Compensatory education revenue is state funding to help schools pay for the educational needs of students who do not meet performance standards appropriate for their age. Minnesota statutes requiring school districts to determine whether compensatory education revenue raised student achievement are unrealistic. We present alternatives to improve oversight of, and requirements related to, the revenue.
In response to a congressional request, GAO provided information on school officials' selection of students for a federal compensatory education program under chapter 1 of the Education Consolidation and Improvement Act of 1981 to determine: (1) whether the students met federal, state, and local selection requirements; and (2) how states ensured compliance with the act's requirements. GAO found that: (1) the act authorized grants to school districts to serve educationally deprived children living in areas with high concentrations of low-income families; (2) most of the districts established their own criteria using a combination of income-related measures, school lunch program participation, and census data; (3) although selection criteria varied, states used standardized test scores most heavily to identify educationally deprived children; (4) school districts erroneously placed few students, whether they used single or multiple criteria; and (5) many states used program evaluations to monitor compliance, while nearly all of the states used audits. Almost all of the state agencies said they monitored compliance mainly by reviewing and approving districts' applications for funds and conducting site visits. However, almost half reduced their site monitoring due to cuts in administrative funds. Although many districts maintained a high compliance level with the established selection criteria, it was difficult to predict whether changes in compliance would occur in the future as a result of funding reductions.
