Goals 2000: Flexible Funding Supports State and Local Education Reform
Released: 1998-11-16T00:00:00

Letter

Background

The Goals 2000: Educate America Act, which became law in 1994 and was amended in 1996, is intended to promote coordinated improvements in the nation’s education system at the state and local levels. All states and the District of Columbia, Puerto Rico, and the U.S. Territories are currently participating in the program.

Goals 2000 funds aim to support state efforts to develop clear standards for and comprehensive planning of school efforts to improve student achievement. Funds are provided through title III of the act and are to be used at the state and local levels to initiate, support, and sustain coordinated school reform activities. (See app. II for a listing of allocations.) States can retain up to 10 percent of the funds received each year, and the remainder is to be distributed to districts through a subgrant program. States have up to 27 months to obligate funds; after this time, unobligated funds must be returned to the federal government.

Goals 2000 requires states to award subgrants competitively. To comply with this component of the law, states’ subgrant programs require districts to compete directly against one another for funding or compete against a standard set of criteria established by the state to determine levels of funding for individual applicants. Some states weigh districts’ subgrant proposals against one another and against standard criteria.

Prior to the 1996 amendments, Goals 2000 was criticized as being too directive and intrusive in state and local education activities. The act initially required that states submit their education reform plans to the Secretary of Education for review and approval before they could become eligible for grants. The Omnibus Consolidated Rescissions and Appropriations Act of 1996 amended the law by providing an alternative grant application process that did not include the Secretary of Education’s approval of a state’s education reform plan and eliminated some requirements for state reporting of information to the Department of Education. The amendment also allowed local districts in certain states to apply directly to the Department for Goals 2000 funds, even if their state did not participate at the state level.

As a result of the 1996 changes, the Goals 2000 program is essentially a funding-stream grant program with fiscal objectives. These types of grants differ from performance-related grants, which have more immediate, concrete, and readily measurable objectives. Funding-stream grant programs often confine the federal role to providing funds and give broad discretion to the grantee. They are also the least likely of various grant types to have performance information. Goals 2000 does not have specific performance requirements and objectives, and the Department of Education has issued no regulations specifically related to performance by states and districts concerning their activities under Goals 2000. Rather, the Department of Education provides states the latitude to merge Goals 2000 funds with other funds from state and local sources to support state and local reform activities. However, the Department has identified objectives in its annual performance plan that it expects to achieve as a result of this program, along with other education programs.

Goals 2000 Funds Support a Broad Range of Education Reform Efforts at the State and Local Levels

Goals 2000 funds, totaling about $1.25 billion for fiscal years 1994 through 1997, have supported a broad range of education reform activities at both the state and local levels. Of this amount, states reported that about $109 million (9 percent) was retained at the state level where it was used for management, development of statewide standards, and other related purposes. The remaining funding was provided in the form of subgrants to local districts, consortia of districts, individual schools, and teachers. State program officials reported that subgrants supported a broad array of district efforts to promote education reform activities and keep up with new state standards and assessments. These efforts included developing district and school reform plans, aligning local curricula with new assessments, and promoting professional development activities for teachers. Subgrants, with few exceptions, were not used to support health-related activities. (See app. IV for additional information on state subgrants.)

State-Retained Funds Helped Manage Subgrant Awards and Fund Special Projects

As permitted by the act, most states retained a portion of their total Goals 2000 funds at the state level and used it primarily to manage the subgrant program and support state-level activities. (See app. III for state-retained funds by cateogry and fiscal year.) Many states retained less than the maximum amount permitted, and a few states retained almost no funds at all. In some instances, state-retained funds were combined with subgrants to support local initiatives. In the 4-year period that we reviewed, states were able to provide detail on how $62 million in state-retained funds have been used. Of this amount, states primarily used Goals 2000 funds for personnel and benefits and contract services and consultants. (See fig. 1.) Funds were also used for training and travel; printing and postage; equipment and supplies; and rent, telephone, overhead, and other costs not classified elsewhere.

