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### Flexibility Under No Child Left Behind

The reauthorization of the *Elementary and Secondary Education Act (ESEA)* as  amended by the *No Child Left Behind Act of 2001 (NCLB)* relied on two notable  policy instruments to improve education: accountability and flexibility. Accountability  is perhaps the most recognized and discussed feature of the legislation. As  a strategy for improving education, it calls for establishing challenging standards  of performance, developing rigorous and scientifically based systems for monitoring  progress toward attaining these standards, and introducing meaningful consequences  for schools that consistently fail to make satisfactory progress. NCLB not  only maintains but also strengthens federal commitments to this approach as  an important driver of reform.

However, NCLB complements this increased accountability with several new flexibility  provisions. In other words, it exchanges greater accountability for results  with greater levels of flexibility in how states and school districts can use  federal education funds. The intent is to reduce federal red tape and put greater  decision-making powers at the local and state levels for educators most in  touch with students’ needs. Some of the flexibility options authorized  under the law are continuing provisions while others are new.

- State Flex and Local Flex.  New demonstration programs that allow  states and school districts the opportunity to consolidate funding from a set  of eligible federal programs.
-  Transferability.  A broad provision that allows states and districts to transfer  a portion of funds among a set of eligible federal programs.
-  Waivers and Ed Flex.  Expanded authority for the secretary and approved “Ed  Flex” states to grant waivers of certain requirements.  1
-  Consolidation.  Authority to consolidate administrative funds and submit consolidated  applications.
-  Rural Education Achievement Program (REAP Flex).  Allows eligible small rural  school districts the opportunity to use funding from certain federal sources  for other federal program purposes.
-  Title I Schoolwide Programs.  Expanded authority for high-poverty schools to  integrate Title I with other funds to support comprehensive school improvement  efforts. 

This study examines three of these flexibility programs—Transferability,  REAP Flex, and the Local Flexibility Demonstration Program (Local Flex)—through  nationally representative surveys and case studies of districts. This Executive  Summary provides a brief overview of the three programs and then summarizes  and compares the key results across the three flexibility programs. Volumes  II, III, and IV of this report provide more detailed information on each of  these flexibility programs.

### Descriptions of Studied Flexibility Programs

**Transferability** is the most widely accessible form of flexibility among the  three programs. There is no application process that might discourage potential  users. Eligibility is automatic for all districts nationwide and only consistent  failures to make adequate yearly progress (AYP) can impact participation in  the program. Transferability allows public school districts to transfer up  to 50 percent of initial formula allocations into and out of the following  federal education programs: 

- Title II, Part A (Improving Teacher Quality State Grants)
- Title II, Part D (Educational Technology State Grants)
- Title IV, Part A (Safe and Drug-Free Schools and Communities State Grants)
- Title V, Part A (State Grants for Innovative Programs). 2

In addition, money may be moved into, but not out of, Title I, Part A (Improving  the Achievement of Disadvantaged Children). Transferred funds are subject to  the rules and guidelines (including set-asides) of the programs to which they  have been redirected. Districts that do not make AYP risk limiting or losing  their Transferability authority. For example, districts designated for improvement  after failing to make AYP for two consecutive years are limited to transferring  only 30 percent of formula funds and they must also use these funds to support  district improvement efforts. Those designated for corrective action after  missing AYP targets for four years may not exercise Transferability.

While there are limitations on the use of Transferability authority, participation  is relatively simple. Districts simply need to notify their state education  agencies 30 days in advance of their decision to transfer funds with a detailed  plan of the amounts, the programs involved and the dates of intended transfer. 

**REAP Flex** targets small, rural school districts. These districts may have  a particular need for flexibility, because the amount of formula-based program  funds these districts receive from individual federal programs may be individually  too small to support significant school improvements. Districts participating  in REAP Flex may use up to 100 percent of the applicable formula funds (Title  II, Part A—Improving Teacher Quality State Grants; Title II, Part D—Educational  Technology State Grants; Title IV, Part A—Safe and Drug-Free Schools  and Communities; and Title V, Part A—State Grants for Innovative Programs)  for activities authorized under one or more the programs listed below. In addition,  there are no “set-asides” or limits on how much money may be utilized  from eligible program funds. Unlike Local Flex, however, there is no application  process for districts that wish to participate in the program. The only requirement  is that eligible rural districts notify states of their intent to exercise  the REAP Flex authority by a state-established deadline. Under this provision,  money can be utilized for activities under the following programs:

- Title I, Part A (Improving Achievement for Disadvantaged Children)
- Title II, Part A (Improving Teacher Quality State Grants)
- Title II, Part D (Educational Technology State Grants)
- Title III (Language Instruction for Limited English Proficient and Immigrant Students)
- Title IV, Part A (Safe and Drug-Free Schools and Communities)
- Title IV, Part B (21st-Century Community Learning Centers)
- Title V, Part A (State Grants for Innovative Programs).

