Elementary and Secondary Education: Ed-Flex States Vary in Implementation
of Waiver Process (Letter Report, 11/13/98, GAO/HEHS-99-17).

Pursuant to a congressional request, GAO provided information on the
Education Flexibility Partnership Demonstration Act (Ed-Flex) in 1994,
focusing on: (1) the scope of Ed-Flex and how it works; (2) the criteria
states must meet to participate in Ed-Flex and identify the extent to
which states not currently participating satisfy these criteria; (3) the
number and type of waivers that Ed-Flex states have granted to their
local school districts; (4) participating states' views on the
usefulness of Ed-Flex; and (5) issues for ensuring accountability if
Ed-Flex is continued or expanded.

GAO noted that: (1) under the Ed-Flex project, the state is allowed to
make decisions about whether particular school districts should be
granted waivers of certain federal requirements; (2) although the
federal government has established a large number of education programs,
states can waive only certain specific requirements within six programs;
(3) in 5 of the 12 Ed-Flex states, the state can grant only individual
waivers; (4) in the remaining seven states, the state can grant
statewide waivers without the requirement that the district demonstrate
its specific need for the waiver; (5) to be eligible for selection as an
Ed-Flex state, a state had to meet two criteria related to its ability
to implement Ed-Flex in conjunction with overall education reform; (6)
states were required to: (a) have a plan for education reform that had
been reviewed and approved by the federal Department of Education; and
(b) be able to modify any of their own state requirements that were
associated with the federal waivers they granted; (7) currently, only 2
of the 38 nonparticipating states clearly satisfy these criteria and
would be eligible to participate if the limit of 12 Ed-Flex states was
eliminated; (8) states participating in the Ed-Flex project vary in the
number of waivers they have granted to local school districts; (9) the
waivers granted by Ed-Flex states typically center around Title I of the
Elementary and Secondary Education Act; (10) Title I provides funds to
many school districts to give special educational assistance to
economically and educationally disadvantaged students; (11) school
districts seeking waivers have mainly sought to change how Title I funds
can be used within a school or to change the distribution of Title I
funds across schools; (12) states also vary in the degree to which they
view these waivers as helpful; (13) some states told GAO that Ed-Flex is
useful for creating a climate that encourages innovation and
flexibility, even if few waivers are granted; (14) others reported that
because the authority to grant waivers is limited to specific programs
and requirements, Ed-Flex is of limited value; (15) the Ed-Flex project
creates challenges in holding districts accountable for the results of
individual waivers and also in holding states, districts, and the
federal Department of Education accountable for the results of federal
programs that are affected by these waivers; and (16) while some states
have put in place specific goals and established clear and measurable
objectives for evaluating the impact of waivers, many Ed-Flex states
have not established any goals or have defined only vague objectives.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-99-17
     TITLE:  Elementary and Secondary Education: Ed-Flex States Vary in 
             Implementation of Waiver Process
      DATE:  11/13/98
   SUBJECT:  State-administered programs
             School districts
             Elementary education
             Aid for education
             School management and organization
             Secondary education
             Waivers
IDENTIFIER:  Dept. of Education Title I Program
             Goals 2000
             Dept. of Education Drug-Free Schools and Communities Program
             Dept. of Education Dwight D. Eisenhower Professional 
             Development Program
             Dept. of Education Emergency Immigrant Education Act Program
             Dept. of Education Vocational Education Program
             Dept. of Education Innovative Education Program Strategies
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Education and the Workforce,
House of Representatives

November 1998

ELEMENTARY AND SECONDARY EDUCATION
- ED-FLEX STATES VARY IN
IMPLEMENTATION OF WAIVER PROCESS

GAO/HEHS-99-17

Ed-Flex Demonstration Project

(104946)


Abbreviations
=============================================================== ABBREV

  EDGAR - Education Department General Administrative Regulations
  ESEA - Elementary and Secondary Education Act
  GED - general equivalency diploma
  IDEA - Individuals With Disabilities Education Act

Letter
=============================================================== LETTER


B-281282

November 13, 1998

The Honorable William F.  Goodling
Chairman
Committee on Education and the Workforce
House of Representatives

Dear Mr.  Chairman: 

Many Americans see the nation's public elementary and secondary
schools as average at best.  With large numbers of students
graduating from school lacking the skills sought by employers,
dissatisfaction with the educational system has fueled calls for
widespread reform.  Some educators and legislators believe that
providing more regulatory flexibility to educators at the state and
local levels will enable local school districts to direct more
resources to the classroom and to adopt more innovative instructional
approaches. 

Reflecting this viewpoint, the Congress established the Education
Flexibility Partnership Demonstration Act (Ed-Flex) in 1994.  Under
Ed-Flex, the Department of Education selected 12 states (the maximum
number allowed) and authorized these states to grant waivers
(temporary exemptions from certain federal requirements) to their
local school districts.  Recently proposed legislation would increase
the number of states allowed to participate in Ed-Flex and expand
somewhat the range of federal requirements that Ed-Flex states could
waive.  Some legislators have supported this proposal because they
view Ed-Flex as highly successful.  However, some education experts
have expressed concern that key federal objectives (such as targeting
federal resources to students most in need) could be compromised. 

