Economic Crisis Summit A NEW FUTURE FOR EDUCATION FUNDING DECEMBER 11-12, 2009 Washington, DC

The American Recovery and Reinvestment Act

ARRAAssociation of School Business

Officials InternationalLeader in School Business Management for

100 years

John D. Musso, CAE, RSBAExecutive Director

Economic Crisis Summit

A NEW FUTURE FOR EDUCATION FUNDINGDECEMBER 11-12, 2009Washington, DC


20 leading school business officials from the United States and Canada met to discuss the current economic environment and the effects on current and future budget cycles. They were joined by representatives from several education, nonprofit, and government organizations who presented case studies about public private partnerships (PPS) and venture philanthropy/education foundations and reviewed federal and state government reactions to the economic crisis.

Economic Crisis SummitSummit intent…

1.Share the information presented at the two day summit2.To provide a point of reference for the difficult conversations now taking place in school districts throughout the country.3.Create an awareness of a “new normal” in the economic underpinnings of public education4.Provide models and a process for moving toward a sustainable future of support5.To anticipate and foster the qualities and skills that will enable school business officials to lead their districts to that future


Was NOT intended to…1.Provide a comprehensive to do list2.Road map to climb out of the financial difficulties

Economic Crisis SummitKnown:1.40 states had reported severe revenue deficits or budget shortfalls for 20092.New administration was preparing economic stimulus plan3.Any decisions we make now must be made with the future in mind4.Low Hanging fruit gone5.Short term solutions = long term consequences6.More than one budget cycle7.Shift in local, state and federal financing8.Growing competition for all resources9.Foreign direct investment will be a driver10.Any recovery will reinforce the role of small business

a. Increased labor mobilityb. Looking for resources, not giving out funds

Economic Crisis SummitUnknown:1. Economic Stimulus Package

a. Amount of dollars to educationb. Guidelinesc. Timeline

2. Full impact of economic crisis3. Recession-depression4. Politics

Economic Crisis SummitResults1.Managing Expenditures

a. Most reductions have been made

2.Revenue Generation/Cost Sharinga. The generation of revenue to offset long-term

shortfalls and funding ongoing projects will have to be significant and sustainable


1. Public Private Partnerships (PPP)2. Venture Philanthropy

Economic Crisis SummitPublic Private Partnerships (PPP)

Contractual agreement between a public agency and private sector entity.1.Skills and assets of each partner are shared in delivering a service or facility for the use of the general public2.Shares resources3.Shares risks4.Shares rewards

Economic Crisis SummitPPP

Used successfully for years to leverage taxpayer funds with private sector investments to reduce the public sector’s costs and transfer some risk involved in infrastructure projects.1.Transportation2.Athletic facilities3.Computer/business labs4.Co share facilities5.Utilization of skilled employees as trainers6.Parking lot services


Venture Philanthropy

Use of education foundations to provide additional funding for local school districts.•Used for years around the states

Economic Crisis SummitVenture Philanthropy

Local Education Foundation (LEF)

1.Fundraising: Raise funds from the community, business and foundations to provide funding for programs and projects that can no longer be supported by the school district.2.Advocacy: Helps ensure that the general public and other stakeholders are aware of and motivated to support these programs


Venture PhilanthropyLocal Education Foundation (LEF)

Goals:Build a stronger alumni support, begin to partner with business and corporate leaders, and encourage the citizens of the community to take a more active role in education of the next generation.


PPP & VP only possible solutions1.Myriad of other opportunities to build a sustainable framework

2.There is no silver bullet or one size fits all solution to the problems school districts are facing.

3.Balancing cost cutting against revenue generation/cost sharing will be the formula for success.


Process for the difficult discussions that school districts must engage in.

Engaging all stakeholders; school officials, board members, teachers, support staff, parents, students, business sector, community members

1.Discussions about the future.2.NOT discussions about cuts3.“New Normal”

Economic Crisis SummitAlternative Futures

SUCCESS…Any decisions must be made with future in mind.

Discussions…Redefining the core curriculum, prioritizing extracurricular activities and renegotiating contracts.

Economic Crisis SummitDiscussions…In order to effect long term change may be necessary to engage lawmakers on both local and state levels {POLICY}

Because:Cost cutting, budget trimming, looking for cost efficiencies and economies of scale, eliminating some ancillary programs may not be enough to balance budgets.

