Detailed Information on the
Impact Aid Payments for Federal Property Assessment

Develop annual and long-term performance measures.

Arrange for an econometric analysis, by a contractor, of the Section 8002 formula.

Work with Congress during the NCLB reauthorization to correct structural flaws in the program.

Mine existing data to compare measures of LEA wealth for school districts that receive Impact Aid, and use these findings to assess targeting of funds to the most heavily impacted school districts.

Craft an "analysis plan" that includes an economic analysis of the costs and benefits of a Federal presence in affected localities.

Develop performance and efficiency measures.

For the NCLB reauthorization, develop legislative proposals to correct structural flaws in the program.

Measure: The percentage of eligible Section 8002 applicants reviewed during the year.

Explanation:The target for this measure is to review and verify assessed values for one-third of all applicants each year.

Measure: Percentage of initial Section 8002 payments made to eligible school districts by the end of the second quarter.

Explanation:This is a new performance measure. The target will be to eventually make 75 percent of initial payments by the end of the second quarter.

Is the program purpose clear?

Explanation: The program compensates local educational agencies (LEAs) that have had a loss of tax base of at least 10 percent of assessed value due to acquisition of real property by the United States Government since 1938.

Evidence: Section 8001 (1) and 8002 (a) of the Elementary and Secondary Education Act, as amended by the No Child Left Behind Act of 2001.

Does the program address a specific and existing problem, interest or need?

Explanation: Impact Aid grants address the loss in tax revenue an LEA faces due to the presence of Federal property. Even if no federally-connected children reside on such land, the loss reduces the level of educational resources for all children.

Evidence: Almost all school districts use property taxes to finance school expenditures. Impact Aid provides financial relief to school districts that are burdened by tax revenue loss since Federal property cannot be taxed.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: Provisions exist in the funding formula to avoid overpaying LEAs that receive funding under other Impact Aid programs. For example, there is a cap on funding that restricts payments under Federal Property so that, when combined with the Impact Aid Basic Support Payments, they do not exceed the maximum payments from either program. Also, there is a revenue deduction clause in the funding formula that takes into account revenue received from any other Federal department or agency for the same property.

Evidence: Section 8002(b)(1)(A)(i) and 8002(b)(1)(C) of the Elementary and Secondary Education Act, as amended by the No Child Left Behind Act of 2001. Also, there is a clause in the statute [Section 8002(b)(1)(ii)] that, for purposes of calculating the amount and LEA shall receive under Payments for Federal Property, excludes revenues received by the LEA from the Secretary of Defense to support the operation of a domestic dependant elementary or secondary school and the provision of public education to dependents on or near a military installation.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There are special provisions in the formula that allow LEAs into the program that cannot document eligibility and that pay other LEAs at a higher rate than they would otherwise be eligible for.

Evidence:  

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The funding formula includes two hold-harmless steps that guarantee partial payments to LEAs based on eligibility determined from 1989 to 1995. The first step provides LEAs at least 38 percent of their maximum payment from 1994 if they were eligible between 1989 and 1994. The second step provides a payment to LEAs that were eligible in 1995. In addition, there is a special payment made to Highland Falls, New York. These steps in the formula reduce the amount of the appropriation remaining for LEAs with the greatest need based on current data. Also, the way that the statute is written, districts are eligible to receive funds regardless of whether or not the Federal presence has a positive or negative effect.

Evidence: Section 8002 (h)(1) and (2) of the Elementary and Secondary Education Act, as amended by the No Child Left Behind Act of 2001.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Department is working to develop long-term performance indicators and performance targets that are tied to short term goals and are consistent with the program's scope and activities.

Evidence: Currently, the only performance measures for Impact Aid programs are administrative measures that concern timeliness and accuracy of payments. Department staff are currently working with the Office of Management and Budget (OMB) to develop an 'analysis plan' to measure the performance of the Impact Aid program. The plan may include, for example, an economic analysis of the costs and benefits of a Federal presence in affected localities, and an examination of Impact Aid targeting to the most heavily impacted school districts.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Long-term targets cannot be set until performance indicators are defined.

Evidence:  

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: No annual measures are currently available for this program.

Evidence: The Department is working with OMB on a general plan to develop measures for the Impact Aid program as a whole.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Baselines and targets for annual measures cannot be set until annual measures are developed.

Evidence: The Department is working with OMB on a general plan to develop measures for the Impact Aid program as a whole. Currently, no measures are available for this program.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Annual and long-term goals have not been set for this program.