To help inform this debate, you asked us to (1) describe the scope of
Ed-Flex and how it works, (2) describe the criteria states must meet
to participate in Ed-Flex and identify the extent to which states not
currently participating satisfy these criteria, (3) identify the
number and type of waivers that Ed-Flex states have granted to their
local school districts, (4) discuss participating states' views on
the usefulness of Ed-Flex, and (5) identify issues for ensuring
accountability if Ed-Flex is continued or expanded.  To obtain this
information, we interviewed Department of Education officials and
reviewed agency documents, including the initial applications and
subsequent annual reports from all the Ed-Flex states.  We also
conducted a survey of all 50 states.  From all states (including the
38 states not participating in the Ed-Flex project), we obtained
information on waivers of their own requirements that states have
granted; from the 12 Ed-Flex states, we also obtained information on
the implementation of Ed-Flex.  We interviewed officials in four
Ed-Flex states to obtain more detailed information.  We also reviewed
the Internet Web sites for the 50 state education agencies for
information on their outreach efforts.  We conducted our review
between June 1998 and October 1998 in accordance with generally
accepted government auditing standards. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Under the Ed-Flex project, the state--rather than the federal
Department of Education--is allowed to make decisions about whether
particular school districts should be granted waivers of certain
federal requirements.  Although the federal government has
established a large number of education programs, states can waive
only certain specific requirements within six programs.  In 5 of the
12 Ed-Flex states, the state can grant only individual waivers--that
is, the state can grant a waiver only when an individual school
district applies to the state for that specific waiver.  In the
remaining seven states, the state can grant statewide waivers--that
is, the state can grant a waiver that can be used by any qualifying
district in the state, without the requirement that the district
demonstrate its specific need for the waiver. 

To be eligible for selection as an Ed-Flex state, a state had to meet
two criteria related to its ability to implement Ed-Flex in
conjunction with overall education reform.  Specifically, states were
required to (1) have a plan for education reform that had been
reviewed and approved by the federal Department of Education and (2)
be able to modify any of their own state requirements that were
associated with the federal waivers they granted.  Currently, only 2
of the 38 nonparticipating states clearly satisfy these criteria and
would be eligible to participate if the limit of 12 Ed-Flex states
was eliminated. 

States participating in the Ed-Flex project vary in the number of
waivers they have granted to local school districts.  For example,
seven states have granted 10 or fewer individual waivers, while three
others have granted 20 or more individual waivers.  In addition, two
states have granted multiple statewide waivers that have affected
large numbers of school districts.  The waivers granted by Ed-Flex
states typically center around Title I of the Elementary and
Secondary Education Act (ESEA), the largest federal education
program.  Title I provides funds to many school districts to give
special educational assistance to economically and educationally
disadvantaged students.  School districts seeking waivers have mainly
sought to change how Title I funds can be used within a school or to
change the distribution of Title I funds across schools. 

States also vary in the degree to which they view these waivers as
helpful.  Some states told us that Ed-Flex is useful for creating a
climate that encourages innovation and flexibility, even if few
waivers are granted.  However, others reported that because the
authority to grant waivers is limited to specific programs and
requirements, Ed-Flex is of limited value. 

The Ed-Flex project creates challenges in holding districts
accountable for the results of individual waivers and also in holding
states, districts, and the federal Department of Education
accountable for the results of federal programs (such as Title I)
that are affected by these waivers.  While some states have put in
place specific goals (such as improving student achievement in math
and science) and established clear and measurable objectives for
evaluating the impact of waivers (such as improving average test
scores by a certain number of points), many Ed-Flex states have not
established any goals or have defined only vague objectives.  In
addition, because each state determines when waivers are appropriate,
it is unclear how the federal government could address possible
conflicts between states' use of the waiver authority and the policy
objectives for the underlying federal program. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The federal government has established a large number of education
programs that support the efforts of the 50 states and the
approximately 15,000 local school districts nationwide.  Many of the
federally funded education programs target specific groups of
students.  For example, the Title I program directs funds to many
school districts to provide special educational assistance to
educationally and economically disadvantaged students.  Programs
authorized under the Individuals With Disabilities Education Act
(IDEA) ensure that children with disabilities are educated and
provide financial assistance to states and school districts to help
pay for the cost of educating these children.  Other federal programs
are targeted not to particular students but to particular subject
areas.  For example, the programs under the Carl D.  Perkins
Vocational-Technical Education Act support vocational education; the
Eisenhower Professional Development Program provides funding for
teacher training, with priority for math and science; the Safe and
Drug Free Schools and Communities Program funds activities to prevent
violence and substance abuse; and the Goals 2000 program provides
financial support to states and school districts for education reform
efforts, including updating curriculum frameworks, developing
standards and assessments, training teachers, and acquiring new
technology. 

Each of these federal programs establishes requirements with which
states, local school districts, or both must comply in implementing
the program.  Some of these programs--such as the Safe and Drug-Free
Schools and Communities Program--impose relatively few requirements
on state and local officials.  Other programs are more restrictive. 
For example, the Title I program limits how districts allocate
federal dollars among schools, what services these dollars may fund,
and which children may benefit.  School districts also face a variety
of federal requirements outside the scope of federal education
programs.  For example, school districts that participate in federal
school lunch and breakfast programs receive federal assistance and,
in return, must provide free and reduced-price meals to children from
low-income families and ensure that the meals meet federal nutrition
standards.  School districts are also subject to federal worker
protection legislation, as are other employers.  Finally, school
districts must comply with federal accessibility and environmental
requirements in managing their buildings and facilities. 

In earlier work on the range of federal requirements that affect
school districts, we found that state governments often play a key
role in administering federal programs and distributing federal
dollars.\1 As part of their monitoring and oversight activities,
states often impose additional requirements on school districts.  For
example, some states require school districts to submit more
documentation on certain purchases made with federal funds than the
federal regulations require.  States also impose requirements in
areas outside the scope of federal programs, including teacher
certification and the length of the school year. 

The Department of Education can waive certain federal requirements
under specific programs; under Ed-Flex, the Department delegates some
of its authority to the Ed-Flex states.  Thus, in both Ed-Flex and
non-Ed-Flex states, districts or schools may be granted an exemption
from certain federal requirements for a given period of time.  In
Ed-Flex states, the district or school applies to the state for a
waiver and the state makes the decision.  In non-Ed-Flex states,
similar waivers are available, but the district must apply to the
federal Department of Education for a decision.  Similarly, some
state education agencies have the authority to waive statutory or
regulatory requirements imposed at the state level.  For example,
some states have granted waivers allowing exceptions to state-imposed
requirements dealing with the length of the school day or year. 


