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ESSA Flexibilities

October 2018
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ESSA Flexibilities

I. State Flexibilities..................................................................................................................... 5

A. Challenging Academic Standards and Assessments (ESEA section 1111(b)) ................ 5

B. Statewide Accountability System (ESEA sections 1111(c)(4)(C)).................................. 6

C. School Support and Improvement Activities (ESEA section 1111(d))............................ 8

D. Direct Student Services (ESEA section 1003A) .............................................................. 9

E. Institution-wide Projects under Title I, Part D, Subpart 1 (ESEA section 1416) .............. 10

F. Charter Schools Program (ESEA section 4301 et seq.)..................................................... 10

G. Funding Transferability for States (ESEA section 5103)............................................... 10

H. Educational Flexibility (Ed-Flex) Program (Education Flexibility Partnership Act of 

1999) 11

I. Consolidation of Funds for State Administration (ESEA section 8201(a))....................... 11

J. Waivers (ESEA section 8401) ........................................................................................... 11

III. District Flexibilities ................................................................................................................ 12

A. Consolidation of Funds for Local Administration (ESEA section 8203) ...................... 12

B. Student-centered Funding Pilot (ESEA section 1501)................................................... 12

C. Locally Selected, Nationally Recognized High School Academic Assessments (ESEA 

section 1111(b)(2)(H); 34 C.F.R. § 200.3)................................................................................ 13

D. District and School Discretion with Respect to School Improvement Activities (ESEA 

section 1111(d)(1)(B) and (d)(2)(B))........................................................................................ 13

E. Public School Choice (ESEA section 1111(d)(1)(D))....................................................... 14

F. Supplement Not Supplant (ESEA section 1118(b)(1))...................................................... 14

G. Consolidation of Funds in a Schoolwide Program (ESEA section 1114(a)(1)(A), (3)) 14

H. Funding Transferability for Districts (ESEA section 5103(b))...................................... 15

I. Waivers (ESEA section 8401) ........................................................................................... 15

J. SRSA Alternative Uses of Funds (ESEA section 5211).................................................... 15
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Purpose of this Document 

The Every Student Succeeds Act (ESSA) passed in December 2015 with broad bipartisan 

support, reauthorized the Elementary and Secondary Education Act of 1965 (ESEA),1as 

amended. The ESEA initially offered grants to districts serving low-income students, Federal 

grants for textbooks and library books and scholarships for low-income college students. 

Additionally, the law provided Federal grants to State educational agencies (SEAs) to improve 

the quality of elementary and secondary education. The ESEA has been periodically reauthorized 

by Congress, with the last version prior to the ESSA being the No Child Left Behind Act of 2001 

(NCLB). 

The ESEA, as amended by the ESSA, provides greater flexibility for State and local education 

leaders to do what is best for children while maintaining important protections for historically 

underserved students, including economically disadvantaged students, students with disabilities, 

and English learners. The law requires States to ensure that all students have equitable access to 

effective teachers and safe learning environments with necessary supports to prepare them for 

success in college, a career and life. 

In addition to reauthorizing the ESEA, the ESSA reauthorized and amended the Education 

Flexibility Partnership Act of 1999 (Ed-Flex Act), which provides another potential source of 

flexibility for States and districts.

The purpose of this document is to highlight basic information about key flexibilities in the 

ESEA and the Ed-Flex Act, as amended by the ESSA. It does not impose any requirements 

beyond those included in the ESEA and other applicable laws and regulations. In addition, it 

does not create or confer any rights for or on any person. We encourage States and districts to 

share this information with stakeholders and consider how to leverage these opportunities to best 

meet the needs of their students and schools. 

When implementing the flexibilities described in this document, States and districts must

continue to comply with Federal civil rights laws that prohibit discrimination based on race, 

color, national origin, sex, disability, and age. These laws include Title VI of the Civil Rights 

Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation 

Act of 1973, Title II of the Americans with Disabilities Act, the Age Discrimination Act of 

1975, and the Equal Educational Opportunities Act of 1974. 

 

1 Throughout this document, unless otherwise indicated, citations to the ESEA refer to the ESEA, as 

amended by the ESSA.
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If you are interested in commenting on this document, please email us your comments at 

OESE.feedback@ed.gov or write to us at the following address:

U.S. Department of Education

Office of Elementary and Secondary Education

ATTN: ESSA Flexibilities

400 Maryland Avenue, SW

Washington, DC 20202
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I. State Flexibilities

A. Challenging Academic Standards and Assessments (ESEA section 1111(b))

The ESEA requires that each State seeking funds under Title I, Part A develop challenging 

academic content and achievement standards. These standards specify the knowledge, skills, and 

levels of achievement that a State expects of all its students. A State has broad discretion to 

establish standards that reflect what the State, in consultation with a wide range of stakeholders, 

and with input from peer reviewers, determines is relevant for students in the State. (ESEA 

section 1111(b)(1)). The U.S. Department of Education (Department) may not mandate State 

standards, including with respect to the Common Core State Standards developed by States

under the Common Core State Standards Initiative, although a State may adopt the Common 

Core standards at its discretion. (See ESEA sections 1111(b)(1)(G); 8526A(a)).

