This report presents the findings of a study of the local costs of the federal No Child Left Behind Act (NCLB) in Virginia by Augenblick, Palaich and Associates, Inc. (APA), under contract for the Virginia Department of Education (VDOE). This report focuses on the school division level cost impact of NCLB since the federal legislation was enacted in 2001, with projections extending through 2007-08.

The statewide estimate for Virginia at the school division level indicates that the cost of implementing NCLB, using the definition described below, ranged from $238 to $267 million per year for the school years between 2003-04 and 2007-08. This represents a local dollar per pupil figure per year of between $204 and $219. When balanced against new NCLB revenues, this results in an unfunded per pupil cost of approximately $53 per year. The $53 estimate represents less than one percent of the statewide average total per pupil expenditure of $8,552 in 2003-04.

Given the conservative assumptions of the study, these results indicate that Virginia’s LEA costs of complying with NCLB are underfunded. As the 2014 NCLB requirement for 100 percent proficiency approaches, it is likely that Virginia’s local school divisions’ costs could increase at a faster rate as additional resources are needed to assist schools and students.

This study was undertaken in response to a request from the state legislature. In 2004, pursuant to Item 144, paragraph E.5.b., of the 2004 Appropriation Act (Chapter 4, 2004 Acts of Assembly, Special Session I), the General Assembly required the Superintendent of Public Instruction to report on the status of the Virginia Department of Education’s effort to estimate the cost impact of the NCLB. In 2005, the General Assembly passed two pieces of legislation, Senate Bill 1136 and House Bill 2602, requiring the Virginia Board of Education to examine the fiscal implications of NCLB for both the state and local governments. The legislation required the Board to report its findings to the House Committees on Education and Appropriations and the Senate Committees on Education and Health and Finance no later than October 1, 2005.

For purposes of this study, the cost of NCLB is defined as the value of the resources – both time and materials – school divisions in the state need to:

Implement the explicit requirements of NCLB that are related to accountability (including the development and implementation of school and school division performance standards, assessments to measure student performance, and consequences of not meeting performance expectations);

Meet any new requirements of NCLB that go beyond what had been required under the previous reauthorization of the Elementary and Secondary Education Act (ESEA) – such as requirements about the qualifications of educators who work with students; and

Administer all aspects of NCLB, including managing the numerous federal grant programs it supports.

Utilizing a series of Microsoft Excel-based templates, APA provided a detailed framework of NCLB requirements that school divisions must meet to comply with the law. The framework was drawn from a close reading of NCLB legislation and the regulations and non-regulatory guidance issued by the U.S. Department of Education. Finally, the framework was reviewed and modified by members of the Council of Chief State School Officers’ NCLB Cost Consortium. It is organized around seven cost-driving NCLB components that APA has identified, including:

Component 1A Standards and Assessments;

Component 1B Accountability;

Component 2A Technical Assistance for LEAs and Schools;

Component 2B School Choice and Supplemental Services;

Component 3 High Quality Educators;

Component 4 NCLB Data Management; and

Component 5 Administration of NCLB and Title Programs.

The APA framework further breaks down these components into uniform subset areas and associated tasks. For instance, under Component 1A, there are a set of required areas which every school division must address regarding the alignment of curriculum and instruction with state standards and assessments for reading, math and science. Within these requirement areas, the framework further delineates a standard series of associated tasks, such as the need to develop and disseminate support materials and to train educators. School division staff – including division business officers and federal program directors – from eight school divisions representing each of the eight administrative and geographic regions of the Commonwealth of Virginia completed the templates that generated the estimates presented in this report.

Virginia’s local NCLB cost study has been conducted with commitment and diligence on the part of all those participating in the study. Nevertheless, it is important to reiterate that this study necessarily relies both on objective data and professional judgment. The resulting figures should therefore be treated as cost estimates, not as precise dollar specifications. Finally, because NCLB implementation decisions continue to be made – with ongoing changes in standards and assessments, student performance and AYP lists, sanctions, technical assistance needs, and other key cost areas — the results presented herein for fiscal year 2005-2006 and beyond may change as these new decisions take effect.

The report that follows describes how the underlying data were collected and shows how these figures were derived.