--------------------
\1 Elementary and Secondary Education:  Flexibility Initiatives Do
Not Address Districts' Key Concerns About Federal Requirements
(GAO/HEHS-98-232, Sept.  30, 1998). 


   ED-FLEX WAIVER AUTHORITY IS
   LIMITED IN SCOPE
------------------------------------------------------------ Letter :3

Under Ed-Flex, the Department of Education delegates a portion of its
authority to grant waivers to the 12 participating states, allowing
each of these states to make decisions about whether particular
school districts should be granted waivers of covered federal
requirements.  According to the Department of Education, the main
purpose of Ed-Flex is to assist the states in removing potential
regulatory barriers to the successful implementation of comprehensive
school reform plans.  The Department of Education's Ed-Flex guidance
says that because the Department emphasizes holding local school
districts accountable for results in administering its waiver
authority, Ed-Flex states are expected to do the same. 

Although the federal government has established many education
programs, Ed-Flex states can waive only certain specific requirements
under six major programs:  (1) Title I of the ESEA, which provides
funding to help local school districts give additional educational
assistance to disadvantaged children; (2) Title II of the ESEA, the
Eisenhower Professional Development Program, which provides funding
to local school districts to provide teacher training and
professional development in math and science; (3) Title IV of the
ESEA, the Safe and Drug-Free Schools and Communities Program, which
provides funding for programs to prevent violence and substance
abuse; (4) Title VI of the ESEA, Innovative Education Program
Strategies, which provides funding to help school districts develop
innovative programs in several areas, including adult education and
family literacy; (5) part C of Title VII of the ESEA, Emergency
Immigrant Education, which provides funding for the educational needs
of immigrant children; and (6) the Carl D.  Perkins
Vocational-Technical Education Act, which provides support for
vocational and technical education programs at the secondary and
postsecondary levels.  Ed-Flex states may also waive some
requirements of the General Education Provisions Act and the
Education Department General Administrative Regulations (EDGAR) that
apply to these programs.  For example, Texas waived one EDGAR
provision that requires written approval before transferring training
funds to another budget category. 

Although these six major programs are included in Ed-Flex, many other
key programs--including IDEA and the Bilingual Education Program--are
not subject to Ed-Flex waiver authority.  Programs and requirements
administered outside the Department of Education (such as school
lunch and breakfast programs or environmental requirements) are not
included in Ed-Flex either.  In addition, even for the six programs
that are covered by Ed-Flex, states are not authorized to waive any
federal regulatory or statutory requirement within these programs
relating to (1) health and safety, (2) civil rights, (3) maintenance
of effort, (4) comparability of services, (5) equitable participation
of students and professional staff in private schools, (6) parental
participation and involvement, and (7) distribution of funds to state
or local education agencies. 

Each state interested in participating in Ed-Flex submitted an
application to the Department of Education.  These applications
described how the states would exercise their waiver authority,
including how they would evaluate waiver applications from districts
and how they would ensure accountability.  The selection process took
place over a 2-1/2-year period.  The 1994 legislation authorized six
Ed-Flex states.  The Department of Education was required to award
three of these six designations to states with populations of 3.5
million or greater, and the remaining three to states with
populations of less than 3.5 million.  The Department selected six
state educational agencies--in Kansas, Massachusetts, Ohio, Oregon,
Texas, and Vermont--for Ed-Flex status between February 1995 and
March 1996.  An additional six designations were authorized by the
1996 Omnibus Appropriations Act.  However, there is no requirement
that these designations be divided evenly between large and small
states.  The additional six states--Colorado, Illinois, Iowa,
Maryland, Michigan, and New Mexico--were awarded Ed-Flex status
between May 1996 and July 1997. 

Although the same programs and requirements are covered in all
Ed-Flex states, some states have the authority to grant waivers that
apply more broadly than those in other states.  Of the 12 Ed-Flex
states, 7--Colorado, Maryland, Michigan, New Mexico, Ohio, Texas, and
Vermont--have the authority to grant both statewide waivers (which
can be used by any qualifying district in the state) and individual
waivers (which can be used by only the district that applied and was
approved for the waiver).  The remaining five states--Illinois, Iowa,
Kansas, Massachusetts, and Oregon--have the authority to grant
waivers only to individual school districts.\2 Because statewide
waivers are granted as a state policy, rather than in response to
specific requests from individual school districts, these waivers can
be a more comprehensive tool for states to use in affecting how
schools and districts operate. 


--------------------
\2 The decision to grant an Ed-Flex state the authority to grant
statewide waivers was made by the Department of Education as part of
the application process.  Several states did not apply for the
authority to grant statewide waivers. 


   FEW STATES MEET ED-FLEX
   ELIGIBILITY CRITERIA
------------------------------------------------------------ Letter :4

Although current law limits the Ed-Flex project to 12 states,
recently proposed legislation would lift this restriction and allow
any additional qualifying states to participate.  However, in
practical terms, Ed-Flex cannot be expanded to a significant number
of additional states unless current eligibility criteria are loosened
or eliminated or unless states make major changes.  As table 1 shows,
only two non-Ed-Flex states--Utah and Washington--clearly meet
current eligibility criteria.  An additional eight states may also be
eligible, depending on their ability to waive certain state-imposed
requirements.  However, the remaining 28 states clearly do not meet
Ed-Flex eligibility criteria.  (For more detailed information on the
status of non-Ed-Flex states with respect to specific eligibility
criteria, see app.  I.)



