Why was the Dade County Project successful? Two characteristics are noteworthy. First, representatives from the teachers associations were involved in establishing the overall project specifications and individual teachers were given not only the decentralized decisionmaking authority regarding the program design and selection, but also operating funds and risk capital. In addition, an incentive was provided. Second, the contract between the Board of Education and the individual teacher groups was binding on both parties, requiring additional time and effort on the part of the Central Office to meet its contract requirements, such as validating a criterion-based testing scheme, providing 24hour maintenance on all equipment and other similar clauses.

The third project is operating in Grand Rapids, Michigan, where the Board of Education contracted with a private corporation under a performance contract to develop, validate and implement an instructional learning system which would significantly increase student achievement in basic cognitive skill areas for educable mentally retarded students. A major objective of the program is to demonstrate that through individualized, tailor-made programs, using sophisticated classroom management techniques, EMR students can achieve significant results, not only in "EMR segregated" classrooms, but also in classrooms where EMR students are integrated with regular students. During the first year of operation, school year 71-72, 150 students whose average I.Q. was approximately 59, all of whom had slight to serious brain damage, achieved over one months gain for each month in both math and reading. The program which is presently in its second year of operation, has been nominated as the State's exemplary Title III Program. Preliminary results during the second year indicate that the program is producing similar results in reading and significantly better results in math.

Why the apparent success? First, contractors designed and developed, and implemented a program which they felt would work best under an incentive structure where their payment was contingent upon student-performance to a large extent. Second, the project director was skilled in project management techniques, and had developed for him a sophisticated project management manual. Third, the intent of the program was to test and demonstrate a system which could be eventually integrated (e.g., turnkeyed) into as many as 10-15 schools with EMR students.

While each of these programs differed, there were some common threads. First, while policy was determined at Federal, State or Board of Education levels, in the vast majority of instances, the decision-making regarding the instructional program to be developed or implemented, was decentralized to the district, building or classroom level. Moreover, along with decentralized decisionmaking authority and responsibility were additional funds and support, including "risk capital".

Second, in all of the projects, an incentive structure existed, which encouraged those responsible to increase student performance and meet other objectives. Incentives were provided to staff, individually or collectively, to buildings or to the district itself. In a project in Woodland, California, a Scanlon Plan recently proposed 2 months ago in Phi Delta Kappan has been implemented. (See Appendix D) In this project, the entire school building is under a bonus-penalty arrangement based on student performance and attitude arrangements. A similar "cost saving-profit-sharing" arrangement is being proposed in Grand Rapids, Michigan, where staff-initiated cost-saving initiatives are rewarded. It is important to note that the nature of the incentive must be suitable to the traditions and moves of the particular district and the staff, and each unique situation.

Third, in each of the projects mentioned above, several accountability techniques were used. Project directors in each of the projects were trained in project management skills, and provided an Operations Manual to assist them in program planning and implementation. Program audits were often conducted to ensure a public accounting. And outside assistance, similar to that included in the initial Title III proposed legislation, was provided.

Last, it is interesting to note that in all three of these projects, even though most used ESEA funds, no Federal officials from the U.S. Office of Education were involved. I mention this point in light of my experience and observations regarding direct Federal involvement in educational projects, which are worth noting.

First, in far too many instances, the criteria chosen by Federal officials for evaluating a project differ radically from those actually used at the local level for decision-making purposes. In other instances, such as the O.E.O. Performance Contract Experiment, the evaluation design is not flexible enough to take into ac

count the dynamic nature of school system operation and the political, social and economic milieu in which decisions are made. (See Appendix E)

Second, in many instances, the legislative flexibility of the ESEA does not allow effective and timely implementation. For example, in a recent U.S.O.E. project, an evaluation of which was disclosed on Tuesday, which offered incentives to parents and teachers based upon student performance, the project was not officially funded until it was half way over, due largely to the legislative restrictions and administrative protocol.

And third, many U.S.O.E. officials in charge of ESEA programs tend to confound and confuse, rather than clarify issues during project planning, development and implementation; when in doubt they are rather proscriptive regarding flexibility and what can be done.

What are the implications of the above projects and their results for ESEA reform? I offer the following observations not as blueprint legislation but as accountability techniques which deserve serious consideration and constructive debate as new directions and emphasis are sought for ESEA.