Additionally, the ESEA requires that each State that seeks Title I, Part A funds implement a 

statewide set of annual academic assessments in mathematics, reading or language arts, and 

science. A State has broad discretion to select the assessments and assessment items that are 

aligned with its academic content standards and measure what the State expects students in the 

State to know and be able to do. The Department may not prescribe specific assessments or 

assessment items. (ESEA sections 1111(b)(2); 1111(e)(1)(B)(iii)(II)). A State’s assessment 

system must include all students, including students with disabilities and English learners (ESEA 

section 1111(b)(2)(B)(vii)).

The ESEA contains a number of specific areas of flexibility with respect to statewide academic 

assessments:

1. Eighth Grade Mathematics Exception (ESEA section 1111(b)(2)(C))

A State may exempt any 8th grade student from the mathematics assessment the State administers 

in 8th grade if the student takes the end-of-course mathematics assessment the State typically 

administers in high school for Federal accountability purposes. This flexibility avoids double 

testing 8th grade students in mathematics. When a student reaches high school, the student must 

take a more advanced high school mathematics assessment. (ESEA section 1111(b)(2)(C)).

2. Locally Selected, Nationally Recognized High School Academic 

Assessments (ESEA section 1111(b)(2)(H))

A State may permit its districts to administer a locally selected, nationally recognized high 

school academic assessment in place of the high school-level statewide academic assessment. 

These assessments must be peer reviewed. A district that elects to administer a nationally 

recognized high school academic assessment must make parents aware of its selection and 

administer the assessment to all its high school students. A “nationally recognized high school 

academic assessment” is an assessment of high school students’ knowledge and skills that is 

administered in multiple States and is recognized by institutions of higher education in those or 
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other States for the purposes of entrance or placement into courses in postsecondary education or 

training programs. (ESEA section 1111(b)(2)(H); 34 C.F.R. § 200.3).

3. Innovative Assessment and Accountability Demonstration Authority 

(ESEA section 1204) 

A State may apply to the Department to implement an innovative assessment system in some of 

its districts instead of the statewide assessments, with the goal of scaling up the innovative 

assessment for statewide administration. Such a system may include competency-based 

assessments, instructionally embedded assessments, interim assessments, cumulative year-end 

assessments, or performance-based assessments that combine into an annual summative 

determination for a student. Innovative assessments may allow students to demonstrate mastery 

or proficiency and allow a district to differentiate student support based on individual learning 

needs. (ESEA section 1204; 34 C.F.R. §§ 200.104-200.108).

4. Alternate Academic Achievement Standards and Alternate Assessments 

for Students with the Most Significant Cognitive Disabilities(AA-AAAS)

(ESEA sections 1111(b)(1)(E), 1111(b)(2)(D))

A State may adopt alternate academic achievement standards and aligned alternate assessments 

for students with the most significant cognitive disabilities, as permitted under section 

1111(b)(1)(E) of the ESEA. Alternate academic achievement standards must be aligned with the 

State’s challenging academic content standards, promote access to the general education 

curriculum, and reflect professional judgment as to the highest possible standards achievable by 

such students. Alternate academic achievement standards are designated in each student’s 

individualized education program, and are aligned to ensure that a student who meets those 

standards is on track to pursue postsecondary education or competitive integrated employment. 

A State may assess up to one percent of its tested population with an alternate assessment. 

(ESEA sections 1111(b)(1)(E), 1111(b)(2)(D); 34 C.F.R. §§ 200.2(b)(3)(ii)(B)(2), 200.6(c)-(d)).

5. Adaptive Testing (ESEA section 1111(b)(2)(J))

The ESEA allows a State to administer its statewide assessments in the form of computeradaptive assessments. A computer-adaptive assessment may measure a student’s academic 

proficiency and growth using items above or below the student’s grade level provided it also 

measures the student’s academic proficiency based on the standards for the grade in which the 

student is enrolled. (ESEA section 1111(b)(2)(J); 34 C.F.R. § 200.2(c)).

B. Statewide Accountability System (ESEA sections 1111(c)(4)(C))

The ESEA requires each State to develop a statewide system of accountability for all public 

elementary and secondary schools to improve student academic achievement and school success, 

but provides broad discretion to a State in the design of the accountability system. (ESEA section 

1111(c)). A State’s system includes indicators that measure academic achievement, another 
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academic measure, graduation rates, the progress of English learners in achieving English 

language proficiency, and school quality or student success. While the ESEA lays out some 

specifics for State accountability systems, each State has discretion to determine how certain 

measures are calculated and how many measures to include in order to evaluate school 

performance. Specifically, each State has discretion to determine a valid and reliable other 

academic indicator (e.g., student growth) as well as discretion to determine how many indicators 

of school quality or student success (e.g., educator engagement) it will include in its system and 

what those indicators will be. 

A State’s accountability system must be used to identify schools for comprehensive, targeted, 

and additional targeted support and improvement, but a State has discretion to determine 

precisely how it will design its system, including how it will combine all of the indicators, to 

identify schools (ESEA sections 1111(c)(4)(C), (D); 1111(d)(2)).

The ESEA contains a number of specific areas of flexibility with respect to statewide 

accountability systems:

1. Exception for Recently Arrived English Learners (ESEA section 

1111(b)(3)(A))

A State has the flexibility to determine how to include in its statewide accountability system 

recently arrived English learners who have been enrolled in a school in one of the 50 States in

the United States or the District of Columbia for less than 12 months. This flexibility allows a

State to choose either to include recently arrived English learners in its accountability system like 

all other English learners or to choose among three exceptions: 

1) Exclude a recently arrived English learner from one administration of the statewide 

reading or language arts assessment and, for any other required statewide assessment, 

report the results of that student but do not include the results of that student in the 

statewide accountability system; OR

2) Assess and report the performance of a recently arrived English learner on the reading or 

language arts and mathematics assessments beginning in the first year of the student’s 

enrollment in a school, and, in the second year, include a measure of student growth (but 

not proficiency) on the reading or language arts and mathematics assessments in the 

statewide accountability system; OR

3) Apply both exceptions and, in the State plan, describe how the State will apply each 

exception to recently arrived English learners across the State. (ESEA section 

1111(b)(3)(A)).

