GAO-26-107727, K-12 EDUCATION: Lessons Learned from Implementing COVID-19 Relief Funding Provisions Could Improve Future Grant Monitoring
- Issuer
- Government Accountability Office
- Document type
- Report
- Date
- 2026-01-29
Summary
GAO-26-107727, a Government Accountability Office report to congressional requesters dated January 29, 2026, on how the Department of Education and states implemented maintenance of equity (MOEquity) requirements under the American Rescue Plan Act of 2021. The report finds that Education provided guidance but lacked written internal procedures for technical assistance, and that it lacked reliable data on state-level MOEquity implementation. GAO's analysis of six states' data found districts generally identified their poorest schools, and officials in seven states described challenges such as staff capacity and limited data access. GAO makes three recommendations to Education on written procedures, data reliability and documenting lessons learned; Education disagreed with the first two and partially agreed with the third. Appendices cover methodology and Education's comments.
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United States Government Accountability Office
Report to Congressional Requesters
K-12 EDUCATION
January 2026
Lessons Learned from
Implementing COVID-
19 Relief Funding
Provisions Could
Improve Future Grant
Monitoring
GAO-26-107727
K-12 EDUCATION
Lessons Learned from Implementing COVID-19 Relief Funding Provisions
Could Improve Future Grant Monitoring
Highlights
GAO-26-107727 January 2026
A report to congressional requesters
For more information, contact: Jacqueline M. Nowicki at nowickij@gao.gov.
What GAO Found Why GAO Did This Study
Statutory Maintenance of Equity (MOEquity) requirements generally prohibited states To receive certain funds under the
and districts from disproportionately cutting funds from districts or schools serving American Rescue Plan Act of 2021,
high percentages of low-income students. Beginning in July 2021, the Department of states and districts generally agreed to
Education provided guidance and technical assistance to help states and districts not make certain cuts. These include
meet these requirements as part of receiving certain COVID-19 relief funding. disproportionately cutting funds from
Education officials said they developed and refined this guidance in real time. As a districts or schools serving high
result, the agency did not develop internal written procedures for its staff to use when percentages of economically
providing related technical assistance. Federal oversight and performance principles disadvantaged students for fiscal years
and practices note the importance of internal guidance and written documentation to 2022 and 2023.
ensure consistency. Without these, Education could not ensure states received
GAO was asked to examine MOEquity
consistent information on implementing MOEquity. Moreover, the risk of
implementation. This report addresses
inconsistently applying guidance may increase with staff turnover, which Education
(1) how Education assisted states and
said occurred during MOEquity implementation.
districts in complying with MOEquity
requirements; (2) what data show about
Selected State and District Maintenance of Equity Requirements state and district implementation of
MOEquity; and (3) what challenges
states and districts faced in
implementing MOEquity and what
lessons Education learned.
GAO reviewed relevant federal laws
and analyzed Education’s MOEquity
guidance and data. GAO also
interviewed Education officials, as well
GAO’s analysis of six states’ data found that districts generally identified their poorest as officials from seven states. GAO
schools; however, Education lacked reliable data on how states implemented the selected states for varied approaches to
state MOEquity requirements to identify their poorest districts. On average, high- implementing MOEquity. In three of
poverty schools had more factors associated with need—for example, free or these states, GAO interviewed officials
reduced-price lunch eligibility and students with disabilities—than other schools. from districts that received the most
However, because MOEquity required schools to be identified by district rather than supplemental funding. GAO also
statewide, MOEquity-identified high-poverty schools in a district were not always the analyzed school-level data from six of
poorest schools in the state. GAO could not determine if states paid appropriate these states that had reliable data for
districts or the total amounts paid in supplemental payments because of data this analysis.
