A r c h i v e d  I n f o r m a t i o n

Fiscal Requirements

Supplement, Not Supplant

Section 6401(b) of Title VI of the ESEA provides that an SEA or an LEA may use and allocate Title VI funds only to supplement and, to the extent practical, increase the level of funds that would, in the absence of funds made available under Title VI, be made available from non-Federal sources. Title VI funds may not be used to supplant funds from non-Federal sources. (20 USC 7371(b))

Whether an SEA or LEA may use Title VI funds as part of any State-mandated program, however, depends upon whether non-Federal funds are already available to carry out activities under the State-mandated plan. Section 6401(b) of Title VI prohibits the use of Title VI funds where such use would result in supplanting funds available from non-Federal sources. Presumably, in the absence of Title VI funds, the SEA or LEA would use State funds to carry out a State-mandated plan. To use Title VI funds in connection with the plan would therefore violate the supplement, not supplant requirement of Title VI. However, Title VI funds might be used in connection with the plan, without violating the supplement, not supplant requirement, if the Title VI funds are used for supplemental activities that would not have been provided but for the availability of the Title VI funds. Example:

A State has a mandated program to test all students in grades one, four, six, nine and twelve. The State decides to use Title VI funds to test students in grades two, five and seven as part of a dropout prevention program. This use of Title VI funds is allowable.

In general, an SEA or LEA should determine what educational activities it would support if no Title VI funds were available. If the result of this determination is that no State or local funds remain available to fund certain activities, then the SEA or LEA may be able to use Title VI funds for those activities. In no event, however, may an SEA or LEA decrease State or local funds for particular activities because Title VI funds are available.

Example: An LEA that qualified for State funds has been conducting a program for gifted and talented students. The State funds were based on the number of such children attending schools in the LEA. The number of these children in the LEA decreases and the LEA therefore no longer qualifies for the State funds. The LEA may choose to continue to operate this program using Title VI funds without violating the supplement, not supplant clause. This example presumes that the LEA would not fund the program out of other non-Federal funds in the absence of Title VI.

Maintenance of Effort

SEAs are required to maintain effort in order to receive their full allocation of Title VI funds for any fiscal year. The SEA maintains effort when either the combined fiscal effort per student or the aggregate expenditures within the State with respect to the provision of free public education for the preceding fiscal year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding fiscal year. (See section 6401(a), 20 USC 7371(a)(1).)

The Department interprets "preceding fiscal year" to mean either the Federal fiscal year or the twelve-month fiscal period most commonly used in a State for official reporting purposes prior to the beginning of the Federal fiscal year in which funds are available.

Both State and local expenditures for free public education within the State are to be considered in determining whether a State has maintained effort under Title VI. The Department interprets "aggregate expenditures for free public education" to include expenditures such as those for administration, instruction, attendance, health services, pupil transportation, plant operation and maintenance, fixed charges, and net expenditures to cover deficits for food service and student body activities. States may include in the maintenance of effort calculation expenditures of Federal funds for which no accountability to the Federal government is required. (Impact Aid funds are an example of such funds; however, there is a requirement of accountability for certain Impact Aid funds, such as those received for children with disabilities. Therefore, Impact Aid funds may be included in a State's maintenance of effort calculation under Title VI, but only to the extent that there is no accountability for their expenditure.)

States must be consistent in the manner in which they calculate maintenance of effort from year to year in order to ensure that the annual comparisons are on the same basis (i.e., calculations must consistently, from year to year, either include or exclude expenditures of Federal funds for which accountability to the Federal government is not required). Moreover, States that choose to include expenditures of Federal funds for which accountability to the Federal government is not required, must do so with the understanding that future years' maintenance of effort calculations may be affected by fluctuating Federal appropriations over which neither the Department, nor a State, has any control.

Finally, it is the Department's position that expenditures not to be considered in determining maintenance of effort under Title VI are expenditures for community services, capital outlay, debt service, or any expenditures of Federal funds for which accountability to the Federal government is required.


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