2. English Learner Subgroup (Former English Learners) (ESEA section 

1111(b)(3)(B))
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A State also has the flexibility to include the results of students who were previously identified 

as English learners and have exited English learner status on the statewide reading or language 

arts and mathematics assessments in the English learner student subgroup for no more than four 

years in the State-determined system of annual meaningful differentiation. This allows a State to 

determine the number of years (up to four) that a former English learner who has already 

achieved English language proficiency will have his or her scores on the reading or language arts 

and mathematics assessments count for purposes of determining the performance of the English 

learner subgroup in a school within the statewide accountability system. (ESEA section 

1111(b)(3)(B)).

C. School Support and Improvement Activities (ESEA section 1111(d))

1. State Discretion with Respect to High Schools (ESEA section 

1111(d)(1)(C))

A State has significant flexibility with respect to the improvement activities it may permit to be 

implemented in certain high schools that the State identifies for comprehensive support and 

improvement based on the schools’ failure to graduate one-third or more of their students.

(ESEA section 1111(d)(1)(C)(i)). In particular, a State may allow differentiated improvement 

activities for high schools that are identified based on their graduation rate and that 

predominantly serve students who are returning to education after having left school without a 

regular high school diploma (i.e., dropout recovery schools), as well as for those that 

predominantly serve students who, based on their grade or age, are significantly off track to 

accumulate sufficient academic credits to meet the State’s high school graduation requirements 

(e.g., credit recovery programs). (ESEA section 1111(d)(1)(C)).

In addition, a State may permit a district to completely forego the implementation of 

improvement activities for any high school identified for comprehensive support and 

improvement based on failing to graduate one-third or more of its students if the high school has 

a total enrollment of less than 100 students. (See ESEA section 1111(d)(1)(C)(ii)).

2. School Improvement Funds (ESEA section 1003)

A State has significant discretion with respect to the funds that it must reserve to support school 

improvement activities in schools identified for comprehensive or targeted support and 

improvement and for the State’s statewide system of technical assistance and support under 

ESEA section 1003.

First, a State has the flexibility to decide whether to distribute those funds on a formula or 

competitive basis. (ESEA section 1003(b)).

Second, a State has the discretion to determine the length of the subgrants it awards, up to a 

period of four years. (ESEA section 1003(c)).
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Third, a State has the discretion to determine the information it will require in a district’s

application for school improvement funds beyond the minimal information required by statute. 

(ESEA section 1003(e)). If a State determines that the amount of funds it reserves under ESEA 

section 1003 is greater than the amount needed to serve schools identified for comprehensive or 

targeted support and improvement, the State must allocate the excess amount to districts, but has 

the flexibility to make that allocation either based on the relative allocations of Title I, Part A 

funds the State made to districts for that fiscal year, or in accordance with any other criteria 

established by the State. (ESEA section 1003(g)).

D. Direct Student Services (ESEA section 1003A)

State Flexibilities 

A State has the flexibility to determine whether to reserve a portion (up to three percent) of its 

Title I, Part A funds to support direct student services. (ESEA section 1003A). Consistent with 

the general parameters established in ESEA section 1003A(b)(2) for how awards are to be 

prioritized, a State has discretion to determine how it will award any funds that it does choose to 

reserve under this provision. To that end, under ESEA section 1003A(d), a State has the 

discretion to determine the information it will require in a district’s application for funds for 

direct student services, beyond the minimal information required by that provision. Further, 

under ESEA section 1003A(c) and 1003A(d), a district has discretion to determine whether it 

will apply for these funds and, if so, the direct student services for which it will seek the funds.

If a State chooses to take advantage of this flexibility, a district may use up to one percent of its 

award under section 1003A for outreach and communications to parents about available direct 

student services in the district and State, and up to two percent of its award for administrative 

costs related to such direct student services. (ESEA section 1003A(c)(1), (2)).

District Flexibilities 

A district may support different student services in different schools based on the needs of the 

students in each school. Examples of direct student services include: credit recovery, enrollment 

in academic courses not otherwise available in a particular school, academic acceleration 

courses, components of a personalized learning approach, and assistance for Advanced 

Placement and International Baccalaureate exam fees. (ESEA section 1003A(c)(3)).

A district may also use section 1003A funds for the costs of transportation to allow a student 

enrolled in a school identified by the State for comprehensive support and improvement to 

transfer to another public school (which may include a charter school) that has not been 

identified by the State for comprehensive support and improvement if the district is not reserving 

funds under ESEA section 1111(d)(1)(D)(v) for this purpose. (ESEA section 1003A(c)(3)(E)).
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E. Institution-wide Projects under Title I, Part D, Subpart 1 (ESEA section 1416) 

A State agency that provides free public education for children and youth in an institution for 

neglected or delinquent children and youth (other than an adult correctional institution) or 

attending a community day program for such children and youth may use funds received under 

Title I, Part D, Subpart I of the ESEA to operate an institution-wide project. (ESEA section 

1416). An institution-wide project serves all children in, and upgrades the entire educational 

effort of, the institution or program. If a State agency wishes to implement an institution-wide 

project, the ESEA requires that the State agency develop, and the State approve, a 

comprehensive plan that meets the requirements of ESEA section 1416.