One particular goal of REAP Flex is to support activities that help participants  reach AYP. After three years of participating in REAP, a district may continue  to exercise the full REAP Flex authority only if it is making AYP. Those districts  falling short of state AYP goals may continue to use REAP Flex to the extent  that the “applicable funding”—program funds eligible for  use with other programs—is used for improvement activities authorized  under Section 1116.

**The Local Flexibility Demonstration Program (Local Flex)** is a competitive program    that grants a selected group of participating districts enhanced flexibility    authority to consolidate their formula allocations under the following four    programs:

- Title II, Part A (Improving Teacher Quality State Grants) 
- Title II, Part D (Educational Technology State Grants)
- Title IV, Part A (Safe and Drug-Free Schools and Communities State Grants)
- Title V, Part A (State Grants for Innovative Programs).

Local Flex permits participating districts to use the consolidated funds from  four eligible federal programs and to use those funds for any educational purpose  authorized under the ESEA. The flexibility associated with Local Flex applies  to funds for public schools and funds for services to nonpublic school students  and teachers in participating districts. Central to Local Flex is the creation  of formal five-year educational improvement plans that include the identification  of needs and the development of strategies to address these needs. Districts  must develop a clear linkage between exercising flexibility authority and carefully  defined local and state educational priorities. Districts must submit an annual  performance report for each year of the Local Flex implementation. In addition,  if the district fails to make AYP for two consecutive years, the Department  must terminate the Local Flex agreement.

###   Comparison of Flex Program Use

***Key Finding: REAP Flex is widely used by eligible rural districts, but districts  were less likely to participate in Transferability, and only one district opted  to participate in Local Flex.***

During the 2005–06 school year, 4,781 districts nationwide were eligible  to exercise REAP Flex, and just over half (51 percent) of districts surveyed  reported participating. In contrast, only about 16 percent of districts nationwide  used the Transferability option, based on district reports. 3 State lists of  Transferability participants indicate a slightly lower usage rate (12 percent).

The above participation rates for Transferability are based on all districts  nationwide, because all districts are eligible to use this form of flexibility.  In theory, districts that are eligible for REAP Flex might be expected to universally  prefer that form of flexibility rather than Transferability, because REAP Flex  is somewhat broader and allows districts greater flexibility in the uses of  federal program funds. Therefore, it might be argued that Transferability participation  rates should be calculated just for districts that are not eligible for REAP  Flex. However, the survey results indicate that there was not a significant  difference between REAP Flex eligible districts and noneligible districts in  their usage of Transferability. Among districts who are not eligible for REAP  Flex, the participation rate in Transferability based on district reports was  17 percent. Again, state list of Transferability participants indicate a slightly  lower usage rate among these districts (11 percent).

Although the Department is authorized to grant Local Flex authority to up  to 80 local education agencies, only one—Seattle Public Schools (SPS)—submitted  a full application and is participating in the Local Flex program. Thus, SPS  was the subject of the Local Flex case study. In addition, the statute authorized  up to seven states to receive State Flex authority. Florida initially applied  for and was approved to participate in State Flex, but withdrew from the demonstration  program before it had begun to implement the activities under its State Flex  plan. 

***Key Finding: Transferability and REAP Flex participants most commonly used  this flexibility to provide additional funds for programs and services authorized  under Title I, Part A, and Title V, Part A, by using funds originally allocated  for Title II, Part A, and Title IV, Part A.***

Transferability participants were most likely to transfer funds to Title V,  Part A (46 percent of participating districts), and a smaller number transferred  funds to Title I, Part A (22 percent). Similarly, REAP Flex participants most  commonly used that flexibility to support activities under Title I, Part A  (34 percent), and Title V, Part A (28 percent).

