Charter Schools:

Federal Funding Available but Barriers Exist

HEHS-98-84: Published: Apr 30, 1998. Publicly Released: May 7, 1998.

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Pursuant to a congressional request, GAO provided information on: (1) the way selected states allocate Elementary and Secondary Education Act Title I and Individuals With Disabilities Education Act (IDEA) funds to charter and other public schools; (2) factors that help and hinder charter schools in accessing Title I and IDEA funds; (3) whether factors that help or hinder charter schools to access federal funds vary by the funding path used in selected states; and (4) state and federal efforts designed to help charter schools access federal funds.

GAO noted that: (1) in general, states either allocate funds to charter schools directly, considering them to be independent school districts or local educational agencies (LEA), or indirectly through a parent school district, considering a charter school to be a member of an existing school district; (2) overall, about two-fifths of the charter schools GAO surveyed received Title I funds, and slightly more than half of them received IDEA funds or IDEA-funded special education services; (3) most charter schools that did not receive funds did not apply for them; (4) two-thirds of charter school operators whom GAO surveyed and who expressed an opinion believed that they received a fair share of Title I or IDEA funds or IDEA-funded special education services; (5) a variety of barriers, according to GAO's review, have made it difficult for charter schools to access Title I and IDEA funds; (6) these barriers include a lack of enrollment and student eligibility data to submit to states before funding allocation decisions are made and the time required and costs involved in applying for such funds; (7) charter school operators most often cited training and technical assistance and notification of their eligibility for federal funds as factors that helped them access Title I and IDEA funds; (8) many factors that helped or hindered charter schools access federal funds had no relation to the schools' receiving their funds directly from the state or indirectly through a parent school district, but some factors did relate to the funding path; (9) for example, the working relationship between a charter school and its sponsoring district could either help or hinder the school's access to federal funds; (10) in contrast, charter schools treated as LEAs and receiving federal funds directly from the state were largely unaffected by their relationships with local school districts; (11) several states and the Department of Education have begun initiatives to help charter schools access federal funds; (12) some states are revising or developing alternative allocation policies and procedures to improve charter schools' access to federal funds and providing training and technical assistance to charter school operators; and (13) the Department recently issued guidance to states and LEAs on allocating federal Title I funds to charter schools and has funded the development of an Internet web site with information on federal programs, charter school operational issues, a charter school resource directory as well as profiles of charter school states and charter schools.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In a June 1999 letter to the Comptroller General, the Secretary of Education wrote that, through the Department's implementation of the Charter Schools Expansion Act (P.L. 105-278), the intent of GAO's recommendation is being fulfilled. In October 1998, the Congress passed this law to, among other things, require the Secretary and State educational agencies to ensure that every charter school receives the federal funding for which it is eligible, not later than 5 months after the charter school first opens or after it significantly expands its enrollment. Covered federal programs include Title I of the Elementary and Secondary Education Act and the Individuals with Disabilities Education Act, and other programs under which the Department allocates funds to States on a formula basis. On May 18, 1999, the Department published proposed rules to implement the requirements.

    Recommendation: The Secretary of Education should direct states to include in their Title I plans information on the strategies, activities, and resources that the state educational agencies will use to ensure that Title I program resources serve eligible charter school students.

    Agency Affected: Department of Education

  2. Status: Closed - Not Implemented

    Comments: In a June 1999 letter to the Comptroller General, the Secretary of Education wrote that the Department did not have the authority to direct states to include charter school representation on states' Title I committees of practitioners. Congress addressed the recommendation in the Charter Schools Expansion Act (Public Law 105-278). GAO believed that including charter school representatives on such committees would provide charter schools with a forum for addressing their concerns about federal funding. Public Law 105-278 requires the Secretary and the states to ensure that charter schools receive the federal funding for which they are eligible not later than 5 months after schools open or after schools significantly expand enrollment. Covered federal programs include:(1) Title I of the Elementary and Secondary Education Act, (2) the Individuals with Disabilities Education Act, and (3) other programs under which the Department allocates funds to states on a formula basis.

    Recommendation: The Secretary of Education should take the steps necessary to direct states to include charter school representation on states' Title I committees of practitioners that advise states on implementing their Title I program responsibilities.

    Agency Affected: Department of Education

 

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