Fiscal Information
How the Federal Government Allocates Funds to States and Districts
Massachusetts's statewide allocation is determined annually by formulas derived from the U.S. Census, which is conducted every ten years. The annual statewide allocation is determined by the sum of the funds calculated for each district in the state. In the years between the decennial census the U.S. Department of Education uses census estimates in calculating grants for districts. Those estimates include the number of children ages 5-17 in families of poverty, the total school aged population, and total resident population for each district. Updated state per-pupil expenditure data as well as the number of children in locally operated neglected or delinquent institutions, foster homes, and families above the poverty level that receive assistance under the Temporary Assistance for Needy Families (TANF) program are also used. In Massachusetts, the data are then adjusted accordingly by the Department of Elementary and Secondary Education for different district configurations, such as single school districts, regional school districts and other special cases. No Child Left Behind (NCLB) contains the following formulas for allocating Title I funds:
- Basic Grants: Districts with at least 10 children in poverty, and the number of children in poverty must exceed 2 percent of the district's school aged population.
- Concentration Grants: Districts with the number of children living in poverty exceeding 15 percent of the district's school aged population.
- Targeted Program and Education Financial Incentive Program Grants: Districts with at least 10 children in poverty and the number of children in poverty is at least 5 percent of the district's school aged population.
Hold harmless provisions may apply when districts drop in population, but remain eligible for any of the above categories.
How Districts Allocate Funds to Schools
Once the money has been allocated to districts by the State, districts must allocate Title I funds to participating school attendance areas or schools, in rank order, based on the percentage of children from low-income families in each area or school. A district with an enrollment of less than 1,000 students or with only one school per grade span is not required to allocate funds to areas or schools in rank order.
If a district serves any areas or schools below 35 percent poverty, it must allocate to all its participating areas or schools an amount for each low-income child in each participating school attendance area or school that is at least 125 percent of the district's allocation per low-income child.
A district's allocation per low-income child is the total district allocation under Title I Part A, subpart 2 divided by the number of low-income children in the district as determined using the poverty measure selected by the district to identify eligible school attendance areas. The district then multiplies this per-child amount by 125 percent. A district calculates 125 percent of its allocation per low-income child before it reserves any funds. A District must allocate at least this amount for each low-income child in every school it serves, not just for those schools below 35 percent poverty. If remaining funds are not sufficient to fully fund the next ranked eligible school attendance area or school, the district may serve the area or school if it determines the funds are sufficient to enable children to make adequate progress toward meeting the State's challenging performance standards.
A district serving only areas or schools at or above 35 percent poverty must allocate funds in rank order, on the basis of the total number of low-income children in each area or school but is not required to allocate 125 percent of its allocation per low-income child. However, in determining what per-child amount to allocate, the district should bear in mind the purpose of such funding--to enable children who are most at risk of not meeting the State's challenging student academic achievement standards. The per-child allocation amount must be large enough to provide a reasonable assurance that a school can operate a Title I program of sufficient quality to achieve that purpose.
A district is not required to allocate the same per-child amount to each area or school. However, it must allocate a higher per-child amount to areas or schools with higher poverty rates than it allocates to areas or schools with lower poverty rates.
A district that opts to serve schools below 75 percent poverty using grade span groupings may determine different per-child amounts for different grade spans so long as those amounts do not exceed the amount allocated to any area or school above 75 percent poverty. Per-child amounts within grade spans may also vary so long as the district allocates higher per-child amounts to areas or schools with higher poverty rates than it allocates to areas or schools with lower poverty rates.
 | Federal Non-Regulatory Guidance on Districts' Selection of School Attendance Areas and Schools and Allocation of Title I Funds to Those Areas and Schools |
Maintenance of Effort, Comparability of Services and Supplement, Not Supplant
Title I funds are intended to provide supplemental funds for targeted services for needy students that add to the resources already available for such students; as such, federal funds must not replace local and state funds for these purposes. As part of a state or federal audit, local officials may be required to provide evidence that Title I funds are provided over and above the resources that would normally be provided. Districts must therefore (1) maintain state and local effort; (2) provide services in areas with state and local funds that are at least comparable to services provided in areas not receiving Title I Part A services; and (3) use Title I Part A funds to supplement, not supplant regular non-federal funds.