reliability issues, such as duplicative or missing data. Education could not explain the
data issues or provide documentation of data reliability procedures. Without reliable What GAO Recommends
data, neither GAO nor Education could assess whether MOEquity requirements fully
achieved their intended results. GAO is making three recommendations
to Education: (1) develop internal
Selected states and districts described challenges implementing MOEquity—e.g., written procedures for engaging in
staff capacity issues and limited access to data—and expressed interest in lessons technical assistance for its grants; (2)
learned, but Education officials said they did not document and share them because establish procedures to ensure the
the agency does not have procedures ensuring it does so and it was not a priority at reliability of data collected for grants
the time. Yet, Education officials noted that MOEquity provided an opportunity to oversight; and (3) develop a way to
inform how they may handle similar situations going forward. Key practices for document and share key lessons
effectively managing federal efforts include identifying and applying lessons learned learned from implementing major grant
for future decision making. Doing so limits the chance of recurrence of failures or efforts, as appropriate. Education
difficulties. Absent a way to ensure Education identifies, documents, and shares disagreed with the first two
lessons learned, insights from such efforts may be limited or lost. recommendations and partially agreed
with the third. GAO maintains all three
are warranted.
United States Government Accountability Office
Contents
Letter 1
Background 4
Education Provided Guidance to States, but Lacked Written
Internal Procedures to Assure It Applied Its Guidance
Consistently 8
Districts Generally Identified Their High-Poverty Schools in Six
Selected States, and Education Lacks Reliable Data on State-
Level MOEquity Implementation 12
Officials in Seven States Experienced Similar Challenges
Implementing MOEquity Requirements, and Education Did Not
Document Lessons Learned 17
Conclusions 20
Recommendations for Executive Action 20
Agency Comments 21
Appendix I Objectives, Scope, and Methodologies 23
Appendix II Comments from the Department of Education 28
Appendix III GAO Contact and Staff Acknowledgements 32
Tables
Table 1: American Rescue Plan Act of 2021 Maintenance of
Equity (MOEquity) Requirements and Exceptions for
States and School Districts 5
Table 2: Example of District Level Maintenance of Equity
Determination of High-poverty Schools 8
Figures
Figure 1: How School Districts Demonstrate Exceptional or
Uncontrollable Circumstances for Maintenance of Equity
(MOEquity) Exception 7
Figure 2: Example of the Gap Between School Poverty in the
Wealthiest District and Poorest District in a State 14
Page i GAO-26-107727 K-12 Education
Abbreviations
ARPA American Rescue Plan Act of 2021
CCD Common Core of Data
COVID-19 Coronavirus disease 2019
ESSER Elementary and Secondary School Emergency Relief
FRPL free or reduced-price lunch
MEPS Model Estimates of Poverty in Schools
MOE maintenance of effort
MOEquity maintenance of equity
NERD$ National Education Resource Database on Schools
OIG Office of Inspector General
OMB Office of Management and Budget
SAIPE Small Area Income and Poverty Estimates
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Page ii GAO-26-107727 K-12 Education
Letter
441 G St. N.W.
Washington, DC 20548
January 29, 2026
The Honorable Patty Murray
Vice Chair
Appropriations Committee
United States Senate
The Honorable Robert C. “Bobby” Scott
Ranking Member
Committee on Education and Workforce
House of Representatives
During the COVID-19 pandemic, Congress appropriated nearly $190
billion to the Elementary and Secondary School Emergency Relief
(ESSER) Fund across three COVID-19 relief Acts. The majority of that
funding was distributed to local school districts. Experts forecasted that
when federal COVID-19 relief ended, states would substantially cut
funding for K-12 education, as happened after the Great Recession of
2007-2009. Specifically, 17 states cut education budgets by 10 percent or
more by 2011, tripling the funding gap between low-income and high-
income school districts in these states. Moreover, the expiration of these
federal funds and state decreases in spending resulted in some states
being unable to meet required spending levels for special education
services. 1
To prevent states and districts from disproportionately cutting funds from
schools serving high percentages of low-income students, Congress set
up maintenance of equity (MOEquity) provisions as part of COVID-19
relief in the American Rescue Plan Act of 2021 (ARPA). 2 States and
districts were required to comply with new MOEquity requirements to
receive ESSER funds under ARPA. For fiscal years 2022 and 2023,
states and school districts that received ARPA ESSER funds generally
agreed they would not make certain cuts, including disproportionately
1GAO, Recovery Act Education Programs: Funding Retained Teachers, but Education
Could More Consistently Communicate Stabilization Monitoring Issues, GAO-11-804
(Washington, D.C.: Sept. 22, 2011).