Economic Crisis SummitKey to success and a warning

Achieving a reliable new foundation of support will require well-designed strategies for revenue generation and cost shifting/sharing. Opportunities for increasing revenue and sharing costs abound, but may be less recognizable than those for cost cutting.


Alternatives Futures Process

A point for beginning the difficult discussions


Alternative Futures ProcessUses the principles of scenario planning to help organizations, from global businesses to local non profits make decisions when the future is uncertain and maintaining the status quo is no longer an option.

Becomes a relationship/partnership

Economic Crisis SummitScenarios

Stories about how the future might lookMeant to be hypotheses, NOT predictions.

Created in sets of stories, usually 3 or 4 that envision a range of futures and the opportunities and threats they present.

Each story about the future models a distinct, plausible world in which we might someday live and work

Economic Crisis SummitScenario planning not forecasting

You don’t predict a single outcome; you pose several potential futures, none of which will probably come to pass as presented but, all of which will challenge the prevailing mindset and make you aware of the forces that will affect your current decisions. It provides a way of thinking about and managing change.


Begin ProcessIdentifying the focal issue or decision that needs to be addressed and determining they key drivers at work in the current environment.

Economic Crisis SummitProcess

These drivers fall into four categories:1.Social Dynamics-How influential will the senior population be in the next 10 years?2.Economic-Will we be able to find the skilled workforce that we need?3.Political- How will changes in the tax structure affect my business?4.Technological- Will the widening availability of wireless technology negate the need for landline phones?

Economic Crisis SummitFrom these driving forces there will be certain “predetermined” elements that are largely outside of our control

The number of high school students in 10 years will be more or less determined by the number of children in elementary school now.


After the predetermined elements are identified, we are left with a number of uncertainties. These must be narrowed to the few that are most important to the focal issue or decision needing to be made.

Commonality among uncertainties can be simplified to form a matrix that will define the 4 very different, but plausible, quadrants of uncertainty. Each of the 4 corners becomes a logical “future”.

Economic Crisis SummitMatrix based on the current trends influencing traditional sources of school funding.

Cost Control Strategies

Government Sovereignty

Revenue Generating Strategies

Social Entrepreneurship

Economic Crisis SummitMatrix based on current trends influencing traditional sources of school funding1.Systemic decline in key sources of state and local government revenue2.Growing dichotomy between schools and labor markets caused by increasingly mobile workforce, reducing the return to education for local municipalities3.Downsizing of American/Canadian businesses, making assessing employer needs more difficult4.Growth in virtual work environments5.Growing role of private and nonprofit participation in public school services


Scenarios took place in 2012

Longer scenarios produce more wildcards that muddy the process-more unknowns-lower chance of success and predictability.


Scenario questions fall into two categories

1.What would we do if…?2.What needs to happen if…?


Address the following questions for each of the futures outlined1.Who provides school services?

a. What new partners are engaged?b. Who are the new gatekeepers?c. What kinds of new organizations are involved?


2. What has changed for school business management and financing?a. What new practices have emerged?b. Who sets the rules for such practices?c. What new kinds of relationships have emerged? –

How does managing those relationships differ from traditional practices?

d. Are there new competitors for school business management?

e. Who are school business officials’ new partners and peers


3. What infrastructure changes need to be effected to ensure that school business managers can succeed?

a. What laws need to be changed?b. What financial rules need to be developed?c. How has authority shifted and to whom?d. What new public relations problems have

arisen and how are they managed?


Attendees were organized groups to conduct and document discussions and evaluation of the alternative futures scenarios.

Examples such as PPP and Venture Philanthropy were the attendees ideas examples of potential solutions to fiscal challenges


Focus…1.Prioritizing the district’s essential needs2.Exploring potential resources3.Creating an implementation plan4.Enlisting individuals to execute the plan5.Creation and implementation of a communications plan


Have a post recession plan

The economy eventually will rebound and we will want to sustain some of the changes made while discarding others. As cost cuts/reductions are reviewed, it is imperative that school officials think ahead and include a rebuilding effort into their plans.