 Federal Non-Regulatory Guidance on Fiscal Issues: Maintenance of Effort; Comparability; Supplement, not Supplant; Carryover; Consolidating Funds in Schoolwide Programs Grantback Requirements (Updated February 2008)
Sample Supplement, Not Supplant Policy and Procedure
Maintenance of Effort: Districts are required to demonstrate that the level of state and local funding remains relatively constant from year to year in order to receive the district's full Title I allocation. A district's education expenditures from non-federal funding sources must be at least 90% of the prior year amounts. It is the State's responsibility to determine annually whether a district has maintained effort. Because data from the prior year are not available in time to make this determination, the calculation is based on a comparison of district expenditures between the third and second preceding school years. For example, in calculating maintenance of effort requirements for FY08, the Department's School Finance office analyzes district expenditures from state and local funds for public education from FY05-FY06.
Comparability of Services: Districts are required to use district funds to provide educational services in Title I schools that are comparable to the services provided in non-Title I schools. Districts must ensure compliance with all comparability requirements, including establishing and implementing: (a) a local educational agency-wide salary schedule; (b) a policy to ensure equivalence among schools in teachers, administrators, and other staff; and (c) a policy to ensure equivalence among schools in the provision of curriculum materials and instructional supplies.
Supplement, Not Supplant: To ensure that funds made available under Title I Part A are used to provide services that are in addition to the regular services normally provided by a school district for participating children, the district must use these funds to supplement, not supplant regular non-Federal funds.
In Targeted Assistance schools, a school district may use Title I funds only to supplement and, to the extent practical, increase the level of funds that would, in the absence of Title I funds, be made available from non-Federal sources for the education of students participating in Title I programs. In no case may Title I funds be used to supplant (e.g., take the place of) funds from non-Federal sources. To meet this requirement, a district is not required to provide Title I services using a particular instructional method or in a particular instructional setting.. Unlike a Targeted Assistance program, a Schoolwide program school is not required to select and provide supplemental services to specific children identified as in need of services. A school operating a schoolwide program does not have to: (1) show that Federal funds used with the school are paying for additional services that would not otherwise be provided; (2) demonstrate that Federal funds are used only for specific target populations; or (3) separately track Federal program funds once they reach the school. A Schoolwide program school, however, must use Title I funds only to supplement the amount of funds that would, in the absence of the Title I funds, be made available from non-Federal sources for that school, including funds needed to provide services that are required by law for children with disabilities and children with limited English proficiency.
Time and Effort Reporting
School districts are required to maintain auditable "time and effort" documentation that show how each Title I employee spent his or her compensated time. Such documentation are written, after-the fact (not estimated or budgeted) documentation of how the time was spent. Time and effort reports should be prepared by any Title I staff with salary charged (1) directly to a federal award, (2) directly to multiple federal awards, or (3) directly to any combination of a federal award and other federal, state or local fund sources.
Semi-annual certifications are required for Title I personnel whose compensation is funded solely from the Title I grant. These certifications document that he/she has been working solely in activities supported by the Title I grant (although some district policies require monthly reports for such personnel). The certification must (1) cover a semi-annual period (e.g., September-January and February-June, or September-February and March-August), (2) identify Title I as the program, and (3) be signed and dated by an employee and supervisor having first-hand knowledge of the work performed by the employee. Monthly reports are required for Title I personnel whose time is charged in part to Title I and in part to other revenue sources (split-funded staff). These reports document the portions of time and effort dedicated to Title I and to other revenue sources. Such records must (1) be completed after-the-fact, (2) account for the total time for which the employee is compensated, (3) be prepared at least monthly, (4) coincide with one or more pay periods, and (5) be signed by the employee and countersigned by an administrator or supervisor. Stipends (and other supplemental contracts) must also be reported. Record stipends on semi-annual certifications or monthly reports, whichever is utilized for the particular employee. Alternatively, permitted documentation includes (1) a signed supplemental contract that stipulates Title I work activity, (2) sign-in attendance logs approved by the supervisor (e.g., pay for professional development activities), and (3) employee time/pay slips that specify "Title I" and are approved by the supervisor.
NOTE: If a school operating a schoolwide program consolidates Federal, State, and local funds in a consolidated schoolwide pool, an employee who is paid with funds from that pool is not required to file a semi-annual certification. Because Federal funds are consolidated with State and local funds in a single consolidated schoolwide pool, there is no distinction between staff paid with Federal funds and staff paid with State or local funds. A school that consolidates Federal funds in its schoolwide program is not required to meet most of the statutory and regulatory requirements of the specific Federal programs included in the consolidation. However, the school must ensure that it meets the intent and purposes of the Federal programs included in the consolidation so that the needs of the intended beneficiaries are met. If funds are not consolidated in a schoolwide pool, them time and effort reporting must be maintained for federally funded personnel.
