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No Child Left Behind: A Desktop Reference
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Funding Transferability for State and Local Educational Agencies (VI-A-2)

Purpose

This program allows states and school districts to target certain federal funds to the federal programs that most effectively meet their local educational needs. This program empowers states and local communities by giving them more control over resource allocation decisions that will help them to elevate student achievement and close the achievement gap. States and local communities are usually in the best position to make such decisions.

WHAT'S NEW--The No Child Left Behind Act

Increases Accountability for Student Performance

  • Enforces accountability requirements. Transferred funds are subject to all requirements of the programs to which the funds are transferred.

Reduces Bureaucracy and Increases Flexibility

  • Allows funds to be transferred across programs. This program provides states and most districts with the flexibility to most effectively address their unique needs by allowing them to transfer certain program funds to activities that best meet their needs.

How It Works

This program allows a state to transfer up to 50 percent of the funds it receives for state-level, non administrative activities under the Improving Teacher Quality State Grants, Educational Technology State Grants, State Grants for Innovative Programs, Safe and Drug-Free Schools and Communities State Grants (including funds reserved for the Governor's Program with the consent of the Governor), and 21st Century Community Learning Centers programs to supplement its state reservation under these programs. In addition, a state may use the transferred funds to carry out state-level activities authorized under Part A of Title I. It is important to note that funds can only be transferred into Title I; no Title I funds may be transferred to other programs.

This program also allows any district that has not been identified as in need of improvement or subject to corrective action under Title I to transfer up to 50 percent of its formula allocation under the Teacher Quality State Grants, Educational Technology State Grants, Innovative Programs, or Safe and Drug-Free Schools programs to supplement its allocation under any of the programs listed above or to supplement its allocation under Part A of Title I.

A district identified as in need of improvement may transfer up to 30 percent of its allocation for the programs listed above only if it transfers the funds to: (1) supplement its school improvement allocation; or (2) carry out Title I district improvement activities. A district identified as in need of corrective action may not transfer any funds. States and districts must use any transferred funds in such a way as to meet all the requirements of the programs to which they are transferred.

Key Requirements

Each state transferring funds must: (1) notify the U.S. Department of Education, at least 30 days prior to the transfer, of its intent to transfer funds; (2) modify each state plan affected by the transfer; (3) provide the Department, not later than 30 days after the transfer, with a copy of the modified plans; and (4) conduct consultations in accordance with Section 9501 of the ESEA in order to provide for the equitable participation of private school students and staff.

Each district that transfers funds must: (1) notify the state education agency (SEA), at least 30 days prior to the transfer, of its intent to transfer funds; (2) modify each local plan affected by the transfer; (3) provide the SEA, not later than 30 days after the transfer, with a copy of the modified plans; and (4) conduct consultations in accordance with Section 9501 of the ESEA in order to provide for the equitable participation of private school students and staff.

How It Achieves Quality

Because states and districts must use transferred funds to meet the requirements of programs to which they are transferred, all quality and performance requirements for each program apply. For example, all Teacher Quality activities supported with transferred funds must reflect scientifically based research strategies.

How Performance Is Measured

States are still accountable for the performance of each program included in the transferability authority. The transferred funds are subject to the performance measures of the program into which the funds are transferred.

Key Activities For The State Education Agencies

State education agencies must:

  • Notify the U.S. Department of Education at least 30 days prior to the transfer of state funds.
  • Modify each state plan affected by the transfer.
  • Provide the Department, not later than 30 days after the transfer, with a copy of the modified plans.
  • Enable local districts discretion in transferring funds among accounts (subject to the statutory limitations on transferability) so that they can take full advantage of the flexibility offered by the legislation.

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Last Modified: 09/14/2007