oversight

An OIG Perspective on the Supplemental Educational Services Provisions of the Elementary and Secondary Education Act

Published by the Department of Education, Office of Inspector General on 2006-11-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                            U.S. DEPARTMENT OF EDUCATION
                                            OFFICE OF INSPECTOR GENERAL




                   An OIG Perspective on the
         Supplemental Educational Services Provisions of
          the Elementary and Secondary Education Act




                           Control Number ED-OIG/S09G0007
                                    November 2006




Our mission is to promote the efficiency,            U.S. Department of Education
effectiveness, and integrity of the                  Office of Inspector General
Department's programs and operations.                Sacramento, California
Perspective Paper
ED-OIG/S09G0007                                                                                      Page 1 of 11



                                       EXECUTIVE SUMMARY


The Elementary and Secondary Education Act (ESEA), as amended by the No Child Left Behind
Act of 2001, is due for reauthorization in 2008. The upcoming reauthorization provides the
Congress an opportunity to further amend the ESEA, if it determines that changes to the law are
warranted. The OIG has completed 11 reviews that evaluated state educational agency (SEA) and
local educational agency (LEA) implementation of the supplemental educational services (SES)
provisions of the ESEA. This paper was developed based on the knowledge obtained while
conducting these reviews. The paper provides an OIG perspective on selected SES provisions in
the ESEA and U.S. Department of Education (Department) regulations.

This paper discusses one issue relevant to the SES eligibility provisions of the ESEA and provides
three alternatives to the current eligibility rules in the ESEA.

        One of the primary goals of the ESEA is to close the achievement gap and ensure that all
        students, including those who are disadvantaged, achieve academic proficiency. The ESEA
        currently limits eligibility for SES to children of low-income families and only considers
        academic achievement if the demand for SES exceeds the available resources. Thus,
        students performing at proficient or higher levels academically are eligible for free tutoring
        if they are low-income, while students that are not low-income are excluded from SES
        eligibility even if their academic performance is below proficient (low-achieving).1
        In contrast, all students attending Title I schools in need of improvement have the School
        Choice option, which allows parents to enroll their children in a school not in need of
        improvement. Consideration should be given to whether the focus of SES eligibility should
        be on academic proficiency rather than family income.

        We have identified three alternative approaches to eligibility that merit consideration during
        ESEA reauthorization:
             •   Further limit SES eligibility to only low-achieving students in low-income families,
                 thereby focusing services on those students with the greatest overall needs.
             •   Modify SES eligibility to include all low-achieving students in Title I schools in
                 need of improvement in order to better achieve the ESEA goal of closing the
                 achievement gap and ensuring all students achieve academic proficiency.
             •   Expand SES eligibility to include not only the low-income students, but also the
                 low-achieving, higher income students not currently eligible, thereby increasing the
                 number of students allowed to receive SES.




1
  LEAs must prepare and disseminate annual report cards that provide information on individual student performance on
state assessments in terms of three levels: basic, proficient, and advanced. We use the term “low-achieving” to describe
those students scoring at the basic level.
Perspective Paper
ED-OIG/S09G0007                                                                     Page 2 of 11

       The benefits of the various approaches, which are presented in the body of the paper, include
       focusing SES on students who are below proficient in academic achievement, providing
       LEAs with more flexibility in the use of Title I funds to meet the goals of the ESEA, and
       reducing the administrative burden on LEAs.

This paper also discusses one issue relevant to the Department’s implementing regulations that
currently prohibit schools or LEAs identified as in need of improvement from operating as
SES providers.

       Even though the ESEA contains no specific prohibition, the Department’s regulations
       currently prohibit any school or LEA identified as in need of improvement from operating as
       an SES provider. The Department has determined that these schools and LEAs should be
       focusing on efforts to help students meet state academic achievement standards and that
       students are not well served receiving SES from providers that are consistently failing to
       meet adequate yearly progress targets. In contrast, the Department’s SES guidance allows
       SES providers, including schools or LEAs not in improvement status operating as
       SES providers, to hire teachers from schools in improvement status for their SES operations.