2Pub. L. No. 117-2, § 2004, 135 Stat. 4, 24-27.
Page 1 GAO-26-107727 K-12 Education
cutting funds from districts or schools serving high percentages of low-
income students. 3
You asked us to examine how MOEquity requirements were implemented
by states and districts and supported by the Department of Education,
and any lessons learned.
This report examines (1) how Education assisted states’ and districts’
efforts to comply with MOEquity requirements; (2) what data show about
state and district implementation of MOEquity and (3) what challenges
states and districts faced in implementing MOEquity requirements and
what lessons Education learned in overseeing implementation.
To assess how Education assisted states and districts in complying with
MOEquity requirements, we reviewed relevant federal laws, Education’s
MOEquity guidance, and interviewed Education officials. We also
interviewed representatives at national organizations that advised states
and districts on MOEQuity requirements, including Ed Trust and the
Council of Chief State School Officers. Additionally, we reviewed federal
internal control standards and Office of Management and Budget
guidance on federal program oversight and performance management
principles and practices. 4
To assess what data show about how states and districts met MOEquity
requirements, we reviewed documents and data from Education. We
assessed the reliability of Education’s data on MOEquity implementation
through electronic testing and comparison with other data sources for
school districts such as Education’s Common Core of Data. We
determined that aspects of Education’s data, including data on district
3Specifically, as a condition of receiving ESSER funds under ARPA, states generally
agreed to not disproportionately reduce per-pupil state funding to high-need school
districts and to not reduce per-pupil state funding to the highest-poverty school districts
below their fiscal year 2019 level. School districts generally agreed to not
disproportionately reduce state and local per-pupil funding in high-poverty schools or
disproportionately reduce the number of full-time-equivalent staff per-pupil in high-poverty
schools.
4GAO, Standards for Internal Control in the Federal Government, GAO-25-107721
(Washington, D.C.: May 15, 2025) and Office of Management and Budget, OMB Circular
No. A-123, Management’s Responsibility for Enterprise Risk Management and Internal
Control, Revised July 15, 2016.
Page 2 GAO-26-107727 K-12 Education
MOEquity exceptions, were sufficiently reliable for our purposes. We also
reviewed federal guidance on data reliability. 5
To examine how states and districts applied MOEquity formulas, we
obtained data from seven states. We selected states with varied
approaches to implementing MOEquity, including variation in states’
approaches to meet the requirements, timing of reaching compliance, and
population size and urbanicity. We excluded one of our selected states
from the analysis because of data reliability concerns. We analyzed data
from the six states. We supplemented this data with school-level data
from Georgetown University’s Edunomics Lab’s National Education
Resource Database on Schools (NERD$) (the first national database of
school-level financial data), Education’s Common Core of Data and the
Civil Rights Data Collection, states’ data on MOEquity implementation 6,
and the Urban Institute’s Model Estimates of Poverty in Schools (MEPS)
data. We assessed the reliability of these datasets by interviewing
knowledgeable officials, reviewing relevant documentation, and
conducting electronic testing. We determined the data were sufficiently
reliable for our purposes.
To describe different approaches to K-12 education funding, including
how states account for the funding needs of different groups of students,
we conducted a literature review. Our search yielded 39 studies, three of
which met our scope and criteria for rigor.