                          Table 1
          
                States' Ed-Flex Status, 1998

               States
               clearly                       States
               eligible for   States         clearly
States         but not        potentially    ineligible
participating  participating  eligible for   for
in Ed-Flex     in Ed-Flex     participation  participation
-------------  -------------  -------------  -------------
Colorado       Utah           Alabama        Alaska
Illinois       Washington     Delaware       Arizona
Iowa                          Georgia        Arkansas
Kansas                        Hawaii         California
Maryland                      Kentucky       Connecticut
                              Minnesota      Florida
Massachusetts                 New Jersey     Idaho
Michigan                      West           Indiana
New Mexico                    Virginia       Louisiana
Ohio                                         Maine
Oregon                                       Mississippi
Texas                                        Missouri
Vermont                                      Montana
                                             Nebraska
                                             Nevada
                                             New
                                             Hampshire
                                             New York
                                             North
                                             Carolina
                                             North Dakota
                                             Oklahoma
                                             Pennsylvania
                                             Rhode Island
                                             South
                                             Carolina
                                             South Dakota
                                             Tennessee
                                             Virginia
                                             Wisconsin
                                             Wyoming
----------------------------------------------------------
Under current law, a state is eligible for the Ed-Flex designation
only if it meets two criteria.  First, the legislation establishing
Ed-Flex stipulates that only states that have an approved state
education reform plan under the Goals 2000 program are eligible for
Ed-Flex status.  Department of Education officials told us that the
primary aim of Ed-Flex is to support states' efforts to implement
their comprehensive education reform plans.  For this reason, these
Department officials also believe that it is important for a state to
have developed a comprehensive state improvement plan before being
designated an Ed-Flex state. 

Second, Ed-Flex states must have the ability to modify their own
requirements consistent with the federal waivers they grant.  Because
states often impose their own requirements on school districts,
initiatives to loosen federal requirements may not have the desired
impact unless related state requirements are also modified.  For
example, Maryland needed to waive certain state requirements on the
use of state funds to allow schools in Baltimore to implement a
federal Title I waiver.  States are considered eligible for Ed-Flex
status only if they have the ability to waive state-imposed education
requirements associated with any federal education requirement that
may be waived.  However, many state education agencies do not have
this authority.  In our survey, only 12 of the 38 non-Ed-Flex states
reported that they had the authority to waive provisions of both
state education statutes and regulations.  An additional 10 state
education agencies reported that they could waive neither regulations
nor statutes, which made them clearly ineligible for Ed-Flex. 
Another 16 state education agencies reported that they could waive
state-imposed education regulations, but not statutes.  According to
Department of Education officials, these 16 states may or may not
meet this eligibility criterion for Ed-Flex status, depending on the
nature of the state regulatory process.  If the state requirements
that apply to schools and school districts appear largely or entirely
in regulations rather than in statutes, Department officials told us,
the state might be considered eligible for Ed-Flex.  However, if many
of the potentially related state requirements were imposed by
statute, the state might not be eligible for Ed-Flex. 


   NUMBER OF ED-FLEX WAIVERS
   VARIES BY STATE, BUT MOST
   WAIVERS ARE RELATED TO TITLE I
------------------------------------------------------------ Letter :5

In some Ed-Flex states, the state education agency has granted
relatively few waivers of federal requirements in comparison with the
number of school districts in the state.  In several other states,
however, the waiver authority has been used more extensively.  Some
of the differences in the use of waivers among states may reflect
differences in implementation of Ed-Flex--for example, variations in
the amount of state resources devoted to Ed-Flex outreach and in the
use of statewide waivers.  The type of waivers that have been granted
has been similar across states.  These waivers typically involve
redistributing Title I funds among schools in a district or
broadening the criteria for eligibility for schoolwide projects under
Title I. 


      STATES DIFFER IN NUMBER OF
      ED-FLEX WAIVERS GRANTED
---------------------------------------------------------- Letter :5.1

Most of the Ed-Flex states granted relatively few waivers during the
past 2 to 3 years, compared with the number of school districts in
the states; however, some states have been more active than others in
granting waivers.  Three states received their Ed-Flex authority in
July 1997 and thus had only limited time to implement their waiver
process.  Of the nine states that had been participating in Ed-Flex
for more than 1 year as of January 1998, four granted 10 or fewer
individual waivers.  However, the other five states have been more
active in their use of Ed-Flex.  Kansas and Maryland have granted
over 20 individual waivers each--an especially high total for
Maryland considering the small number of school districts in the
state.  Texas and Ohio have not only granted a relatively high number
of individual waivers but have also granted statewide waivers that
have affected larger numbers of school districts.  For example, 180
districts in Ohio have taken advantage of a statewide waiver that
broadens eligibility for schoolwide programs under Title I.  Table 2
shows when each state received its Ed-Flex authority, the number of
school districts in the state, and the number of individual and
statewide waivers granted from January 1995 through December 1997. 



                          Table 2
          
              Data on Ed-Flex States, 1995-97

                         Number of   Number of   Number of
                           regular     waivers     waivers
              Date          school  granted to  granted on
              state      districts  individual           a
              entered       in the      school   statewide
State         Ed-Flex      state\a   districts       basis
------------  --------  ----------  ----------  ----------
Colorado      7/96             176           6           1
Illinois      7/97             905           1          \b
Iowa          7/97             383           0          \b
Kansas        8/95             304          20          \b
Maryland      5/96              24          22           0
Massachusett  9/95             248          14          \b
 s
Michigan      7/97             593           0           1
New Mexico    8/96              89           1           0
Ohio          9/95             611          14           2
Oregon        2/95             233           2          \b
Texas         1/96           1,044          40           8
Vermont       3/96             251          10           1
----------------------------------------------------------
\a Regular school districts are agencies responsible for providing
free public education for school-aged children residing in their
jurisdiction.  This category excludes local supervisory unions that
provide management services for a group of associated school
districts, regional education service agencies, state and federally
operated institutions, and other agencies that do not fall into these
groupings. 

\b This state does not have the authority to grant statewide waivers. 

The variation among states in the number of waivers granted may
reflect differences in three key factors:  state outreach efforts,
use of waivers for state-imposed requirements, and use of statewide
waiver authority.  These factors can either promote or inhibit use of
Ed-Flex by local school districts. 

