In addition to federal funding, state and  local agencies provide significant funding to support the education of  these students. In particular, Title III  provides for formula-based grants whereas Title VII provided funds  primarily through discretionary grants. Education Used Census’ ACS Data to Distribute Title III Funds Because State Data Were Incomplete and Data Measurement Issues Could Result in Funding Differences across States

Education used ACS data to distribute Title III funds across states  although measurement issues with ACS and state-reported data could  affect the amount of funding that each state receives. Education officials told us that they expect  this review along with feedback to the states to result in improved data for  school year 2005-06 and beyond. While Education officials expected that their efforts would improve the  quality of the data, they told us that they had not established criteria or a  methodology to determine the relative accuracy of the two data sources. The Allowable State Data and the ACS Data Differ in What They Measure and How That Measurement Occurs

The two allowable sources of data measure fundamentally different  populations. We simulated the  distribution of funds across our 12 study states, using ACS data and data  representing the number of students with limited English proficiency  reported to us by state officials. Under NCLBA, Federal Funding for Students with Limited English Proficiency and Immigrant Children and Youth Has Increased, and More School Districts Are Receiving Funds

Federal funds for students with limited English proficiency and immigrant  children and youth increased significantly from fiscal year 2001—the year  prior to the enactment of the NCLBA— to fiscal year 2006. Congress appropriated over $650 million for this  purpose in fiscal year 2002. 6). In fiscal year 2001, Education distributed 41.2 percent of the $432 million  of Title VII funds provided to states in the form of discretionary grants to  schools, school districts, and state education agencies to support the  education of students with limited English proficiency, and 22.5 percent  for professional development of teachers and others associated with the  education of these students. States and School Districts Used Title III Funds to Support Programs for Students with Limited English Proficiency, but Some Cited Challenges Recruiting Highly Qualified Staff

States and school districts reported using Title III funds to support a  variety of programs and activities for students with limited English  proficiency, ranging from various types of language instruction programs  to professional development. In addition, officials in 5 of the 12 study states thought more guidance was  needed to develop English language proficiency assessments that meet  NCLBA’s requirements. In addition, ACS data have shown volatility—large increases and  decreases—in the numbers of students with limited English proficiency  from 2003 to 2004. To strengthen the basis for Education’s distribution of Title III funds, we  recommend that the Secretary of Education develop and implement a  transparent methodology for determining the relative accuracy of the two  allowable sources of data, ACS or state data on the number of students  with limited English proficiency assessed annually, for Title III allocations  to states.
Why GAO Did This Study

Title III of the No Child Left Behind Act of 2001 (NCLBA) designates federal funds to support the education of students with limited English proficiency and provides for formula-based grants to states. This report describes the data the Education Department used to distribute Title III funds and the implications of data measurement issues for the two allowable sources of data-- American Community Survey (ACS) and state assessment data--for allocating funds across states. In addition, the report describes changes in federal funding to support these students under NCLBA and how states and school districts used these funds as well as Education's Title III oversight and support to states. To address these objectives, GAO reviewed documentation on ACS and state data, interviewed federal and state officials, and collected data from 12 states, 11 districts, and 6 schools.

What GAO Found

Education used ACS data to distribute Title III funds, but measurement issues with both ACS and state data could result in funding differences. Education used ACS data primarily because state data were incomplete. In September, Education officials told us they were developing plans to clarify instructions for state data submissions to address identified inconsistencies. While Education officials expected their efforts to improve the quality of the data, they told us that they had not established criteria or a methodology to determine the relative accuracy of the two data sources. State data represent the number of students with limited English proficiency assessed annually for English proficiency, and ACS data are based in part on responses to subjective English ability questions from a sample of the population. ACS data showed large increases and decreases in numbers of these students from 2003 to 2004 in part due to sample size. ACS data and state counts of students with limited English proficiency for the 12 study states differed. GAO's simulation of the distribution of Title III funds for fiscal years 2005 and 2006 based on these numbers showed that there would be differences in how much funding states would receive. In fiscal year 2006, Congress authorized over $650 million in Title III funding for students with limited English proficiency--an increase of over $200 million since fiscal year 2001 under NCLBA. This increase in funding as well as the change in how funds are distributed--from a primarily discretionary grant program to a formula grant program--contributed to more districts receiving federal funding to support students with limited English proficiency since the enactment of NCLBA. States and school districts used Title III funds to support programs and activities including language instruction and professional development. Education provided oversight and support to states. Officials from 5 of the 12 study states reported overall satisfaction with the support from Education. However, some officials indicated that they needed more guidance in certain areas, such as developing English language proficiency assessments that meet NCLBA's requirements. Education is taking steps to address issues states identified.