The largest category of state-retained funds where detail was available was for funds reported as used for personnel and benefit costs (44 percent). These expenditures typically involved salaries and benefits for state-level staff who managed the state’s subgrant program and other state-sponsored education reform activities. Generally, these personnel were responsible for disseminating information on the Goals 2000 program, providing technical expertise to districts regarding grant requirements, assisting district personnel with proposal writing, reviewing districts’ subgrant proposals, and managing the subgrant selection process. These staff also typically monitored subgrantees’ expenditures and reviewed reports that subgrantees submitted regarding their projects.

The remaining state-retained funds where detail was reported were used for contract services, training and travel, printing and postage, equipment and supplies, and other activities. Contract services and consultant fees constituted about 28 percent of state-retained funds. These expenditures were often associated with state efforts to create new standards and assessments, develop new curricula in alignment with the standards, and use outside experts to research and develop these measures. Travel, training, and conference costs, accounting for about 9 percent of total expenditures, typically supported state Goals 2000 panel activities and training for teachers and administrators. These funds were also used to support state conferences designed to educate district and school officials about Goals 2000 and allow them to share information and collaborate on projects. Printing and postage made up 7 percent of state-retained funds, and funds used for equipment and supplies, such as purchasing computer hardware and software, made up another 7 percent. Other expenses—such as rent, telephone costs, overhead, and other costs not classified elsewhere—accounted for the remaining 5 percent of the identified funds.The additional $47 million identified by states as having been retained at the state level had either not yet been spent or could not be identified in detail.

Most state officials said that Goals 2000 funding has been an important resource in their states’ development of new standards and assessments, but they were unable to estimate how much future Goals 2000 funding they would need to complete these activities. Generally, officials said they were unqualified to make this estimate because their involvement in the state’s overall education reform efforts was limited or they viewed the development of standards and assessments as an iterative process that will never be fully complete.

Subgrants to Local School Districts Supported a Wide Range of Education Initiatives

We identified 16,375 local subgrants totaling over $1 billion that were awarded with funding provided in fiscal years 1994 through 1997. As shown in table 1, the number of subgrants and total dollar amount of subgrant awards rose each year between fiscal years 1994 through 1996. (Amounts for fiscal year 1997 are incomplete because several states had not yet awarded their subgrants for that year at the time of our review.) Subgrants ranged from a $28 subgrant that funded a reading professional development activity in a single California school to a $6.1 million subgrant for fourth- to eighth-grade reading instruction awarded to the Los Angeles Unified school district. More than 34 percent of the 14,367 school districts nationwide that provide instructional services received at least one Goals 2000 subgrant during the 4-year period reviewed. Many districts received Goals 2000 funding for 2 or more of the years we reviewed.

Over the 4-year period reviewed, Goals 2000 subgrants funded several general categories of activities: local education reform projects, professional development, computer equipment and training, preservice training, and standards and assessments. Local education reform projects and professional development, the two largest categories, together account for about two-thirds of the subgrant funding. Some activities fell into a “crosscutting and other” category that reflected activities that had been combined or were too infrequent to categorize separately. In cases where states could not identify a single primary activity for a grant, we classified the grants as having had a crosscutting purpose. (See fig. 2.)

Standards and Assessments $50,871,015 Table 2 summarizes some of the activities undertaken with subgrant funds under each of the general categories.

Local education reform activities, constituting about 39 percent of total subgrant funding, included activities such as the development of district improvement plans, alignment of local activities with new state education reform plans, and efforts to update curriculum frameworks. For example, Indiana awarded a subgrant to align curricula and instruction and to design and implement an improvement plan that allows secondary schools to build on foundations developed at the elementary schools. In Kentucky, state officials reviewed their comprehensive reform activity and concluded that their plan was missing a public engagement program for parents and community members that would sustain education reform. Thus, the state awarded subgrants to improve public information, boost parental understanding, increase families’ understanding of technology, engage parents, and broaden the reach of the school into the community.

Professional Development

Professional development activities, representing about 28 percent of Goals 2000 subgrant funding over the 4-year period reviewed, included activities such as updating teacher skills in new teaching approaches and providing enrichment courses for teachers. For example, Tennessee provided a grant for 11 teachers to complete a year-long Reading Recovery training program in strategies to teach the most at-risk first-graders to read. Teachers who participated in the training program subsequently used the strategies to help 63 of 89 at-risk first-graders progress to reading at a level comparable to the average of their class. In the Troy, New York, area, subgrants funded a series of professional development activities for staff providing inservice programs, a curriculum workshop, and training in the use of learning and telecommunications technologies as tools to support innovative instructional processes.