F. Charter Schools Program (ESEA section 4301 et seq.)

The Expanding Opportunity Through Quality Charter Schools Program (CSP) authorizes the 

Department to award grants to various eligible entities (i.e., specific State entities, charter

management organizations, and charter school developers) to support the creation of new charter 

schools as well as the replication and expansion of high-quality charter schools. Grantees and 

subgrantees may exercise flexibility in developing their charter school programs.

Another key area in which CSP grantees and subgrantees have flexibility relates to waivers. 

Under ESEA section 4303(d)(5), eligible entities may include in their applications requests for 

waivers of any statutory or regulatory requirement over which the Secretary exercises 

administrative authority, except requirements related to the definition of “charter school” in 

section 4310(2) of the ESEA. These waivers are subject to the Secretary’s approval. 

G. Funding Transferability for States (ESEA section 5103) 

States and districts have broad flexibility under the ESEA to transfer some or all of their funds 

under certain ESEA programs to other eligible ESEA programs in order to better meet State and 

local needs. (See ESEA section 5103). Transferability does not affect the overall amount of 

ESEA funds a State or district receives, but it provides greater flexibility in using some of those 

funds. States and districts do not need prior approval from the Department to exercise this 

authority provided they comply with the requirements described in ESEA section 5103. Under 

ESEA section 5103(e)(2), before a State or district can transfer funds from a program subject to 

equitable services requirements, it must engage in timely and meaningful consultation with 

appropriate private school officials. 

For more information, see the “Transferability” section in the Fiscal Changes and Equitable 

Services Requirements under the ESEA non-regulatory guidance, available at 

https://www2.ed.gov/policy/elsec/leg/essa/essaguidance160477.pdf, and the Guidance on the 

Transferability Authority, which remains applicable except as modified by the Fiscal Changes 

guidance, available at www2.ed.gov/programs/transferability/finalsummary04.doc.
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H. Educational Flexibility (Ed-Flex) Program (Education Flexibility Partnership Act of 

1999)

The Education Flexibility Partnership Act of 1999, which was most recently amended by the 

ESSA, authorizes the Department to delegate to States with strong accountability safeguards the 

authority to waive certain Federal education requirements that may, in particular instances, 

impede local efforts to reform and improve education. (20 U.S.C. 5891a-b). The Ed-Flex 

program is designed to help districts, educational service agencies, and schools carry out 

educational reforms and raise the achievement levels of all children by providing increased 

flexibility in the implementation of Federal education programs in exchange for enhanced 

accountability for the performance of students. The Department intends to continue to make this 

flexibility available through an application process for any interested States during the 2018-19 

school year. 

I. Consolidation of Funds for State Administration (ESEA section 8201(a))

A State that can demonstrate that the majority of its resources are derived from non-Federal 

sources has the flexibility to consolidate funds specifically made available to it for State 

administration under any ESEA program, as well as other programs that the Secretary may

designate. (ESEA section 8201(a)). A State that consolidates funds is not required to keep 

separate records for each individual program included in the consolidation to account for costs 

related to the administration of the consolidated programs. The consolidated State administrative 

funds may be used to administer the programs included in the consolidation, carry out activities 

designed to enhance the effective and coordinated use of funds under those programs such as the 

examples provided in section 8201(b)(2) of the ESEA, and develop the standards and 

assessments required under Title I. (ESEA section 8201(b)). If the State does not use all of the

funds that it consolidated for a particular year for administration, a State may use those funds

during the applicable period of availability as funds available under one or more of the programs 

included in the consolidation. (ESEA section 8201(e)).

J. Waivers (ESEA section 8401)

Section 8401 of the ESEA authorizes the Secretary to waive certain statutory and regulatory 

requirements for ESEA programs. Waiver requests may be submitted by a State on its own 

behalf or on behalf of a district or school. (ESEA section 8401(a)). The ESEA outlines the 

information that the State must include when it submits waiver requests to the Secretary (ESEA 

section 8401(b)(1)) and the manner in which States and districts seeking waivers must provide 

notice and opportunity to comment to the public and affected agencies (ESEA section 

8401(b)(3)). This includes a description of: 

1. The Federal statutory or regulatory requirements to be waived; 

2. How the waiving of such requirements will advance student academic achievement; 
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3. The methods the State, district, school, or Indian tribe will use to monitor and regularly

evaluate the effectiveness of the implementation of the plan;

4. If the waiver relates to provisions of assessments (ESEA section 1111(b)) or State or

district report cards (ESEA section 1111(h)), how the State, district, school, or Indian

tribe will maintain or improve transparency in reporting to parents and the public on

student achievement and school performance, including the achievement of the

subgroups of students; and

5. The notice and comment process, including by submitting the comments and input to the

Secretary, with a description of how the State addressed the comments and input.

Upon receiving a waiver request, the Secretary has 120 days to review and issue a determination 

regarding the request. If the waiver is not approved, a State has 60 days to revise and re-submit 

the waiver. (ESEA section 8401(b)(4)). 

States may apply for a waiver via email or mail. Typically, the Department will receive a waiver 

request sooner if it is submitted via email through the appropriate State mailbox. The State 

mailbox email address is [State].OESE@ed.gov (for example Maine.OESE@ed.gov).

