Assessment of the This is the analysis and review of the GAO report, Impact Aid Program" dated October 15, 1976, which you asked that I complete for the Impacted Area Schools. The GAO report contains six points in the Digest on which USOE was requested to take action. In addition to these six points, several other significant items of the report were treated in this analysis. This report includes revisions to the draft report submitted to you on I sincerely hope this report will be helpful to the Impacted Area Schools members in interpreting and understanding the GAO report. Part VII. FEDERAL PROPERTY LOCATED OUTSIDE COUNTY OR VIII. PAYMENT RATES COMPARED TO LEA's PER PUPIL IX. CONCLUSIONS AND RECOMMENDATIONS Page 13 14 16 iv SYNOPSIS 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 non-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. vi |