Preservice Training

Preservice training activities, which involved teachers-in-training and university programs conducting new teacher training, used about 6 percent of the subgrant funds. For example, subgrant projects funded mentor programs in Illinois, where up to 50 percent of new teachers leave the profession after 5 years. In Peoria, Goals 2000 funded a grant allowing education majors in local colleges to attend an educators’ fair, observe classes, create projects for classroom use, and meet regularly with selected master teachers from the district. In Delaware, a subgrant funded technology and staff support for a preservice program that allowed second-year student teachers to teach during the day and attend courses by videoconference rather than driving long distances to the state’s only university with a preservice training program.

Technology and Training

Subgrants for computer equipment and training—which are used to buy computer hardware and software, network schools to educational sites on the Internet, and train teachers and staff on the effective use of the new technology—amounted to about 10 percent of total funding. For example, a subgrant in Louisiana allowed a teacher to buy a graphing calculator, which could be used with an overhead projector to help low-performing math students better understand algebra. In some states, districts could purchase technology using Goals 2000 funds if the primary purpose of the subgrants involved meeting state education reform goals. Other states—including New Mexico, Kansas, and Wisconsin—permitted districts to purchase technology using Goals 2000 funds only if the equipment was closely tied to an education reform project. As one Wisconsin official stated, “Districts cannot purchase technology for technology’s sake.” A few states restricted technology purchases in 1 or more years. Oregon, for example, did not permit districts to purchase high-cost computer equipment using Goals 2000 subgrant funds. However, some states, such as Virginia and Alabama, required all subgrant projects to be associated with technology. Officials in these states told us that they had taken this approach because their states tied their education reform efforts to their state technology plans or because the approach was one of the least controversial purposes available for using Goals 2000 funds.

Standards and Assessments

Standards and assessments activities, accounting for about 5 percent of total subgrant funding, included funding for such activities as the development of standards, alignment of current curriculum standards with new state content standards, and the development of new or alternative assessment techniques. For example, state officials in New York said Goals 2000 funds are being used to clarify standards for the core curriculum and to prepare students for the state’s regents examination for twelfth-graders—an examination all New York students must pass to graduate from high school. State staff were also developing new assessments using state-retained funds. With Goals 2000 funds, Texas funded the development and dissemination of its Texas Essential Knowledge and Skills (TEKS) program, which informs teachers about what students should know and be able to do. Goals 2000 paid for items such as a statewide public and committee review of TEKS and subsequent revisions; printing and distribution of TEKS following its adoption by the state board; and ongoing support, including statewide centers, resource materials and products, and training related to TEKS. In Louisiana, Goals 2000 project directors reported that teachers in a number of subgrant projects were able to experiment with alternative assessment techniques. Project directors reported that team planning and networking made possible by Goals 2000 grants encouraged more applied learning strategies and the use of alternative approaches to student evaluation, such as portfolios, applied problem solving (especially in math and science), the use of journals, checklists, and oral examinations.

Crosscutting and Other Initiatives

These subgrant activities associated with education reform, reflecting districts’ crosscutting approaches to meeting education reform goals, accounted for the remaining 12 percent of subgrant funding. In many of these cases, state officials were unable to identify a single focus for subgrant activities because they reflected a combination of activities. Some subgrants, for example, combined development of a district improvement plan (a local education reform activity) with teacher education on the new curriculum (a professional development activity). In Pennsylvania, most of the $41 million in subgrants for the 4-year period had several different areas of focus, such as a district’s $462,100 subgrant identified as being for the development and implementation of a local improvement plan, assessments, technology, and preservice teacher training and professional development.

Less than two-tenths of 1 percent of Goals 2000 subgrant funding was identified as being used to support health-related education activities. In the 31 subgrants specifically identified as being related to health issues, most involved nutrition and hygiene education efforts that district officials believed were important to the preparedness of their students to learn. For example, a subgrant in New Mexico focused on making children healthier and used subgrant funds to implement a curriculum that taught children about health issues, such as dental care, nutrition, exercise, and problems associated with cigarette smoking and alcohol use. According to a state official, this proposal was in congruence with a comprehensive health component that state officials had originally included in the state’s education reform plan because they believed that their reform effort should address barriers to learning.