       The Department’s policy of not allowing schools or LEAs in improvement to operate as
       SES providers may override SEA authority to evaluate and approve SES providers operating
       in their states and may also unnecessarily increase the costs of delivering SES by
       eliminating school or LEA providers that could deliver SES at a lower cost than private
       providers. This policy may also reduce the provider options available to parents of eligible
       students. Therefore, we suggest that the Department reconsider its policy on this matter and
       explore strategies for evaluating the quality of each SES program operated by a school or
       LEA that is identified as in need of improvement.
Perspective Paper
ED-OIG/S09G0007                                                                                        Page 3 of 11



                                                BACKGROUND


The ESEA requires LEAs to offer SES to students from low-income families when the students
attend a Title I school that is in the second year of school improvement, or that has been identified
for corrective action or restructuring.2 SES consists of tutoring, remediation, and other educational
interventions that are designed to increase the academic achievement of students, and are in addition
to instruction provided during the school day.

State-approved SES providers, selected by the individual student’s parents, provide SES to eligible
students under agreements with LEAs. These agreements, which should be developed in
consultation with the parents and the provider, are required to include a statement of specific
achievement goals, identify how the student’s progress will be measured, and set a timetable for
improving the student’s achievement. If the funding available for SES is not sufficient to provide
SES to all students whose parents have requested services, the LEA must give priority to the lowest
achieving students.

The SEA is responsible for evaluating potential providers, maintaining a current list of approved
providers, and monitoring all providers delivering services in the state. The SEA must develop and
apply objective criteria when evaluating potential providers. SES providers include for-profits,
non-profits, LEAs, public and private schools, and faith-based organizations. To meet its
monitoring requirements under the ESEA, the SEA must develop, implement, and publicly report
on standards and techniques for monitoring the quality and effectiveness of the services offered by
each approved provider and for withdrawing approval from a provider that fails, for two
consecutive years, to contribute to increasing the academic proficiency of students receiving SES.

The Department published an interim report on its National Assessment of Title I that provided data
showing that the SES option is not being fully utilized.3 Only 233,000 out of 1.4 million eligible
students (17 percent) participated in SES programs in school year 2003-2004.

The OIG has completed a body of work related to SES. This work includes audits of five SES
providers operating in California and their relationships with LEAs, as well as reviews of SEA and
LEA implementation of the School Choice and SES provisions of the ESEA in six other states and
multiple LEAs. Please refer to the Appendix of this report for a list of these reviews. This OIG
Perspective Paper is being issued in conjunction with the OIG Management Information Report
entitled, Implementation of Supplemental Education Services in California (control number
ED-OIG/X09G0007), which provides suggestions to the Department for enhancing its SES
guidance.

2
 Title I schools that fail to make adequate yearly progress (AYP) for two consecutive years are identified for school
improvement. Title I schools are identified for corrective action if they do not make AYP for four years, while Title I
schools not making AYP for five years are identified for restructuring. The “low-income family” determination is
based on the same poverty data that an LEA uses to allocate Title I, Part A funds to its schools under section 1113 of the
ESEA, Title I. Those data are usually a student’s eligibility for free or reduced price lunch under the National School
Lunch Program.
3
 National Assessment of Title I Interim Report, Institute of Education Sciences – National Center for Education
Evaluation and Regional Assistance, NCEE 2006-4001, February 2006.
Perspective Paper
ED-OIG/S09G0007                                                                                        Page 4 of 11



                            Issue 1: Modification of SES Eligibility Rules


Our work on SES implementation has raised questions about the current SES eligibility criteria in
the ESEA. One of the primary goals of the ESEA is to close the achievement gap and make sure all
students, including those who are disadvantaged, achieve academic proficiency. The ESEA
provides two options for parents once a Title I school has been identified for school improvement
for at least two years—parents can either choose to enroll their child in a school that is not in
improvement status (the School Choice option) or they can enroll their child in SES.4 Whereas all
parents of students attending Title I schools in improvement are afforded the School Choice option,
the ESEA places an income restriction on SES eligibility. As a result, only low-income families are
afforded the SES option.5 The Department advised us that SES eligibility is currently limited to
students from low-income families to ensure that such students are not precluded from access to
additional tutoring because of the limited resources of their families.