What to watch out for: (1) failing to recognize that a change in position, duties or funding may result in a change in time and effort reporting; (2) failing to provide training to staff who are responsible for completing and/or approving time and effort documentation; (3) reporting time according to how the ratios were budgeted without regard to how the individual actually worked; (4) time and effort reports not reviewed and signed by appropriate staff; (5) entire days' schedule not accounted for (for federal program time reported); or (6) lack of appropriate time and effort records for employees compensated through supplemental contracts, stipends, extra hours, etc.
Time and effort problems can result in: Inappropriate charges to federal programs, inaccurate management information for decision-making, and/or increased risk of audit findings and questioned costs.
The Massachusetts Department of Elementary and Secondary Education is subject to the same reporting requirements as local school districts. To comply with its time and effort requirements, the Department utilizes an automated Federal Time and Attendance Report built with Microsoft Access. At the end of every month, State employees are required to indicate the percent of time spent on each program worked. The employee and his or her administrator then sign the report as a certification. Local school districts may use the sample documents below in furtherance of Title I time and effort compliance requirements:
| | Sample Title I Time and Effort Records |
NOTE: Time and effort reporting guidelines are specified in the U.S. Office of Management and Budget (OMB) Circulars A-87 and A-133. The circulars provide instructions to auditors performing Single Audits of states, local governments, and non-profit organizations. OMB-87 establishes standards for charging employee compensation for federal grants. OMB A-133 lists the compliance requirements for federal education programs, including Title I Part A.
Transferability, Flexibility, and Program Coordination
Districts may transfer up to 50 percent (with greater limits imposed under particular circumstances) of the federal grant funds they receive under the Improving Teacher Quality (Title II-A), Educational Technology (Title II-D), 21st Century Schools (Title IV), and Innovative Programs (Title V) grants to any of these programs or to their Title I program. While funds may be transferred into a Title I program, Title I funds may not be transferred out of Title I to other programs.
Limitations on transferability of federal funds apply to districts identified for improvement or corrective action. Districts identified for improvement may transfer no more than 30% of the funds allocated to them under Titles II-A, II-D, IV, and V. Moreover, all transferred funds must be used for improvement activities as outlined in the district's improvement plan. Districts in corrective action may not transfer funds between Titles I, II-A, II-D, IV, or V while they are in corrective action.
Ed-Flex Waivers
Ed-Flex is a program operated by the U.S. Department of Education that allows certain states, such as Massachusetts, the authority to waive certain federal education requirements (programs covered by the Ed-Flex Authority) that may, in particular instances, impede local efforts to reform and improve education. Ed-Flex is designed to help districts and schools carry out educational reforms and raise the achievement levels of all children by providing increased flexibility in the implementation of federal education programs in exchange for enhanced accountability for the performance of students.
| | Request for Waiver Cover Sheet |
| | Form A - Education Flexibility Partnership Demonstration Site Program "Ed Flex" Goals 2000 section 311 (e) |
Reservations / Set-Asides
NCLB requires some schools and/or districts to set aside a portion of their Title I Part funds as follows:
For professional development activities to ensure that teachers who are not highly qualified become highly qualified (5% of district funds); For addressing the professional development needs of instructional staff in a school or district identified for improvement, corrective action or restructuring; and For costs related to NCLB school choice and supplemental educational services in Title I schools identified for improvement, corrective action or restructuring (an amount equal to 20% of the district's Title Part A allocation from either the district's Title I funds or local sources).
Districts may reserve funds necessary for district-level activities prior to allocating them to eligible schools, including those related to:
Administrative costs; Professional development; Parent involvement (School districts with $500,000 or more must reserve at school districts 1 percent for parent involvement with 95 percent of those reserved funds allocated to individual schools); and Services to eligible children who do not attend Title I schools (e.g., homeless children, migrant children, children in local institutions for neglected and delinquent) other district-wide activities, such as, but not limited, to preschool, summer school, Even Start Family Literacy and school improvement activities equitable services to private school students.
October 12, 2004 Policy Letter from the U.S. Department of Education to States regarding use of Title I funds
Carryover Funds
Under NCLB, no more than 15 percent of the Title I, Part A funds allocated to a district for any fiscal year may be carried over into the next fiscal year. Funds in excess of 15 percent must be encumbered and expended by September 30.
Guidance from the Massachusetts Department of Elementary and Secondary Education Regarding Title I Carryover Funds
last updated: April 13, 2009
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