### OMB Supporting Statement for Proposed Data Collection: {#omb-supporting-statement-for-proposed-data-collection .unnumbered}

### Study of the Effects of the Section 1003(e) Hold Harmless Provision on Title I Allocations {#study-of-the-effects-of-the-section-1003e-hold-harmless-provision-on-title-i-allocations .unnumbered}

# JUSTIFICATION

1.  **Importance of Collecting the Information**

Improving student achievement in schools that repeatedly miss state
achievement targets is a key goal of Title I of the Elementary and
Secondary Education Act (ESEA) as amended by the No Child Left Behind
Act (NCLB). Section 1003(a) of Title I requires states to reserve 4
percent of Title I, Part A Grants to Local Educational Agencies to
support state and local school and LEA improvement activities authorized
under sections 1116 and section 1117 of the ESEA (see Appendix A).
However, a recent report issued by the U.S. Government Accountability
Office (GAO) noted that some states are not able to set aside the full 4
percent for school improvement due to a 100 percent hold-harmless
provision contained in section 1003(e), which prohibits states from
reducing any LEA's Title I, Part A allocation below its prior year level
when a State Educational Agency (SEA) reserves funds for this purpose.
Because school districts with growing numbers of children from
low-income families generally are the ones that receive increases in
their Title I allocations, the hold-harmless provision often results in
school districts with declining numbers of children from low-income
families contributing a proportionately smaller amount (and sometimes
nothing at all) to the section 1003 reservation. As a result, the burden
of the reservation falls disproportionately on those districts that have
growing numbers of children from low-income families. The GAO report
recommended, "To further support the department's proposal to eliminate
the hold-harmless provision, develop an analysis comparing the
characteristics of districts that contribute to the set-aside with those
protected by the hold-harmless provision. Such an analysis could
identify differences in school performance or student characteristics."
(The GAO report is provided in Appendix B and is also available online
at
[www.gao.gov/new.items/d08380.pdf](http://www.gao.gov/new.items/d08380.pdf).)

This study will examine the impact of the section 1003(e) provision
described above on states' Title I Part A allocations to school
districts, primarily by comparing the characteristics of the districts
that contribute to the section 1003(a) school improvement reservation
with those districts that are protected by the section 1003(e)
hold-harmless provision. Specifically, the study will ask each SEA to
provide an electronic datafile that includes the following information:

-   The amount of section 1003(a) funds allocated to each individual
    school district in the state for the 2007-08 and 2008-09 school
    years.

-   The final Title I, Part A allocation for each district in the state
    for the 2006-07, 2007-08, and 2008-09 school years.

-   A datafile showing the steps the SEA took in calculating final Title
    I, Part A allocations for school districts (including charter school
    districts) for the 2007-08 and 2008-09 school years. Specifically,
    the datafile should show how much the SEA reserved from each
    district's allocation to support the state's section 1003(a) school
    improvement activities as well as for state administration and
    (where applicable) for the State Academic Achievement Awards
    program.

In order to provide information about this issue in a timely manner for
the upcoming Title I reauthorization, we are asking states to provide
these extant data by December 15, 2008.

2.  **Purposes and Uses of the Data**

The primary purpose for this data collection is program evaluation. This
study is designed to examine the characteristics of the LEAs that, due
to the application of the section 1003(e) hold-harmless provision
contribute and do not contribute to the 4-percent school improvement
reservation authorized by section 1003(a). Findings from this study will
inform the upcoming reauthorization of ESEA and will help to guide
policymakers who may consider potential changes to section 1003 and the
hold-harmless provision.

The proposed data collection instrument is provided in Appendix C.

3.  **Improved Information Technology**

We will send the request for data to state Title I directors
electronically, via email, and we will ask them to provide the data to
the Department electronically. To minimize the burden placed on
respondents, we will accept data in a variety of formats in order to
allow respondents to use the format that is most convenient for them.

4.  **Efforts to Identify Duplication**

These data have not been previously collected by the Department or by
any other source. The Department does expect to begin collecting the
amount of section 1003(a) and 1003(g) funds allocated by States to each
school district through the annual Consolidated State Performance Report
(CSPR). However, these CSPR data for SY 2007-08 and SY 2008-09 would not
be available to the Department within the study's timeframe.

5.  **Methods Used to Minimize Burden on Small Entities**

This program does not affect small entities. All respondents for this
data collection are State Educational Agencies.

6.  **Consequences of Not Collecting the Information**

Without this information, we would not be able to respond to the GAO's
recommendation to study the effects of the section 1003(e) hold-harmless
provision on Title I funding for different types of districts. Further,
any reauthorization discussions about whether to revise this section of
the law (which may be stimulated by the GAO report) would have to
proceed without the benefit of objective and complete data on the actual
effects of this provision on the distribution of funds.

7.  **Special Circumstances Justifying Inconsistencies with Guidelines
    in 5 CFR 1320.6**

This data collection does not require any special circumstances and is
consistent with guidelines in 5 CFR 1320.5.

8.  **Consultations Outside the Agency**

A notice concerning this study was published in the Federal Register on
June 25, 2008. No public comments were received. A second Federal
Register notice will be published in early September, and any comments
that received will be forwarded to OMB.

9.  **Payments or Gifts to Respondents**

No payment or gifts to respondents will be made.

10. **Assurance of Confidentiality**

We are not making any assurance of confidentiality for the data to be
collected in this study.

11. **Sensitive Questions**

There are no questions of a sensitive nature.

12. **Estimated Response Burden**

It is estimated that the hour burden on respondents will total 196
hours, based on an estimate of 4 hours for each of the 49 State
Education Agencies included in this data collection. (There is no need
to collect these data from Hawaii, the District of Columbia, or Puerto
Rico, since they each contain only one school district.)

13. **Estimates of Annualized Respondent Capital and Maintenance Costs**

There are no respondent capital and start-up costs, nor operation and
maintenance costs.

14. **Estimated Annualized Cost to the Federal Government**

The total cost to the federal government for this one-time data
collection is estimated to be \$50,000. This amount represents the
budgeted cost for our contractor, RTI, to collect, compile, and
summarize the data for this study. U.S. Department of Education staff
will write the report.

15. **Changes in Burden**

Not applicable. This study constitutes a new information collection.

16. **Study Schedule and Publication Plans**

> The data collected under this study will be summarized in a report to
> Congress that presents an analysis of the data in narrative and
> tabular form. We anticipate that a final report will be submitted to
> Congress by June 2009. Exhibit 1 provides a schedule for completion of
> the data collection and report.
>
> **Exhibit 1**
>
> **Schedule of Deliverables**

  ---------------------------------------- ------------------------------
  Begin data collection                    November 14, 2008

  End data collection                      December 15, 2008

  Final report: first draft                January 12, 2009

  Final report: second draft               February 9, 2009

  Final report: final draft                March 9, 2009
  ---------------------------------------- ------------------------------

17. **Display Expiration Date for OMB Approval**

> No request is being made to not display the expiration date for OMB
> approval of the information collection.

18. **Exceptions to Certification Statement**

> There are no exceptions to the referenced certification statement.