Detailed Information on the
Impact Aid Basic Support Payments and Payments for Children with Disabilities Assessment

Continue development of model for estimating the effectiveness of the program in delivering an appropriate amount of assistance to federally affected school districts.

Develop annual and long-term performance measures for the programs.

Work with Congress during NCLB reauthorization to correct the structural flaws in the program.

Measure: The percentage of eligible applicants who receive initial Basic Support Payments within 60 days after the enactment of an appropriation.

Explanation:

Measure: The number of requests to forgive overpayments of Basic Support Payments.

Explanation:This measure is intended to track programmatic efficiency by calculating the extent to which the Department's payments are accurate.

Is the program purpose clear?

Explanation: The Impact Aid program provides financial assistance to school districts affected by Federal activities through a variety of programs, including Basic Support Payments, Payments for Children with Disabilities, Facilities Maintenance, Construction and Payments for Federal Property. (To learn more about the Impact Aid programs, see www.ed.gov/about/offices/list/oese/impactaid/index.html). Most public elementary and secondary education is funded through local property taxes levied by local and State governments. Communities that host Federal activities frequently have a diminished tax base, because the Federal government has acquired local property that cannot be taxed, as well as an increased number of children to be educated in the local schools due to the Federal presence. Basic Support Payments [Sections 8003(a) and (b) of the ESEA] partially compensate local educational agencies (LEAs) for the local cost of educating federally connected children; Supplemental Payments for Children With Disabilities [Section 8003(d)] provide further assistance for the local cost of educating federally connected children with disabilities who are eligible under the Individuals with Disabilities Education Act (IDEA).

Evidence: Sections 8001(1)-(5) and 8003(d)(2) of the Elementary and Secondary Education Act clearly states that the purpose of the Impact Aid Program is to provide financial assistance to local educational agencies that experience a substantial financial burden due to a Federal presence, educate children of parents who either reside or work on Federal property, or educate children of parents in the military.

Does the program address a specific and existing problem, interest, or need?

Explanation: Impact Aid grants partially address the loss in local tax revenue an LEA faces due to the presence of Federal property and the increased local education costs due to the enrollment of federally connected children.

Evidence: Almost all school districts use property taxes to finance school expenditures. Impact Aid provides financial relief to school districts that are burdened by tax revenue loss since Federal property cannot be taxed.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: There is a cap on funding that restricts Payments for Federal Property so that, when combined with Basic Support Payments, they do not exceed the maximum payment from either program. In addition, program regulations specify that children for whom other Federal programs provide substantial funding are not eligible for Impact Aid. This avoids duplicate funding with Head Start, Bureau of Indian Affairs (BIA) and Department of Defense (DOD) operated or contract schools. The DOD also administers an Impact Aid program for certain LEAs that serve military bases, but the Congress authorizes that program as a supplement to the Impact Aid program administered by the Department of Education. In addition, the DOD supplement does not support LEAs that receive Impact Aid because of the presence of Indian lands or other non-defense Federal activities.

Evidence: Section 8002(b)(1)(A)(i) and 8002(b)(1)(C) of the Elementary and Secondary Education Act spell out the funding cap with respect to Basic Support Payments while program regulations restricting eligibility for children receiving substantial funding under other Federal programs can be found in Title 34 Code of Federal Regulations (CFR) 222.30(2)(ii). Department of Defense (DoD) Supplemental Impact Aid Program, Section 386 of Public Law 102-484, the National Defense Authorization Act for Fiscal Year 1993.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The statute includes special formula provisions designed to alter eligibility and funding levels in ways that benefit select LEAs. The statutory formula does not effectively differentiate compensation for LEAs in different States that provide different school financing arrangements.

Evidence: Section 8003(a)(2)(C) adds extra weighting for children in eight large districts while sections 8003(b)(2)-(4) provides additional funding to about 30 "heavily impacted" districts. The formula provisions intended to account for different cost factors are in sections 8003(b)(1)(C),(E) and (G).

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: A limited number of LEAs that qualify as Heavily Impacted Districts or otherwise benefit from special formula provisions receive much larger payments at the expense of the majority of Impact Aid districts. In addition, an economic analysis of the program, currently in development at the Department of Education (ED), may indicate that the formula provisions are not well aligned with LEA needs.

Evidence: Section 8003(a)(2)(C) adds extra weighting for children in eight large districts while sections 8003(b)(2)-(4) provides additional funding to about 30 "heavily impacted" districts. The formula provisions intended to account for different cost factors are in sections 8003(b)(1)(C),(E) and (G).

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Department has not yet developed specific long-term performance measures that focus on outcomes for the Impact Aid program. The Department is working to develop long-term performance indicators and performance targets that are tied to short-term goals and are consistent with the program's scope and activities.

Evidence: Currently, the only performance measures for the non-Construction Impact Aid programs are administrative measures that concern timeliness and accuracy of payments. These measures gauge the operational effectiveness of the program but do not address the program's ultimate purpose to compensate local educational agencies (LEAs) for the burden of educating federally connected children. The Department has, however, presented to the Office of Management and Budget the initial design for a model for determining whether the Impact Aid formulas effectively allocate funds to school districts based on their relative needs.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: This answer is a "NO" until the Department develops long-term performance measures.

Evidence: Not applicable

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: No annual measures are currently available for this program.

Evidence:  

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Baselines and targets for annual measures cannot be set until annual measures are developed.

Evidence:  

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Annual and long-term goals have not yet been set for this program.

Evidence:  

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: No independent evaluations are available for this program at this time. The Department has not carried out many evaluations of the program because (as a general aid program), it is difficult to evaluate in a meaningful way. However, ED has begun an economic analysis that is attempting to measure whether the Impact Aid formulas reflect actual district need for assistance.