Economic Crisis SummitHave a post recession plan

For example, increasing class sizes will not be something that most school systems will want to sustain……Increased numbers of teachers will be needed to fill those once-vacant slots. Planning for those eventualities must occur now when the cuts are being made.


Have a post recession plan

Use the economic crisis to your advantage

Programmatic “Sacred Cows”

Economic Crisis SummitHave a post recession plan

Your post recession plan then becomes a PR tool.1.Essentially telling the school community that some of these unattractive solutions are temporary. 2.Become part of solutions-not problems3.Become your advocates4.Avoids “killing the messenger” syndrome5.Enlisting their support throughout the process is critical.

Economic Crisis Summit3. What infrastructure changes need to be effected to ensure that school business managers can succeed?

a. What laws need to be changed?b. What financial rules need to be developed?c. How has authority shifted and to whom?d. What new public relations problems have

arisen and how are they managed?

Perfect Storm for Reform

•Obama effect•Leadership on the Hill and the Unions•Proven strategies for success•The Recovery Act--$100 billion

Saving and Creating Jobs and Reforming Education

“In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity - it is a pre-requisite. The countries that out-teach us today will out-compete us tomorrow.” - President Barack Obama, 2/24/09

Historic, One-time Investment

Over $100 billion education investment Historic opportunity to stimulate economy and

improve education Success depends on leadership, judgment,

coordination, and communication

Guiding Principles

Advance Core Reforms: Assurances

Balance of Speed and Effectiveness

Balance speed and stimulus with careful planning and effective reforms

States should award funds to LEAs as quickly as is prudent and LEAs should use funds expeditiously but sensibly

LEA obligation timelines: State Fiscal Stabilization Fund (SFSF): must be obligated by

September 30, 2011 Title I, Part A: in absence of a waiver, 85% by Sept 30, 2010; any

remaining by Sept 30, 2011 IDEA, Part B: majority during school years 2008/09 and 2009/10

and remainder by September 30, 2011

Short-term Investments that Produce Lasting Results; Avoid “The Cliff”

Maximize short-term investments with lasting results for: students teacher, school, and district capacity for improvement

Minimize unsustainable ongoing commitments Integrate coherent improvement strategies that are

aligned with the core reform goals

State Fiscal Stabilization Fund for Government Services

States may use for education, public safety and other government services

May include modernization, renovation, and repair of public schools and public and private college facilities

SFSF Incentive Fund: “Race to Top” and “Invest in What Works and Innovation”

“Race to the Top”- $4.35 billion competitive grants to States making most progress toward the assurances

“Investing in What Works and Innovation” - $650 million competitive grants to LEAs and non-profits that have made significant gains in closing achievement gaps to be models of best practices

2010 grant awards will be made in two rounds - late Fall 2009, Summer 2010

All dressed up and no where to go?

Or$100 billion and what do I

spend it on?

Potential Uses of Title I Funds that Support Assurances and Avoid “The Cliff” Examples to consider:

Establish a system for identifying and training highly effective teachers to serve as instructional leaders in Title I schoolwide programs and modifying the school schedule to allow for collaboration among the instructional staff

Provide new opportunities for Title I schoolwide programs for secondary school students to use high-quality, online courseware as supplemental learning materials for meeting mathematics and science requirements

Develop and expand longitudinal data systems to drive continuous improvement efforts focused on increased achievement in Title I schools

Potential Uses of IDEA Funds that Support Assurances and Avoid “The

Cliff” Examples to consider:

Provide intensive district-wide professional development for special education and regular education teachers that focuses on scaling-up, through replication, proven and innovative evidence-based school-wide strategies in reading, math, writing and science, and positive behavioral supports to improve outcomes for students with disabilities

Develop or expand the capacity to collect and use data to improve teaching and learning

Framing Questions for Decision Making in Spending Funds

1. Does it drive results for students?


1. Does it drive results for students?2. Does it increase capacity?


1. Does it drive results for students?2. Does it increase capacity?3. Does it accelerate reform?


1. Does it drive results for students?2. Does it increase capacity?3. Does it accelerate reform?4. Does it avoid the cliff and improve

productivity?


1. Does it drive results for students?2. Does it increase capacity?3. Does it accelerate reform?4. Does it avoid the cliff and improve productivity?5. Does it foster continuous improvement?