To identify any challenges selected states and districts experienced
during the implementation of MOEquity, we interviewed officials in the
same seven states whose data we obtained. Of these seven selected
states, five provided supplemental funding to districts as part of MOEquity
implementation, according to Education’s data. We interviewed officials
from the districts that received the highest supplemental payments in
fiscal years 2022 and 2023 in three of the five states. Our interviews with
state and school district officials provide illustrative examples of MOEquity
implementation and are not generalizable. We also interviewed Education
5Office of Management and Budget, Appendix A to OMB Circular No. A-123, Management
of Reporting and Data Integrity Risk, M-18-16 (Washington D.C.: June 6, 2018) and Office
of Management and Budget, Guidelines for Ensuring and Maximizing the Quality,
Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies, 67
C.F.R. § 8452 (Feb. 22, 2002).
6We obtained state data from state websites and in some cases, Education’s website. We
verified with state officials that the state data on Education’s website was accurate and up-
to-date.
Page 3 GAO-26-107727 K-12 Education
officials and representatives at national education organizations to obtain
their views on challenges states and districts generally faced regarding
MOEquity implementation. For more information on our methodology, see
appendix I.
We conducted this performance audit from August 2024 to January 2026
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Background
Overview of MOEquity MOEquity requirements were included in ARPA, the third and final
COVID-19 relief law to appropriate ESSER funds. The state MOEquity
provision generally required states to not disproportionately reduce
How Is Maintenance of Equity (MOEquity) certain funding to high-need districts or to the highest-poverty school
Different from Maintenance of Effort districts below fiscal year 2019 levels. The school district MOEquity
(MOE)?
provision generally required each school district to not disproportionately
Maintenance of effort (MOE) and
maintenance of equity (MOEquity) reduce certain state and local funding in high-poverty schools or
requirements both generally prohibit states disproportionately reduce certain staff levels in high-poverty schools. 7
and districts from using American Rescue
Plan Act of 2021 Elementary and Secondary See table 1 for specifics of these requirements and exceptions to them,
School Emergency Relief Fund to reduce as established in the law and by Education.
state and local financial support for
education. MOE required that states
maintain overall financial support for
elementary and secondary education and for
higher education. MOEquity generally
prohibited states and school districts from
making certain cuts, such as
disproportionately cutting funds from districts
or schools that serve high percentages of
low-income students.
Source: GAO analysis of the American Rescue Plan Act
and Department of Education guidance. | GAO-26-107727
7Specifically, as a condition of receiving ESSER funds under ARPA, school districts
agreed to not disproportionately reduce state and local per-pupil funding in high-poverty
schools or disproportionately reduce the number of full-time-equivalent staff per-pupil in
high-poverty schools.
Page 4 GAO-26-107727 K-12 Education
Table 1: American Rescue Plan Act of 2021 Maintenance of Equity (MOEquity) Requirements and Exceptions for States and
School Districts
State MOEquity Requirements: District MOEquity Requirements:
As a condition of receiving funding, states could not; As a condition of receiving funding, school districts could not:
• Reduce state per-pupil funding for any high-need • Reduce combined state and local per-pupil funding for any high-
school district by more than the total reduction for all poverty school by more than the total reduction for all schools in the
districts in the state in that year. A high-need school district in the fiscal year. A high-poverty school is a school that is in
district is a school district among the group of districts the top 25 percent of schools served by the district based on the
in the state with the highest percentages of percentage of economically disadvantaged students in the school.
economically disadvantaged students. The group • Reduce the number of staff per-pupil in any high-poverty school by
collectively serves not less than 50 percent of more than the total reduction of staff per-pupil in all schools in the
students served by all school districts in the state. district.
• Reduce state per-pupil funding for its highest-poverty
school districts below their 2019 level. Highest-
poverty school district refers to a school district that
has the highest percentages of economically
disadvantaged student in the state and collectively
serves not less than 20 percent of students served by
all school districts in the state.
State MOEquity Exceptions: District MOEquity Exceptions:
While the statute did not include any specific exceptions Under the statute, districts were excepted from MOEquity requirements if
for states, Education allowed states to request allowances they:
for circumstances where small districts had o enrolled fewer than 1,000 students;
disproportionate changes in per-pupil funding that were
driven by the district’s size. o operated a single school;
o had only one school for students in each grade span; or
o demonstrated “exceptional” or “uncontrollable” circumstances (e.g.,
unpredictable changes in enrollment or a significant decline in district
financial resources, as determined by the Department of Education).