First, the successful results achieved in these and other projects indicate that we now have the capability to ensure not only equal education opportunity, but also "equity in terms of results”—a guaranteed level of performance in math and reading. Aware of the fact that ESEA Title I provides for services other than cognitive skills, I am confident that in this area of math and reading, a number of new and redesigned individualized learning systems can produce significant results if staff are encouraged to use these systems effectively. A capability exists within certain public schools, as well as outside groups to train staff in other schools to implement such programs. What is needed is the will to accept this challenge of the 70's reflected in legislative intent.

Second, school districts and staff must be provided an incentive to search the marketplace for what works best to increase student performance in basic skills. Incentives should be based upon student performance and process objectives (e.g., did the teacher use the materials in accordance with the procedures in the Manual?) The criteria and nature of incentives should be developed through a participatory management process involving teachers and administrative personnel. Incentives could take the form of dollar bonuses to faculties collectively, free time, staff promotions, and consultant arrangements, whereby school developers of effective programs are encouraged to replicate programs elsewhere, and others.

At the same time, existing “disincentives" which divert time and attention at the local level from the main issue-the performance of the student--and encourage inefficiency of operations must be removed (e.g., rigid staff-student ratio, endof-year spending sprees to ensure subsequent year budgets are not reduced, etc.) And since many of these disincentives can be directly or indirectly traced to Federal legislation or State interpretation, a good starting point lies here before this Committee.

Third, incentives alone would be unfair without some subsidy scheme which will ensure some equity among present inequitable distribution of needs, financ ing, and capacities which range considerably from district to district across this country. Strong financial support is needed to start up new programs and train staff; to gain support and credibility of parents; to overcome fatalistic attitudes which are too often prevalent among teachers; and to reach and then motivate children who exist in a quagmire of poverty.

Fourth, incentives based upon student performance and other factors, combined with equitable subsidies based on needs, would be ineffective and even punitive without decentralizing decision-making authority, even to the building or classroom level, regarding instructional program selection and design. While those closest to the problem often have a better perception of the problem and feasible solution, their direct involvement in the decision-making process will in itself ensure not only professional self-governance, but also some accountability. ESEA Title I "comparability" guidelines and their interpretations by State and district personnel often stifle creativity, promote inefficiency of program implementation, and consume limited administrative time and effort at the expense of monitoring programs with student performance in mind. Had not special waivers been granted in several of the above projects, ESEA Title I guidelines would have been violated. The issue of "supplanting" should be concerned more with total actual or imputed resources targeted to a student than with equality of inputs or design features such as pupil-teacher ratio, maximum percentage allowances for material expenditures, etc. Comparability and flexibility must co-exist in a compatible manner.

Fifth, in order to correct a major deficiency in the vast majority of ESEA Title I and Title III projects, and projects noted in the recent Ford Foundation Report, Federal and State guidelines, if not legislation itself, should mandate the creation and implementation of a Projects Management and Evaluation System Office for all medium and large scale ESEA projects. This office would have direct access to high level decision-makers and Parent Advisory Committees with all the necessary authority to ensure effective program implementation and continual internal evaluation.

Sixth, a public accounting for each Title I project's performance should be mandated by legislation, as now required in most Title III and all Title VII and VIII projects. An education program auditor would provide a public report on the project objectives, management and evaluation procedures, and the project's results. Subsequent year's funding would be contingent upon specific and objective evidence and actions taken to correct reported deficiencies, when such actions are considered appropriate by the local Board of Education, the Parent Advisory Committee, and the Title I State Coordinator. The education program auditor would be selected by the district based upon evidence of capability and integrity and approved by the State Title I Coordinator.

APPENDIX A

STATE COMPENSATORY PROGRAM "WORKS" IN MICHIGAN

The first results from Michigan's $22.5 million “accountability model” for compensatory education appear to dispute the contention that these programs can't succeed. Under the state-funded "comp ed" program, schools establish performance objectives, representing at least one grade level gain, for participating students. The program now reaches 112,000 elementary school children who rank in the bottom 16th percentile in math and reading in 67 school districts. In order for the school district to receive a full $200 per pupil grant in subsequent years, each student must achieve at least 75% of the specified objectives. John Porter, state superintendent of public instruction, describes the program as a “performance pact" with local districts: "We say to them, 'Here's the money. Use it in any way you want to make a difference in the lives of kids. If you can't make a difference, what do you need the money for?"