Before districts can use Ed-Flex, they need to know which
requirements can be waived and how to apply for a waiver.  Because
states vary in their outreach efforts, districts in some states may
have greater access to this information than districts in others. 
For example, one Ed-Flex state posted detailed information on Ed-Flex
in a prominent position on its Web site, in addition to other
outreach efforts, including mailings and presentations at education
conferences and meetings.  However, of the 12 Ed-Flex states, only 4
mentioned Ed-Flex or waivers of federal requirements on their Web
site. 

The use of waivers for state requirements may also promote districts'
ability and willingness to apply for waivers of federal requirements
under Ed-Flex.  According to several state officials we interviewed,
an active state waiver program makes districts more familiar with the
concept of waivers and more comfortable with applying for them. 
However, not all Ed-Flex states granted many state waivers.  For
example, Iowa, Illinois, Michigan, and Texas have granted hundreds of
waivers for state requirements, but other states, including Kansas
and Maryland, have granted very few or none.  Of the 10 Ed-Flex
states that supplied data on state waivers, 5 granted 40 or more
waivers in 1997; however, the other 5 states granted fewer than 10
waivers per year.  In our survey of the 50 state education agencies,
we found that the non-Ed-Flex states with the ability to grant
waivers from their own state requirements also varied considerably in
how frequently they used this authority.  (For more information on
state-level waiver programs, see app.  II.)

Finally, the use of statewide waiver authority can encourage school
districts to take advantage of federal waivers.  In the seven Ed-Flex
states that have the authority to grant statewide waivers, any
qualifying school district can take advantage of a statewide waiver
without having to demonstrate specific need for that waiver.  In some
of these states, many more school districts have used the statewide
waivers than have applied for individual waivers.  For example, Texas
has waived four record-keeping and administrative requirements on a
statewide basis, and hundreds of school districts in Texas have taken
advantage of these waiver provisions. 


      MOST ED-FLEX WAIVERS INVOLVE
      TITLE I
---------------------------------------------------------- Letter :5.2

Most of the Ed-Flex waivers granted have centered around Title I, the
largest federal program for elementary and secondary education.  For
example, waivers of the provisions for schoolwide projects under
Title I accounted for the largest number of Ed-Flex waivers.  When
operating Title I as a schoolwide project, the school can use its
Title I funds to implement a plan to improve the education of all
students in the school, not just those students that are Title
I-eligible.  Under current law, a school can operate as a Title I
schoolwide project only if 50 percent of the students in the school
or in the school attendance area are from low-income families. 
Waivers allow schools that do not meet this threshold to become
eligible to use schoolwide projects.  Three Ed-Flex states have
granted statewide waivers to expand schoolwide projects; in addition,
schoolwide projects account for nearly 70 percent of approved
individual waivers. 

Another common type of waiver allows school districts to distribute
Title I funds according to criteria established by the district,
rather than adhering solely to the statutory formula.  For example,
one school in Massachusetts was not eligible for Title I services for
the 1997-98 school year, although it had been eligible in the past;
further, the school was expected to become eligible again in the
1998-99 school year, when the district was to begin implementing a
voluntary desegregation plan.  The school district received a 1-year
waiver to continue providing Title I funds to this school, rather
than disrupt services for 1 year.  Some school districts have also
received waivers of requirements under the Eisenhower Professional
Development Program that require them to give priority in the use of
Eisenhower funds to math and science subject areas.  Figure 1 shows
the number of individual waivers approved by Ed-Flex states for Title
I schoolwide programs, Title I eligibility, the Eisenhower
Professional Development Program, and other areas. 

   Figure 1:  Types of Individual
   Waivers Granted Under Ed-Flex,
   1995-97

   (See figure in printed
   edition.)

Source:  Annual reports provided by Ed-Flex states to the Department
of Education. 


   ED-FLEX STATES GENERALLY REPORT
   POSITIVE EXPERIENCES, BUT SOME
   SAY ED-FLEX IS OF LIMITED USE
------------------------------------------------------------ Letter :6

Officials from participating states generally reported positive
experiences with Ed-Flex.  Two states that have used Ed-Flex
extensively--Ohio and Texas--told us that the waivers they granted
under Ed-Flex had a positive impact.  For example, a Texas official
told us that Texas' statewide waiver to allow more flexible use of
federal teacher training funds has allowed districts to better direct
professional development dollars to those areas where they are needed
the most. 

According to several officials from these and other Ed-Flex states,
Ed-Flex is valuable, regardless of the number of waivers granted,
because it promotes a climate that encourages state and local
educators to explore new approaches, frequently making better use of
the flexibility that already exists within state and federal
requirements.  One state official reported that Ed-Flex motivates
school districts to consider nontraditional ways of using federal
resources to enhance educational services.  Similarly, Ohio officials
reported that as a result of examining the relevant laws and
regulations, many districts discovered that they already had the
ability to do what they want without a waiver. 

However, some officials from Ed-Flex states commented that the
program creates false hopes and expectations, because the waiver
authority is limited to certain specific federal requirements.  For
example, one state official told us that it is the cumulative effect
of all regulations combined, rather than any single requirement, that
causes problems for school districts.  Therefore, he believes that
Ed-Flex's emphasis on identifying specific individual requirements
makes the project less effective.  In another Ed-Flex state, staff
told us that the Ed-Flex waiver authority is too narrow to do much
good.  Officials in several states reported that Ed-Flex would be
more helpful if the waiver authority were extended to other programs,
such as special education or bilingual education.  For example, while
Texas has used its waiver authority to streamline administrative
provisions for programs covered by Ed-Flex, the standard
administrative requirements remain in effect for other programs that
are not covered by Ed-Flex.  A Texas state official told us that
extending Ed-Flex authority to other programs would allow Texas
districts to make even more progress in reducing administrative
effort. 