Transferability participants were most likely to transfer funds from Title  II, Part A (70 percent), and Title IV, Part A (55 percent), but a sizable minority  transferred funds from Title II, Part D (35 percent), and Title V, Part A (32  percent). Among REAP Flex participants, the funds that districts most frequently  used for other program purposes were Title II, Part A (58 percent), and Title  IV, Part A, funds (58 percent); as with Transferability, a sizable minority  also used funds from Title II, Part D (43 percent), and Title V, Part A (36  percent), for other program purposes.

**Exhibit 1  Uses of Funds Under Transferability and REAP Flex, 2005-06**

  Exhibit reads: Twenty-two percent of districts participating in Transferability  reported using this flexibility to transfer funds to Title I, Part A, and 70  percent reported that they transferred funds from Title II, Part A.  Source: Transferability Authority District Administrator Survey #18, REAP Flex  Authority District Administrator Survey #21.

***Key Finding: Eligible districts most commonly relied on their state for information  or technical assistance about Transferability and REAP Flex.***

More than two-thirds of Transferability and REAP Flex eligible districts indicated  that information or technical assistance from the state was a very useful or  somewhat useful source of information about flexibility programs. Other sources  that districts reported were useful included workshops or information sessions,  U.S. Department of Education Web site or publications, and regional technical  assistance providers (see Exhibit 2). 

**Exhibit 2  Percentage of Districts Reporting That Sources of Information About Transferability  and REAP Flex Were Very Useful or Somewhat Useful, 2005-06**

  Exhibit reads: Sixty-nine percent of districts reported that information or  technical assistance provided by the state was very useful or somewhat useful.  Source: Transferability Authority District Administrator Survey #4, REAP Flex  Authority District Administrator Survey #4.

**Reasons Why Districts Participate in Flexibility Programs**

***Key Finding: Districts that chose to participate in the three flexibility  programs did so in order to focus funds on achieving their goals of making  AYP by targeting particular areas of need. Rural districts found flexibility  particularly useful because of the small allocations for individual programs  and funding constraints associated with declining enrollments.***

Transferability participants reported that their primary reason for using  the program was a desire for greater flexibility in the use of federal funds.  More specifically, district representatives identified mismatches between federal  funding and district priorities, decreasing levels of federal funding, and  a higher degree of flexibility associated with particular programs as driving  forces in the decision to use Transferability. Generally, districts reported  that money transferred under Transferability was used for initiatives aimed  at helping schools make AYP. Specifically, the most common goals associated  with transferred funds were improved teacher quality, an increased focus on  Title I students, technology, math, and literacy. 

REAP Flex participants reported similar reasons for using flexibility provisions  as Transferability participants, with a focus on using flexibility to provide  more resources to activities aimed at making AYP. REAP Flex was most often  used to target low-performing student subgroups and raise reading and math  achievement via improvements in technology and teacher quality. District administrators  also chose to implement REAP Flex as a means of increasing the effectiveness  of priority programs and maintaining a stable level of effort for on-going  activities threatened by budget constraints. Rural districts found flexibility  particularly useful, as often the amount of formula-based funds they received  within a particular federal program was insufficient to support significant  school improvement efforts. Many rural districts are experiencing declining  enrollments resulting in reductions in federal program allocations, making  REAP Flex even more essential to rural districts, and high participation rates  reflect rural districts' need and enthusiasm for the program. 

In the case of Local Flex, participating in the program created new possibilities  for effectively reaching the district's goals and allowing Seattle Public  Schools to think strategically about student needs through the methods articulated  in its five-year plan. In its plan, SPS has chosen to focus on five major themes  to better target federal funds and meet student needs through planning and  accountability measures, tracking student progress, and employing new initiatives.  While Seattle Public Schools initial Local Flex agreement ended after it failed  to make AYP for two consecutive years, the Department has provisionally approved  a new agreement that Seattle Public Schools recently submitted. Seattle is  making modifications to that agreement, and a peer review panel will be reviewing  the modified agreement. Local Flex has changed the way the district focused  on strategic planning, helped to deploy resources to the schools and students  most in need through expanded programs, and encouraged greater collaboration  within the district office and with public and private schools.