II. District Flexibilities

A. Consolidation of Funds for Local Administration (ESEA section 8203)

A district, with the approval of its State, has the flexibility to consolidate and use for the 

administration of one or more programs under the ESEA an amount equal to or less than the 

percentage, established in each program, of the total available to the district for administration of 

those programs. (ESEA section 8203(a)). A district that consolidates funds is not required to 

keep separate records for each individual program included in the consolidation to account for 

costs related to the administration of the consolidated programs. (ESEA section 8203(e)). For 

example, a district that has a consolidated pool of administrative funds that includes Title III, 

Part A in the consolidation may use any of the consolidated funds to administer its Title III, Part 

A program, even though section 3115(b) of the ESEA limits the amount of Title III, Part A funds 

that may be contributed to the consolidated pool to two percent of a district’s Title III, Part A 

allocation. The ESEA requires a State, in collaboration with districts in the State, to establish 

procedures for responding to district requests to consolidate administrative funds and for 

establishing limitations on the amount of funds under those programs that can be used for 

administration on a consolidated basis. (ESEA section 8203(b)). 

B. Student-centered Funding Pilot (ESEA section 1501)

A district may apply for extensive flexibility from many district-level program and fiscal 

requirements related to eligible Federal programs if the district wishes to combine those eligible 

Federal funds with State and local funds in order to allocate resources to schools based on the 
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number of students and their corresponding levels of educational need as determined by the 

district. Specifically, a district may include funds under any of the following programs 

authorized under the ESEA: Title I, Parts A, C, and D; Title II; Title III; Title IV, Part A; and 

Title V, Part B. (ESEA section 1501(1). A district taking advantage of the flexibility would need 

to design and implement a system that uses weights to provide substantially more funding to 

students from low-income families, English learners, and any other educationally disadvantaged

student groups identified by the district. Notably, the flexibility does not relieve an approved 

district of any State-level requirements. Provided a district meets all requirements of the 

program, it would receive substantial relief from both fiscal requirements (such as separately 

tracking Federal funds) and programmatic requirements for those programs the district includes 

in the weighted funding system. Additional information, including an application, is available at 

https://www2.ed.gov/policy/elsec/leg/essa/scfp/studentcentered.html. 

C. Locally Selected, Nationally Recognized High School Academic Assessments (ESEA

section 1111(b)(2)(H); 34 C.F.R. § 200.3)

If permitted by the State, a district may administer a nationally recognized high school academic 

assessment in place of the statewide academic assessment in any subject. A district that elects to 

administer a nationally recognized high school academic assessment must make parents aware of 

its selection and administer the assessment to all its high school students. A “nationally 

recognized high school academic assessment” is an assessment of high school students’ 

knowledge and skills that is administered in multiple States and is recognized by institutions of 

higher education in those or other States for the purposes of entrance or placement into courses 

in postsecondary education or training programs. (ESEA section 1111(b)(2)(H); 34 C.F.R. § 

200.3)

D. District and School Discretion with Respect to School Improvement Activities 

(ESEA section 1111(d)(1)(B) and (d)(2)(B))

A district has the flexibility to determine the evidence-based interventions it will include in each 

comprehensive support and improvement plan it develops for its schools. (ESEA section 

1111(d)(1)(B)). Similarly, a school that is implementing a targeted support and improvement 

plan has the flexibility to determine the evidence-based interventions it will include in its school 

support and improvement plan. (ESEA section 1111(d)(2)(B)). School Improvement Funds 

(ESEA section 1003)

Any district with one or more schools identified for comprehensive support and improvement 

under ESEA section 1111(c)(4)(D)(i) or implementing a targeted support and improvement plan 

under ESEA section 1111(d)(2) is eligible to apply to the State for school improvement funds. 

The ESEA provides significant flexibility to districts regarding school improvement funds 

reserved under section 1003 of the ESEA for schools identified for comprehensive or targeted 

support and improvement, including discretion to determine how much school improvement 
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funding it will seek, the schools for which it will seek such funding (e.g., all identified schools or 

only those identified for comprehensive support and improvement), and whether to seek any 

funding for district-level activities.

Possible activities that a district may carry out using school improvement funds include the 

following: family and community engagement, rigorous review of external providers, recruiting 

and hiring staff, instructional programs, and professional development and support. A district 

may also use the funds to support other allowable activities, including those that are part of a 

plan for comprehensive or targeted support and improvement, which must include one or more 

evidenced-based interventions.

E. Public School Choice (ESEA section 1111(d)(1)(D))

A district has the discretion to offer students enrolled in a school that is identified by the State for 

comprehensive support and improvement with the option to transfer to another public school 

served by the district. (ESEA section 1111(d)(1)(D)(i)). Furthermore, a district may use up to 

five percent of its Title I, Part A funds to pay for transportation for students who take advantage 

of this public school choice option. (ESEA section 1111(d)(1)(D)(v)). If a district chooses to 

offer this option to its students, ESEA section 1111(d)(1)(D)(ii)-(iv) outlines the requirements 

for implementation. Note that any public school choice option provided by a district under these 

provisions must be consistent with State law. (ESEA section 1111(d)(1)(D)(i)).

