[Federal Register Volume 67, Number 139 (Friday, July 19, 2002)]
[Notices]
[Pages 47529-47532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18307]


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DEPARTMENT OF EDUCATION


Local Flexibility Demonstration Program

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

ACTION: Notice of final application requirements, selection criteria, 
and application process.

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SUMMARY: The Secretary announces final application requirements, 
selection criteria, and the application process for the Local 
Flexibility (Local-Flex) Demonstration Program.

EFFECTIVE DATE: August 19, 2002.

SUPPLEMENTARY INFORMATION: On February 22, 2002, we published in the 
Federal Register (67 FR 8442-8444) a notice of proposed application 
requirements, selection criteria, and application process for the 
Local-Flex program, which is authorized under sections 6151 through 
6156 of the Elementary and Secondary Education Act (ESEA), as amended 
by the No Child Left Behind Act of 2001 (Pub. L. 107-110). This notice 
announces final application requirements, selection criteria, and the 
application process for the program.

    Note: This notice does not solicit applications. A notice 
inviting applications under the Local-Flex competition is published 
separately in this issue of the Federal Register.

Analysis of Comments and Changes

    Four parties submitted various comments in response to the notice 
of proposed application requirements, selection criteria, and 
application process.
    Comment: One commenter suggested that we revise the language 
concerning the baseline academic data that local educational agencies 
(LEAs) would submit with their applications. This commenter suggested 
that LEAs should provide as their baseline the results under their 
adequate yearly progress (AYP) definition under the predecessor ESEA.
    Discussion: Recognizing that States are in the process of 
developing State AYP definitions to meet the requirements in the 
reauthorized ESEA we are requesting LEAs to submit the best available 
disaggregated baseline data. These data should be based on assessments 
consistent with section 1111(b)(3) of the predecessor ESEA.
    Changes: We have clarified that, in submitting baseline academic 
data, LEAs must provide student achievement data from assessments 
consistent with section 1111(b)(3) of the predecessor ESEA.
    Comment: One commenter suggested that after revising its goals 
based on the State's new AYP definition, an LEA should be required to 
submit its revised goals to the Secretary.
    Response: The Secretary had intended that an LEA be required to 
submit these revised goals as part of a proposed amendment to its 
Local-Flex agreement.
    Changes: We have clarified that an LEA must not only revise its 
goals, as necessary, after the State develops the State AYP definition, 
but that it must also submit the revised goals to the Secretary as part 
of a proposed amendment to its Local-Flex agreement. We have also 
clarified that LEAs must submit any revised strategies for reaching 
those goals.
    Comment: Two commenters expressed concern about the relationship 
between LEAs that have entered into Local-Flex agreements and State 
educational agencies (SEAs) that subsequently seek State-Flex authority 
under sections 6141 through 6144 of the ESEA. One of the commenters 
indicated that an SEA seeking State-Flex authority should not be 
required to incorporate Local-Flex agreements into its State-Flex 
proposal, and the other commenter said that an LEA should not be forced 
to incorporate its Local-Flex agreement into its SEA's State-Flex 
proposal.
    Response: Under the legislation, the Secretary may enter into 
Local-Flex agreements only with LEAs in States that do not have State-
Flex authority. Furthermore, if an SEA notified the Secretary, by May 
8, 2002, that it intended to apply for State-Flex authority, an LEA in 
that State is precluded from applying for Local-Flex until the 
Department makes a final determination concerning the SEA's State-Flex 
application. The May 8, 2002 notification deadline essentially gave 
SEAs an opportunity to seek State-Flex before permitting their LEAs to 
seek Local-Flex authority.
    The application process that we described in the February 28, 2002 
Federal Register notice is consistent with the statutory provisions. 
Under this process, an SEA initially decided whether it intended to 
apply for State-Flex authority and to preclude its LEAs from entering 
into Local-Flex agreements with the Secretary. If an SEA chose not to 
notify the Department, by May 8, 2002, that it intended to apply for 
State-Flex, its LEAs may participate in the Local-Flex competition.
    Once an LEA in a State has entered into a Local-Flex agreement, an 
SEA may subsequently receive State-Flex authority only if any LEA in 
the State with a Local-Flex agreement agrees to be part of the SEA's 
State-Flex proposal.
    Changes: In the notice inviting applications published elsewhere in 
this issue of the Federal Register, we have clarified that if an LEA 
has entered into a Local-Flex agreement with the Secretary and its SEA 
later seeks to apply for State-Flex authority, the SEA may not force 
the LEA to be part of the State-Flex proposal. The SEA may seek State-
Flex only if each of its LEAs that has a Local-Flex agreement with the 
Secretary agrees to be part of the SEA's submission. SEAs and LEAs are 
encouraged to work cooperatively to minimize potential disputes 
regarding the implementation of State-Flex and Local-Flex.
    Comment: One commenter suggested that applicants be required to 
submit the following information to enable the Secretary to evaluate 
whether they are focusing on serving the needs of students most at risk 
of educational failure: (1) The number and percentage of schools in the 
district that qualify for schoolwide programs; (2) The amount of local 
education funds spent per pupil at Title I schools compared to the per-
pupil spending at non-Title I schools; and (3) Any formula the district 
would use to target consolidated Federal funds to students most at risk 
of education failure.
    Discussion: An applicant must submit detailed baseline academic 
data and specific measurable goals, with annual objectives, that it 
seeks to achieve by consolidating and using funds in accordance with 
the terms of its proposed agreement. The goals must relate to raising 
student achievement and narrowing achievement gaps relative to the 
baseline data that are submitted. In addition, the applicant must 
propose specific strategies for reaching the stated goals. On the basis 
of the application requirements and the selection criteria that will be 
used for this competition, we will be able to focus Local-Flex 
agreements on LEAs serving the need of students most at risk of 
educational failure competition.
    Changes: None.