### Reasons Why Districts Do Not Participate in Flexibility Programs

***Key Finding: Lack of information and districts’ inability to distinguish  clear benefits from the flexibility programs were the two main reasons districts  reported for not using flexibility provisions. In the case of Local Flex, the  application requirements further discouraged participation.***

### Barriers to Participation in Transferability and REAP Flex

Evaluations of Transferability and REAP Flex revealed two main factors that  limited participation in the programs. First, as with Local Flex, lack of information  was a central reason that districts did not utilize Transferability and REAP  Flex. Second, there was a perception by many district officials that there  were not clear benefits from the flexibility programs and that they already  possessed adequate flexibility in their use of federal funds. 

**Information about Transferability and REAP Flex.** Over one-third of districts  not participating in the Transferability cited insufficient information as  a factor in their choice not to use the flexibility provision. In general,  there appeared to be an information gap between Transferability participants  and nonparticipants. For example, 86 percent of Transferability participants  recalled obtaining information from the state, yet only 57 percent of nonparticipants  received information or recalled receiving information from the state. The  state appeared to be the most important source of information about the program  with nearly 70 percent of districts reporting the information to be useful.  In addition, in states that appeared to be particularly active in providing  information about the program, a much higher percentage of districts participated  in the program. 

There were similar results related to information about the REAP Flex program.  As with Transferability, over a third of nonparticipants cited insufficient  information about REAP Flex as a reason for not participating in the program.  There were also similar information gaps with participants receiving information  about the program at much higher levels. The state was also the most important  source of information about REAP Flex and about three-quarters of districts  reported that information from the state was useful. Furthermore, 28 percent  of nonparticipating districts did not consult any source of information about  REAP Flex, which may also have contributed to not participating in the program.

There also appeared to be some confusion about the different flexibility provisions,  which may contribute to limited participation, as districts are unable to identify  particular provisions and related benefits. States did not always have accurate  information about the districts using Transferability, even though districts  are required to inform the state about their use of the provision. Districts' Transferability  use status may not have corresponded with state lists because districts did  not realize they were using a different flexibility program (some districts  that thought they were using Transferability were actually using REAP Flex),  did not know they needed to notify the state, or because districts knowingly  chose not to notify the state. Also, states may not have asked for this information  or kept accurate and up-to-date lists. Districts that participated in REAP  Flex often exhibited a misunderstanding about what REAP Flex entails. The most  common mistake was confusion related to the names of the program (differentiating  among REAP, REAP Flex, and the Small Rural School Achievement Program). Districts  often did not know what the different flexibility provisions were, how they  could use them, or even whether they were currently using a particular provision  (e.g., Transferability vs. REAP Flex).

**Benefits of Transferability and REAP Flex.** About 40 percent of school districts  that did not participate in Transferability and REAP Flex identified satisfaction  with current levels of flexibility as a major factor in the decision to not  to use Transferability. These districts indicated that they could carry out  priority programs without additional flexibility. In addition, 35 percent districts  reported the amount of funds in applicable categories would have been individually  too small to carry out desired activities effectively even after exercising  Transferability. Just under a quarter of REAP Flex nonparticipants indicated  that this was a major reason for not participating. Thus, some districts made  a conscious decision not to participate in Transferability or REAP Flex because  they did not see clear benefits from participation.

###   Barriers to Participation in Local-Flex

The U.S. Department of Education commissioned the Urban Institute in 2003  to conduct a series of interviews to examine the low application rates for  both the Local Flex and State Flex demonstration programs. That study identified  three main factors that led to the low participation rates in Local Flex (and  State Flex) competitions. 

**Competing Priorities and Organizational Capacity.** The combination of higher  priorities and limited organizational capacity limited interest in the State  and Local Flex programs. State and local education agencies viewed the implementation  of other No Child Left Behind provisions, particularly those related to accountability,  as a higher priority than exploring the possibilities of the State Flex and  Local Flex programs. Thinly stretched organizational resources and agency staff  also made agencies less likely to pursue discretionary opportunities, unless  they were viewed as particularly attractive. 

**Benefits and Costs of Local Flex.** District administrators generally agreed  that greater flexibility in the administration of federal funds would be beneficial.  Few respondents, however, could provide specific examples of how the demonstration  programs could uniquely help them to achieve their educational goals. In short,  many administrators saw no clear benefits in implementing State or Local Flex.  As the implementation of the provisions would involve additional costs and  responsibilities (e.g., a time-intensive application process, new accounting  procedures, and new expenses related to administering the program), a rough  cost-benefit analysis led some administrators to decide that participating  in the demonstrations was not worthwhile, especially since these programs provided  no additional funds. 