ESEA Section 1116(e)(12)(A) identifies students eligible for SES as “a child from a low-income
family….” ESEA Section 1116(b)(10)(C) requires LEAs to give priority for SES to the
lowest-achieving children if the required funding is not sufficient to provide SES to each child
whose parents request the services. Thus, under the current law, all low-income students attending
schools in need of improvement, whether they are struggling academically or excelling in school,
are entitled to free tutoring if adequate funding is available. Eligibility for SES is only limited to
lower achieving low-income students when an LEA determines that the demand for SES exceeds
the resources available to provide SES. The Department’s regulations related to SES can be found
at 34 C.F.R. §§ 200.45 through 200.48.

The remainder of this report section discusses three approaches to defining SES eligibility that are
worthy of consideration during ESEA reauthorization. The table below shows which students are
currently eligible for SES under the ESEA and identifies which students would be eligible for SES
under each of the three alternative approaches. Higher-income, high achieving students are not
currently eligible for SES and would not become eligible for SES under any of the alternative
approaches discussed below.

                                   Low-Income and               Low-Income and             Higher-Income and
                                    Low-Achieving               High-Achieving               Low-Achieving
    Current Law                             X                            X
    Approach 1                              X
    Approach 2                              X                                                         X
    Approach 3                              X                            X                            X



4
    ESEA Section 1116(b)(9) requires LEAs to pay for transportation costs if a parent elects School Choice.
5
  Schools classified as Provision 2 or 3 schools under the National School Lunch Act can offer SES to all students
regardless of family income.
Perspective Paper
ED-OIG/S09G0007                                                                                        Page 5 of 11

Approach 1: Limit SES Eligibility to Low-Income, Low-Achieving Students

One approach would be to limit eligibility to students that are both low-income and low-achieving.
This approach would focus SES resources on students that are both disadvantaged economically and
underachieving academically. Low-achieving students would continue to be defined in relation to
each state’s student academic achievement classifications. Under this approach, students classified
as proficient or above would no longer be eligible for SES. For example, in California, which has
five student achievement classifications, students deemed proficient or advanced would not be
eligible for free tutoring under the SES provisions of the ESEA.6 Limiting eligibility for SES to
students that are both low-income and low-achieving would likely result in the following:

    •    Focus SES on students with the greatest overall needs (disadvantaged and low-achieving).
    •    Eliminate confusion regarding when/how LEAs should prioritize and eliminate the need to
         prioritize in many LEAs.7
    •    Reduce the administrative burden on many LEAs (e.g. fewer parent notifications, fewer
         individual student learning plans, reduced likelihood of needing to institute a prioritization
         process).
    •    Reduce set asides for SES, which could provide LEAs added flexibility to target more Title I
         funds for other program activities aimed at low-achieving disadvantaged students.

Approach 2: Modify SES Eligibility to Include All Low-Achieving Students
In contrast to further limiting eligibility for SES under Approach 1, this approach would modify
SES eligibility to include all low-achieving students attending Title I schools identified as in need of
improvement. This change to SES eligibility would eliminate the income restriction in the current
law and give more parents of students at schools in improvement the option of School Choice or
SES. It would also enable LEAs to help additional underachieving students increase their academic
achievement. However, students classified as proficient or above would not be eligible for SES
under this approach. Despite this restriction, demand for SES would likely increase under this
approach and prioritization might be necessary in more schools.8 Offering SES to all low-achieving
students in schools where SES must be provided could have a greater positive impact on overall
school achievement than the current system or one in which eligibility is limited to low-income and
low-achieving students (Approach 1), and is better aligned with the ESEA goal of ensuring
academic proficiency for all students. Making SES available to all low-achieving students
attending Title I schools required to offer SES would likely result in the following:




6
 The five classifications for student achievement are advanced, proficient, basic, below basic, and far below basic.
Students scoring at basic or below on California standardized tests are not meeting the state’s academic standards.
7
  Some LEAs perceived that SES was for low-achieving students that were also low-income. For example, one LEA
limited eligibility to low-achievers first, then made a final eligibility determination based on whether the student was
low-income. Another LEA’s notification letter and other materials provided to parents interpreted ESEA provision on
SES to apply only to low-achieving, low-income students.
8
 The ESEA and the Department’s SES regulations already contain provisions for SES prioritization and the Department
has published SES guidance on prioritization.
Perspective Paper
ED-OIG/S09G0007                                                                      Page 6 of 11

   •   Better achievement of the ESEA goal of closing the achievement gap and ensuring all
       students achieve academic proficiency.
   •   Increase the number of students that can receive additional academic instruction.
   •   Increase the academic achievement of more students and help schools meet AYP targets
       sooner.
   •   Utilize more of the funding that LEAs are required to set aside for SES, and thus reduce
       carryover.

Approach 3: Expand SES Eligibility to Include Low-Achieving Higher Income Students
Under this approach, current SES eligibility provisions would be expanded to include low-achieving
students that are currently ineligible because family income exceeds the low-income criteria. All
low-income students, including those classified as proficient or above, attending Title I schools
identified as in need of improvement would continue to be eligible for SES. If prioritization of SES
were warranted using this approach, low-income students would have priority over other students.
This approach would have similar benefits to those associated with Approach 2, while not
eliminating eligibility for low-income students that are classified as proficient or above. Just as
with Approach 2, this approach could also have a greater positive impact on school achievement
than the current system or one in which eligibility is limited to low-income and low-achieving
students (Approach 1).

We recognize that any of these approaches would require a change in legislation. However, the
benefits described above warrant consideration of a change in the SES eligibility provisions of the
ESEA. Therefore, we suggest that the Department and the Congress consider whether the ESEA
should be amended to either (1) limit eligibility for SES to only those students that are both
economically disadvantaged and academically underachieving, (2) make SES available to all
low-achieving students attending Title I schools in need of improvement, or (3) offer SES to all
low-income students as well as low-achieving students that do not meet the income criteria.
Perspective Paper
ED-OIG/S09G0007                                                                                        Page 7 of 11



    Issue 2: LEAs and Schools in Improvement Status Operating as SES Providers


There are many types of organizations functioning as SES providers, including LEAs and public
schools. The ESEA does not specifically address whether a school or LEA that is identified for
school improvement can operate as an SES provider. The ESEA requires an SES provider to have a
demonstrated record of effectiveness in increasing student academic achievement. The Department
has taken the position that a school or LEA in improvement cannot operate as an SES provider.9

ESEA § 1116(e)(4)(D) places the responsibility for evaluating and approving SES providers on the
SEAs. In question A-2 of its SES guidance, the Department reaffirms the state’s role by stating that
an SEA “is required to identify organizations, both public and private, that qualify to provide these
services.” In question D-4 of its SES guidance, the Department states “[a]n SEA must use a
consistent policy for withdrawing supplemental educational service providers from the
state-approved list. The statute requires an SEA to remove from the approved list any provider that
fails, for two consecutive years, to contribute to increased student proficiency relative to State
academic content and achievement standards.” However, the Department’s regulations at
34 C.F.R. § 200.47(b)(1)(iv)(A) and (B) prohibit schools that are in improvement or that have been
identified for corrective action or restructuring, as well as LEAs that are identified for improvement
or corrective action, from operating as SES providers. The Department has determined that these
schools and LEAs should be focused on helping students meet state academic achievement
standards and not divert staff and resources to the creation and operation of SES programs. The
Department has also taken the position that students should not receive SES from entities that
consistently fail to meet adequate yearly progress targets. However, the Department’s regulations
could be viewed as overriding the authority the ESEA grants to SEAs.