FOREWORD AND ACKNOWLEDGEMENTS

This report, which presents an estimate of new federal No Child Left Behind (NCLB) Act related costs to Virginia local education agencies (LEAs), is being released concurrently with a report that presents similar information for the Virginia state education agency (the Virginia Department of Education). Both studies grew out of an initiative of the Council of Chief State School Officers (CCSSO) that formed a consortium of state departments of education to develop a coordinated approach for analyzing the costs of NCLB for multiple states. The CCSSO contracted with Augenblick, Palaich and Associates, Inc. (APA) to develop the model framework for states and local divisions to use to determine the activities and costs to implement NCLB. Virginia, in turn, contracted with APA to undertake its LEA study and to review the methodology used for the state education agency study.

This report is the result of collaboration between APA, eight local school divisions, and the department. APA took the lead in training staff of the school divisions in determining their NCLB-related costs and in undertaking the analysis that resulted in per pupil costs for each division and for the state. The department acted as liaison and coordinator for the overall project and had final approval of the variables used for the statewide per pupil cost extrapolation. Each division prepared its own cost information using the APA guidelines and gave final approval on the cost information presented in this study. All per pupil amounts for each of the eight LEAs are presented using the cost information provided by the respective division, measured against student populations as determined by the department.

The department, working closely with the eight participating school divisions, provided APA with narrative information and with data used for the revenue/cost analysis shown in Part V of this report. Throughout the study, the department and participating school divisions worked closely with APA.

The majority of the work that resulted in this study, however, was conducted by staff of the eight participating school divisions. These divisions were Albemarle County, Fairfax County, City of Fredericksburg, Halifax County, Henrico County, City of Norfolk, Roanoke County, and Washington County. We are grateful to these eight divisions that agreed to participate in this study and to their staff who undertook a great deal of intense work in a short period of time, in addition to their already heavy workloads. This study could not have been produced without their efforts and we appreciate the tremendous contribution they have made to our understanding of this important issue.

The authors would like to acknowledge the contributions of the Council of Chief State School Officers (CCSSO) and the members of its NCLB Cost Consortium (of which Virginia is a member) for their contributions to the refinement of the data collection templates used in this study. In Virginia, the strong commitment of the Virginia Department of Education (VDOE) to the completion of this study was made possible by the State Superintendent of Public Instruction, Dr. Jo Lynne DeMary.

This report would not have been possible without the leadership, encouragement and logistical support of Assistant Superintendent Anne Wescott and Director of Policy Michelle Vucci. Ms. Vucci acted as the liaison between APA and the participating school divisions. In addition, Ms. Vucci provided APA data from the department regarding estimates of federal revenue that could be used to offset the cost of NCLB in local divisions. She was assisted in her work by Albert Ciarochi, a Ph.D. candidate and experienced educator, who helped author parts of this study. The superintendents of the eight participating school divisions gave permission for their divisions to participate. Finally, deputy and assistant superintendents, business officials, federal program coordinators as well as principals and teachers worked for many hours to complete the data collection templates for each division. The local NCLB cost estimate would not have been possible without the contributions of these individuals. Thank you again for your efforts.

Finally, the authors would like to thank Dr. Dianne deVries for her contribution to the development of the local NCLB cost templates. Dale DeCesare edited this report.
PART I: INTRODUCTION

This report presents the findings of a study of the local costs of the No Child Left Behind Act (NCLB) in Virginia by Augenblick, Palaich and Associates, Inc. (APA), under contract for the Virginia Department of Education (VDOE). This report focuses on the school division level cost impact of NCLB since the federal legislation was enacted in 2001, with projections extending through 2007-2008. The study utilized a research methodology adapted by APA for the nonpartisan Council of Chief State School Officers (CCSSO) and its NCLB Cost Consortium, of which Virginia is a member.

For purposes of this study, the cost of NCLB is defined as the value of the resources – both time and materials – school divisions in the state need to:

Implement the explicit requirements of NCLB that are related to accountability (including the development and implementation of school and school division performance standards, assessments to measure student performance, and consequences of not meeting performance expectations);

Meet any new requirements of NCLB that go beyond what had been required under the previous reauthorization of the Elementary and Secondary Education Act (ESEA) – such as requirements about the qualifications of educators who work with students; and

Administer all aspects of NCLB, including managing the numerous federal grant programs it supports.