Education defined the “exceptional” and “uncontrollable” circumstances
category to allow districts to self-certify that they did not and would not
implement reductions in per-pupil funding in fiscal years 2022 or 2023.
Source: GAO analysis of American Rescue Plan Act of 2021 and Education guidance. | GAO-26-107727
State MOEquity The state MOEquity requirements focused on state per-pupil spending at
Requirements and the district level and defined two categories of districts: “high-need” and
“highest-poverty”. MOEquity required states to (1) identify high-need and
Calculations
highest-poverty districts using Census’ Small Area Income and Poverty
Estimates (SAIPE), (2) calculate per-pupil expenditures for those districts,
and (3) determine if there was a reduction in state funding to those
districts.
To identify high-need and highest-poverty districts, states were required
to rank districts from highest to lowest percentage of economically
disadvantaged students. The MOEquity requirement identified high-need
Page 5 GAO-26-107727 K-12 Education
districts as those including the percentage of economically disadvantaged
students that collectively represent at least half of the state’s K-12
enrollment. To determine compliance with MOEquity for high-need
districts, the state had to ensure any reduction in per pupil spending for
high-need districts was less than or equal to the reduction in per pupil
spending statewide. The MOEquity requirement defined highest-poverty
districts as those including the highest percentages of economically
disadvantaged students that collectively represent at least one-fifth of the
state’s K-12 enrollment. Then, to determine compliance for highest-
poverty districts, the state had to ensure highest-poverty districts did not
have state level funding below 2019 levels.
When a state did not meet MOEquity requirements, state officials
obtained technical assistance from Education, used exceptions, or
provided supplemental payments to districts that had experienced
disproportionate funding reductions. Education also provided an
allowance for small districts, which was intended to recognize that a small
shift in enrollment numbers can dramatically affect per-pupil spending
averages. 8 The small-district allowance could be used for circumstances
in which small districts appear to have a large reduction in the calculated
per-pupil funding amounts, but the changes appear disproportionate
because of the district’s size, regardless of the state’s intent to maintain
equity in funding.
District MOEquity The MOEquity district requirement focused on school per-pupil funding
Requirements and staffing levels and identifying high-poverty schools. States could
choose the measure for economic disadvantage (e.g., eligibility for free or
reduced-price lunch) and whether to rank schools on a districtwide basis
or by grade span.
The MOEquity requirement provided districts an exception if they met
specific criteria, including if the school district:
• enrolled fewer than 1,000 students,
• operated a single school, or
• served all students within each grade span with a single school.
In addition, a district could be excepted for an exceptional or
uncontrollable circumstance that prevented it from maintaining equity, as
determined and approved by Education. See figure 1.
8Education formally referred to these as “small tolerance levels.” For the purposes of this
report we are referring to them as small-district allowances.
Page 6 GAO-26-107727 K-12 Education
Figure 1: How School Districts Demonstrate Exceptional or Uncontrollable Circumstances for Maintenance of Equity
(MOEquity) Exception
a“Exceptional or uncontrollable circumstances” are determined and approved by the Department of
Education. This flow chart represents how Education interpreted that statutory exception.
Districts subject to MOEquity needed to identify high-poverty schools and
assess if these schools met MOEquity funding and staffing requirements.
To determine their high-poverty schools, districts were to:
1. Rank each school in the district by its percentage of economically
disadvantaged students, from highest to lowest.
2. Divide the total number of schools in the district by four to
determine the number of schools in the highest quartile (top 25
percent). This is the number of schools the district must identify as
high-poverty.
3. In rank order, from highest to lowest, identify their high-poverty
schools.
Table 2 illustrates this process for a hypothetical district.