Citing the need to increase the number of eligible students receiving SES, the Department has
granted a limited number of waivers to LEAs in improvement status that operate as SES providers.
In November 2005, the Secretary approved “flexibility agreements” for the Boston Public Schools,
the New York City Department of Education, and the Chicago Public Schools to operate as SES
providers during the 2005-2006 school year.10 For the 2006-2007 school year, the Secretary again
approved flexibility agreements for Boston Public Schools and Chicago Public Schools, and also
approved flexibility agreements for the Anchorage School District and Hillsborough County Public
Schools. The Secretary is requiring that these providers still be approved through the appropriate
SEA’s normal provider approval process and that each fulfill several conditions specified by the
Secretary.




9
 The Department recently issued a policy letter to all chief state school officers clarifying instances in which an SEA
can approve an SES provider that is affiliated with an LEA that is in need of improvement. The letter states that “an
SEA may approve as an SES provider an entity that is affiliated with an LEA in improvement or corrective action,
provided that the SEA determines that the entity is separate and distinct from the LEA in which it is operating” and
provides criteria for SEAs to consider when making this determination.
10
  According to a Department official, the New York City Department of Education chose not to operate as an SES
provider in school year 2005-2006.
Perspective Paper
ED-OIG/S09G0007                                                                                      Page 8 of 11

Even though the Department normally prohibits schools or LEAs in school improvement from
serving as SES providers, it does not prohibit teachers from these same schools or LEAs from
working as SES tutors. Question C-15 of the Department’s SES guidance states “[I]ndividual or
groups of teachers who work in a school or an LEA identified as in need of improvement may be
hired by any State-approved provider (including an LEA provider that is not in need of
improvement) to serve as a tutor in its program.” In effect, this policy creates a situation in which
the same teachers that may have served as tutors for the school or LEA provider instead may work
for other SES providers, at a potentially significantly higher cost to the LEA.

The one LEA provider we reviewed could deliver SES to their students at a significantly lower cost
than the other SES providers we reviewed. Our comparison of provider charges for SES at San
Diego City Schools (SDCS), which also operates as an SES provider, showed that the LEA
provided SES at less that half the cost of other providers serving SDCS students. In school year
2004-2005 the LEA provided SES to its students at a cost of $256 per student served while other
SES providers charged the LEA $564, on average, for each student served.11 Our audits of five SES
providers also showed that the rate SDCS charged for SES was significantly lower than the rate the
other providers we reviewed charged. Rather than charging for SES tutoring per hour and per
student as the other providers did, SDCS only charged for those hours its teachers served as SES
tutors at the teachers’ normal hourly rate of pay and other costs such as fringe benefits and training.
Assuming that other LEA providers charge for SES based on the teachers’ hourly rates, as SDCS
does, the LEA provider would provide SES to students at a significantly lower cost than non-LEA
providers.

During our school choice and SES audit of Nevada, an LEA official expressed concern that
for-profit providers’ higher cost will reduce the benefit to the students.12 She indicated that the
for-profit providers hire district teachers at a higher rate then the district would as an SES provider.
Three of the five providers we reviewed hired teachers from schools in need of improvement to
tutor students in these same schools.

Prohibiting LEA providers from delivering SES when the LEA is identified as in need of
improvement may cause SES costs to increase and the amount of tutoring provided to decrease.
The current Department policy prohibiting schools or LEAs identified as in need of improvement
from being providers could have the following impacts:

     •   The number of providers from which parents can choose is reduced.
     •   Fewer tutoring hours are available to individual students because they must enroll with
         higher cost providers that deplete per pupil allocations sooner.
     •   The number of students that can be served decreases because the average cost per student
         increases.
     •   The overall costs of the LEAs’ SES programs increase because the lower cost provider is
         eliminated.
     •   Teachers that would have otherwise worked for the LEA provider are instead hired by
         outside providers that charge more and therefore increase the costs to the LEA.

