Guidelines Sketch Out Use of Aid

Includes updates and/or revisions.

The eagerly awaited federal guidelines on some $100 billion in stimulus funding for public education aim to pump money out quickly, while giving the U.S. Department of Education leverage to demand improvements from states and districts.

But those same states and districts are also warned not to expect the hefty sums for K-12 programs in the American Recovery and Reinvestment Act to become part of a new baseline for federal aid. The guidelines advise recipients to use the extra money coming over the next two years for short-term expenditures that could have longer-term benefits for student learning.

And as state and local officials gird for the challenge of managing the stimulus money, they are being told to keep careful track of every dollar in order to meet rigorous transparency and accountability requirements.

“If we see money being misspent, we’re going to put a stop to it, and we will call it out and we will publicize it,” President Barack Obama told a group of state officials who gathered at the White House for a March 12 conference on allocating the economic-stimulus funds.

“On the other hand, if the money is being spent as it needs to be spent, to rebuild our roads and our bridges and our schools, … then I think … the people we work for are going to be extraordinarily grateful,” he said.

Mr. Obama, who took office two months ago amid a worsening recession, had made the $787 billion stimulus bill his top legislative priority.

The first batch of education stimulus money will be made available swiftly, federal officials say, and with relatively few strings attached. But the Education Department is asking states to submit much more detailed information on how they plan to improve student learning before they can tap a sizable portion of their second round of funding.

And, to tap a portion of special education aid and Title I funding for disadvantaged students, states must explain how they will comply with transparency and accounting requirements.

The biggest single restriction in the guidelines issued March 7 involves the $53.6 billion State Fiscal Stabilization Fund, the bulk of which is aimed at steadying faltering state budgets in fiscal years 2009 and 2010.

States will get that funding in two batches.

This month, states will be able to apply for the first phase, about 67 percent of the money—roughly $32 billion. That money will go out within two weeks of a state’s submission of its application.

But a state can’t tap the rest of its stabilization funding—part of a $16 billion pot slated to go out next fall—until the Education Department approves its plans to comply with a set of education-redesign-oriented “assurances” spelled out in the stimulus law.

Each state must explain, in detail, how it will improve teacher quality and the equitable distribution of highly qualified teachers, develop better data systems, bolster standards and assessments, and turn around failing schools.

There’s a safety valve: If a state can demonstrate that the first round of funding won’t be enough to avert immediate layoffs, it could receive up to 90 percent of their stabilization money in the first round of funding. Those states would still have to submit detailed plans on how they would meet the assurances before they could gain access to the rest of their money.

Title I and IDEA

The department’s two-cycle plan is a good way to prod states to take the law’s education redesign assurances seriously, said Amy Wilkins, a vice president of the Education Trust, a Washington-based advocacy organization for the needs of minority students and those from low-income families.

“That’s heartening … that they remain serious about reform despite pressure to just move money,” Ms. Wilkins said in an e-mail.

The department is using a somewhat similar strategy with the $10 billion in stimulus money for the Title I program and the $11.7 billion for special education state grants, all of which will be spread out over fiscal 2009 and 2010.

Although Title I and special education aid has long been a cornerstone of federal funding for precollegiate education, the new allocations are a considerable increase over the usual annual appropriations. Title I received about $14.5 billion for fiscal 2009, the current budget year, while special education got $11.5 billion.

Fifty percent of the stimulus program’s Title I and special education funds will be available by the end of March. But, to get the rest of the funding, which won’t go out until the fall, states must detail how they plan to comply with record-keeping and reporting requirements for those programs.

The guidance also stresses that the stimulus funding is short-term money that may not be sustainable in future budgets. It emphasizes that districts and states should use the money for shorter-term investments to avoid being hurt by the “funding cliff” when the money runs out.

For instance, the Education Department recommends that Title I funds be used to expand prekindergarten programs, bolster online learning, or offer new opportunities for teacher professional development. And money provided under the Individuals with Disabilities Education Act could be used to train general education teachers to work with students in special education.

Still, analysts say, districts may have a tough time finding programs that will put the stimulus aid to good use without setting up expectations for future funding.

“I think that’s one of the trickiest provisions in the law,” said Thomas Toch, a co-director of Education Sector, a think tank in Washington. “Politically, it’s a killer [to put] money into programs, then pull the rug out from under them two years later.”

But T. Kenneth James, the state schools chief in Arkansas, said his state, which has not made substantial cuts in education spending, will be able to pinpoint projects that will raise student achievement without needing to become part of the state’s budget baseline.

“We have to make sure we’re proving [to] our constituents and our taxpayers that we’re being good stewards of these resources,” Mr. James said. “We’re treating this as capital money, one-time money, because that’s what it is.”

Meanwhile, state officials and the federal department are gearing up to meet demanding accountability and transparency requirements.

Education Department advisers said they would be working to build on lessons learned from the department’s current inspector general and from the Department of Housing and Urban Development’s experiences with disaster relief.

Judy Jeffrey, the state education chief in Iowa, is hoping that the department will be clear about what’s needed from states.

“We always want to make sure we have clarity at the front end so at the back end, when we are audited, we have really prepared ourselves,” she said.

More Guidance Expected

Additional guidelines and information are expected in the coming weeks and months.

For instance, the Education Department plans to allocate $4.35 billion in “Race to the Top” grants, which aim to reward states and districts that make significant strides in closing achievement gaps, raising academic standards, tracking student progress, and improving the distribution of high-quality teachers.

The department must also create an application process for the up-to-$650 million What Works and Innovation Fund, which will reward districts, nonprofit groups, and consortia of districts that are making substantial progress in improving student outcomes.

The guidance says the grants for those programs will go out in two batches, one next fall, and another in spring 2010. It says that guidelines and applications will be published “expeditiously,” but doesn’t give an exact timeline.

In what perhaps is a hint of what’s to come in the application guidance, Secretary of Education Arne Duncan signaled last week that the department is going to use the “Race to the Top” fund to prod states to develop more-uniform standards.

“I don’t want 12 great proposals from 12 great states,” Mr. Duncan told a Council of Chief State School Officers meeting in Washington. Such a scattered approach, he said, “doesn’t change the national conversation.”