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Flexibility for Innovative State Education Agencies

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While regulations and their interpretation are seemingly small issues of policy implementation, they can and do create tremendous obstacles for state administrators.

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This report contains corrections.

State education agencies, or SEAs, are being asked—and in some cases, forced—to make operational changes in the name of school improvement. New laws and expectations are pushing them to play a greater role in managing school performance, displacing to a significant degree their decades-old responsibility for monitoring local school districts for compliance with federal and state programs.

Moving toward school improvement, however, requires a new way of doing things, often involving reconfigured priorities, staff positions, and processes within these agencies. This transition is taking place while overall state education department funding has remained flat, at best, or declined in many states. Consequently, SEAs are looking for ways to do more with less, shifting resources within the agency to align with new priorities. Ironically, the most visible force pushing SEAs to play a more substantive role in managing and improving school performance is also one of the biggest obstacles standing in the way of efforts to realign funds for that purpose—the federal government.

Two factors combine to create this situation. First, federal grants supply a surprisingly large share of the resources that support state-level education administration. Second, those funds come to the state with a number of strings attached—namely, reporting requirements and restrictions about how the funds are used. State education administrators looking to combine similar responsibilities and focus resources for school improvement are beginning to bump up against these restrictions. This paper examines what the federal government might do to get out of SEAs’ way as they work to reinvent themselves. In doing so, it attempts to answer three questions:

  • What role do federal dollars play in supporting the work of SEAs?
  • What are the constraints that SEAs face in using or repurposing federal resources as they look to innovate and support improved student outcomes?
  • What could be done to facilitate more flexibility from the federal level?

To answer these questions, we reviewed state and federal documents, interviewed state administrators and education regulatory law experts, and drew on prior research. The paper first provides a context for understanding how SEAs have been forced to shift out of the role of compliance monitor and into that of performance manager. It then describes how state agencies allocate their resources and the critical role that the federal government plays in that distribution.

The SEAs that have undertaken the challenge of reconfiguring their departments to better contribute to improving schools and student outcomes have encountered significant challenges. Since it is unlikely that they will receive any new resources, these leading-edge SEAs have sought to repurpose existing resources to better manage performance. One of the biggest obstacles to realizing this shift is the federal government. Federal funds can account for about one-half of all of the administrative resources available to state education departments. But the strings attached to those dollars make it difficult to allocate them to activities other than compliance. Some of these restrictions stem from the federal education programs themselves and how those regulations have been interpreted over time. As a consequence, state agencies have built individual program silos to satisfy the federal requirements but at the expense of flexibility. In addition, cross-cutting regulations designed to ensure that states do not generally misuse federal dollars create strong disincentives to look for ways that resources can be combined and focused on assisting schools and school districts.

Such controls are well intended and designed to ensure that states use the funds in accordance with the intent of the legislation, as well as guard against waste or abuse. Ironically, these restrictions provide almost no support to a state department looking to maximize its resources to improve student outcomes. Instead, the collective effect at the state level is a powerful set of incentives to maintain the status quo—a culture of compliance monitoring.

In order to get the federal government out of the way of innovative, reform-minded SEAs, this report offers a number of recommendations designed to reconfigure some of the incentives for SEAs seeking to prioritize the performance management of schools and districts. The recommendations range from the unlikely—such as a reauthorization of the Elementary and Secondary Education Act, or ESEA—to the more doable—such as issuing refined regulations and guidance from the U.S. Department of Education, or DOE. At a minimum, it should be possible for DOE to work with states to develop waivers for some of these restrictions.

In recent years, the federal government has encouraged states to play a greater role in helping districts and schools improve student learning. Embracing that priority represents a dramatic shift from a decades-long state-federal relationship that emphasized compliance. Existing federal regulations and guidelines, however, are some of the most significant obstacles standing in the way of SEAs making this cultural and procedural transition. And while regulations and their interpretation are seemingly small issues of policy implementation, they can and do create tremendous obstacles for state administrators. As a result, they have a huge impact, particularly when one considers that these regulations directly affect the distribution and use of tens of millions of dollars in any given state and billions of dollars nationwide.

Patrick Murphy is director of research and the Thomas C. Sutton chair in policy research at the Public Policy Institute of California. 

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