[[Page 47530]]

    Comment: One commenter suggested that each applicant be required to 
describe how its proposed Local-Flex plan will meet the general 
purposes of the programs included in the consolidation. This commenter 
also urged us to require each applicant to document parental 
involvement in the planning process, to explain how the applicant will 
continue to comply with all applicable civil rights requirements, and 
to include in its application a description of the accounting 
procedures and safeguards that it would employ to ensure proper 
disbursement of, and accounting for, Federal funds.
    Discussion: In the February 22, 2002 Federal Register notice, we 
did not include all of the statutory application requirements. We did 
not believe that it was necessary to seek public comments on some of 
the more explicit requirements included in the legislation. However, 
all of the statutory application requirements, including those 
addressed in this notice, are discussed in the application package.
    The comments referenced in the preceding paragraph concerning 
parental involvement and fiscal responsibility are addressed in the 
application package. We have made changes to the application 
requirements and selection criteria in this notice to address the 
comment concerning the general purposes of the programs included in the 
consolidations. With respect to the comment on civil rights compliance, 
all applicants, as mandated by the legislation, will be required to 
submit an assurance that they are complying with all applicable civil 
rights requirements.
    Changes: We have modified the application requirements to state 
expressly that each applicant must, as part of its five-year proposal, 
describe how it will meet the general purposes of the programs that are 
consolidated. In addition, we have modified the ``Quality of the Local-
Flex Plan'' selection criterion to include a factor relating to the 
general purposes of the consolidated programs.
    Comment: One commenter suggested that under the application 
requirements, migrant status should be listed as one of the subgroups 
by which the baseline academic data should be disaggregated.
    Discussion: We do not agree because migrant status is not one of 
the required subgroups for determining AYP under Part A of Title I. 
Given that an LEA's progress in implementing Local-Flex will be 
measured on the basis of its AYP status, we believe that it is 
important to obtain, at a minimum, disaggregated baseline data that 
reflect the AYP subgroups. While it is not mandatory, applicants may 
also submit other disaggregated data, such as migrant status, which are 
required for reporting assessment results under section 1111(b)(3) of 
the reauthorized ESEA.
    Changes: None.
    Comment: One commenter suggested that under the ``Quality of the 
Local-Flex Plan'' selection criteria, we add a factor about the extent 
to which the LEA included parents in the development of its Local-Flex 
proposal, particularly parents of subgroups of significant size.
    Discussion: We agree that the selection criteria should include a 
factor relating to parental involvement in the development of the 
Local-Flex proposals, particularly the parents of students most at risk 
of educational failure.
    Changes: We have modified the ``Quality of the Local-Flex Plan'' 
criterion to add a factor relating to the involvement of parents, 
particularly the parents of students most at risk of educational 
failure, in the development of the Local-Flex proposal.
    Comment: One commenter stated that the overall application process 
should outline a process for reviewing and deciding issues of continued 
participation in Local-Flex if the LEA does not meet its stated targets 
for student achievement over a two-to three-year period.
    Discussion: The legislation states that the Secretary must, after 
providing notice and an opportunity for a hearing, promptly terminate a 
Local-Flex agreement if an LEA fails to make adequate yearly progress 
for two consecutive years. The legislation also provides that, after 
providing notice and an opportunity for a hearing, the Secretary may 
terminate a Local-Flex agreement if there is evidence that an LEA has 
failed to comply with the terms of the agreement.
    The Secretary does not believe that it is necessary to issue, at 
this time, additional guidance on the termination of a Local-Flex 
agreement.
    Changes: None.