Evidence: The Department is working with OMB on a general plan to develop measures for the Impact Aid program as a whole.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: No independent evaluations are available for this program.

Evidence: Department staff are currently working with OMB to develop an 'analysis plan' to measure the performance of the Impact Aid program. The plan may include, for example, an economic analysis of the costs and benefits of a Federal presence in affected localities, and an examination of Impact Aid targeting to the most heavily impacted school districts.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Budget requests do not link program performance with changes in funding levels. The program, at this time, does not have sufficiently valid and reliable performance information to assess (directly or indirectly) the impact of the Federal investment. However, ED's budget submissions show the full cost of the program (including Salaries and Expenses).

Evidence:  

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program has no system for evaluating the effectiveness of the program's strategic planning, or for correlating deficiencies when goals are not achieved.

Evidence:  

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: While grantees provide supporting information on the estimated assessed values of Federal property, the information is not connected to any baseline performance data and is not currently used to set performance targets.

Evidence:  

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Currently, ED cannot demonstrate how federal managers and program partners are held accountable for program goals. However, the Department has initiated several efforts to improve accountability in its programs. First, ED is in the process of ensuring that EDPAS plans -- which link employee performance to relevant Strategic Plan goals and action steps ' hold Department employees accountable for specific actions tied to improving program performance. ED is also revising performance agreements for its SES staff to link performance appraisals to specific actions tied to program performance. Finally, ED is reviewing its grant policies and regulations to see how grantees can be held more accountable for program results.

Evidence: The President's Management Agenda scorecard (Human Capital and Budget & Performance Integration initiatives) notes ED's efforts to improve accountability. ??The Department's Discretionary Grants Improvement Team (DiGIT) recommendations indicate that ED is reviewing its grant policies and recommendations.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Funds are obligated within the timeframes set out by Department schedules and used for the purpose intended.

Evidence: According to Department financial statements, initial payments are made in the first 6 months and all payments are completed within three years. The statute requires all payments to be made within six years.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Program managers are engaged in an ongoing process to enhance the Impact Aid System (IAS), the information technology used to manage application and payment data and calculate payments. Recent enhancements have substantially reduced the effort previously required to calculate payments off-line and load the information into the system. System enhancements have also reduced errors and permitted data review. Impact Aid managers have also implemented staff performance standards that measure both the timeliness and accuracy of payments.

Evidence: While the Department is working with OMB on a general plan to develop efficiency measures for this specific program, the current measures for the Impact Aid program concern timeliness and accuracy. In addition, program staff monitor information that grantees provide.

Does the program collaborate and coordinate effectively with related programs?

Explanation: Although the program operates effectively among the Impact Aid programs, it does not collaborate with other Department of Defense and Bureau of Indian Affairs programs that have common beneficiaries and related goals.

Evidence: This program collaborates and coordinates payments with Section 8003 Basic Support Payments.

Does the program use strong financial management practices?

Explanation: Recent audits have not identified deficiencies in the financial management of this program.

Evidence: The Impact Aid program has received a clean audit for two consecutive years. To respond to a finding of inadequate segregation of duties, the Impact Aid Program Director formally reviewed with staff the proper procedures for ensuring the review and approval of each payment transaction by multiple staff members. The program also made several enhancements to the Impact Aid System (IAS) so that each action would require approval by two different users.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Material internal management deficiencies within the Department have not been identified for this program.

Evidence: See above. The program has taken steps to correct earlier management deficiencies and has a two step approval process in place to process and monitor payments.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: The program has no oversight authority. The current law does not require grant recipients to report on how they use their funds. Funds are used for current expenditures.

Evidence:  

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: Grantees provide supporting information on the estimated assessed values of Federal property, but the Department does not make this information available to the public.

Evidence:  

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: Since targets have not been set, it is not currently possible to assess progress towards meeting them.

Evidence:  

Does the program (including program partners) achieve its annual performance goals?

Explanation: Since targets have not been set, it is not currently possible to assess progress towards meeting them.

Evidence:  

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The Department has yet to develop and implement efficiency measures to quantitatively assess performance improvements.

Evidence: The Department is working with OMB on developing appropriate efficiency measures for this program.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: To date, the Department lacks comprehensive data to inform development of measures or to establish performance targets. Without this information, it is difficult to compare this program with other Federal revenue replacement programs.

Evidence:  

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: No evaluations have been conducted under the current program.

Evidence: