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  1. What is the purpose of the STEP Program?
  2. What do we mean by “SEA-type functions” and what are examples of SEA-level responsibilities that a TEA might assume as part of this grant program?
  3. For purposes of STEP, what is an LEA, what are LEA-type functions, and what are examples of LEA-level responsibilities that a TEA might assume as part of the STEP project?
  4. Does the Department have any prohibitions on the SEA-type or LEA-type functions a TEA may adopt?
  5. Which ESEA formula grant programs could TEAs and SEAs or LEAs include under STEP?
  6. How can a TEA include the title VII, part A Indian Education formula grant program in a project?
  7. Can a TEA propose to include in its STEP project only the title VII, part A Indian Education formula grant program?
  8. What is meant by “capacity-building” as part of the STEP grant program?
  9. Who must comply with the ISDEAA hiring preference?
  10. What are the ways in which the parties can share ESEA formula grants funds, or STEP funds?
  11. Will the Department provide TEAs with State-administered formula grant program funds to distribute to the affected LEAs under the STEP program?
  12. Will a TEA receiving a STEP grant become the agency responsible to the Department for ensuring compliance with statutory and regulatory requirements?
  13. If a TEA decides to undertake joint functions with either the SEA or the LEA, such as monitoring or providing technical assistance, would that count as the TEA assuming administrative functions?
  14. Does the Family Educational Rights and Privacy Act (FERPA) prohibit a TEA from collecting or receiving data on students as part of its agreement with the SEA?
  15. What does the Department expect to see in a Preliminary Agreement between a TEA, an SEA, and an LEA?
  16. Which parties must sign the Preliminary and Final Agreements?
  17. Will an application be reviewed if it is missing required signatures on the Preliminary Agreement?
  18. What does the Department expect to see in a Final Agreement between a TEA, an SEA, and an LEA?
  19. Are TEAs required to identify the participating schools in their applications?
  20. Can a TEA choose to work with only one school? Is a TEA required to make an agreement with two different LEAs?
  21. Can a TEA apply if one or more selected schools serve students from multiple tribes?
  22. Can a TEA choose to work with only BIE schools?
  23. What additional requirements apply to applicants that include BIE-funded schools?
  24. Can STEP funds be used for BIE schools if BIE-funded schools are included?
  25. What is the purpose of permitting applicants to include Bureau of Indian Education (BIE)-funded tribally-controlled schools in STEP projects?
  26. What are the audit requirements for STEP applicants? Is the TEA required to have an audit?
  27. What are examples of costs that are not allowable under STEP?
  28. How does the Department review proposed project budgets before an award is made?
  29. Must a TEA submit a current indirect cost rate (ICR) agreement as part of its application?

1. What is the purpose of the STEP Program?

The purpose of the STEP program is to: (1) promote increased collaboration between Tribal Education Agencies (TEAs) and the State educational agencies (SEAs) and local educational agencies (LEAs) that serve students from affected tribes, and (2) build the capacity of TEAs to conduct certain SEA-type or LEA-type administrative functions under certain Elementary and Secondary Education Act (ESEA) formula grant programs for eligible schools, as determined by the TEA, SEA, and LEA.

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2. What do we mean by “SEA-type functions” and what are examples of SEA-level responsibilities that a TEA might assume as part of this grant program?

Depending on the statutory authorization of the particular ESEA formula grant program, SEA-level functions may include developing policy; providing technical assistance to subgrantees; monitoring for compliance; collecting, analyzing, and reporting performance information; and evaluating programs. SEAs also make subgrants (either competitively or by formula) to LEAs and other subgrantees, but a TEA cannot take on an SEA’s subgranting function. A TEA can, however, agree to take on any of the other functions, under agreement with the SEA, consistent with State procurement laws.

For example, SEA-level responsibilities that a TEA might carry out through the STEP grant include:

    Developing a reservation-wide title I-A implementation plan in collaboration with the SEA
    Providing technical assistance to LEAs on various topics related to the implementation of title I, such as technical assistance on school improvement; or
    Working with the SEA on title II-A to develop teacher evaluation systems, provide training and support to teachers and school leaders, or provide technical assistance to LEAs.

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3. For purposes of STEP, what is an LEA, what are LEA-type functions, and what are examples of LEA-level responsibilities that a TEA might assume as part of the STEP project?

An LEA is an entity that meets the definition of “local educational agency” in section 9101(26) of the ESEA, (i.e., a school district that is recognized by the State as an LEA). This can include a charter school that is a stand-alone LEA, but not a charter school that is part of a larger LEA. A charter school that is part of a larger LEA can only participate as a school in a STEP project. Similarly, BIE schools can be included as participating schools in a STEP project, but are not considered LEAs for purposes of the STEP program.

Activities that LEAs typically conduct include supervision and direction for educational services to students, grant implementation, and data submissions, as well as school district curriculum development and staff professional development pursuant to State guidelines.

For example, LEA-level responsibilities that a TEA may carry out through the STEP grant include:

    Assisting with development of job descriptions for teachers in schools receiving School Improvement Grant (SIG) funds;
    Running an after-school program under the 21st Century Community Learning Centers program;
    Conducting native language activities, summer programs for either students or teachers, or culturally-responsive curriculum development under title I-A; or
    Providing cultural competence training for staff under title II-A.

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4. Does the Department have any prohibitions on the SEA-type or LEA-type functions a TEA may adopt?

A TEA may choose any SEA-level or LEA-level functions, as long as all parties agree to each function in the preliminary and final agreements. However, if a TEA performs both SEA-level and LEA-level functions for a single ESEA program, the parties must ensure there is no conflict between these functions. A TEA cannot perform both LEA-type and SEA-type functions for the same ESEA formula grant program if the result would be that the TEA is monitoring itself. For example, if a TEA includes the title II-A formula grant program in its STEP project, the TEA could not perform both the LEA function of providing professional development to schools and the SEA function of monitoring the delivery of professional development, because then the TEA would be monitoring itself.

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5. Which ESEA formula grant programs could TEAs and SEAs or LEAs include under STEP?

ESEA State-administered formula grant programs are programs for which States: receive ESEA formula funding; subgrant funds to LEAs or other entities (in accordance with statutory allocation formulas or other criteria); and oversee the use of those funds by subrecipients.

TEAs may include the following SEA-administered programs in a STEP grant application:

    Improving Academic Achievement of the Disadvantaged (title I, part A);
    School Improvement Grants (Section 1003(g));
    Migrant Education (title I, part C);
    Neglected and Delinquent State Grants (title I, part D);
    Improving Teacher Quality State Grants (title II, part A);
    English Learner Education State Grants (title III, part A); and
    21st Century Community Learning Centers (title IV, part B).

TEAs may include the following LEA-administered program in a STEP grant application:

    Indian Education Formula Grants (title VII, part A).

Title VII is a direct grant to LEAs; it is not a State-administered grant. Projects that include title VII grants must also include at least one State-administered ESEA formula grant program. (See question 7 below for more information). TEAs can still choose SEA-type or LEA-type functions for the State-administered ESEA formula grant.

Projects cannot include Impact Aid grants. Impact Aid funds are intended to replace local tax revenues and are generally treated by LEAs as part of the general fund budget. There is no required use of Impact Aid funds by LEAs. Thus, unlike the other ESEA formula programs, there are not required LEA functions for Impact Aid that would be relevant to the STEP program.

Additionally, the schools included in the partnership agreement must be recipients of grant funds or services under the particular ESEA formula grant program chosen. It is possible for a project to include one ESEA program for one school (e.g., title VII for a public school), and a different ESEA program for another school (e.g., title I for a BIE-funded school).

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6. How can a TEA include the title VII, part A Indian Education formula grant program in a project?

A TEA interested in assuming administrative functions for the title VII, part A Indian Education formula grant program has two options:

    i. A tribe may be eligible, outside of the STEP project, to apply for a title VII grant, but only if the tribe is applying in lieu of the LEA under the provisions of section 7112 of the ESEA. A tribe or TEA may not compete with an LEA for a title VII grant. If the LEA meets the eligibility requirements of the title VII program, but does not apply for or receive title VII funds, the tribe and LEA may agree that the tribe can apply for and administer the title VII program in place of the LEA. In this case, the tribe would be the grantee under title VII, and the parties could also include the title VII program in the STEP project.
    ii. If the LEA, not the TEA, remains the grantee under title VII, the parties can still agree to coordinate administration of the title VII project in participating STEP schools. Through the STEP project, the TEA would coordinate with the applicable LEA and submit a preliminary agreement that explains, in part, how the parties would work collaboratively to administer the title VII program and what functions the TEA would assume.

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7. Can a TEA propose to include in its STEP project only the title VII, part A Indian Education formula grant program?

No. If a TEA includes title VII, part A in its STEP project, it must also include at least one State-administered ESEA formula grant. STEP’s dual purpose is to build TEA capacity and to build relationships between the TEA and the relevant LEAs and SEA; if a proposed project only included title VII, part A, there would be no State role in the project. However, for each State-administered program, the TEA can still choose to propose either LEA-type or SEA-type functions.

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8. What is meant by “capacity-building” as part of the STEP grant program?

Capacity-building refers to activities that strengthen the knowledge, skills, and abilities of individuals or groups to perform specific activities or functions that lead to strengthening communication, cooperation, coordination and collaboration between and among individuals or groups. Regardless of which ESEA programs or functions are selected, we expect that capacity-building will be a focus of each grant proposal. For example, to build the capacity of the organization, applicants may conduct a needs assessment, develop a technical assistance plan, and implement the technical assistance plan.

We expect that a major component of both the preliminary and final agreements will be descriptions of capacity-building activities to be conducted by and for the TEA, SEA, and LEA. By “capacity-building activities,” we mean activities intended to increase the capacity of the:

    TEA to carry out administrative responsibilities under the affected ESEA programs;
    TEA, SEA, and LEA(s) to work together effectively on meeting the objectives of this program; and
    SEA and LEA to understand the unique cultural and academic needs of the American Indian/Alaskan Native students enrolled in participating schools and how to address them more effectively.
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9. Who must comply with the ISDEAA hiring preference?

STEP grants that are primarily for the benefit of members of federally-recognized tribes are subject to the provisions of section 7(b) of the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638). That section requires that, to the greatest extent feasible, a grantee—

    i. Give to Indians preferences and opportunities for training and employment in connection with the administration of the grant; and
    ii. Give to Indian organizations and to Indian-owned economic enterprises, as defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452(e)), preference in the award of contracts in connection with the administration of the grant.

A TEA from a federally-recognized tribe that receives a STEP grant is subject to the hiring preference. If such a TEA shares STEP funds with an SEA or LEA or any other entity, that entity would be subject to the hiring preference when using STEP funds. However, a TEA from a State-recognized tribe generally would not be subject to this hiring preference.

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10. What are the ways in which the parties can share ESEA formula grants funds, or STEP funds?

There are several ways applicants could share funding. The applicant could: (a) share the STEP grant award only; (b) share the STEP grant award and the SEA’s or LEA’s formula grant administration funds; (c) share the SEA’s or LEA’s grant administration funds, but not the STEP grant award; or (d) share no funds. The ultimate goal of the distribution of funds should be to support the objectives of the program.

To enable the TEA to assume certain ESEA administrative functions, SEAs or LEAs can provide a portion of their formula grant administration funds to the TEA, in accordance with applicable State laws. If the TEA and the SEA or LEA agree to share formula grant administrative funds, the TEA must detail the fund distribution in the budget submitted to the Department with the grant application, and the TEA, SEA, or LEA should describe the plans to share these funds in the preliminary and final agreement.

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11. Will the Department provide TEAs with State-administered formula grant program funds to distribute to the affected LEAs under the STEP program?

No. The Department will not grant formula funds to TEAs as a part of this grant program. No changes have been made to the ESEA that would permit the Department to change the designated grantee under any ESEA program. STEP grant funds to successful applicants will consist only of discretionary funds appropriated for this competition. However, a TEA, SEA and LEA may distribute funds according to the options listed in question ten.

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12. Will a TEA receiving a STEP grant become the agency responsible to the Department for ensuring compliance with statutory and regulatory requirements?

No. SEAs that participate in the STEP program will continue to subgrant ESEA State-administered formula funds to eligible LEAs in the State, including to LEAs with schools involved in the STEP grant program. SEAs will continue to have the responsibility and authority to ensure subrecipient compliance with the applicable laws and regulations governing all ESEA State-administered formula grant programs. The Department will continue to monitor the performance of the SEA as the agent required to comply with the requirements of Federal laws and regulations related to the administration of the ESEA.

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13. If a TEA decides to undertake joint functions with either the SEA or the LEA, such as monitoring or providing technical assistance, would that count as the TEA assuming administrative functions?

Yes. A TEA’s assumption of SEA-level or LEA-level responsibilities under an agreement could include carrying out responsibilities jointly with the SEA or LEA. Alternatively, TEAs could take on an activity alone, on behalf of the SEA or LEA. Under either option, SEAs retain legal responsibility to the Department, as discussed above. The types of SEA-level or LEA-level functions that a TEA will perform will depend on the terms of the agreement reached by the TEA and SEA, or TEA and LEA.

