This update covers FY15 appropriations, E-Rate, QZABs, Secure/Rural Schools, OMB Regulation, and State Medicaid. It is seemingly all over the board, but do take a moment to scan it all. Happy holidays!

As AASA prepares for a few days away from the office to celebrate the holidays, here’s a quick round up of what happened as Congress wrapped up their 113th session and returned hope, not to return until the new year and the new Congress.

Funding: Congress completed its work for FY15 in mid-December, more than two months after the fiscal year had started. Here’s what you need to know: Generally speaking, if it is not listed below, it is level funded (and most programs in FY14 were not fully restored to pre-sequester levels, so many programs are level funded below pre-sequestration levels):

  • US Education Department discretionary funding, overall, is down by $166 million. Excluding Pell grants, the USED has a net increase of $137 million.
  • INCREASES
    • Early Education: Head Start is level funded and Child Care Development Block Grants received an increase of $75 million
    • Title I: $25m increase
    • IDEA: $25m increase
    • Charter School Grants: $5m increase
    • 21st Century Community Learning Centers: $2m increase
    • English Language Acquisition Grants: $14m increase
    • Striving Readers: $2m increase
    • Mathematics and Science Partnership: $3m increase
    • Funds for the Improvement of Education: $255.6m increase, $250m of which is for the Preschool Development Grants
      • FIE also includes $25m for Arts, $10m for Full Service Community Schools, $25m for Innovative Approaches to Literacy, $10m for Javits Gifted/Talented
    • IDEA Grants for Infants/Families: $.058m increase
  • DECREASES
    • Race to the Top: Eliminated
    • Investing in Innovation: $21m decrease
    • Safe and Drug Free Schools National Program: $20m decrease
    • High School Graduation Initiative: $46.2m decrease
    • Transition to Teaching: $.062m decrease
    • School Leadership: $9.3m decrease
    • Teacher Incentive Fund: $58.7m decrease
    • Carol White Physical Education Program: $27.5m decrease
    • NAEP: $3m decrease

Other Language to Note:

  • Secure/Rural Schools (Forest Counties): NOT funded in the CRomnibus.
  • School Nutrition Waivers: States can grant an exemption from the whole grain requirements to LEAs that demonstrate a hardship, including financial hardship, in procuring whole grain products. Additionally, sodium standards cannot be reduced below Target 1 until the latest scientific research establishes the reduction is beneficial for children. Also, States can vary the frequency of monitoring and compliance reviews of each school food authority based on past school performance, with no cycle extending more than five years.
  • ESEA Title II Teacher Quality State Grants: Allows up to 2.3% to be used for competitive awards for teacher/principal recruitment, training and PD activities.
  • Unaccompanied Minors: Dedicates the $14 million increase in ELL grants to LEAs with a significant increase in unaccompanied minor children. State-to-local grants, available to states with at least one county with 50 or more unaccompanied children released to sponsors since January 1, 2014.
  • Statewide Data Systems: Allows for up to $6 million of funds in the Educational Technical Assistance Act to support activities to improve data coordination, quality, and use at the local/state/national level.
  • Comprehensive School Safety Initiative: $75 million for this Justice Department program
  • School Improvement Grants: Includes languages that any final requirements for the SIG program adhere to bill language that allows LEAs to implement an alternative state-determined school improvement strategy

Related Resources:

E-Rate: On December 11, the FCC took unprecedented action to bolster E-Rate funding. By a partisan vote of 3-2, the FCC voted to raise the E-Rate funding cap by $1.5 billion. The funding cap decision was but one of a handful of changes/tweaks included in the broader order. The other big item that AASA was involved in was the definition of rural within E-Rate (Refresher here, from the blog). We are pleased to report that in addition to the long-advocated cap raise, the FCC vote included the AASA- recommended rural definition modification. You can read the full order or a related summary.

Each year, we need to ensure that the E-Rate program has an exemption from the Anti-Deficincy Act. The ADA requires that payments for programs cannot be made until there is actual money in the coffers. While this is not always a problem for E-Rate, there are instances where the user fees collected by the telecommunications companies are not available for distribution at the exact time the funds are due. Absent, the ADA exemption, the payment would not go out and internet connectivity would be disrupted for schools and libraries. We are always working for a permanent exemption from ADA, but have so far had to settle for one- or two-year exemptions. The current ADA exemption was set to expire at the end of 2015. As part of the FY15 CRomnibus, the exemption was extended through 2016.

School Construction (Qualified Zone Academy Bonds, or QZABs): QZABs moved as part of the tax extenders package at the very end of the Congressional session. Congress approved a one-year extension of QZABs, which provide critical support for renovating and repairing schools and classrooms. The tax extenders package provided a one-year $400 million extension.

Secure Rural Schools (Forest Counties): The CRomnibus did NOT include funding for SRS. While there was $70 million for Payment in Lieu of Taxes, there was zero funding for SRS. The two are related, but SRS is the program that ensures funding specific/direct to schools. Here’s an interesting/relevant link that helps describe the differences and overlap between PILT and SRS. Absent funding in the final FY15 funding bill, there is already a ‘Dear Colleague’ letter circulating on the House side to support reauthorization of and funding for SRS. We will be focusing on reauth in 2015, as well as efforts aimed at funding SRS (including retroactively, to the extent possible).

State Medicaid: Last week, the Centers for Medicare and Medicaid Services (CMS) issued guidance that removes a key barrier to funding school health services: the free care rule. In a State Medicaid Director’s Letter issued by CMS Director Cindy Mann, CMS clarified that schools are eligible to receive reimbursement for health services delivered to Medicaid-eligible students. Advocates around the country had been working to seek clarity from CMS on the “free care” rule, which had been inappropriately applied to schools, preventing school districts from receiving reimbursement for health services provided to Medicaid-eligible students. This announcement changes that.

OMB Procurement Regulations: In late 2013, the Federal Government issued a set of regulations from the Office of Management and Budget (OMB) designed to update policies for federal agency procurement and grant administration. The push for this revision stems from a 2012 Executive Order aimed at streamlining processes, improving cost effectiveness and reducing waste/fraud/abuse. The regulations are government-wide and each agency is responsible for providing additional clarification as necessary. Much of what is in the regulation is not new, but instead represents a streamlining/merger of multiple OMB guidance circulars. Please read the attached memo.

These rules take effect December 26, 2014 and will impact administrative, purchasing and audit policies for federal agencies and programs. It applies to all federal grantees, including school districts, states, institutions of higher education and educational service agencies—as well as their vendors. The rule applies to all purchases made by federal agencies and by any recipient of federal funds through a grant award, including state and local education agencies. The regulations apply more pressure to ensuring fair/open competition as well as more transparency in pricing and purchasing.

The Department of Education released its interim final rule this week, which kicked off a 60 day comment period. The reality is that there is not a lot of wiggle room for them to make substantive changes from what is outlined in the larger OMB document. Related FAQs, guidance and training will be available in the coming months.

Most important for your purposes and how this relates to procurement: While the new regulations take effect December 26, 2014, there will be a one-year grace period for the new procurement rules, The expectation is that most states already have a more rigorous procurement process in place. The change most likely to impact LEAs, ESAs and their vendors is the requirement for competition for contract awards exceeding $150,000 (no more sole source awards) as well as a requirement to make decisions based on both price and profit on contracts between $3,000 and $150,000 when there is no competition.