These reactions to Ed-Flex are consistent with the findings in our
September 1998 report on how states and school districts have used
waivers and other federal flexibility initiatives.\3 In our work on
how federal requirements affect school districts, we found that
school districts' concerns did not focus on any single program or
requirement; instead, they extended across several broad areas,
including obtaining key information, working with limited funds, and
overcoming logistical and management challenges.  Whether granted by
the Department of Education or by the state under Ed-Flex, waivers do
not address these areas of concern because waivers are limited to a
specific set of programs and requirements, and because districts'
major concerns often lie outside the scope of the waiver authority. 


--------------------
\3 GAO/HEHS-98-232, Sept.  30, 1998. 


   STRUCTURE OF ED-FLEX POSES
   CHALLENGES FOR ENSURING
   ACCOUNTABILITY
------------------------------------------------------------ Letter :7

In recent years, political leaders and government officials have
become increasingly concerned with improving government management
and increasing accountability for program results at the federal,
state, and local levels.  At the federal level, for example, the 1993
Government Performance and Results Act (the Results Act) requires
federal agencies to specify strategic goals and related performance
objectives and to measure and report their progress in meeting these
goals.  Proponents of the Results Act anticipated that setting
clearly defined goals (such as increasing reading proficiency for all
students) would serve to focus program efforts and that establishing
specific, measurable objectives (such as having all fourth-grade
students pass a basic reading test) could be used to assess progress
toward these goals and thus enhance accountability. 

Ed-Flex poses unique challenges for achieving and maintaining
accountability in this results-focused, data-driven environment.  The
Ed-Flex legislation and the guidance provided to Ed-Flex states by
the Department of Education highlight two types of accountability. 
First, states are to ensure that districts and schools that receive
waivers are held accountable for achieving intended results--that is,
for fulfilling the purpose for which the waiver was granted.  Second,
the federal government is accountable for the overall results of the
federal programs affected by Ed-Flex waivers. 

Both the legislation and the guidelines represent the importance of
both types of accountability but provide the states with little
specific direction on how to apply these concepts in implementing the
waiver program.  Providing more specificity could be difficult,
however, because of the variation in the types of waivers that are
allowed and the circumstances prompting the waivers.  In addition,
providing explicit federal direction may affect states' discretion in
designing their own processes for overseeing and evaluating Ed-Flex
waivers.  Consequently, Ed-Flex allows the states broad latitude in
developing accountability systems with limited federal oversight, and
states vary widely in how they establish goals, track districts'
progress, and protect underlying program purposes. 


      ED-FLEX STATES VARY IN HOW
      THEY ESTABLISH GOALS AND
      OBJECTIVES FOR FEDERAL
      WAIVERS
---------------------------------------------------------- Letter :7.1

Wide variation exists among Ed-Flex states regarding whether they
have established clearly defined goals to measure the results of
waivers received by districts and schools.  Some states and districts
have expressed their goals only in the vaguest of terms, while others
have been more precise.  For example, in one state where a district
was granted a schoolwide program waiver, only nonspecific goals were
reported, such as "a commitment to the identification and
implementation of programs that will create an environment in which
all students actualize academic potential." In contrast, the goals
listed for two school districts in another state that received
similar waivers to implement schoolwide programs were "to improve
reading comprehension" and to ensure that "students will become
better readers and more proficient in math skills."

States also differ in the degree to which they use specific and
measurable objectives to assess whether districts have achieved their
goals.  Of the 12 Ed-Flex states, 5 have set no specific objectives
at all, nor have they specified whether the results of the waivers
will be reviewed for the district, the school, or groups of students. 
For example, one state has stated that it is able to review
standardized test results only for the state as a whole.  In another
state, officials reported only that districts are expected to submit
reports that describe their progress. 

Other Ed-Flex states have established more specific objectives, but
these states differ in whether they target these objectives to a
group of students, a specific school, a group of schools, or the
district.  For example, one state evaluates schools receiving waivers
for schoolwide programs as a group, by comparing the overall
performance of students in that group of schools with the performance
of a control group of similar schools that did not receive such
waivers.  Another state expects an individual school receiving
schoolwide program waivers to achieve a specific increase in the
overall percentage of students from that school to pass the statewide
assessment test.  Only one Ed-Flex state--Texas--has set specific
numerical criteria that are closely tied to both the schools or
districts and the specific students affected by the waiver.  For
example, Texas expects all districts that receive waivers under Title
I to make annual gains on test scores so that in 5 years 90 percent
of all students will pass the state's assessment tests in reading and
mathematics.  In addition, Texas' districts must make annual gains so
that at the end of the same 5-year period 90 percent of
African-American students, 90 percent of Hispanic students, 90
percent of white students, and 90 percent of economically
disadvantaged students will pass these tests. 


      FEDERAL OVERSIGHT UNDER
      ED-FLEX PROVIDES LIMITED
      INFORMATION ON PROGRAM
      RESULTS
---------------------------------------------------------- Letter :7.2

Currently, the Department of Education's oversight of Ed-Flex waivers
is limited to requiring Ed-Flex states to submit an annual report to
the Department summarizing the waivers granted in the previous
calendar year.  These reports vary in the level of detail they
provide--both on the process for reviewing waivers and on the waivers
that have been granted.  As a result, the Department has considerable
information available on some states' activities and very limited
data on other states' implementation of Ed-Flex.  Aside from this
reporting requirement, the Department's role in Ed-Flex is generally
confined to providing technical assistance and information when
requested by the states. 

The Department's limited oversight role in the Ed-Flex project raises
issues about ensuring accountability for the results of federal
programs to which those waivers apply.  Although the states play a
key role in administering key federal programs such as Title I and
the Eisenhower Professional Development Program, the Department of
Education maintains an assistance and oversight role and is
accountable for program results.  In addition, the legislation
authorizing Ed-Flex prohibits Ed-Flex states from waiving
requirements if such a waiver would be inconsistent with the purpose
of the underlying federal program.  For example, some education
experts have expressed concern that waivers of Title I targeting
requirements could, if used indiscriminately, dilute Title I funds
and undermine the program's ability to direct scarce federal dollars
to the children most in need.  Under Ed-Flex, each state
independently decides whether its waivers are consistent with the
purpose of the underlying federal program, creating the potential for
inconsistencies across states. 

