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It is evident from the findings in this report that the Impact Aid staff (both regional and headquarters) needs to be increased to adequately respond to portions of the GAO report. GAO did not recommend additional staff to administer the program due to the small percent of the amount overclaimed. However, they did strongly recommend several items that would require more staff for compliance. The report recommended that USOE (1) require more adequate documentation of child's residence with civilian parent, (2) establish weights to be given the criteria used in selecting comparable districts and examine the procedures for computing rates, (3) review more thoroughly rate data submitted by States, and (4) review State-aid allocation formulas more closely to insure compliance with the supplant provision of the Act. Such additional staff would permit USOE to properly respond to these recommendations and continue to maintain the small percent of error which could increase significantly under the present conditions.

In their response to GAO, USOE had agreed to develop an "employed on" concept, examine and review the methods used in computing rates, and issue instructions reinforcing the need for compliance with the requirement that the child reside with civilian parent.

Based on the statutory language and the legislative history, the present concept for determining eligibility of "uniformed services" category children should continue.

The computation of ADA figures was found to be a common cause of error. It has been suggested that the law be amended to allow USOE to develop a common procedure for computing State and local ADA and revise the method for computing the Federally connected ADA or compute payment on Federally connected membership.

Duplicate payments received by LEA's for the same Federal property is not a significant amount in proportion to the program's total appropriation. Therefore, it has been recommended that no action be taken on this matter.

The impacted LEA's have a greater need for Impact Aid assistance than non-impacted LEA's. This is supported by the facts presented in the GAO report which indicates that most impacted LEA's are larger (which have higher operating costs and a greater demand for services) than non-impacted LEA's and the assessed valuation per pupil (financial resources) in most impacted LEA's is less than it is in ncn-impacted LEA's.

Until final regulations governing section 5(d) of the Act has been approved, no final determinations concerning the supplanting of State funds with Impact Aid funds can be made.

The impact of a Federally connected child of a civilian parent employed on a Federal property located out of State or the LEA is just as great as the impact of the "uniformed services" category child.

To avoid discriminating against LEA's in States which had equilization plans financed by State revenues, the Congress amended the Act to establish a minimum rate of one-half the State or national average per pupil cost-which ever was greater. According to the GAO report, the minimum rate provision appears to be achieving its purpose.



On October 15, 1976, the Comptroller General of the United States, hereinafter referred to as the General Accounting Office (GAO), published a report entitled "Assessment of the Impact Aid Program." The topics covered in this report were reviewed at the request of 14 members of the House Committee on Education and Labor and 2 other Congressmen.

It is the purpose of this report to analyze and review the following selected topics which were presented in the GAO report: (1) validity of Impact Aid claims under sections 2, 3(a), and 3(b) of Public Law (PL) 81-874; (2) payments received by local education agencies (LEA's) under Impact Aid and other sources for the same Federal property; (3) the use of Impact Aid funds by States to supplant State funds; (4) the methods, procedures, and regulations used by the United States Office of Education (USOE) to compute payment rates; (5) economic impact of federally connected children on LEA's; (6) the effect of Impact Aid payments on one State's equalization plan; (7) payments made to LEA's based on Federal property located outside the county of the State in which the LEA is located; and (8) comparison of payment rates to the LEA's per pupil cost.

The above topics will be analyzed and reviewed with regard to possible program changes, either legislative or administrative.

Data used in this report to rebut or substantiate the above topics have been collected through personal interviews, library research, legislative histories, statutes, and the Congressional Record. In addition, the author has relied on 15 years of personal experience (10 years in the field and 5 years in headquarters) in the Impact Aid Program.

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