11
  For school year 2004-2005, total costs for district-provided SES was $744,227 for 2,905 students and total costs for
SES provided by other SES providers was $1,107,259 for 1,964 students.
12
  The OIG issued Final report, entitled Nevada Department of Education’s Compliance with the Public School Choice
and Supplemental Educational Services Provisions (Control Number A09F0002).
Perspective Paper
ED-OIG/S09G0007                                                                   Page 9 of 11


Rather than making a blanket determination that any LEA or school-affiliated SES provider is
substandard because the LEA or school itself is identified as in need of improvement, the
Department should reconsider its position on this matter and develop a strategy for evaluating the
quality of the LEA/school provider’s program. Specifically, the Department should consider the
role of the SEAs, as specified in the ESEA, in evaluating and monitoring providers, as well as the
cost benefits inherent in retaining LEA/school providers and the negative impacts on students if
LEA/school providers are eliminated. Therefore, we suggest that the Department consider changing
the regulations at 34 C.F.R. § 200.47(b)(1)(iv)(A) and (B) and explore strategies, such as those
provided below, for assessing the quality of LEA/school providers that are in improvement status:

   •   The Department could rely on the SEAs to evaluate the performance of LEA/school
       providers during the normal provider approval and assessment cycles.
   •   The Department could require SEAs to perform more comprehensive assessments of
       LEA/school providers identified as in need of improvement.
   •   The Department could perform its own evaluation of LEA/school providers to determine the
       quality of the providers’ programs.
   •   The Department could place special conditions in the regulations that the LEA/school
       provider in improvement status is required to meet in order to continue to provide SES.
Perspective Paper
ED-OIG/S09G0007                                                                   Page 10 of 11



                                  PURPOSE AND SCOPE


This paper provides a discussion of issues relevant to the SES provisions of the ESEA and the
Department’s implementing regulations. It is intended to assist the Department and the Congress in
determining whether revisions to the Act and/or the Department’s regulations are necessary and
beneficial.

We have completed 11 reviews related to SES that involved seven SEAs and 34 LEAs. These
reviews included evaluations of SEA and LEA implementation of the SES provisions of the ESEA.
Using the experience gained while conducting the audits, we developed this paper to provide an
OIG perspective on selected SES provisions in the law and regulations and to suggest issues to be
considered during reauthorization of the ESEA.
Perspective Paper
ED-OIG/S09G0007                                                                     Page 11 of 11



                                          APPENDIX


The table below lists the audit reports issued by the OIG that are relevant to SES. The reports are
available on the ED OIG Webpage at http://www.ed.gov/about/offices/list/oig/areports.html under
the heading Office of Elementary and Secondary Education.

 Audit Control Number                          Report Title                        Date Issued
                           San Diego City Schools' Compliance With
 A09F0019                                                                             3/27/2006
                           Supplemental Educational Services Provisions
                           Progressive Learning and Salinas Union High
 A09F0022                  School District Compliance With ESEA's                     2/27/2006
                           Supplemental Educational Services Provisions
                           The State of Delaware's Compliance with NCLB
 A03F0002                                                                            11/22/2005
                           School Choice and SES Provisions
                           Learning Excitement Incorporated and Stockton
 A09F0012                  Unified School District's Compliance With                 11/12/2005
                           Supplemental Educational Services Provisions
                           Professional Tutors of America and Los Angeles
 A09F0013                  Unified School District's Compliance With                 10/27/2005
                           Supplemental Educational Services Provisions
                           ARC Associates' and Oakland Unified School
 A09F0009                  District's Compliance With Supplemental                   10/13/2005
                           Educational Services Provisions
                           New Jersey Department of Education's Compliance
 A02F0006                  with Title I, Part A, of the Elementary and                9/14/2005
                           Secondary Education Act of 1965
                           Illinois State Board of Education's Compliance with
                           the Public School Choice and Supplemental
 A07F0003                                                                             8/23/2005
                           Educational Services Provisions of the No Child
                           Left Behind Act
                           The Michigan Department of Education's
 A05F0007                  Compliance with the Public School Choice and                 8/2/2005
                           SES Provisions of NCLB
                           Nevada Department of Education's Compliance
 A09F0002                  with the Public School Choice and Supplemental             7/14/2005
                           Educational Services Provisions
                           Indiana Department of Education's Compliance
 A05E0014                                                                             2/18/2005
                           with NCLB School Choice and SES Provisions