Evidence:  

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: These programs do not have annual or long-term measures that Budget requests can be tied to. However, ED has satisfied the second part of the question in that the Department's budget submissions show the full cost of the program (including S & E).

Evidence:  

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: ED has begun an economic analysis that is attempting to measure whether the Basic Support Payments and Children with Disabilities formulas reflect actual district need for assistance.

Evidence:  

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The Department collects financial data from those LEAs that receive Payments for Children With Disabilities reporting their expenditures for educating students with disabilities to verify that the Section 8003(d) supplement does not exceed the LEAs' excess costs. The Department also obtains annual financial data through the National Center for Education Statistics (NCES) on the total current expenditures of LEAs that receive Impact Aid Basic Support Payments, and these data become a component of the payment formula used to distribute available funds. The Department examines these data to identify discrepancies that could lead to payment errors. The Department also communicates regularly with the Department of Defense concerning base housing renovation and base realignment and closure (BRAC) plans so that information can be shared with LEAs in advance of changes in Impact Aid assistance.

Evidence: Program files. Sources of data include Tables 7 and 9 from the Basic Support Payments applications, NCES data collections for LEAs' current expenditures and information gathered by Impact Aid analysts via telephone and the Web.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Impact Aid program managers are held accountable via the Education Performance Appraisal System (EDPAS) to manage the program efficiently and make payments in a timely and accurate manner. These goals are also incorporated into the program staff's EDPAS agreements, and they are rated on their timeliness and accuracy in reviewing and preparing applications and payments to LEAs.

Evidence: Program files and Education Performance Appraisal System (EDPAS) agreements.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Funds are obligated within the timeframes set out by Department schedules and used for the purpose intended. For 2003 and 2004, 98 and 95 percent of payments respectively, were made within 60 days after the enactment of the appropriation. The intended purpose for this program is not specific. The funds are usually deposited into the LEAs' general funds and are not tracked once they become part of the LEAs' receipts for current operations.

Evidence: Program office files. Section 8001(1)-(5) of the Elementary and Secondary Education Act.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Program managers are engaged in an ongoing process to enhance the Impact Aid system (IAS), the information technology used to manage application and payment data and calculate payments. Recent enhancements have substantially reduced the effort previously required to calculate certain payments off-line and load information into the system. System enhancements have also reduced the potential for errors by automating additional steps in the payment process and permitted more efficient and effective data review. Impact Aid managers have also implemented staff performance standards that measure both the timeliness and accuracy of payments. In addition, the program's performance measures track the efficiency of operations.

Evidence: Impact Aid Program procedures and EDPAS agreements. There have been more than 300 individual functional improvements in the IAS. Some of the major system enhancements that have provided support to analysts and helped to control errors are the enhancement to calculate 8003(b)(2) payments in the system, the comparison tab enhancement, which allows analysts to view data elements across application years to identify significant differences, and improvements in voucher displays that allow applicants to see all the detail supporting their payments.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Impact Aid program consults with the Department of Defense and provides the data that they use to make their payments under the DoD Impact Aid Program. ED staff have also helped Defense officials estimate the costs that will be faced by school districts that receive new students as a result of pending base closures. For example, DOD provided rollout briefing materials for the most recent BRAC announcement to assist with the exchange of information that may be pertinent to both agencies' activities. ED staff also informally consult with DOD staff to exchange information.

Evidence: DOD briefing materials.

Does the program use strong financial management practices?

Explanation: Recent audits have not identified deficiencies in the financial management of this program.

Evidence: The Impact Aid program has received a clean audit for two consecutive years. To respond to a finding of inadequate segregation of duties, the Impact Aid Program Director formally reviewed with staff the proper procedures for ensuring the review and approval of each payment transaction by multiple staff members. The program also made several enhancements to the Impact Aid system (IAS) so that each action in the system would require approval by two different users.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Material internal deficiencies have not been identified for this program for the past three years. The Impact Aid Program managers have taken steps to ensure that they have a management system in place that effectively prevents problems. For example, to respond to finding of inadequate segregation of duties, the Impact Aid Program Director formally reviewed with staff the proper procedures for ensuring the review and approval of each payment transaction by multiple staff members. The program also made several enhancements to the Impact Aid system (IAS) so that each action in the system would require approval by two different users.

Evidence: The program has taken steps to correct earlier management deficiencies and has a two-step approval process to initiate, approve, and monitor payments.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: The current law does not require grant recipients to report on how they use their funds. Funds are generally used for current expenditures. Program staff conduct field reviews of applicants annually if they receive large payments (greater than $750,000) and periodic reviews of applicants that receive more than $200,000. Program staff also conduct site visits to about 40 applicants per year.

Evidence: Monitoring activities.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: The Impact Aid Program does not collect grantee performance data. The current law does not require grant recipients to report on how they use their funds. Each LEA's performance is reported and made public through the accountability requirements of the No Child Left Behind Act.

Evidence:  

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program has no specific performance indicators as answered in 2.1.

Evidence:  

Does the program (including program partners) achieve its annual performance goals?

Explanation:  

Evidence:  

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: Program data from 2003 and 2004 show that an increasing percentage of payments are made in a timely fashion (defined by 60 days after enactment of an appropriation) and have exceeded performance targets. Data also show that the accuracy of payments has improved and also exceeded performance targets.

Evidence: Impact Aid system and program office files.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There are no comparable programs with which to compare performance.

Evidence:  

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: No evaluations have been conducted under the current program.

Evidence: