Sneak Preview: ED Issues Draft ‘Supplement Not Supplant’ Guidance

(The following was excerpted from a recent article in the Federal Grants Management Handbook.) The Department of Education (ED) has developed and is seeking comments on proposed guidance to help school districts more easily follow the “supplement not supplant” requirement pertaining to their Title I, Part A grant awards under the Every Student Succeeds Act (ESSA) (Pub. L. 114-95). The guidance was one of two recent federal documents issued addressing grants oversight under ESSA. The other was issued by the Government Accountability Office (GAO).

ESSA, the reauthorization of the Elementary and Secondary Education Act (ESEA) (Pub. L. 89-10) and its successor No Child Left Behind (NCLB) (Pub. L. 107-110), maintains and expands “supplement not supplant” provisions for many of its education funding programs. These provisions require that awarded federal funds be used to create a new program or augment an existing program, not to replace state and local funds or services that would otherwise be provided.

ED recently issued proposed nonregulatory guidance, meaning it does not create or impose new legal requirements, to support school districts’ compliance with the requirement that federal funds supplement, but do not supplant, state and local funds.

According to ED, the supplement not supplant requirement under NCLB had become restrictive and burdensome — to the point that some school districts made ineffective spending choices to avoid noncompliance. The agency added that the requirement changed under ESSA to provide more flexibility to school districts while still ensuring that federal dollars are supplemental to state and local funds and cannot be used to replace them.

ESSA contains a new supplement not supplant compliance demonstration for local educational agencies (LEAs). To demonstrate compliance with the supplement not supplant requirement, an LEA’s allocation methodology must result in each Title I school in the LEA receiving all the state and local funds it would otherwise receive if it were not receiving Title I, Part A funds (i.e., the methodology may not take into account a school’s Title I status.) When an LEA allocates state and local funds to schools through a methodology that is neutral with regard to whether or not a school receives Title I, Part A funds, it follows that Title I, Part A funds in a Title I school are supplemental to its state and local funds. ED defines such an allocation methodology as “Title I neutral.”

The guidance document also contains numerous Frequently Asked Questions. For example, one question asks whether an LEA has discretion as to which state and local funds it allocates to schools? ED responded that the determination of which funds to allocate to schools is at the discretion of the LEA. An LEA does not normally allocate all of its state and local funds to schools, the agency added, explaining that “an LEA by both necessity and choice retains some state and local funds at the district level.”

(The full version of this story has now been made available to all for a limited time here.)

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