State and Local Officials Believe Goals 2000 Funds Promote State Reform Efforts

Subgrants to local education agencies supported state education reform efforts. Professional development, preservice training, standards and assessments, and technology subgrants generally were aligned with state standards or reform priorities. Almost all state and local officials said Goals 2000 funds provided valuable assistance to education reform efforts at both the state and local levels and that, without this funding, some reform efforts either would not have been accomplished or would not have been accomplished as quickly. Some officials said Goals 2000 had been a catalyst for some aspect of the state’s reform movement, though in most cases the funding served as an added resource for reform efforts already under way. State-level officials voiced strong support for the program’s existing funding design.

State and Local Officials Believe That Goals 2000 Funds Have Furthered State Reform Efforts

Almost all of the state officials we interviewed told us that Goals 2000 funds furthered their state’s and local districts’ education reform efforts by providing additional funding that they could use to implement reform plans that they had already initiated. In many cases, state officials said that Goals 2000 state-retained funds or subgrant money allowed the state and districts to accomplish things that would not have been done—or would not have been done as quickly or as well—had it not been for the extra funding provided by Goals 2000. For example, one Oregon official said that Goals 2000 funding was the difference between “doing it and doing it right” and that, without Goals 2000 funds, the state would either not have been able to develop standards or would have had to settle for standards only half as good as the ones that were developed. For example, Goals 2000 funds allowed Oregon to bring in experts, partner with colleges, align standards, create institutes to help teachers with content standards, and articulate the curriculum to all teachers to prepare students for standardized testing. Local officials in Kentucky described how their Goals 2000 funded projects allowed them to make progress in meeting their new state standards and speed their reform efforts.

In several cases, state officials reported that Goals 2000 had served as a catalyst for a certain aspect of their reform efforts, such as the development of standards and assessments. For example, in Nevada, a state official said that Goals 2000 was a catalyst for developing content and performance standards that identified what, at a minimum, students would need to master at certain grade levels. Before Goals 2000, the state did not even have the terminology for standards-based reform. Goals 2000 brought terminology and a consistency of ideas regarding standards-based reform, he said. Goals 2000 was also a catalyst for education reform communication in Missouri. One state official reported that Goals 2000 was the vehicle that got schools and universities talking for the first time about issues such as student-teacher preservice training.

State and Local Officials Support the Current Flexibility of Goals 2000 Funds

While the scope of our work did not specifically include ascertaining the view of state education officials on the format of the Goals 2000 funding, most of the officials we interviewed expressed support for continuing the funding in its present format. The Congress has been considering changing the present format of Goals 2000 funding as part of ongoing discussions on how to better assist states in their education reform efforts. Almost every state official told us that flexibility is key to Goals 2000’s usefulness in promoting state education reform because states could direct these funds toward their state’s chosen education reform priorities. The current level of flexibility, officials told us, allowed states to use their state-retained funding according to self-determined priorities as well as structure their subgrant programs to mesh with their states’ education reform plans. As one Washington state official said, Goals 2000 is laid out in the law with broad functions rather than with specific programs, which has had an impact in bringing schools and districts together to increase standards and prioritize issues rather than developing program “stovepipes.” A state official from Arizona said that the flexibility permitted in determining how funds will be used allows states that are at different points in the reform process to use the funds according to their own needs—an especially important feature given the wide variation among states with respect to education reform progress. In New York, local and state officials described the Goals 2000 funding as being valuable because it allowed the state to react quickly to problems and opportunities. As one official stated, “It allows you to change the tire while the car is moving.”

Further, several state officials told us that they did not want more program flexibility, such as placing the funding into block grants that could be used for many purposes in addition to education reform. Generally, these state officials wanted the funding criteria to remain as they are with funds dedicated to systemic education reform purposes at a broad level but permitting flexibility at the state and local levels to determine what would be funded within that broad purpose. For example, Louisiana state officials said that they feared the funding would be used in lieu of current state spending if it were not earmarked for education reform and that this would reduce the level of reform that would occur in the state. In Nevada, an official told us that he did not want Goals 2000 funds to be more flexible because he thought this would cause the state to lose the focus on the standards and improved learning that it has had under Goals 2000.

Conclusions

Title III of Goals 2000 provided more than $1.25 billion from fiscal years 1994 through 1997 for broad-based efforts to promote systemic improvements in education. State and local officials believe that Goals 2000 funding has served a useful purpose by helping states to promote and sustain their individual education reform efforts over the past 4 years. While the state-retained portion of funding allowed states to employ staff to coordinate overall reform efforts, the bulk of the funding was distributed as subgrants to thousands of local districts where, according to state and local officials, it enhanced their ability to develop education reform projects, professional development activities, preservice training, and new standards and assessments.

Goals 2000 funds have provided an additional resource to enhance education reform efforts and helped states promote and accomplish reforms at an accelerated pace—which state officials believed would not have occurred without this funding. By giving states the flexibility to target funds toward their own education reform goals, states were able to direct funds toward their greatest priorities within the broad constraints of the law. While a program such as this, which entails great latitude in the use of funds and requires little in the way of reporting requirements, reduces some of the states’ accountability for process and results, Goals 2000 appears to be accomplishing what the Congress intended—providing an additional and flexible funding source to promote coordinated improvements to state and local education systems.

Agency Comments and Our Evaluation

The Department of Education provided written comments on a draft of this report. The Department said that our report represents the most comprehensive review to date of state and local activities supported under Goals 2000 and that it would find this information extremely informative in its consideration of reauthorization proposals. Staff from the Goals 2000 office provided technical comments that clarified certain information presented in the draft, which we incorporated as appropriate. The Department of Education’s comments appear in appendix V.

Copies of this report are being sent to the Secretary of Education and interested congressional committees. We will also make copies available to others upon request. If you have questions about this report, please call me or Harriet Ganson, Assistant Director, on (202) 512-7014. Other major contributors to this report are listed in appendix VI.

Objectives, Scope, and Methodology

We were asked to (1) review the purposes for which Goals 2000 state-retained funds have been used, (2) determine what local projects have been funded using Goals 2000 funds, (3) determine state officials’ views about how Goals 2000 relates to state reform, (4) ascertain how much of Goals 2000 funds have been used for developing standards and assessments and what future support is needed for these purposes, and (5) find to what extent Goals 2000 funds have been used for health education activities. For reporting purposes, we combined these questions into two broader objectives: (1) how Goals 2000 funds have been spent at both the state and local levels, including the levels of funding for developing standards and assessments as well as health education, and (2) how state and local officials view Goals 2000 as a means to promote education reform efforts.

To conduct our work, we visited 10 states and interviewed federal, state, and local officials in these states. We also reviewed documents from the Department of Education, state departments of education, and the Council of Chief State School Officers; surveyed Goals 2000 coordinators in all states; analyzed quantitative and qualitative data from federal and state Goals 2000 offices and from independent audits; and reviewed the statutory and regulatory requirements of the Goals 2000 program.

Data Collection

To obtain information about each assignment objective, we conducted site visits to 10 states, which account for over 32 percent of the 4-year total Goals 2000 funding under review. The sites visited were California, Delaware, Illinois, Kentucky, Louisiana, Maryland, New York, Oregon, South Carolina, and the District of Columbia. The selection of these sites was made on the basis of the 10 states’ funding allocations and geographic representation, the number of subgrants awarded, activities we became aware of during our review, and recommendations of the Department of Education and Council of Chief State School Officers.

At each site visit location, we interviewed state, district, and school officials to obtain comprehensive and detailed information about how the program has been used to promote education reform. At the state level, we spoke with various officials including state superintendents, Goals 2000 coordinators and staff, and financial officials. At the district level, we spoke with representatives of 71 districts. These included district superintendents, finance or budget officials, district staff, teachers, and students. In addition to the site visits, we also conducted comprehensive telephone interviews with state Goals 2000 coordinators. Both the telephone interviews and the site visits were used to obtain information on how each state has used Goals 2000 funding to support education reform. These interviews also included queries on subgrant selection criteria and processes, financial and programmatic monitoring, and evaluation efforts.

