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Districts Failing To Give Funds To Private Schools, E.D. Says

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Washington--In an unusual rebuttal to a national education group's research report, the Education Department has charged that "a significant number of school districts" may be failing to comply with regulations requiring that private-school students receive an equitable share of federal block-grant funds.

The department's rebuttal, which is based on a survey of 49 school-district Chapter 2 programs conducted by the federal agency, notes that in the 1981 federal law that set up Chapter 2, "there is clearly an intention to foster the participation of private-school students on an equitable basis."

The document asserts that some school districts are erroneously withholding Chapter 2 funds from private-school students on the grounds that they do not qualify for funds generated by "high-cost" public-school students--for example, handicapped students, the gifted and talented, and those with limited proficiency in English.

Response to aasa

The April 1984 report by the American Association of School Administrators to which ed's report reacts suggested that private-school students benefit disproportionately from school districts' share of Chapter 2 funds because they receive high-cost funds to which they are not entitled. (See Education Week, April 4, 1984.)

The association also asserted that private schools have received Chapter 2 funds without first providing assurances that they do not discriminate against women, the handicapped, and minorities.

Impact a Concern

Education groups have been attempting to assess the impact of the block-grants program since its enactment by the Congress in 1981, but they have noted that the sketchiness of data on funding provided private-school students has made calculating any funding shifts under the law difficult. The aasa is one of several groups that have protested the new arrangement, contending that an unwarranted amount of federal aid is being channeled to students in nonpublic schools.

Under Chapter 2 of the Education Consolidation and Improvement Act (ecia), 28 categorical programs were merged into a block grant to each state. The amount of a state's block grant is calculated on a per-pupil basis.

States must distribute 80 percent of the money to local education agencies (lea's), using formulas that take into account schools' enrollment and "high-cost" factors." Under the block-grants law, lea's must spend comparable amounts of their Chapter 2 funds for public- and nonpublic-school students.

Decision To Respond

Entitled "Setting the Record Straight: What ed knows about Private School Participation Under ecia Chapter 2," the Education Department study is meant "to be read in concert" with the aasa report, according to Carol Chelemer, a department analyst and co-author of the study.

But an aasa official, Bruce Hunter, commented that the department's study "missed the point of what we were trying to do." He said the association's intent was to call for more federal guidelines on the participation of private-school students in Chapter 2-funded programs.

The Education Department chose to respond to the document because it was "different from an organization simply blasting the department," according to Charles J. O'Malley, the Secretary of Education's executive assistant for private education.

Mr. O'Malley contended that charges made by the aasa--particularly those concerning whether private-school students must qualify for Chapter 2 funds--"could not ... go unanswered." He said the group's study was not "the only report that the department has tried to rebut" but could not cite any others.

Intent of Law Cited

The authors of the department report cited Section 586 of the block-grants law, which states that expenditures for private-school students "shall be equal (consistent with the number of children to be served) to expenditures for programs under this chapter for children enrolled ininued on Page 16


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the public schools of the local educational agency."

The Education Department's claim that some local education agencies may be shortchanging private-school students in the Chapter 2 program is based on the language in the statute and subsequent regulatory and nonregulatory guidance, according to Mr. O'Malley.

Funding Gap

The department surveyed 49 school districts that, taken together, enrolled about 14 percent of the nation's public-school students and 27 percent of the private-school students, according to 1980 enrollment data.

The aasa's failure to include enrollment data was one of its study's major shortcomings, the federal response says.

In the districts sampled by the Education Department, an average of 13.5 percent of Chapter 2 funds went to private-school students; the aasa had reported that an average of 15.6 percent of Chapter 2 funds went to services for private-school students in the 34 districts that responded to its survey.

The authors of the department's study found that in all but six of the school districts, less of the Chapter 2 money was spent, per pupil, on private-school students than on public-school students in the district.

In five of the six districts, they found, the proportion of funds for pri-vate-school students exceeded their share of the district's population by less than 2 percentage points.

The study notes, however, that this discrepancy may have resulted from private schools that do not participate in Chapter 2 programs, and the authors acknowledge that they "do not have data on the number of private schools participating in these districts."

'A Problematic Area'

The study says that "a problematic area seems to be the extent to which lea's share their 'high-cost' dollars in services to private-school students."

Although state education agencies typically distribute the Chapter 2 funds to lea's on the basis of a formula that takes into account enrollment and "high-cost" factors, federal regulations stipulate that an lea "may not [report's emphasis] take into account the extent to which children in private schools generated a portion of the lea's allocation" in making the Chapter 2 funds available to private-school students, the report said.

Some school districts are "distinguishing between these two pots of money"--funds generated by enrollment and "high-cost" funds--said Ms. Chelemer. "But the regulations say there is no difference between the two."

The department's study found that 16 of the districts that responded "did not distribute funds generated by high-cost students to private-school students, and 11 districts6reported that private schools were required to submit proof of qualification for those funds."

The report revealed that in many cases, state education agencies counted some private-school students in determining the "high-cost" allocation to an lea

The ed study also notes that regulations for implementation of Chapter 2 contain "no provision to deny private-school students an equal share of those 'high-cost' dollars."

It rejects "the notion of private schools qualifying [report's emphasis] for high-cost funds," saying that "this concept does not exist in the statute, the regulations, or the nonregulatory guidance."

aasa 'Strengths'

The Education Department document comments, however, that the aasa's paper did have two strengths. One was the amount of new fiscal data it provided on services to private schools.

The other was that it highlighted administrators' concerns regarding the "equity of allocating high-cost funds to private-school students and the procedures for obtaining civil-rights assurances from private schools."

According to Ms. Chelemer, the new study will be distributed to national leaders in education, Congressional offices, chief state school officers, state Chapter 2 directors, and those on the mailing list of the department's office of private education.

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