Guidance: 2013-14 Title I Part A LEA AllocationConsolidated Application, Winter Release program guidance for the 2013-14 Title I, Part A, Local Educational Agency (LEA) Allocation.
Frequently Asked Questions and Answers
Q. What is the 85 percent/15 percent rule?
A. The California Education Code Section 63000 requires public educational agencies to spend no less than 85 percent of funds received from specific categorical programs, including Title I, Part A, at school sites for direct services to students. The maximum allowable for administrative costs, including indirect costs, is 15 percent.
Q. What is the definition of direct services to students?
A. Direct services to students are those supplementary services that are typically delivered at the school site and where the student is the direct recipient or beneficiary of the services. Expenditures for personnel and services are justified as direct service and for inclusion in the 85 percent if:
- The personnel are providing direct, hands-on instruction to students;
- The services being provided are so integral to the instructional program that not to provide the services would affect the quality of the instruction itself and the academic success of students. Examples of these type of services are professional development for teachers and parent involvement activities;
- The funds are used to purchase instructional materials and equipment to be used by eligible students;
- The funds support the analysis and use of student performance data that is then used to inform instruction for eligible students.
For example, an LEA may include in the 85 percent direct services to students, the salaries and benefits of such certificated personnel as specialists or resource teachers, school nurses, school librarians, school counselors, and classified instructional aides. Title I school program administrators, to the extent that they provide direct hands-on instruction or services to students or conduct professional development to meet specific Title I student needs, may also be included in the 85 percent.
Operating costs and capital outlay can also be included in the 85 percent direct services to students if such expenditures meet the specific educational needs of eligible students, as supported by student data and effective practice, and the educational objective and purpose of Title I, and the Single Plan for Student Achievement (SPSA). Examples of operating and capital outlay include equipment such as computers and computer software.
Q. What is the definition of administrative costs?
A. Administrative costs are defined as any costs, indirect or direct, that are administrative in nature and supports the management of a program. Do not confuse direct costs with direct services to students. Just because a cost is a direct cost does not mean it is a direct service to students.
Costs of program administration may encompass both:
- Direct costs (salaries of program administrators, program monitoring, preparing program plans, and the purchasing of program specific equipment and supplies); and
- Indirect costs (costs of the personnel division, payroll preparation, accounting and procurement systems).
Direct costs are those that can be easily attributed to a particular program and cost objective. Indirect costs benefit multiple federal and state grant awards, programs, and cost objectives. Thus, indirect costs cannot be easily identified with a particular cost objective. Activities that result in direct services to students are usually considered to be direct costs.
Q. What are the maximum administrative costs that can be charged to Title I?
A. Title I, Part A, has an “administrative cap” or limit of administrative costs which can be charged to the program. The cap is a combination of direct administrative costs and indirect costs. Indirect costs are a subset of the broader category of administrative costs. Administrative costs and indirect costs combined may not exceed 15 percent.
The salaries and benefits of personnel engaged in administrative or planning activities can be included in the administrative costs. This can include:
- District administrative personnel;
- District program personnel, either certificated or classified, except for the time engaged in directly instructing pupils, providing professional development activities directly related to the purposes of the Title I program, or traveling to or from school sites for the delivery of instruction or staff development;
- Itinerant staff based at the district, except for the time engaged in directly instructing pupils, providing professional development activities directly related to the purposes of the Title I program, or traveling to or from school sites for the delivery of instruction or staff development;
- School program administrators, to the extent they do not provide direct instruction or conduct professional development activities to meet the specific student needs consistent with Title I purposes.
Similarly, allowable expenditures at the district office for operating expenses and equipment when the purposes support the program for eligible Title I students may include, but are not limited to:
- District program evaluation or review activities of school sites;
- District advisory councils;
- Staff development activities not related to specific student; academic needs
- Indirect costs.
Q. What is a centralized service?
A. A centralized service is an activity funded by a school allocation but administered by the local educational agency central office. Even though the services may be directed by the LEA and possibly housed at the central office, the services are provided directly to students at the school site and thus would be charged to the 85 percent. Examples of centralized services that would be within the 85 direct services limitation include:
- Teacher professional development activities for multiple schools;
- Shared costs of staff members (i.e., nurses, instructional aides, or content coaches) who provide services to multiple schools.
Centralized services must be itemized as proposed expenditures in the SPSA and approved by the School Site Council (SSC) and local school board.
If staff funded by the school allocation, whether centralized or not, conduct administrative duties, that portion of their salaries that is administrative must be charged to the 15 percent.
Q. What is the difference between a Title I, Part A, LEA reservation on the Winter release of the ConApp and a centralized service?
A. The Elementary and Secondary Education Act requires LEAs to reserve funds for specific purposes and gives LEAs discretion to reserve for other allowable purposes. These reservations are taken from the total annual Title I entitlement before allocating funds to schools. LEAs report these set-asides on the LEA reservations screen in the Winter release of the ConApp. Therefore, an LEA reservation is taken before funds are allocated to schools, while a centralized service is funded from a school allocation. The SSC must approve centralized services as part of the SPSA.
Because funds reserved on the Consolidated Application (ConApp), Spring release, for allowable activities (not required reservations) reduce the funds available for distribution to schools, LEAs must consult with SSCs to determine which reservations are needed.
LEA reservations must also be part of the consultation with private school officials before an LEA makes any decisions that affect the opportunities of eligible private school children to participate in Title I, Part A, programs.
Q. When does an LEA identify the funds that are to be set aside for indirect costs?
A. Indirect costs are calculated before district reservations and before funds are allocated to schools. Since the calculation is just an estimate, the actual indirect costs are subtracted at the end of the year based on how much funding was expended. In other words, an LEA allowed a three percent Indirect Cost Rate (ICR) out of the total Title I annual allocation would budget for it on the Winter release of the ConApp on the LEA Allocation of Title I, Part A, Funds. However, the LEA would only charge indirect costs equal to three percent of its eligible expenditures at the end of the year.
For example, an LEA that is allowed a three percent ICR out of a total Title I allocation of $100,000, would indicate an amount of $2,913 ($100,000 divided by 1.03= $97,087; $100,000-$97,087= $2,913 (see the California School Accounting Manual, Procedure 915-6)) on the Winter release of the ConApp. However, if the district only has eligible expenditures of $90,000 of the Title I allocation by the end of the year, the LEA would only be allowed an indirect cost amount of $2,700 ($90,000 x .03 = $2,700).