MODIFICATIONS TO QUESTIONS IN THEAPRIL 2009 GUIDANCE ON THE

INDIVIDUALS WITH DISABILITIES EDUCATION ACT, PART B

U.S. DEPARTMENT OF EDUCATIONJULY 1, 2009

H. Treating Stabilization Funds as State or Local Funds for Purposes of Meeting the IDEA, Part B MOE Requirements (Section H added July 1, 2009)

Accountability and Transparency All ARRA funds must be tracked separately

Quarterly reports on both financial information and how funds are being used

Estimated number of jobs created Subcontracts and sub-grants required to comply with the

Federal Funding Accountability and Transparency Act Reporting template being developed for use by States to

capture required information Transparency allows opportunity to quantify/define goals and

mobilize support for improving results for all students

ARRA AND DATA

“President Obama has made clear that every dollar spent under the ARRA will be subject to the most stringent standards of accountability and transparency. A government-wide Recovery Accountability and Transparency Board will coordinate and conduct oversight of program funds to prevent fraud, waste, and abuse –they will monitor the progress of the economic recovery and the use of funds under the act”.

ARRA-REPORTING REQUIREMENTS

Secretary Duncan…


“It starts with robust data systems that track student achievement and teacher effectiveness-”

“ We need to do a much better job of tracking students from Pre-K through college”.


“Teachers need data to better target instruction to students”.

“Principals need to know which teachers are producing the biggest gains and which may need more help”.


“We need to track teachers back to their colleges of education so we can challenge teacher-training programs to raise the bar”.

“There’s a lot of money available in the Recovery Act to help improve our data systems and I want to work with you to put the very best technology at the service of educators”.


“We also have to fix our method of evaluating teachers-which is basically broken”.

“We encourage you to work together to develop benchmark tests so that teachers can understand how their students are doing during the school year and can target instruction accordingly”.


1. All ARRA funds must be tracked separately1. Quarterly reports on both financial information and

how funds are being used2. Estimated number of jobs created3. Subcontracts and sub-grants required to comply with

the Federal Funding Accountability and Transparency Act

2. Reporting template being developed for use by States to capture required information

3. Transparency allows opportunity to quantify/define goals and mobilize support for improving results for all students

Advance Core Reforms: Assurances

Data Metrics: Show How Schools Perform, Help Schools Improve (1)

• Specific data metrics on the four assurances• Transparency on state progress toward reforms will drive

conversations and action• In application for phase two stabilization funds, states provide

plan for collecting and reporting these data


• Teacher effectiveness and ensuring that all schools have highly qualified teachers– Number and % of teachers in the highest-poverty and lowest-

poverty schools in the state who are highly qualified – Number and % of teachers and principals rated at each

performance level in each LEA’s teacher evaluation system– Number and % of LEA teacher and principal evaluation systems

that require evidence of student achievement outcomes


• Higher standards and rigorous assessments that will improve both teaching and learning – Most recent math and reading NAEP scores – Steps to improve assessments– Valid reliable measures for ELLs and students with disabilities test in math

and English Language Arts (ELA)– % of ELLs and students with disabilities tested in math and ELA– Number and % of students who graduate and complete one year of college


• Intensive support, effective interventions, and improved achievement in schools that need it the most – Number of schools in restructuring status that demonstrated substantial

gains in achievement, closed, or consolidated – last 3 years – Number of schools in the bottom 5% of those schools that demonstrated

substantial gains in student achievement, closed or consolidated - last 3 years

– Number and % of schools in restructuring status that have made progress in math and ELA in last year

– Charter school caps, number operating, number closed


• Better information to educators and the public, to address the individual needs of students and improve teacher performance – Statewide data system includes elements of America

COMPETES Act– All teachers in math and ELA in tested grades receive timely

data and estimates of individual teacher impact on student achievement to inform instruction

Transparency, Accountability, and Reporting

Are there rules that govern the amount of IDEA Part C ARRA funds that a state lead agency may draw down at any one time?

Yes. A state lead agency must have an effective system for managing the flow of funds that ensures that it is able to draw down funds as needed to pay program costs but that also minimizes the time that elapses between the transfer of the funds and their disbursement by the state lead agency, in accordance with U.S. Department of the Treasury regulations at 31 CF. Part 205. (See 34 CFR §80.21(b).) A state lead agency must promptly, but at least quarterly, remit to ED interest earned on advances (34 CFR §80.21(i)). The Department will take appropriate actions against state lead agencies that fail to comply with this requirement.