Test scores from 36 of the 67 participating districts show that 93% of the students in only the math program achieved 75% or more of the objectives as did 73% of those in only the reading program and 63% of those in both programs. The scores also show that more than half of the students achieved a full grade level or better. Detroit, one of the 67 participating districts, is not included in these first results, but preliminary scores are somewhat comparable, indicating that "these students are showing improvement for the first time," Porter says. In addition, the "Chapter Three Program," as it is now known, is creating a "spin-off effect" on projects funded by Title I of the Elementary and Secondary Education Act (ESEA), and these results also "look encouraging," Porter says. He adds that he has been trying to convince the federal government to adopt Michigan's "comp ed" plan as a model of Title I "to face up to what's important." Why does Michigan's compensatory education program appear to be successful whereas others have failed? Michigan has shifted the burden for succeeding from the student to the instructional program, Porter says: "We have told schools to spell out what they want to happen and have them held accountable for achieving it." In the past, he says, "we have just applied money" and then determined whether the child made any improvement on the basis of national norms. Although the reaction of educators to this program was "hostile" at first, Porter says, most teachers are now pleased by the flexibility and the financial and other support the program provides. And the administrators "are coming around to accepting the concept," he says.

Another key point is that money is being spent in a different way, says Charles Blaschke of Education Turnkey Systems, which has provided technical assistance to the state and the 67 school districts. Free to spend the money as they wished, the districts have used 34% on the average, for materials and equipment. In contrast, most Title I programs, following federal guidelines, usually devote 80% to 90% to additional staff salaries and less than 10% to materials, Blaschke says. "For the first time districts, given almost total program flexibility, have had the incentive to do what they, not others, feel works best," he says. "At this time, when the future of ESEA and Title I is uncertain, it would appear to be critical

to find out what worked in Michigan and why. This model could have the most far-reaching implications for fundamental education reform in this century."

The Serrano school finance case is in court again, and the outcome of "Serrano II" could be even more significant than the original decision. In 1971, the California Supreme Court, overturning a lower court decision not to hear the case, ruled that state systems of school finance which link access to educational funds with local wealth are unconstitutional. The state supreme court then sent the case back to the lower court to decide on the claims involved. Now, in round two, a trial is in progress in the Los Angeles Superior Court on the facts of the case and the assumptions underlying it, i.e., do district expenditures really differ that greatly, and is the quality of a child's education directly related to its cost? David Long of the Lawyer's Committee for Civil Rights Under Law says that although the "cost-quality" issue has been brought up in courts before, this is the first time it has been the central issue of a case. "The new Serrano trial is a significant one to watch. It will be very important to see if the court, on the basis of inadequate research to date, will find contrary to the assumption on which school finance has been based for one hundred years-the more you spend for education, the better education you get."

The U.S. Supreme Court has agreed to review the Richmond metropolitan school desegregation case involving merger of city and surburban school districts. (See Education U.S.A., Jan. 17, 1972.) The court will probably hear the case in April or May, making it unlikely that any decision will come in time for the 1973-74 school year. The principle of urban-suburban merger has come up in several court cases, most notably, Detroit, where the full nine-member 6th U.S. Circuit Court of Appeals has agreed to rehear that case. A three-judge panel from the court had earlier upheld a lower court order to desegregate Detroit's schools by cross-district busing with the city's suburbs. Reargument of the Detroit suit, set for Feb. 8, temporarily sets aside the earlier order. Civil rights leaders, who were encouraged that the high court decided to hear the Richmond case, say the justices might ultimately decide to postpone that hearing and review both the Richmond and Detroit cases at the same time.

Results of the state's federally funded "comp ed" projects for fiscal 1972, just released by the U.S. Office of Education, show that students averaged gains of 1.3 months for every month of instruction in reading and math. Achievement was even higher in summer school programs, with students posting gains of 2.5 months per month of instruction in math and 2.8 in reading, and in extended school year programs, with 2.3 monthly gains in math and 1.6 in reading. The gains indicate, the report says, that Michigan students in projects funded by Title I of the Elementary and Secondary Education Act have begun to "narrow the gap" in "basic skills achievement." Earlier state officials released the first results of an apparently successful state-funded "comp ed" program which they said was creating a "spin-off effect" on projects funded by Title I since many students are in both programs. (See Education U.S.A., Dec. 18, 1972.) The Title I evaluation also shows that achievement varied according to the type of instruction, with small group and tutorial instruction producing the greatest gains. In addition, "combination types of instruction" produced “significantly greater” gains than "remedial type instruction."

