-Flex states, with a maximum of 10 districts per state. The other 80 must be in non-State Flex states, with a maximum of three per state.

The programs are competitive, with participating states and districts chosen by a peer review process based on applications. States have priority and must notify the secretary by May 8, 2002 whether they will be applying for State-Flex. Once the State-Flex states are chosen, school districts that are not in the chosen states may apply for Local-Flex authority.

Federal funds consolidated under the programs cannot be used to supplant non-federal funds for the same purposes.

STATE FLEXIBILITY AUTHORITY

The federal act allow the U. S. education secretary to grant up to seven states authority to consolidate federal ESEA funds reserved for certain state administration and state-level activities and use them for any educational purpose authorized by the federal act. The state must also enter into performance agreements with between four and 10 districts to allow those districts to consolidate certain federal funds the districts receive and use them for purposes consistent with the state's flexibility plan.

The secretary must use a peer review system to decide among the states applying for State-Flex authority. The system must include representatives of parents, teachers, and state and local education agencies. The flexibility authority lasts for up to five years and may be renewed once for an additional five years. States are subject to a review halfway through their first term and, if they have failed to make adequate yearly progress for two consecutive years, the secretary must revoke the authority.

According to a January 14, 2002, letter to chief state school officers from Susan B. Neuman, Assistant Secretary for Elementary and Secondary Education, the secretary plans to announce the proposed state selection process and criteria soon.

State Application Requirements

To be considered for State-Flex, a state education agency submits an application to the Education Department that:

1. includes a five-year plan for consolidating and using federal funds to make adequate yearly progress in advancing both the state's educational priorities and those of the local districts with which it has performance agreements (see below);

2. shows that the flexibility offers substantial promise of helping the state agency and the specified local districts make adequate yearly progress and of aligning state and local reforms;

3. includes proposed performance agreements with between four and 10 school districts in the state, at least half of which must have at least 20% of their students from low-income families ("high-poverty districts"), that contain plans for the districts to consolidate federal funds for activities aligned with the state plan;

4. assures compliance with applicable civil rights laws and proper fiscal control over the federal funds;

5. assures equitable participation by private school students and staff; and

6. shows that parents, teachers, local district representatives, and other educators were consulted in developing the terms of the flexibility authority.

Funds That May Be Consolidated

A State-Flex state may consolidate funds for state administration and state-level activities received under the following grants (see OLR Report 2002-R-0052 for more information about these grants):

Improving the Academic Achievement of Disadvantaged Children (Title I, Part A)

Reading First

Teacher and Principal Training and Recruitment

Education Technology

Safe and Drug-Free Schools and Communities (state agency funds and governor's funds with governor's consent)

21^st Century Community Learning Centers

Innovative Programs

A local district that has a performance agreement with the state under the State-Flex program may consolidate its formula grants under the following programs:

Teacher and Principal Training and Recruitment

Education Technology

Safe and Drug-Free Schools and Communities

Innovative Programs

A State-Flex state may also specify how all districts in the state, not just the ones with performance agreements, may use their Innovative Program grants.

LOCAL FLEXIBILITY AUTHORITY

The federal law allows the education secretary to enter into performance agreements directly with up to 80 local school districts in states that do not have State-Flex authority. The act limits the number of Local-Flex districts to no more than three per state. The secretary must assure an equitable distribution among urban and rural districts.

Eligible districts must apply to the secretary. Districts are chosen by a peer review process as already described. Other characteristics of the authority are similar to those that apply to the State-Flex program.

Local Application

To be considered for Local-Flex, a district must not be located in a State-Flex state. It must submit an application to the education secretary that:

1. includes a five-year plan for consolidating and using federal funds to meet the state's definition of adequate yearly progress, advance the district's educational priorities and the general purposes of the included programs, improve student achievement, and narrow achievement gaps;

2. shows that parents, teachers, and other educators were consulted in developing the terms of the flexibility authority;

3. assures compliance with applicable civil rights laws and proper fiscal control over the federal funds; and

4. assures equitable participation by private school students and staff.

Funds That May Be Consolidated

A Local-Flex district may consolidate its formula grants under the following programs:

Teacher and Principal Training and Recruitment

Education Technology

Safe and Drug-Free Schools and Communities

Innovative Programs.

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