Utilizing a series of Microsoft Excel-based templates, APA provides a detailed framework of NCLB requirements that all states must meet to comply with the law. The framework was drawn directly from a close reading of NCLB legislation and the regulations and non-regulatory guidance issued by the U.S. Department of Education. Finally, the framework was reviewed and modified by members of the Council of Chief State School Officers’ NCLB Cost Consortium. It is organized around seven cost-driving NCLB components that APA has identified, including:

Component 1A Standards and Assessments;

Component 1B Accountability;

Component 2A Technical Assistance for LEAs and Schools;

Component 2B School Choice and Supplemental Services;

Component 3 High Quality Educators;

Component 4 NCLB Data Management; and

Component 5 Administration of NCLB and Title Programs.

The APA framework further breaks down these components into uniform subset areas and associated tasks. For instance, under Component 1A, there are a set of areas which NCLB requires every state to address regarding the creation of state standards and assessments for reading, math and science. Within these requirement areas, the framework further delineates a standard series of associated tasks, such as the need to develop and disseminate support materials and to train educators.

Using this framework, the school divisions in Virginia were then asked to identify the set of activities that reflect the strategies that each participating division has adopted to respond to NCLB. Examples of activities might include convening study groups, holding meetings, conducting professional development, preparing materials, managing contracts, responding to questions, resolving disputes, developing reports, or other steps taken to complete a task in the APA template. Because the Constitution of Virginia vests the operation of school divisions with the respective local school boards, each of Virginia’s school divisions operates independently of one another. Consequently, the eight divisions participating in the study faced the challenge of defining what new NCLB costs meant in the context of their own unique operating structure, geographic location, economic condition, and student population.

School division staff from each participating division entered the raw personnel and other cost data for each task on each of the templates, which generated specific costs for each task. The analysis further required that the percent of an activity cost attributable to NCLB also be indicated for each activity. This percent reflects the cost of the activity that would not have been incurred if NCLB did not exist. That is, it specifically focuses on resources expended above and beyond those the Commonwealth was already spending to develop and implement its own programs. The school division results were then analyzed and used (methodology described below) to obtain an estimate of the statewide local cost of implementing NCLB in Virginia.

The rationale for an activity-based cost analysis is this: requiring activity-based reporting of time, contracts, and other expenditures minimizes speculation, reduces the incidence of over- or under-reporting of staff time, and facilitates verification or replication of the data. The completed templates also can be used as long-range planning tools, since they clearly identify what activities have been implemented and are still underway, how many days are required for various levels of personnel to perform those activities, where additional personnel may be needed, and which activities might be consolidated to improve efficiency or maximize program outcomes.

PART II: SCOPE AND METHODOLOGY

Cost Structure

The methodology used by APA to execute this report is based on one that the firm developed and used in Hawaii. Under a 2003 contract with the Council of Chief State School Officers’ (CCSSO) NCLB Cost Consortium, however, the methodology was examined and refined for use in consortium member states. The consortium – which includes Virginia and eleven other states – was charged with devising a common methodology for conducting NCLB cost studies in member states.

Consortium participants met twice in Washington, D.C. in late spring 2004 to help shape the APA cost data collection framework. As stated above, the resulting methodology utilizes cost templates to collect, organize, and aggregate costs at four levels: by (1) component, (2) areas within each component, (3) tasks within each area, and (4) activities within each task. Cost Consortium members also made clear that each state should have a degree of flexibility in the final design of the study within each state.

Initial consortium deliberations determined that costs are collected for the NCLB startup period of January 2001 through June 2003, but that the focal year of interest is July 2003 through June 2004, for which sound data could most easily be produced. Finally, projections are made through fiscal year 2007-2008, understanding that great care needs to be taken in estimating the ramping up of time/effort and contract expenditures and that NCLB provisions, and the flexibility provided therein, could undergo revisions during that timeframe.

This cost study specifically excludes state-supported interventions, competitive grant initiatives, and professional development programs that are not directly related to compliance with NCLB. While it is true that efforts aimed at improving student performance, narrowing the achievement gap, and ensuring high-quality schooling for all Virginia children are the kind of investments that also help schools and LEAs to meet AYP requirements, NCLB does not mandate prevention/intervention/school-reform actions prior to a school or division’s failure to meet AYP. Moreover, though state investments in initiatives such as pre-school, after-school programs, class size reduction, summer school, or summer leadership academies for educators are worthwhile initiatives, these initiatives in Virginia were undertaken independently of any federal requirements.