Department of Education officials told us that they believe the 12
current Ed-Flex states have used their waiver authority carefully and
judiciously.  However, both federal and state officials acknowledged
the potential for states to act less carefully, especially if Ed-Flex
is expanded to states that are less knowledgeable or prepared.  It is
unclear how the Department of Education, in its current limited role,
could address such issues.  However, expanding the role of the
Department of Education could conflict with the intention of Ed-Flex
by limiting the discretion allotted to the states. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

The Department of Education provided written comments on a draft of
this report.  In its comments, the Department stated that we should
note that Ed-Flex was enacted with the understanding that there would
be accountability in exchange for increased flexibility.  We added
language to further emphasize this understanding.  The Department
also described the process under which the Department reviewed
states' applications for Ed-Flex status:  specifically, the
eligibility for Ed-Flex and the selection process.  We added more
detailed information on this point. 

The Department also expressed concern that the report focused on the
few requirements that may not be waived rather than on the broad
scope of program-related requirements that are subject to waivers. 
Although Ed-Flex waivers are available for many requirements within
six major education programs, other important requirements within
these same programs (including maintenance of effort, parental
participation and involvement, and distribution of funds to local and
state education agencies) are not subject to waivers.  Other key
federal programs--including IDEA, school lunch and breakfast
programs, and bilingual education--are not subject to Ed-Flex at all. 
As we reported, officials from several Ed-Flex states expressed
frustration with these limitations to the Ed-Flex waiver authority. 
Similarly, the Department stated that although waivers were not
designed to address some of the school districts' concerns, this is
not a deficiency in Ed-Flex but rather an indication that school
districts also need help in other areas.  However, officials from
several Ed-Flex states commented that, given many of the issues they
would like to address, Ed-Flex creates false hopes. 

Finally, the Department suggested that instead of providing
information on the number of waivers granted, we should provide
information on the number of schools affected by the waivers. 
Because it is generally the school district that applies for Ed-Flex
waivers, we believe that presenting information at the district level
is more appropriate.  In its report on the Goals 2000 program, where
it presented information on Ed-Flex, the Department took a similar
approach and reported the number of waivers approved.  The complete
text of the Department's comments appears in appendix III. 


---------------------------------------------------------- Letter :8.1

We are sending copies of this report to the Secretary of Education,
relevant congressional committees, and other interested parties.  If
you or your staff have any questions concerning this report, please
call me; Harriet C.  Ganson, Assistant Director; or one of the
individuals listed in appendix IV on (202) 512-7014. 

Sincerely yours,

Carlotta C.  Joyner
Director, Education and
 Employment Issues


NON-ED-FLEX STATES:  GOALS 2000
PLANS, WAIVER AUTHORITY, AND
ED-FLEX SELECTION CRITERIA
=========================================================== Appendix I

                                         Status of state
                                               plan                Status of waiver authority                Does state meet Ed-Flex criteria?
                                        ------------------  -----------------------------------------  ----------------------------------------------
                                                                                                       State clearly                   State clearly
                                                                          State can                    meets both      State may meet  does not meet
                                        State has an        State can     waive         State can      criteria--has   criteria--has   both criteria-
                                        approved Goals      waive both    regulations   waive neither  plan and        plan and some   -has no plan
                                        2000 state          statutes and  but not       statutes nor   waiver          waiver          or waiver
State                                   improvement plan    regulations   statutes      regulations    authority       authority       authority
--------------------------------------  ------------------  ------------  ------------  -------------  --------------  --------------  --------------
Alabama                                 X                                 X                                            X

Alaska                                                                    X                                                            X

Arizona                                 X                                               X                                              X

Arkansas                                                                  X                                                            X

California                                                  X                                                                          X

Connecticut                                                 X                                                                          X

Delaware                                X                                 X                                            X

Florida                                                     X                                                                          X

Georgia                                 X                                 X                                            X

Hawaii                                  X                                 X                                            X

Idaho                                                                                   X                                              X

Indiana                                                     X                                                                          X

Kentucky                                X                                 X                                            X\a

Louisiana                                                                 X                                                            X

Maine                                                       X                                                                          X

Minnesota                               X                                 X                                            X

Mississippi                                                                             X                                              X

Missouri                                                                  X                                                            X

Montana                                                                                 X                                              X

Nebraska                                                                  X                                                            X

Nevada                                  X                                               X                                              X

New Hampshire                                                                           X                                              X

New Jersey                              X                                 X                                            X

New York                                                                  X                                                            X

North Carolina                                              X                                                                          X

North Dakota                            X                                               X                                              X

Oklahoma                                                    X                                                                          X

Pennsylvania                                                X                                                                          X

Rhode Island                                                              X                                                            X

South Carolina                                                                          X                                              X

South Dakota                                                              X                                                            X

Tennessee                                                   X                                                                          X

Utah                                    X                   X                                          X

Virginia                                X                                               X                                              X

Washington                              X                   X                                          X

West Virginia                           X                                 X                                            X

Wisconsin                                                   X                                                                          X

Wyoming                                                                                 X                                              X

=====================================================================================================================================================
Total                                   14                  12            16            10             2               8               28
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a Kentucky applied for Ed-Flex status but withdrew its application
upon determining that it did not meet the criteria for selection
because its authority to waive state regulations was too limited. 

Sources:  For status of state Goals 2000 plan, Department of
Education; for state waiver authority, our survey of state education
agencies. 


NUMBER AND TYPES OF WAIVERS
GRANTED FOR STATE-IMPOSED
REQUIREMENTS, 1997
========================================================== Appendix II

                  Does state
                  have             Number of
                  authority to       regular   Number of
                  waive state         school       state
                  requirements  districts in     waivers  Types of waivers most commonly
State             ?                    state     granted  granted
----------------  ------------  ------------  ----------  ------------------------------
Ed-Flex States
----------------------------------------------------------------------------------------
Colorado          Yes                    176   State did  Rules governing charter
                                                     not  schools.
                                                 provide
                                                   data.