F. Supplement Not Supplant (ESEA section 1118(b)(1)) 

A district now demonstrates compliance with the Title I, Part A supplement not supplant 

requirement just by using a methodology to allocate State and local funds to each Title I school 

that ensures that each school receives all the State and local funds it would otherwise receive if it 

were not receiving Title I funds. The district’s methodology must be Title I neutral. Unlike prior 

to ESSA, a district is not required to identify that any individual cost or service supported with 

Title I, Part A funds is supplemental. This provision applies to both schoolwide programs and 

targeted assistance schools. (ESEA section 1118(b)).

G. Consolidation of Funds in a Schoolwide Program (ESEA section 1114(a)(1)(A), (3))

A Title I schoolwide program is a comprehensive reform strategy designed to upgrade the entire 

educational program in a Title I school in order to improve the achievement of the lowestachieving students by coordinating services funded from a variety of sources into a 

comprehensive framework. Title I schools that have a poverty percentage of at least 40 percent 

have significant flexibilities available to them through the operation of a schoolwide program. 

(ESEA section 1114(a)(1)(a)). In addition, a State may grant a waiver for a Title I school with a 

poverty percentage below 40- percent to operate a schoolwide program after considering how a 

schoolwide program will best serve the needs of students in the school who are failing, or at risk 

of failing, to meet the challenging State academic standards. (ESEA section 1114(a)(1)(B)). To 

encourage this approach and better leverage all available funding, a schoolwide program school 
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has the flexibility to consolidate funds from Title I and other Federal education programs with 

State and local funds. (ESEA section 1114(a)(1)(A), (3)). Consolidating Federal, State and local 

funds in a schoolwide program offers significant flexibility to a school to use all of its funds to 

meet the specific needs of its students identified through a needs assessment and included in the 

schoolwide plan. 

For more information on schoolwide programs in general and the advantages of consolidation 

funds in particular, see the ESEA non-regulatory guidance on schoolwide programs, available at 

https://www2.ed.gov/policy/elsec/leg/essa/essaswpguidance9192016.pdf.

H. Funding Transferability for Districts (ESEA section 5103(b))

For information on the transferability provisions, please see section I.G., which covers 

transferability for both States and districts.

I. Waivers (ESEA section 8401)

Districts may apply for waivers of Federal ESEA program requirements by applying through 

their State. (ESEA section 8401(b)(3)(B)). For information on the waiver authority generally, 

please see section I.J, which discusses waivers for both States and districts. 

J. SRSA Alternative Uses of Funds (ESEA section 5211)

Districts eligible for the Small, Rural School Achievement (SRSA) program under Title V, Part 

B of the ESEA (ESEA section 5211(b)) have considerable flexibility in using the formula grant 

funds they receive under certain State-administered ESEA programs. This flexibility, referred to 

as the Alternative Fund Use Authority (AFUA), allows eligible districts to use the formula funds 

they receive under Title II, Part A and Title IV, Part A for any activities authorized under Title I, 

Part A; Title II, Part A; Title III; or Title IV, Parts A or B. Before exercising AFUA, section 

5211(a)(2) of the ESEA requires an eligible district to annually notify its State of its intent to do 

so by the notification deadline established by the State.

Appendix A compares the AFUA and transferability authorities for districts eligible for either 

SRSA or the Rural and Low-Income School (RLIS) program, the other formula grant program 

under Title V, Part B of the ESEA, the Rural Education Achievement Program (REAP).
16

Appendix A: AFUA and Transferability Guidelines for REAP Districts 

Districts eligible for SRSA have great flexibility in using the formula grant funds they receive under certain State-administered 

Federal programs. This flexibility, referred to as AFUA, is similar to the flexibility available to all districts—not just SRSA-eligible 

districts— under the transferability provisions at section 5103(b) of the ESEA. Under the transferability authority, all districts have the 

authority to transfer funds from certain ESEA formula programs to others. Unlike AFUA, however, districts exercising their 

transferability authority actually transfer the funds from one program’s allocation into another program’s allocation, and those funds

become funds of the program to which they are transferred and are subject to all of the rules and requirements of that program.

The chart below compares the AFUA and transferability authorities for districts eligible for either SRSA or RLIS. Please note that 

while the information in the transferability column is correct as applied to all districts, not just REAP-eligible districts, the information 

provided is tailored for REAP grantees. Also note that this chart discusses the transferability authority available to districts, not the 

transferability authority available to States, which is discussed above in sections I and G. 

AFUA Transferability

1. Summary Eligible districts are given flexibility in the use of 

certain Federal formula funds; funds are not 

actually transferred from one program to another. 

While the eligible funding may be used for local 

activities authorized under other ESEA programs, it 

is not subject to all of the rules and requirements of 

those programs.

Districts may transfer all or a portion of the funds they 

receive by formula under certain programs to other 

programs to better address local needs. When a district

transfers funds, those funds become funds of the program 

to which they are transferred and are subject to the rules 

and requirements of the program.

2. Which

districts can

exercise this

authority?

Districts eligible for SRSA. Only districts eligible 

for the SRSA program may exercise AFUA. This 

does not mean that the district must receive an 

SRSA grant award, but only that the district must 

meet the statutory eligibility criteria for the SRSA 

program. For example, a district that is eligible for 

an SRSA award but receives a $0 allocation may 

exercise AFUA. For more information about SRSA 

eligibility, see the SRSA program website: 

www2.ed.gov/programs/reapsrsa/eligibility.html. 