By excluding all improvement strategies and preventive measures not directly related to compliance with NCLB’s provisions, the study presents a conservative estimate of NCLB costs. The resulting cost figures, then, are what they are — the meticulously tabulated cost of new activities initiated at the division level solely for the purpose of complying with and administering the provisions of NCLB. The study’s design and implementation produces results that should satisfy the need for objective information for policymakers, regardless of their support for NCLB.

Determination of Local Costs

As part of the agreement with the CCSSO NCLB Cost Consortium, APA developed a set of templates to estimate division-level NCLB costs. These templates were tailored to the types of costs divisions would face when implementing NCLB. For example, a division could expend resources and incur additional costs related to offering school choice and supplemental services.

Identifying the division costs associated with NCLB was the critical task for the school divisions that participated in the study. Each school division collected a list of job titles that worked on NCLB-related activities and determined an average salary for each job category. APA then helped each division create a tailored set of templates for itself so that it could participate in the local part of Virginia’s NCLB cost study.

The participating school divisions included Albemarle County, Fairfax County, Fredericksburg City, Halifax County, Henrico County, Norfolk City, Roanoke County and Washington County. These school divisions represent the eight administrative and geographic regions in the Commonwealth. Collectively, these school divisions served more than 279,000 students in the 2003-2004 school year. The responsible staff in each school division convened additional staff members as needed to complete the templates.

School division staff were asked to report, to the best of their ability, the number of days of effort that were needed to complete each activity in 2002-2003 (the “development” year) and 2003-2004 (when most costs became “ongoing”). Staff members were also asked to estimate the portion of any outside contracts (e.g., with technical assistance providers) that would be attributable to NCLB. For those NCLB activities that were expected to continue beyond school year 2003-2004, APA also asked for estimates of the increase and/or decrease in the NCLB cost of each activity for the school year 2004-2005.

Staff time was reported by activity and personnel category. As the data were entered into the specially-designed division templates, days of effort were translated into full-time equivalents (FTEs). Embedded in the activity spreadsheet cells was the average cost (wages plus benefits) for each personnel category, allowing for the automated accumulation of cost for each activity as the data were entered. The software automatically uploaded these costs, as well as the annual cost of any contracts associated with the activity, into area summary spreadsheets, which in turn were automatically uploaded into component costs. The costs in this report are reported at the component level. Finally, the lead staff member in each division was responsible for data cleaning including the careful review of cell entries and summary figures.

Limitations of the Study

All costs contained in this study represent a “snapshot in time.” The study uses a conservative approach in estimating state costs incurred as a result in NCLB; it does not capture every single cost in state and federal dollars but focuses on documenting significant new costs to the eight local school divisions from fiscal years 2003-2004 through 2007-2008. The study documents only those new costs resulting from NCLB. The study focuses only on cost and does not evaluate any aspect of NCLB’s programs or policies in Virginia.

Finally, this study is not an “adequacy” study; that is, it does not project the costs to the local school divisions of 100 percent proficiency in reading/language arts and mathematics by 2013-2014 as required by NCLB.

PART III: LOCAL SCHOOL DIVISION FINDINGS

Context and Overview

The Constitution of Virginia requires the state Board of Education to determine and prescribe standards of quality for the public schools of Virginia, subject to revision only by the General Assembly. These codified standards, known as the Standards of Quality (SOQs), include Standards of Learning (SOLs), teacher licensing, school accreditation, and student achievement.

In 1995, the Virginia Board of Education (Board) undertook to further reform Virginia’s public education system by regularly assessing student achievement in key areas and making schools accountable for student achievement. The Board approved SOLs in English, history and social science, mathematics, and science for grades kindergarten through twelve, and technology SOLs to be achieved by the end of grades five and eight. In addition, the Board began implementing a statewide system of assessment to measure student achievement and to base school accreditation upon testing results. The first statewide SOL tests were administered in the spring of 1998. Since then, Virginia has continued to develop and refine its accountability system.

In 2001, Congress passed the No Child Left Behind Act (NCLB) that required states to ensure that all students achieve high standards, through attaining 100 percent proficiency in reading/language arts and mathematics by 2013-2014. Because of its rigorous SOL testing requirements for NCLB core subjects (i.e., English, mathematics, and science), Virginia was already targeting student achievement in these areas.