Page 7 GAO-26-107727 K-12 Education
Table 2: Example of District Level Maintenance of Equity Determination of High-poverty Schools
School Percentage of Grade span High-poverty school?
economically
disadvantaged
students
A 80% Elementary Yes
B 75% Elementary Yes
C 65% Middle No
D 60% Elementary No
E 40% Middle No
F 35% High No
Source: GAO analysis of Education guidance for Maintenance of Equity. | GAO-26-107727
Education Provided
Guidance to States,
but Lacked Written
Internal Procedures
to Assure It Applied
Its Guidance
Consistently
Education Provided Education provided assistance with MOEquity to states and districts
Guidance and Technical through written guidance and webinars. Education’s written guidance
provided details on how states and districts should test for and ensure
Assistance to States on
compliance with the MOEquity requirements. This guidance, provided in a
MOEquity Requirements frequently asked questions (FAQ) format, gave step-by-step instructions
for implementing MOEquity state and district requirements. The document
described how states should identify highest-poverty and high-need
districts and calculate and compare per-pupil spending for those districts
to other districts within the state. The guidance also provided details on
how districts should identify high-poverty schools and compare per-pupil
funding and staffing levels for those schools compared to others in the
district.
In addition to guidance, officials told us they provided one-on-one
technical assistance to states until both the state and Education agreed
that the state’s calculations were accurate and met MOEquity
requirements. For example, officials we interviewed from one state told us
Page 8 GAO-26-107727 K-12 Education
that Education helped them determine whether reimbursements for the
purchase of new school buses should be included in MOEquity per-pupil
calculations. Education also held webinars, and posted transcriptions of
the webinars, for those state and districts seeking additional assistance
on MOEquity requirements.
In response to feedback from states, Education updated its guidance five
times between June 2021, when it was first released, and January 2023.
These updates clarified how states and districts could meet MOEquity
requirements. For example, Education made the following updates:
• In August 2021, Education updated its interpretation of exceptions
allowed by MOEquity requirements. Specifically, it allowed districts to
self-certify that they did not and would not implement reductions in
per-pupil funding in fiscal year 2022 or fiscal year 2023.
• In October 2021, Education created the small-district allowance for
states, which allowed states a reasonable decrease in funding relative
to other districts, as determined by Education, for its smallest districts.
• In January 2023, Education clarified how school districts were to
determine whether they maintained staffing equity for their high-
poverty schools.
Education Lacked Internal Education did not have internal written procedures to ensure that its staff
Written Procedures for had a common understanding of how to apply its MOEquity guidance to
states. Education officials stated that staff met regularly to discuss the
Providing Technical
technical assistance provided to states, but did not document procedures,
Assistance to States such as a technical assistance plan. Education officials said this was
because they were developing rules and guidance on MOEquity, in real
time during MOEquity implementation. Although updating guidance in real
time can be challenging, internal controls, including documenting
processes, are critical to ensure consistent application of rules and
guidance across grantees. Moreover, we have previously found that
weaknesses in such controls have hindered Education’s oversight and
monitoring of grantees, and its assessments of K-12 program
performance. 9
Education’s Office of Inspector General (OIG) has also noted a lack of
written policies and procedures in multiple reviews of Education’s
9GAO- K-12 Education: Challenges to Assessing Program Performance and Recent
Efforts to Address Them, GAO-19-266R (Washington, D.C.: Jan 31, 2019).
Page 9 GAO-26-107727 K-12 Education
program oversight. In November 2023, the OIG recommended that
Education implement written guidance and review procedures for staff
involved in overseeing state compliance with Every Student Succeeds Act
requirements. The report noted that such guidance would provide greater
consistency and less subjectivity in its reviews. 10
Moreover, the risk of inconsistency, confusion, or dissimilar application of
guidance may increase during times of staff turnover, which Education
and state officials told us occurred throughout MOEquity implementation.
Federal oversight and performance management principles and practices
stress the importance of internal guidance and written documentation to
ensure consistency. 11 This is especially true during times of emergency
response or staff turnover.
States and Districts Used
Various Flexibilities to
Meet MOEquity
Requirements
State Flexibilities States reached compliance with MOEquity requirements by using small
district allowances and supplemental payment flexibilities offered by
Education, according to our analysis of Education data.
Small district allowance. Education offered states a small district
allowance to acknowledge that small school districts are vulnerable to
large changes in per-pupil funding caused by small fluctuations in
enrollment. If a state wished to take advantage of this flexibility, they were
required to propose (1) a school district enrollment size the state
considered small, and (2) the percent reduction in per-pupil funds that
should be allowed for these districts, among other information. For
example, for fiscal year 2023, Colorado’s approved proposal allowed up
to a 5 percent reduction in per-pupil funding for the state’s 52 small rural
10U.S. Department of Education Office of Inspector General, The Department’s Approval
of Alternate Assessment Waivers and Extensions, ED-OIG/I23DC0112 (Washington,
D.C.: November 29, 2023).
11GAO, Standards for Internal Control in the Federal Government, GAO-25-107721
(Washington, D.C.: May 15, 2025). In addition, the Office of Management and Budget’s
(OMB) Circular A-123 requires federal agencies to establish written policies and
procedures for implementing internal controls. Office of Management and Budget, OMB
Circular No. A-123, Management’s Responsibility for Enterprise Risk Management and
Internal Control, Revised July 15, 2016.
Page 10 GAO-26-107727 K-12 Education
districts. This included two districts identified as high-need or highest-
poverty, which collectively served 0.03 percent of Colorado’s students. In
fiscal year 2022, 32 states proposed small district allowances, and 25
states proposed allowances in fiscal year 2023.
Supplemental payments. States could also reach MOEquity compliance
by making supplemental payments to school districts that experienced
disproportionate reductions in state education funding. According to
Education data, 21 states made supplemental payments to at least one
district in their state in fiscal year 2022 and 18 states made these
payments in fiscal year 2023. Education reported a total of $780 million in
supplemental payments as of September 30, 2024. Individual payments
to districts ranged from $76.00 to more than $89 million, according to
Education data.
District Flexibilities Under the law, there were four circumstances under which school districts
were excepted from MOEquity requirements: (1) having an enrollment of
less than 1,000 students, (2) operating a single school, (3) serving all
students within each grade span with a single school, or (4)
demonstrating an exceptional or uncontrollable circumstance as
determined by the U.S. Secretary of Education. Education interpreted the
exceptional or uncontrollable circumstance to allow school district officials
to obtain an exception by self-certifying that their school district did not
and would not implement budget reductions. Self-certification was
available in both fiscal year 2022 and 2023. According to Education’s
data, on average, the majority of districts in a state received exceptions in
fiscal year 2022 and 2023. 12
12Education’s data were missing information on district exceptions in one state. Absent
these data, it is not possible to know the precise number of district exceptions.
Page 11 GAO-26-107727 K-12 Education
Districts Generally
Identified Their High-
Poverty Schools in
Six Selected States,
and Education Lacks
Reliable Data on
State-Level MOEquity
Implementation
In Selected States, In the six selected states for which we obtained reliable school-level data
Districts Generally directly from the states, we found that districts generally identified the
poorest schools and those with higher proportions of vulnerable students
Identified Their High- in each district. 13 Specifically, schools that were identified as high-poverty
Poverty Schools Under for the purposes of MOEquity had higher percentages of students eligible
MOEquity Requirements for free or reduced-price lunch (FRPL), higher percentages of students
living at or below the poverty line (according to MEPS data), and higher
proportions of English learners and students with disabilities than schools
that were not identified. In five of the six of states, MOEquity-identified
high-poverty schools also had higher per-pupil expenditures, on average.
In all six states, they had lower student-teacher ratios, on average.
However, in all six states, MOEquity-identified high-poverty schools were
not always the state’s poorest schools, because MOEquity required
schools to be identified by district rather than statewide. For example, the
poorest school in a wealthy district may be better off economically than
the wealthiest school in a poor district. One state official explained the
variation in the amount of poverty in their state’s school districts, telling
us, “If you were identifying the top half of neediest schools in [a wealthy
district], they’re not that needy. If you go to a needy district, then all their
schools look more needy than any school in [the wealthy district].”