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14. Does the Family Educational Rights and Privacy Act (FERPA) prohibit a TEA from collecting or receiving data on students as part of its agreement with the SEA?

FERPA does not prohibit data-sharing with TEAs if required steps and safeguards are followed. FERPA generally prohibits the disclosure of personally identifiable information from students’ education records without parental consent; however, an SEA or an LEA could release student information in non-personally identifiable form to a TEA. In addition, an SEA or an LEA may designate an Indian tribe or TEA as its authorized representative to audit or evaluate Federal or State-supported education programs, under the conditions set forth in the Department’s regulations. See 34 CFR 99.3, 99.31(a)(3), 99.35. For further information, see resources from the Department’s Family Policy Compliance Office and Departmental regulations. Also, review the requirements for the preliminary and final agreements, as detailed in the application package.

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15. What does the Department expect to see in a Preliminary Agreement between a TEA, an SEA, and an LEA?

A TEA must submit a preliminary agreement between the TEA, SEA, and LEA with its application. The preliminary agreement must document the commitment of the TEA, SEA, and LEA to work together and must include all of the elements required in the application package.

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16. Which parties must sign the Preliminary and Final Agreements?

The preliminary and final agreements must be signed by the TEA, the SEA, and at least one LEA. Letters of support will not be accepted as a substitute.

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17. Will an application be reviewed if it is missing required signatures on the Preliminary Agreement?

No. The signatures in the preliminary agreement are evidence of a commitment between the TEA, SEA and LEA to fulfill the requirements in the proposed application.

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18. What does the Department expect to see in a Final Agreement between a TEA, an SEA, and an LEA?

By March 30, 2016, each TEA grantee must submit to the Department a final agreement that builds on the preliminary agreement and details a feasible, sustainable plan for how the TEA, SEA, and LEA will work together to administer selected ESEA formula grant programs for identified schools. The final agreement must contain all required elements listed in the application package.

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19. Are TEAs required to identify the participating schools in their applications?

Yes. Applicant TEAs are required to list the participating schools in the preliminary agreements that they submit with their applications.

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20. Can a TEA choose to work with only one school? Is a TEA required to make an agreement with two different LEAs?

A TEA cannot work with only one school; it must work with a minimum of two schools, at least one of which is a public school. However, the TEA is not required to make an agreement with two different LEAs. For example, a TEA may work with two schools within a single LEA, such as an elementary school on the reservation, and a high school off the reservation; it could not choose, however, to include only the single elementary school. The TEA could also work with one school that is part of an LEA and one BIE school. This does not require that a TEA make an agreement with two different LEAs. (Please refer to the LEA definition in question three).

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21. Can a TEA apply if one or more selected schools serve students from multiple tribes?

Yes. We expect TEA grantees to serve students from all tribes who attend schools participating in the STEP project. For schools that have students from multiple tribes with a presence in the community, we would encourage a TEA planning a STEP application to first consult with other affected tribes. One option for the TEA would be to form a consortium and include the affected TEAs as its consortium partners. Another option is for all tribes in the community to agree that one TEA will serve as the sole applicant, without forming a formal consortium.

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22. Can a TEA choose to work with only BIE schools?

No. If a project includes a BIE school, the TEA must include at least one public school as well, in order to promote better communication and collaboration between the tribe and the SEA and LEA.

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23. What additional requirements apply to applicants that include BIE-funded schools?

Applicants that include one or more BIE schools in a proposed project are required to transmit a copy of the application to the Bureau of Indian Education. Applicants may transmit this application through email to stepapp@bia.gov , fax the application to (202) 208-3312, or send the application to Dr. Charles M. Roessel, Director, Bureau of Indian Education, 1849 C Street, NW, MS-4657-MIB, Washington, D.C. 20240. In submitting the application to the Department, these applicants must include as an attachment evidence of the submission to BIE (e.g., copy of dated email transmission or fax receipt).

This will allow the Department and BIE to consult as to whether the TEA will be required to enter into an agreement with BIE that details the respective responsibilities of each entity. Applicants proposing to assume SEA-type functions in a BIE-funded school will be required to enter such an agreement. If the TEA is not able to reach an agreement with BIE by the time of award, the TEA must remove the proposed BIE school from its project and adjust its budget accordingly. A TEA that proposes to assume only LEA-type functions with respect to BIE-funded schools will not be not required to enter into an agreement with the BIE.
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24. Can STEP funds be used for BIE schools if BIE-funded schools are included?

