HD61 - Final Report on the Costs of the Federal No Child Left Behind Act (September 28, 2005)


Executive Summary:
The Virginia Department of Education (DOE) undertook to study the state agency and local school division costs of the 2001 "No Child Left Behind Act" (NCLB) in response to actions taken by the 2004 and 2005 General Assembly. Concurrently, the DOE joined a consortium of state departments of education, sponsored by the Council of Chief State School Officers (CCSSO) to develop a coordinated approach for analyzing the costs of NCLB for multiple states. The CCSSO contracted with Augenblick, Palaich and Associates (APA) to develop the model framework for states and local divisions to use to determine the activities and costs to implement NCLB.

The CCSSO initiative takes a two-part approach: first, states identify the costs of NCLB to the State Education Agency or SEA (in Virginia, the Department of Education) and, secondly, the Local Education Agencies or LEAs (in Virginia, local school divisions) determine their costs of implementing NCLB. This report, presented to and approved by the Board of Education, contains the findings on NCLB costs to the Virginia Department of Education. A separate, second report, issued concurrently, sets out the NCLB costs to Virginia's LEAS.

Working with APA, the states participating in the CCSSO cost consortium broke the requirements of NCLB into seven major components for purposes of determining costs to both the SEAs and LEAS. All states participating in the NCLB cost consortium agreed to use the following major components: 1) Standards and Assessments; 2) Accountability; 3) Technical Assistance; 4) School Choice and Supplemental Services; 5) High-Quality Educators; 6) NCLB Data Management; and 7) Administration of NCLB and Title Programs.

Prior to the implementation of NCLB, Virginia had already established its own system of accountability. The Constitution of Virginia requires the Board of Education to determine and prescribe standards of quality for the public schools of Virginia, subject to revision only by the General Assembly. These codified standards, known as the Standards of Quality (SOQ), include requirements for Standards of Learning (SOL), teacher licensing, school accreditation, and student achievement. In 1995, the Virginia Board of Education (Board) took action to reform Virginia's public education system by identifying what students should learn, regularly assessing student achievement in key areas, and making schools accountable for student achievement. The first statewide SOL tests were administered in the spring of 1998.

NCLB is not a new federal program but an overlay of new requirements on many existing federal programs, with additional funds provided to help states make the transition to an environment of annual student achievement tests. In Virginia, NCLB overlaid the state's well-established, statewide system of assessment, accountability and support. It also presented reporting challenges to the Commonwealth because of differences between the existing state accreditation requirements and the federal measure of Adequate Yearly Progress (AYP). As a result, since the passage of NCLB, Virginia has been blending its accountability system with the requirements of NCLB, a process that has been administratively challenging to both state and local administrators and to the public.

Virginia's approach to determining the SEA costs related to NCLB entailed building three "tiers" of costs. First, the budget for each division within the SEA for the base fiscal year, 2004-2005, was developed for both personal and nonpersonal services (Tier I). Next, staff determined what costs were NLCB-related costs and eliminated all non-NCLB-related costs (Tier II). Finally, staff determined what Tier II costs were truly new costs as a result of NCLB, that is, costs resulting from activities that DOE would not have undertaken at any time except for NCLB requirements (Tier III). The final Tier III costs for the SEA were then assigned to the applicable cost structure components.

Because the state-level data collection method differed somewhat from that developed by APA, Virginia collaborated directly with APA on the study methodology. APA reviewed the final SEA study methodology and this report and found that the data collection method and the placement of the data in the CCSSO/APA cost structure is sound and consistent with the intended purpose of the component structure.

The figures presented in this report present estimates only, not precise expenditures or revenues.

The cost study found that total estimated SEA costs for NCLB are covered by total projected federal revenues for the measurement period of the study. The major cost components were:

• Standards and Assessments, as a result of the new testing requirements under NCLB;

• Administration of NCLB and Title Programs, which includes the Reading First program, 21st Century Community Learning Centers, and English Language Proficiency;

• High Quality Educators, including data management activities and continuation of initiatives to develop and support high quality teachers and principals; and

• Technical Assistance for LEAs and Schools, including the development of strategies to help schools avoid falling into "in improvement status" and to assist LEAs with schools "in improvement status."

Because of the 2014 requirement for 100 percent student proficiency and because NCLB implementation decisions continue to be made as the result of waiver requests and other national issues, the results presented here could and most likely will change over time. Unanticipated need sat both the state and local level could quickly eradicate the modest surpluses found in this study. The SEA's ability to cover all estimated costs with available NCLB federal revenues is predicated upon its having the flexibility to use federal revenues to meet related needs across NCLB Title programs.