Illinois          Yes                    905         466  State-mandated holidays; daily
                                                          physical education
                                                          requirement.

Iowa              Yes                    383         395  Requirements to offer third
                                                          and fourth year of foreign
                                                          language; changes to the
                                                          length of school day or year;
                                                          block scheduling of physical
                                                          education periods.

Kansas            Yes                    304           0  No waivers were granted.

Maryland          Yes                     24           0  No waivers were granted.

Massachusetts     Yes                    248          40  Requirements concerning the
                                                          age span of class groups or
                                                          class size.

Michigan          Yes                    593       381\a  Administrative rules that
                                                          apply to special education.

New Mexico        Yes                     89           1  Changes to the length of the
                                                          school day or year; class load
                                                          and teaching load
                                                          requirements.

Ohio              Yes                    611   State did  Changes to the length of the
                                                     not  school day or year.
                                                 provide
                                                   data.

Oregon            Yes                    233           8  Changes to the length of the
                                                          school day.

Texas             Yes                  1,044       1,606  Changes to the length of the
                                                          school day or year to make
                                                          additional time available for
                                                          staff development.

Vermont           Yes                    251           8  State did not provide data.


Non-Ed-Flex States
----------------------------------------------------------------------------------------
Alabama           Yes                    127          67  Changes to the length of the
                                                          school day or year; student
                                                          course requirements; state
                                                          special education
                                                          requirements.

Alaska            Yes                     55           0  No waivers were granted.

Arizona           No                     214  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Arkansas          Yes                    311          15  Class size and staffing
                                                          requirements; state curriculum
                                                          requirements; teacher
                                                          certification requirements.

California        Yes                    999       1,600  Staffing requirements; student
                                                          testing; requirements for
                                                          summer school meal program;
                                                          rules concerning placing
                                                          special education students in
                                                          certain private schools.

Connecticut       Yes                    166   State did  Curriculum requirements;
                                                     not  charter schools.
                                                 provide
                                                   data.

Delaware          Yes                     19           8  State special education
                                                          requirements; certification
                                                          requirements; physical
                                                          education requirements;
                                                          changes to the length of the
                                                          school day or year.

Florida           Yes                     67          39  Changes to the school day to
                                                          accommodate block scheduling.

Georgia           Yes                    180         185  Changes to the school day to
                                                          accommodate block scheduling;
                                                          high school graduation
                                                          requirements.

Hawaii            Yes                      1           5  State did not provide data.

Idaho             No                     112  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Indiana           Yes                    292         772  Curriculum requirements.

Kentucky          Yes                    176   State did  State did not provide data.
                                                     not
                                                 provide
                                                   data.

Louisiana         Yes                     66   State did  Age requirements for general
                                                     not  equivalency diploma (GED)
                                                 provide  testing; curriculum changes;
                                                   data.  teacher certification.

Maine             Yes                    228   State did  Requirements concerning the
                                                     not  age span of class groups;
                                                 provide  class size; tutorial services.
                                                   data.

Minnesota         Yes                    383           3  Special education
                                                          requirements; superintendent
                                                          licensing; extended school
                                                          year.

Mississippi       No                     153  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Missouri          Yes                    525          14  Certification requirements for
                                                          Title I teachers.

Montana           No                     465  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Nebraska          Yes                    653           1  Staffing requirements.

Nevada            No                      17  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

New Hampshire     No                     164  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

New Jersey        Yes                    582         297  State special education
                                                          requirements.

New York          Yes                    709         156  Curriculum and testing
                                                          requirements.

North Carolina    Yes                    119           5  Restrictions on the amount of
                                                          funds a district can carry
                                                          over from one fiscal year to
                                                          the next.

North Dakota      No                     234  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Oklahoma          Yes                    548       200\b  Changes to the length of the
                                                          school day or year; teaching
                                                          hours; requirements concerning
                                                          library and counseling
                                                          services.

Pennsylvania      Yes                    500         796  Changes to the length of the
                                                          school day or year.

Rhode Island      Yes                     36          22  Changes to the length of the
                                                          school day or year.

South Carolina    No                      95  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

South Dakota      Yes                    173          30  Changes to the length of the
                                                          school day or year.

Tennessee         Yes                    138           5  State requirements for local
                                                          maintenance of effort in
                                                          schools operating as
                                                          schoolwide programs.

Utah              Yes                     40   State did  Changes to the length of the
                                                     not  school day or year; teacher
                                                 provide  certification requirements;
                                                   data.  some financial requirements.

Virginia          No                     132  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.

Washington        Yes                    296          49  Changes to the length of the
                                                          school day or year.

West Virginia     Yes                     55          61  State requirements concerning
                                                          instructional materials.

Wisconsin         Yes                    426           6  Changes to the length of the
                                                          school day or year.

Wyoming           No                      49  State does  No waivers were granted.
                                                not have
                                                  waiver
                                              authority.
----------------------------------------------------------------------------------------
\a Data apply to the period Sept.  1996 through Feb.  1998. 

\b Data apply to the 1997-98 school year. 

Sources:  For number of regular school districts, National Center for
Education Statistics Common Core of Data; for state waiver authority,
our survey of state education agencies. 




(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
EDUCATION
========================================================== Appendix II



(See figure in printed edition.)


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
========================================================== Appendix IV

GAO CONTACTS

Harriet C.  Ganson, Assistant Director
Sarah L.  Glavin, Senior Economist

STAFF ACKNOWLEDGMENTS

Arthur T.  Merriam, Jr., managed the state survey and cowrote the
report; Linda W.  Stokes assisted in designing the survey and in
gathering the information on the design of Ed-Flex and the waivers
granted by the states. 


*** End of document. ***