STEP funds can be used to build communication between BIE-funded tribally-controlled schools and public schools. However, STEP funds cannot be used on activities that are already funded by BIE. For example, a TEA may work with a BIE-funded tribally-controlled preschool and the LEA to promote kindergarten readiness and ensure that student goals are aligned across the programs. The STEP funds could not be used, however, to hire additional teachers for the BIE-funded school.

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25. What is the purpose of permitting applicants to include Bureau of Indian Education (BIE)-funded tribally-controlled schools in STEP projects?

BIE-funded tribally-controlled schools are administered by the tribe. These schools serve students that may move between BIE-funded schools and public schools. By including BIE-funded tribally-controlled schools, we promote better communication between the BIE-funded schools and public schools, coordinated through the TEA whose member students are affected by the systems serving the community.

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26. What are the audit requirements for STEP applicants? Is the TEA required to have an audit?

Under 2 CFR 200.500-512, all entities that expend $750,000 or more annually in total Federal awards must have a current audit. If an entity does not comply with the Federal audit requirements, the Department has the option of awarding the STEP grant with special conditions or not funding an application. Note that, as applicable, TEAs may meet this requirement through an audit of the whole tribe; if the tribe expends $750,000 or more annually, the tribe is required to have a current audit. A late audit or an audit with findings for the tribe may have an impact on the TEA’s application status.

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27. What are examples of costs that are not allowable under STEP?

Direct services are not allowable costs under STEP. For example, a grantee cannot hire teachers for a school using STEP funds. In addition, costs must be aligned to the scope of the application, the project purpose, and the general purpose of the STEP program. Additionally, the general government-wide cost principles apply, which prohibit use of funds for most purchases of food, any entertainment expenses, incentives, prizes, or other items identified by the Office of Management and Budget’s (OMB) Cost Principles at 2 CFR 200. For more information, please read the FAQs about the Cost Principles.

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28. How does the Department review proposed project budgets before an award is made?

The Department’s pre-award review of a proposed budget will focus on whether the proposed budget supports the goals and objectives of the grant program and whether those costs are allowable, reasonable, and allocable. The Department eliminates amounts for unallowable or unreasonable expenditures; thus the actual grant amount may be less than the amount in the applicant’s proposed budget. For information on allowable costs, see references in question 27

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29. Must a TEA submit a current indirect cost rate (ICR) agreement as part of its application?

If a TEA has a current ICR agreement and intends to charge indirect costs to the STEP grant, the TEA must submit a copy of the ICR agreement as part of its application. The ICR agreement must be negotiated with and approved by the grantee’s cognizant agency, i.e., either (1) the Federal agency from which it has received the most direct funding, subject to indirect cost support; (2) the Federal agency specifically assigned cognizance by OMB; or (3) the State agency that provides the most subgrant funds to the grantee (if no direct federal awards are received). For federally-recognized tribes, the Department of Interior (DOI) is the cognizant agency.

An applicant selected for funding that has an expired ICR agreement and intends to charge indirect costs to the STEP grant must follow the Department’s regulations at 34 CFR 75.560. Those rules permit an applicant to use a temporary rate of 10 percent of budgeted direct salaries and wages while it negotiates a rate with its cognizant agency (e.g., DOI); the applicant must then submit an ICR proposal to its cognizant agency within 90 days after the Department issues the grant award notification. 34 CFR 75.560.

Applicants with no previous ICR can use a de minimis rate of 10 percent of modified total direct costs (MTDC); these TEAs do not need to negotiate for this rate. Should such an applicant decide to use this MTDC as its ICR, it must use this rate for a full fiscal year; it cannot negotiate for a different rate. 2 CFR 200.414(f).

Please note that, in accordance with OMB’s Cost Principles at 2 CFR 200, applicants that have an expiring ICR agreement can apply to the cognizant agency for a one-time extension of up to four years. 2 CFR 200.414(g). If a successful applicant has an expiring ICR agreement, after the expiration date of the original agreement, the grantee will be required to submit evidence to the Department that its cognizant agency granted an extension of the ICR agreement in order to charge indirect costs to the STEP grant at the approved rate.

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Last Modified: 04/21/2015