On July 08, 2015, the Senate approved by voice vote an amendment to the Senate version of the re-authorization of the Elementary and Secondary Education Act (ESEA) of 1965, the Every Child Achieves Act of 2015. The amendment in question, Senate Amendment 2086, sponsored by Senator Mark Warner (D- VA), allows states to spend the administrative portion of ESEA funding grants on “fiscal support teams.” Though not explicitly stated in the amendment language, such support teams could include education businesses and consulting firms.
In response to the above news, on July 09, 2015, investigative journalists David Sirota and Matthew Cunningham-Cook wrote an article in the International Business Times entitled, “Senate Passes Bill Letting Schools Give Education Money to Financial Consulting Firms.” The article implies that the Warner amendment has the potential to funnel ESEA grant funding to consultant bank accounts and away from needy children.
Yes, the amendment grants consultants direct access to ESEA funds– but not to at least 95 percent of it.
For each of the grants in the ESEA document, limits are set regarding how much of the funding can be spent on administrative costs. These limits usually range from 1 to 5 percent. In the case of Warner’s SA 2086, the amendment refers to two sections from No Child Left Behind (NCLB), sections 9201 and 9203, both of which concern consolidation of administrative funds. According to these sections, states (and, under the supervision of states, the local education agencies) are allowed to consolidate the administrative allotments from various ESEA grants “if the State educational agency can demonstrate that the majority of its resources are derived from non-Federal sources.” (NCLB, pg 542).
So, yes, according to NCLB language to be retained as part of the Senate ESEA reauth bill, the state is able to spend ESEA funds on consulting firms; however, the states can only spend from the small percentage of ESEA funding allowed for administrative costs and only if the bulk of the state’s administrative funding comes from sources other than the ESEA money it receives.
Sure, it’s an opportunity for those consultants to make money, but not the unfettered opportunity for ESEA funding exploitation that it might appear to be upon first glance.