I. Application Requirements

    In order that the Secretary can select Local-Flex participants in 
accordance with section 6151 of the ESEA, Local-Flex applicants must 
submit the following information, together with the other information 
set forth in the legislation and outlined in the Local-Flex application 
package.
    (a) Baseline academic data. Each LEA seeking to enter into a Local-
Flex agreement with the Secretary must provide, as part of its proposed 
agreement, student achievement data for the most recent available 
school year, including data from assessments under section 1111(b)(3) 
of the predecessor ESEA, as well as descriptions of achievement trends. 
To the extent possible, an LEA must provide data for both mathematics 
and reading or language arts, and the LEA must disaggregate the results 
by each major racial and ethnic group, by English proficiency status, 
by disability status, and by status as economically disadvantaged. 
(These are the categories, among others, by which an LEA will 
disaggregate data for determining AYP under section 1111(b)(2) of the 
reauthorized ESEA. Furthermore, these are the categories, among others, 
by which an LEA had to disaggregate data for reporting assessment 
results under section 1111(b)(3) of the predecessor ESEA.)
    In addition to submitting baseline achievement data that are 
disaggregated, to the extent possible, by the categories noted above, 
LEAs may also submit baseline achievement data that are further 
disaggregated by gender and by migrant status, or baseline data on 
other academic indicators, such as grade-to-grade retention rates, 
student dropout rates, and percentages of students completing gifted 
and talented, advanced placement, and college preparatory courses. To 
the extent possible, the baseline data on other academic indicators 
should also be disaggregated.
    (b) Specific, measurable education goals. Each applicant must 
submit a five-year Local-Flex plan that contains specific, measurable 
educational goals, with annual objectives, that the LEA seeks to 
achieve by consolidating and using funds in accordance with the terms 
of its proposed agreement. The goals must relate to raising student 
achievement and narrowing achievement gaps relative to the baseline 
achievement data and other baseline data that are submitted.
    At the time an LEA submits its initial proposed Local-Flex 
agreement, the goals in its proposal will not have to relate to the 
State's definition of AYP under section 1111(b)(2) of the ESEA because 
those definitions are just being developed. However, as soon as its 
State definition of AYP is submitted to and approved by the Secretary, 
each LEA that has entered into a Local-Flex agreement must revise its 
goals, as necessary, based on that definition. (Note: State definitions 
of AYP under section 1111(b)(2) of the ESEA must be submitted no later 
than January 31, 2003, and implemented by the end of the 2002-2003 
school year.) The LEA must submit its revised goals as part of

[[Page 47531]]

a proposed amendment to its Local-Flex agreement.
    (c) Strategies for meeting its goals and the general purposes of 
the consolidated programs. Each applicant must propose a five-year plan 
that contains specific strategies for reaching its stated goals. In 
particular, the plan must describe how the applicant will consolidate 
and use funds received under Subpart 2 of Part A of Title II (Teacher 
and Principal Training and Recruitment); Subpart 1 of Part D of Title 
II (Enhancing Education Through Technology); Subpart 1 of Part A of 
Title IV (Safe and Drug-Free Schools and Communities); and Subpart 1 of 
Part A of Title V (Innovative Programs).
    As part of its five-year plan, an applicant must also describe how 
it will meet the general purposes of the programs that are consolidated 
under the Local-Flex agreement. In particular, an applicant must 
describe how its proposed plan would--
    (i) Improve teacher and principal quality and increase the number 
of highly qualified teachers in classrooms (Title II, Part A);
    (ii) Improve teaching and student academic achievement through the 
use of technology in schools (Title II, Part D);
    (iii) Support programs that prevent violence in and around schools 
and that prevent the illegal use of alcohol, tobacco, and drugs (Title 
IV, Part A);
    (iv) Support local education reform efforts that are consistent 
with and support statewide education reform efforts (Title V, Part A).
    Once a Local-Flex LEA's State definition of AYP has been 
established and the LEA has modified its goals, as necessary, to 
reflect that definition, the LEA must modify, as appropriate, the 
strategies that it would implement to reach its revised educational 
goals. The LEA must submit these modifications as part of a proposed 
amendment to its Local-Flex agreement.