We surveyed each state, the District of Columbia, and Puerto Rico to obtain financial and programmatic documentation of their Goals 2000 program. (Although small amounts of Goals 2000 funds are provided to the U.S. Territories and the Bureau of Indian Affairs, we did not review their programs.) We collected this documentation, reviewed it, and cross-checked it with documents and funding reports from the Department of Education and the Council of Chief State School Officers. We also clarified any discrepancies found in the data during our interviews. Documentation provided to us included requests for proposals, state reform plans, progress reports, budget and expenditure reports, and applicable audits. We also gathered and analyzed subgrant summaries from each state containing the name of the recipient, category of the subgrant, and subgrant amounts for all subgrants supported by Goals 2000 funds from fiscal years 1994 through 1997. (See app. IV.) For various reasons, several states were unable to provide details on state-retained funds, subgrant data, or both for 1 or more years.

We reviewed title III of the Goals 2000: Educate America Act and analyzed regulations pertinent to the program. This review provided the foundation from which we analyzed the information collected. In conducting the data collection, we relied primarily on the opinions of the officials we interviewed and the data and supporting documents they provided. Although we did not independently verify this information, we requested copies of all state audits pertaining to Goals 2000 and reviewed those we received for relevant findings. We also reviewed, for internal consistency, the data that officials provided us and sought clarification where needed. We did not attempt to determine the effectiveness of the various grant-funded activities or measure the outcomes achieved by the funded projects. We conducted our work in accordance with generally accepted government auditing standards between November 1997 and October 1998.

Goals 2000 Allocations by State

From fiscal years 1994 through 1997, a total of $1,262,740,153 was allocated to the states and the District of Columbia and Puerto Rico. The smallest allocation was $370,124 to Wyoming in 1994; the largest was $54,659,343 to California in 1997. (See table II.1.)

Table II.1: Goals 2000 Allocations by State, Fiscal Years 1994 Through 1997 (continued)

Fiscal year 1995 and fiscal year 1996 funds were awarded directly to LEAs in Montana, New Hampshire, and Oklahoma on a competitive basis. Direct awards are also being made to LEAs in Montana and Oklahoma with respect to fiscal year 1997 and fiscal year 1998 funds.

State-Retained Funds, Fiscal Years 1994 Through 1997

The Goals 2000: Educate America Act permits states to retain a portion of their total Goals 2000 funds at the state level—up to 40 percent in fiscal year 1994 and 10 percent thereafter—to develop state reform plans and engage in statewide activities. States primarily use this portion to manage the district subgrant program and support state-level activities. Many states retained less than the maximum amount permitted, and a few states retained almost no funds at all. As shown in table III.1 below, states primarily used Goals 2000 funds for personnel and benefits; contract services and consultants; and, to a lesser extent printing, travel, equipment, training, supplies, and conferences. Other expenses such as rent, telephone, and postage (along with indirect and other costs not elsewhere classified) accounted for the remainder. In cases where states could not provide specific categorizations for the state-retained funds they reported, these amounts were included in the “other” category.

State Subgrant Summary, Fiscal Years 1994 Through 1997

This appendix provides state-by-state information on subgrants made to local school districts and other organizations. Table IV.1 shows the number and amount of subgrants in total for each state, table IV.2 shows the number of subgrants by category for each state, and table IV.3 shows the dollar amounts of subgrants by category for each state.

Total amount of subgrants reported (continued)

Table IV.3: Total Dollar Amounts for Subgrants by Category, by State, Fiscal Years 1994 Through 1997 (continued)

Comments From the Department of Education

GAO Contacts and Staff Acknowledgments

Contacts

Acknowledgments

In addition to those named above, the following individuals made important contributions to this report: Dawn Hoff collected and analyzed state information and drafted major sections of the report, Sonya Harmeyer collected state information and had a lead role in analyzing and developing graphic presentations of the data, Richard Kelley gathered and assisted in the analysis of information from states and the Department of Education, Edward C. Shepherd and Jennifer Pearl assisted in data collection activities, Edward Tuchman provided assistance in analyzing and verifying data, Stanley Stenersen assisted in structuring and reviewing the draft report, and Jonathan Barker of the Office of the General Counsel provided legal assistance.

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