All districts. All districts, including both SRSA- and 

RLIS-eligible districts, as well as districts that are not 

eligible for REAP, may exercise transferability. However, 

a district may only transfer eligible funds into a program 

for which that district receives an allocation in a particular 

fiscal year. This means that only districts that receive 

REAP funds—either SRSA or RLIS— may transfer funds 

into their REAP allocation in a particular fiscal year.
17

However, districts that are eligible for SRSA Hold 

Harmless awards under section 5212(b)(4) of the 

ESEA may not exercise AFUA.

3. Which funds 

are eligible for 

this 

flexibility?

Title II, Part A and Title IV, Part A. Eligible 

districts may use some or all of their formula Title 

II-A and IV-A funds for activities authorized under 

certain other Federal programs (see Question 4). 

Please note that in order to receive its funds under 

Titles II-A or IV-A, a district must meet the 

relevant application and eligibility requirements, 

regardless of whether it intends to use the funds for 

alternative uses under AFUA.

Title II, Part A and Title IV, Part A. All districts may 

choose to transfer their formula Title II-A or IV-A funds 

into their allocations under certain other Federal programs 

(see Question 4). Please note that in order to receive its 

funds under one of these programs, a district must meet 

the relevant application and eligibility requirements, 

regardless of whether it intends to transfer those funds to 

other program allocations. 

4. How may 

districts 

exercising this 

flexibility 

spend the 

eligible funds? 

On local activities authorized under eligible ESEA 

programs. An eligible district may spend some or 

all of its formula Title II-A or IV-A funds on local 

activities authorized under one or more of these 

ESEA programs:

 Part A of Title I

 Part A of Title II

 Title III

 Parts A or B of Title IV

While Title II, Part A or Title IV, Part A funds may 

be used for local activities authorized under these 

programs, those funds are not subject to all of the 

rules and requirements of these programs. For 

example, these funds would not be subject to the 

set-aside requirements of those programs, such as 

the requirement that a district receiving $30,000 or 

more of Title IV-A funds use not less than 20% to 

support well-rounded education; 20% to support 

safe and healthy students; and a portion to support 

the effective use of technology (ESEA section 

4106(e)(2)(C)-(E)). 

Under eligible ESEA programs into which the district has 

transferred funds. A district may transfer some or all of its 

formula Title II-A or IV-A funds into its allocation under 

one or more of these ESEA programs:

 Parts A, C, or D of Title I

 Part A of Title II

 Part A of Title III

 Part A of Title IV

 Part B of Title V

When a district transfers funds, those funds become funds 

of the program to which they are transferred and are 

subject to all of the rules and requirements of that 

program. For example, a district that receives RLIS funds 

could transfer all of its Title II-A funds into its Title V-B 

allocation. Those funds would then be considered RLIS 

funds and would be subject to the rules and requirements 

of the RLIS program. For more information about RLIS 

allowable activities, see

https://www2.ed.gov/programs/reaprlisp/index.html

A district must receive an allocation in a particular fiscal 
18

Additionally, a district does not have to receive 

funds under one of these programs in order to 

spend its Title II-A or IV-A funds on an allowable 

local activity under this program. For example, a

district exercising AFUA that does not receive 

funds under Part A of Title I may nonetheless use 

its formula Title II-A or IV-A funds for Title I 

activities.

year in order to transfer its Title II-A or IV-A funds for 

that fiscal year into that program. For example, only 

districts that receive REAP funds (Title V, Part B) may 

transfer funds into an SRSA or RLIS allocation.

5. What rules 

apply to the 

funds?

Eligible funds are not subject to all rules and 

requirements of the programs that authorize the 

activities for which funds are spent. If a district

exercises AFUA with respect to its Titles II-A or 

IV-A funds, those funds may be spent on local 

activities authorized under the programs listed in 

Question 4, but those funds are not subject to all of 

the rules and requirements of those programs. See 

Question 4 for more information and examples. 

This means, for example, that an eligible district

exercising AFUA with respect to its formula Title 

IV-A funds may use those funds for any allowable 

activity under Title IV-A; it does not need to meet 

the requirements under Title IV-A that certain 

percentages of Title IV-A funds be spent on 

specific types of activities.

When completing financial reports, a district

should report its Titles II-A and IV-A funds as 

expenditures under those programs, even if it 

exercises AFUA to spend those funds on

authorized activities under other programs listed 

under Question 4.

Rules and requirements of programs into which funds are 

transferred apply. The rules and requirements of the 

programs into which funds are transferred apply to the 

transferred funds. See Question 4 for more information 

and examples.

When completing financial reports, a district should report 

any transferred funds as expenditures under the programs 

to which funds are transferred.
19

6. Does a district

need to 

receive funds 

under a given 

program in 

order to spend 

eligible funds 

under that 

program?

No. An eligible district does not have to receive 

funds under one of these programs in order to 

spend its Title II-A or IV-A funds on an allowable 

local activity under this program. For example, a

district exercising AFUA that does not receive 

funds under Part A of Title I may nonetheless use 

its formula Title II-A or IV-A funds for Title I-A 

activities.

Yes. A district must receive an allocation in a particular 

fiscal year in order to transfer its Title II-A or IV-A funds 

into that program. For example, only districts that receive 

REAP funds (Title V, Part B) in a particular fiscal year 

may transfer funds into an SRSA or RLIS allocation in 

that fiscal year.

7. What are a

districts 

responsibilitie

s for 

providing 

equitable 

services under 

this 

authority?