II. Selection Criteria

    The Secretary will use the following criteria to select the LEAs 
with which he will enter into Local-Flex agreements:
    (a) Identification of the Need for the Local-Flex Agreement. (25 
points) The Secretary considers the LEA's description and analysis of 
its need for a Local-Flex agreement. In determining the quality of the 
description and analysis, the Secretary considers the following 
factors:
    (i) The extent to which the LEA's baseline achievement data and 
data on other academic indicators are objective, valid, and reliable, 
and provide disaggregated results.
    (ii) The extent to which the proposal identifies achievement gaps 
among different groups of students.
    (iii) The extent to which the Local-Flex agreement will focus on 
serving or otherwise addressing the needs of students most at risk of 
educational failure.
    (iv) The extent to which the additional flexibility provided under 
the Local-Flex agreement would enable the LEA to meet more effectively 
the State's definition of adequate yearly progress and specific, 
measurable goals for improving student achievement and narrowing 
achievement gaps.
    (b) Quality of the Educational Goals. (25 points) The Secretary 
considers the quality of the goals that the LEA sets in its proposed 
Local-Flex agreement. In determining the quality of the LEA's goals, 
the Secretary considers the following factors:
    (i) The extent to which the goals in the proposed Local-Flex 
agreement are clearly specified and measurable.
    (ii) The significance of the improvement in student achievement and 
in narrowing achievement gaps proposed in the agreement.
    (iii) The extent to which the goals relate to the needs identified 
in the LEA's baseline achievement data and data on other academic 
indicators.
    (iv) The extent to which the goals support the intent and purposes 
of the Local-Flex program.
    (c) Quality of the Local-Flex Plan. (35 points) The Secretary 
considers the quality of the LEA's Local-Flex plan. In determining the 
quality of the Local-Flex plan, the Secretary considers the following 
factors:
    (i) The extent to which the LEA will use funds consolidated under 
the Local-Flex agreement to address the needs identified in the 
baseline achievement data in order to assist the LEA in achieving its 
educational goals.
    (ii) The extent to which the LEA's Local-Flex plan constitutes a 
coherent, sustained approach for reaching the LEA's goals, and to which 
the timelines for implementing strategies in the plan are reasonable.
    (iii) The extent to which the LEA will use achievement data and 
data on other academic indicators to manage the proposed activities and 
to monitor progress toward reaching its goals on an ongoing basis.
    (iv) The extent to which the LEA demonstrates that it will meet the 
general purposes of the programs that would be consolidated under its 
Local-Flex agreement;
    (v) The extent to which the LEA included parents, especially 
parents of children most at risk of educational failure, in the 
development of the Local-Flex proposal.
    (d) Adequacy of the Resources. (15 points) The Secretary considers 
the adequacy of the resources for the proposed Local-Flex agreement. In 
considering the adequacy of the resources, the Secretary considers the 
following factors:
    (i) The extent to which the funds that the LEA proposes to 
consolidate under the Local-Flex agreement are adequate to support the 
strategies in its Local-Flex plan.
    (ii) The extent to which the funds that the LEA proposes to 
consolidate under the Local-Flex agreement will be integrated with 
other resources to meet the goals of the proposed agreement.
    (iii) The extent to which costs that the LEA will incur under the 
Local-Flex agreement are reasonable in relationship to the goals that 
will be achieved under the agreement.

III. Application Process

    The Secretary will conduct two separate Local-Flex competitions. A 
notice inviting applications for the initial group of Local-Flex LEAs 
is published elsewhere in this issue of the Federal Register. Depending 
on the number and quality of the applications submitted, the Secretary 
intends to select up to 40 LEAs with which to enter into Local-Flex 
agreements during the initial competition. The Secretary will reserve 
the remaining Local-Flex slots for a subsequent Local-Flex competition.

FOR FURTHER INFORMATION CONTACT: Ms. Milagros Lanauze. Telephone: (202) 
401-0039 or via Internet: [email protected].
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339. 
Individuals with disabilities may obtain this notice in an alternative 
format (e.g., Braille, large print, audiotape, or computer diskette) on 
request to the contact person listed above.

Electronic Access to This Document

    You may view this document, as well as other Department of 
Education documents published in the Federal Register in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/legislation/FedRegister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about

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using PDF, call the U.S. Government Printing Office (GPO), toll-free, 
at 1-888-293-6498; or in the Washington DC, area at (202) 512-1530.
    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the official 
version of the Federal Register and the Code of Federal Regulations is 
available on GPO access at: http://www.access.gpo.gov/nara/index.html.

    Program Authority: Sections 6151 through 6156 of the ESEA, as 
amended by the No Child Left Behind Act of 2001 (P.L. 107-110).


    Dated: July 15, 2002.
Susan B. Neuman,
Assistant Secretary for Elementary and Secondary Education.
[FR Doc. 02-18307 Filed 7-18-02; 8:45 am]
BILLING CODE 4000-01-P