**Information About the Local Flex Programs.** Administrators at the state and  district level often displayed only a modest familiarity with the program provisions.  While all administrators were familiar with ESEA-related flexibility in general,  few had detailed knowledge of the nuances of the Local Flex provisions or what  distinguished them from the Transferability authority. This knowledge gap is  partially attributable to the distance between information sources and the  administrators charged with examining and applying for the programs; state-level  administrators were more familiar with State Flex than their district-level  counterparts were with Local Flex. Unable to distinguish State or Local Flex  provisions from other flexibility options, many officials chose not to pursue  the program.

### Increasing Participation in Flexibility Programs

***Key finding: Ensuring districts have accurate information and can distinguish  among the different programs would enable districts to make an informed decision  about whether or not participating in a flexibility program would be beneficial  and would likely increase participation rates.***

Providing more information to eligible non-participating districts about flexibility  programs would likely increase participation in all three of the studied flexibility  provisions. It would be especially beneficial for participation in Transferability  and REAP Flex. Clarifying the names, scope, and benefits of the programs would  reduce confusion and allow districts to better understand the requirements  and benefits of the new flexibility provisions. Case studies of Transferability  and REAP Flex nonparticipants indicated that if district officials had known  about the program or had more information about the benefits of the program,  they would have been more likely to participate.

The state is likely the single most important source of information about  these programs. Districts using Transferability noted that the state provided  information about both the uses and requirements of the program. For REAP Flex,  districts noted that the state provided them with information about both the  uses and restrictions associated with REAP Flex funds, including potential  restrictions related to AYP or LEA improvement status. State employees also  provided more than technical guidance—one district did not even know  REAP Flex existed until a state supervisor brought it to the district’s  attention. While it may be difficult to reach rural or smaller districts, the  findings indicated the importance of state efforts to disseminate information.  While there are clearly a large minority of nonparticipant districts that reported  having adequate flexibility, providing accurate information would allow more  districts to make an informed decision about participation and would likely  increase participation rates as inadequate information appeared to be a significant  obstacle to participation.

While increasing the quality and availability about information would likely  increase participation without making changes to the programs, the evaluation  findings also indicated that some specific changes to Transferability and REAP  Flex would also increase interest in the use of the program. A large majority  of districts reported that they would be more likely to take advantage of Transferability  if the transferred funds were not restricted by the rules and regulations of  the receiving programs. Increasing the proportion of funds that could be transferred  from eligible programs would also enhance interest in the program, as would  reducing the amount of accounting requirements or increasing assistance for  maintaining necessary records. These types of changes could also potentially  lead to greater participation in Transferability. Similar changes would increase  the interest of REAP Flex eligible districts including relaxing accounting  requirements and increasing the number of federal programs where applicable  funds could be used. 

### Conclusions

Overall, participants in flexibility programs had positive reports of their  experiences. Transferability participants generally found the program useful,  although some district officials would like to see fewer programmatic requirements.  REAP Flex participants reported a very high level of satisfaction with the  program in meeting the specific needs of rural districts. Once districts used  REAP Flex they continued to participate year after year. While this study does  not examine the impact of the flexibility options on student achievement, district  participants generally reported being pleased with the flexibility program  they use and the opportunities it has provided the district. The largest barrier  to use of the Flexibility programs did not appear to be the programs themselves  but rather insufficient information about the flexibility provisions. 

Notes

1 The Ed Flex program is authorized under the Education Flexibility Partnership Act of 1999.  The No Child Left Behind Act updated the list of federal programs subject to Ed Flex authority, although it did not alter the provisions that specify eligibility requirements for Ed Flex.  

2  State education agencies may exercise Transferability authority as well, but the discussion here and the larger evaluation of the program consider only district use of the program.

3The standard error on the estimate for the rate of Transferability participation from the survey results was large, because there were a small number of districts that were not on the state lists but reported using Transferability and these districts ended up representing a large number of districts nationally. Weighted results from district surveys suggested that Transferability participation ranges between 12 percent and 21 percent of districts nationwide.

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