What information is a state required to include in its quarterly reports under the ARRA?

A state is required to submit reports containing the information required under section 1512(c) of the ARRA. These reports must be submitted not later than 10 days after the end of each calendar quarter. OMB has issued government-wide guidance on the ARRA reporting requirements and procedures.


What are our shared responsibilities for ensuring that all funds under the ARRA are used for authorized purposes and instances of fraud, waste, and abuse are prevented?

All ARRA funds must be spent with an unprecedented level of transparency and accountability. Accordingly, state lead agencies must maintain accurate, complete, and reliable documentation of all IDEA, Part C ARRA expenditures. The ARRA contains very stringent reporting requirements and requires that detailed information on the uses of funds be available publicly on www.recovery.gov <<http://www.recovery.gov>>.


The ARRA establishes the Recovery Act Accountability and Transparency Board, which is responsible for coordinating and conducting oversight of spending under the ARRA to prevent fraud, waste, and abuse. The Department’s Office of Inspector General (OIG) will be conducting comprehensive audits of ARRA implementation activities. In addition, Department program offices will closely monitor these activities.

Establishing data systems and using data for improvement

At the heart of improving schools and school districts are systems to gather and analyze data and provide feedback to educators, students, families, and the community in order to improve student and teacher performance continuously. Examples of investments in data systems and effective use of data include efforts to:


Develop or enhance existing data systems to provide teachers access to

(1)student data in such areas as attendance, grades, course schedules, and disability or English language learner status, and

(2) data that show academic performance and growth, how those compare to statewide averages for similar students and schools, and whether students are on track to meet standards and graduate from high school.


Track the number and percentage of students by school who graduate high school and go on to complete at least one year’s worth of college credit. Use the information to strengthen high school programs and increase the percentage of students going on to college.


Link districts’ multiple data systems (including student, financial, and personnel) and use resulting information for analyses and reports that enable community, district, and school leaders to better understand the educational and cost effectiveness of district programs and strategies and allocate resources accordingly.


Launch an easy-to-use online Individualized Education Program (IEP) system for students with disabilities that is aligned with state academic standards and can be used by educators to create content-rich IEPs that are aligned with the general education curriculum.


• The Secretary intends to issue regulations to allow reasonable adjustments to the limitation on State administration expenditures to help States defray the costs of ARRA data collection requirements.


2009


2009 2010


2009 2010 2011


2008 2009 2010 2011


2008 2009 2010 20112007


2008 2009 2010 2011FY ’06 Level-MOE

2007

Accountability and Transparency Board

Currently two Indiana School Districts have been notified of impending ARRA audits

NEXT STEPS

ISSUE AT HAND

• Education has become the “target” for the $$ available.

ARRAOpportunity and Danger Card

Dr. Carolyn Warner

1. Listen closely

1. Listen closely

2. Plan carefully

1. Listen closely2. Plan carefully.

3. Proceed cautiously

1. Listen closely2. Plan carefully. 3. Proceed cautiously.

4. Document thoroughly

“The path to jobs and growth begins in America’s classrooms. The decisions we make about how to educate our children will shape our future for generations to come. They will determine not just whether our children have the chance to fulfill their God-given potential, or whether our workers have the chance to build a better life for their families, but whether we, as a nation, will remain in the 21st Century, the kind of global economic leader that we were in the twentieth. If we want to out-compete the world tomorrow, we must out-educate the world today.” ~ President Barack Obama

Make a difference in the life of a child everyday

If any professional organization can help its members minimize the “Danger” side of

the card and emphasize the “Opportunity” side, it is ASBO International.

…Dr. Carolyn Warner

No portion of this presentation may be used or reproduced without the consent from ASBO International

RESOURCES

www.asbointl.org1. ARRA2. ASBO RADIO3. ASBP Economic Recovery and Planning

Blog, USDOE Updates & Links

[email protected]

http://www.asbointl.org/

mailto:[email protected]

Economic Crisis Summit A NEW FUTURE FOR EDUCATION FUNDING DECEMBER 11-12, 2009 Washington, DC

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