Flexibility and Waivers – Transferability – NCLB Policy Letters to States

August 7, 2002

Wayne V. Pierson
Chief Financial Officer
Florida Board of Education
325 Gaines Street, Room 1214
Tallahassee, Florida 32399-0400

Dear Mr. Pierson:

Thank you for your recent letter requesting guidance from the Department concerning the proper method to calculate caps and/or set-asides when funds are transferred from one program to another under section 6123 of the Elementary and Secondary Education Act (ESEA).

As you have noted, funds that a State educational agency (SEA) or local educational agency (LEA) transfers under the transferability authority are subject to the rules and requirements of the programs to which the funds are transferred. Thus, statutory provisions that establish specific set-asides or caps governing the uses of funds apply to funds transferred into a program under the transferability authority.

For example, under the Enhancing Education Through Technology (Ed Tech) program, an LEA must spend at least 25 percent of its allocation on professional development. If an LEA transfers funds from its allocation under another program to its allocation under the Ed Tech program, the 25 percent professional development requirement applies to the funds transferred into the Ed Tech program. Similarly, if an LEA transfers funds from its Ed Tech program to another program, the base on which the 25 percent professional development amount is calculated is reduced and the funds transferred out of Ed Tech would be subject to the requirements of the program to which they are transferred.

Part A of Title I, which you use as an example in your letter, has several statutory set-asides governing an LEA’s use of funds. For example there are set-asides prescribing the percentages of Title I funds that an LEA must spend on transportation or supplemental services, family literacy and parenting skills, professional development, and other activities. An LEA must apply the Title I set-aside provisions to funds that it transfers to its Title 1, Part A allocation.

We appreciate States’ need for guidance as they implement the provisions of No Child Left Behind. We plan to issue draft guidance on the new transferability provisions in the near future. In the meantime, if you need further assistance, please let me know.

Susan B. Neuman, Ed.D.
Assistant Secretary
Office of Elementary and Secondary Education

Table of Contents Policy Letters to States

Flexibility and Waivers - Transferability - NCLB Policy Letters to States