The executive committee of the National Council of Urban Education Assns. (NCUEA) has censured its president for “her unauthorized manipulation" of the council's name. The president, Marge Beach of Oakland, Calif., announced last month that NCUEA, an NEA group, had joined with the American Federation of Teachers (AFT) in a coalition to promote an NEA-AFT merger. (See EDUCATION U.S.A., Dec. 18, 1972.) The NCUEA committee says it has an "interest in merger, but never authorized its president to enter into an alliance" with AFT. Meanwhile, AFT has declined NEA's invitation to join the Coalition of American Public Employes to avoid “creating a false substitute for true unity."

NAMES IN THE NEWS: J. Stanley Pottinger, director of HEW's Office for Civil Rights, has been nominated by the White House to be assistant attorney general for civil rights.

APPENDIX B

"CONTRACTS" PRODUCE TEACHER BONUSES, PUPIL GAINS

A performance contracting project in Florida's Dade County Public Schools has produced achievement gains that are more than double the national norms. The project, which ran for four months last spring, will be continued at one school this year to confirm the spectacular results. However, some school

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officials have already declared the project a "success" while others, who are more cautious, say "the project appears to have the potential to be highly successful." State education officials in Michigan are already looking at the Date County model and may adopt it in a modified form.

Under the unusual Dade County project, a few faculty members at two elementary schools entered into a contract with the district. Their goal: to increase the reading and math achievement of disadvantaged students performing significantly under grade level. At one school the 180 participating students gained an average of 4.8 months in reading and 8 months in math, according to standardized tests, after 4 months of instruction. At the other school, the 180 students gained 11.3 months in reading and 7 months in math. Education Turnkey Systems, which helped develop the project, computed the cost of monthly gains in both subjects and found that it was lower, in five of six cases, than in the cost of instruction elsewhere in the county. Specifically, the costs were 68% lower in reading at both schools and 80% lower in math at one school and 22% at the other. The primary reason for the lower costs is that teachers increased class size to 35 to 45 students, says Charles Blaschke, president of Education Turnkey.

Dade County's performance contracting project has several unusual features. For example, the teachers and principals involved in the contract are paid incentives of up to $110 per pupil for increasing student achievement by 100% or more over the previous year. In both schools those involved shared the bonuses equally, earning $3,228 each in one school and $2,124 in the other. They are also given the option of using "risk capital" of up to $55 per student for equipment and teacher training. However, the teachers risk having to repay all or part of this money if students achieve less than 50% above expected gains. Last year teachers at one school had to return $600 because their fifth graders did not do well enough in math. Teachers were also given up to $55. per students to use for materials and operating costs in any way they saw fit. One school hired four aides on a half-day basis after increasing class size to 45 students. Both schools used student incentives. Cash "rewards" of no more than $1 a week per student were tried by one school, but small "gifts," such as books, toys and radios, had a better motivational effect, Herb Weinfeld, project director, says. The teachers also made extensive use of teaching machines, programmed learning and peer tutors.

The apparent success of the Dade County project, funded last year by about $50,000 in federal compensatory education funds, may raise some basic questions about "comp ed," Blaschke says. Specifically, the U.S. Office of Education (USOE) has stressed the comparability principle in recent years-calling for all classrooms in a district to have the same class size, materials, etc. Blaschke suggests that "one has to ask whether USOE and Congress are more interested in the comparability of resources, which too often stifle creativity, or are they serious about increasing the performance of minority children, regardless of how teachers organize the classroom."

APPENDIX C

AN ADDRESS BY BLAIR H. CURRY AND JOHN M. SWEENEY, EDUCATION TURNKEY SYSTEMS, INC.

(AASA Annual Conference, Atlantic City, N.J., Feb. 15, 1972)

In a session today of the annual conference of the American Association of School Administrators, Blair H. Curry and John M. Sweeney of Education Turnkey Systems, a Washington-based management support and analysis firm, revealed disturbing facts concerning current American educational spending priorities. Their eighteen-month-long analysis of the patterns of educational resource consumption revealed that in the typical American school only slightly more than half of all resources go directly into the classroom instruction process. Only about three-fourths of a classroom teacher's salary goes for this academic instruction-the remainder is absorbed by such duties as supervision of recess, lunch, and homeroom activities. For every dollar currently devoted to books and audiovisual software, ten dollars are spent for operating and maintaining the physical plant.

The analysis which produced these startling results shifts attention from the resources purchased for education (teachers, classroom, etc.) to the more relevant question of how these resources are consumed in educating our children. Basic to their analysis was the application of a large computer-based analytical