Districts must provide equitable services relative to 

Titles II-A and IV-A funds. Participation in AFUA 

does not relieve a district of its responsibility to 

provide for equitable services for private school 

students and teachers relative to its Title II-A and 

IV-A funds. A district participating in AFUA with 

its Title II-A and/or IV-A funds must reserve for 

the benefit of private school students and teachers 

the proportion of its Title II-A and IV-A funds that 

is equal to the expenditures (including those under 

AFUA authority) for the public school program, 

taking into account the number and educational 

needs of the children to be served. 

After timely and meaningful consultation with 

private school officials (see ESEA section 8501(c)), 

a district exercising AFUA determines how the 

reserved funds will be expended for the benefit of 

private school students and teachers. A district may 

exercise AFUA with the respect to the reserved 

funds to use those funds on local activities under 

the ESEA programs listed in Question 4 for the 

benefit of private school students and teachers. 

Districts must provide equitable services based on funds 

remaining after transfer. A district must provide private 

school students and teachers equitable services under the 

program(s) to which, and from which, the funds are 

transferred based on the total amount of funds available to 

each program after the transfer. A district may not reserve 

Title II-A or IV-A funds solely to provide equitable 

services. 

Please note that a district must engage in timely and 

meaningful consultation with appropriate private school 

officials before transferring funds (ESEA section 

5103(e)(2)). Per the Title VIII Uniform Provisions (ESEA 

section 8501) governing the equitable services 

requirements of Title II-A and Title IV-A, the goal of 

consultation is agreement and the district must give due 

consideration to the views of private school 

representatives. For more information about programs 

subject to the equitable services requirements, please see

Fiscal Changes and Equitable Services Requirements 

under the ESEA, as amended by ESSA (issued 2016, 

section V on Equitable Services) [available at 

https://www2.ed.gov/policy/elsec/leg/essa/essaguidance1604

77.pdf] and Title IX, Part E Uniform Provisions, Subpart 1 
20

Funds for private school students and teachers need 

not be expended under the same programs as funds 

for public school students and teachers and should 

serve to meet the needs of the private school 

students and teachers. For example, a district

exercising AFUA may use its Titles II-A and IV-A 

funds for school improvement activities for public 

schools under Title I-A, but use the Title II-A and 

IV-A funds reserved for the benefit of private 

schools for professional development for private 

school teachers under Title II-A. 

For more information about equitable services, 

please see the guidance documents Fiscal Changes 

and Equitable Services Requirements under the 

ESEA, as amended by ESSA (issued 2016, section 

V on Equitable Services) [available at 

https://www2.ed.gov/policy/elsec/leg/essa/essaguid

ance160477.pdf] and Title IX, Part E Uniform 

Provisions, Subpart 1 – Private Schools (revised 

2009) [available at 

http://www2.ed.gov/policy/elsec/guid/equitableserg

uidance.doc].

– Private Schools (revised 2009) [available at 

http://www2.ed.gov/policy/elsec/guid/equitableserguidanc

e.doc]

8. May districts 

exercise this 

flexibility with 

respect to

their Title IVA funds 

received 

through a 

competition? 

It depends. If an SRSA-eligible district that 

receives a competitive Title IV-A subgrant

exercises AFUA with respect to its Title IV-A 

funds, it must continue to carry out the scope and 

objectives, at a minimum, at the level described in 

the district’s approved application under Title IVA. When possible, in applying for Title IV-A 

competitive grant funds, an SRSA-eligible district 

would indicate in its application that it intends to 

exercise AFUA with respect to some of its Title 

No. A district that receives a competitive Title IV-A 

subgrant may not transfer funds into or out of that award. 

Section 5103(b) of the ESEA applies only to funds 

received through a formula allocation, not to funds 

awarded competitively. 

For more information about Title IV-A subgrants received 

through a competition, please see additional information at 

https://safesupportivelearning.ed.gov/sites/default

/files/Subgranting_FY_2017_Title_IV_A_LEAs_QA.pdf.
21

IV-A funds. If the SRSA-eligible district is able to 

carry out the scope and objectives of its approved 

Title IV-A application, it may be able to exercise 

AFUA with respect to some of its Title IV-A funds.

The Department encourages districts to contact to 

their States if they have questions about the effect 

of AFUA with respect to their Title IV-A 

competitive subgrants. 

For more information about Title IV-A subgrants 

received through a competition, please see 

additional information at 

https://safesupportivelearning.ed.gov/sites/default

/files/Subgranting_FY_2017_Title_IV_A_LEAs_Q

A.pdf.

9. What steps 

does an 

eligible 

district need 

to take to 

exercise this 

flexibility?

Notify State. An SRSA-eligible districts may 

exercise AFUA without the approval of either its 

State or the Department. However, before 

exercising AFUA, an eligible district must annually 

notify its State of its intent to do so by the 

notification deadline established by the State. 

Notify State and modify and submit local applications. 

Before transferring funds, a district must conduct timely 

and meaningful consultation with appropriate private 

school officials (see Question 7), modify each affected 

local plan or application to reflect the transfer, notify its 

State of the transfer at least 30 days before the transfer’s 

effective date, and submit the modified local plan or 

application to its State within 30 days of the transfer. See 

ESEA section 5103(d)(2).

For more information, please see the guidance document 

Fiscal Changes and Equitable Services Requirements 

under the ESEA, as amended by ESSA (issued 2016, 

section VI on Transferability) [available at 

https://www2.ed.gov/policy/elsec/leg/essa/essaguidance16

0477.pdf].