NCLB is not a new federal program but a set of new requirements on many existing federal programs, with additional funds provided to help states make the transition to an educational environment that includes rigorous, annual student achievement tests. In Virginia, NCLB could be characterized as an overlay to a well-established state system of assessment and accountability.

NCLB has, however, presented reporting challenges to the Commonwealth because of existing state accreditation requirements and the federal measure of Adequate Yearly Progress (AYP). As a result, since the passage of NCLB, Virginia has been integrating its accountability system with the requirements of NCLB – a process that has been challenging to both state and local administrators and to the public. Because of this “blending” of state and federal reporting systems, the Commonwealth decided that determining true, new costs to Virginia of NCLB required a school division by school division examination of costs.

Virginia’s Local Education Agencies (LEAs) are divided into eight administrative and geographic regions. To identify candidates for this study, the designated representative superintendent worked with the divisions in his or her region. Eight school divisions, one from each region, agreed to participate in the LEA NCLB cost study, prior to the study being mandated by the 2005 General Assembly.

The participating divisions chosen for the study had sufficient administrative capacity to handle the labor-intensive data collection and analysis process. These divisions also represented diverse geographic, economic, and cultural areas of the Commonwealth and, collectively, contained almost one-fourth of Virginia’s total student population of approximately 1.2 million for the 2003-2004 school year (which is the base year for this study). Participating LEAs comprised approximately 14 percent of the 765 Title I schools in the state.

The study includes not only cost information provided but also qualitative information collected through interviews with each of the participating divisions. From this information, a number of themes emerged that are common to most of the eight divisions. These themes are as follows:

· To some extent, all LEAs are diverting resources to meet NCLB requirements and experiencing opportunity costs as a result. All divisions participating in this study are making these trade-offs. Most divisions are experiencing difficulty in balancing their needs and priorities with state and federal requirements.

· LEAs are focused on the current accountability situation and its challenges. These challenges include a recognition that efforts may need to be undertaken to ensure that school do not fall into “in improvement status” and remain in this status. No LEA in the study has a mechanism for projecting the number of schools that might fall into “in improvement status,” due to the lack of experience with NCLB requirements. The participating divisions are diligent in their efforts to ensure that sufficient resources are available so that schools do not have to incur sanctions under NCLB.

· Among the unquantifiable costs for some LEAs is the communication efforts they undertook (and are still undertaking) to inform parents, students, and faculty and staff about NCLB. The time and energy needed for this effort is compounded by the differences between Virginia’s existing accountability system and NCLB.

· The LEAs in the study reported that data disaggregation required by NCLB is a positive thing to do. Several large, urban divisions were already building database systems that would enable them to better focus on addressing achievement gaps. To accomplish this goal, divisions in the study are seeking solutions to data warehousing demands as a result of NCLB. Selected LEAs are investigating comprehensive and cost-efficient alternatives, such as data warehousing consortia and interface with the state Education Information Management System (EIMS).

· Most divisions are experiencing difficulty in maintaining the high quality teacher work force required by NCLB. The divisions participating in the study regard the requirements for high-quality educators as beneficial to their school systems.

· Prior to NCLB, all LEAs in the study had developed an infrastructure to administer Virginia’s state assessment program. Nevertheless, all divisions in the study have needed substantial, additional resources to meet the testing requirements of NCLB and to ensure that the existing state accountability structure is merged with AYP reporting requirements.

· School divisions in Virginia, like school divisions nationally, have more Limited English Proficient (LEP) students coming into their systems. The testing requirements for these students in their first years of enrollment are challenging the capacity of the schools both to prepare students for the tests and to administer the tests.

· School divisions are expending additional resources to assist students needing testing accommodations to take and pass required tests so that AYP benchmarks are met.

The remainder of this section of the report sets out the key statistics and significant findings for each of the eight divisions. An appendix to this report contains additional cost information and, in some cases, additional narrative data for each of the eight divisions.

Albemarle County

Table 1: School Division Characteristics Albemarle County
Region	V
End-Year-ADM from 2003-2004	12,272
Division Free Lunch as of 10/31/03	13.82%
Total Number of Schools as of 9/30/04	25
Number of Title I Schools (2004-2005)	11
Number of Title I Schools in Improvement Status (2004-2005)	0

Table 2: School Division Results

Albemarle County, ADM = 12,272

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

Total NCLB Cost

$1,179,405

$1,306,201

$1,513,621

$1,637,827

$1,693,108