Figure 2 illustrates that sometimes the wealthiest school in a poor district
is poorer than the poorest school in a wealthy district. This held true for all
13These states collectively represented 20 percent of public K-12 students in school year
2022-23. We omitted the seventh state from this analysis due to data reliability concerns.
Education was not required to track how districts identified high-poverty schools under
MOEquity. Therefore, it does not have related school-level data. See Appendix I for more
information.
Page 12 GAO-26-107727 K-12 Education
six states we analyzed and regardless of which measure of school-level
poverty was used. 14 If MOEquity requirements had defined poverty at the
state level, then the poorest schools statewide would have been
identified. However, our review of academic literature shows there are
many ways to define disadvantaged schools. The MOEquity requirement
identified schools using student poverty; studies describe other
characteristics of disadvantage that are used to allocate school funding.
For example, one study found that districts considered overall
percentages of English Learner students, special education students, and
students in poverty when determining school funding. 15 In another study,
researchers incorporated parent education level and occupation, and the
number of books available at home in the definition of disadvantage when
evaluating school funding. 16
14We did not have the poverty measure used by each state to define its high-poverty
schools. Instead, we investigated the relationship between high-poverty schools using two
measures of school-level poverty: MEPS poverty estimates and FRPL eligibility. To define
the wealthiest and poorest districts in a state, we used the average MEPS poverty
estimate for the district. We selected MEPS to define the wealthiest and poorest districts
in a state because FRPL has become a less reliable proxy for student poverty in part
because of a provision that provides free lunch to all students in qualifying schools and
districts. MEPS and FRPL are highly positively correlated.
15Marguerite Roza, Katherine Hagan, and Laura Anderson, “Variation is the Norm: A
Landscape Analysis of Weighted Student Funding Implementation.” Public Budgeting &
Finance vol. 41. No. 1 (2021): 3-25.
16Programme for International Student Assessment. Equity in Education: Breaking Down
Barriers to Social Mobility. OECD Publishing, 2018.
Page 13 GAO-26-107727 K-12 Education
Figure 2: Example of the Gap Between School Poverty in the Wealthiest District and
Poorest District in a State
Note: We did not have the poverty measure each state used to define their high-poverty schools. We
used the average MEPS poverty estimate for a district to define the wealthiest and poorest districts in
a state to investigate the relationship between high-poverty schools using MEPS poverty estimates
and free or reduced-price lunch eligibility.
Education Lacks Reliable Because Education’s data on state MOEquity implementation were
Data Needed to Assess incomplete and unreliable, neither we nor Education could determine
whether states identified their poorest districts. When we reviewed
State MOEquity
Education’s data, we found inconsistencies in multiple data files and
Implementation found some data elements needed for such analysis to be unreliable, for
example:
Page 14 GAO-26-107727 K-12 Education
• Education’s data showed that multiple districts received both a small
district allowance (which would effectively exempt these districts from
MOEquity requirements) and supplemental payments (which would
bring a district into compliance after testing for MOEquity). Yet, a
state’s use of a small district allowance and districts receiving
supplemental payment(s) should be mutually exclusive.
• Education’s data on small district allowances had missing and
duplicative district identification numbers resulting in misaligned state
and district names when compared to the Common Core of Data
(CCD). For these districts, we were unable to determine which
received a small district allowance.
• Education’s data on the supplemental payments that states made to
districts were incomplete. Specifically, we found that two states were
each missing 1 of 2 years of data on the specific amounts of
supplemental payments states made to districts. Absent these data, it
is not possible to know the total amount of supplemental payments
that states awarded to districts.
• Education’s data were missing information on the number of districts
that received exceptions to MOEquity requirements for one state.
Absent these data, it is not possible to know the total number of
districts that were excepted from MOEquity requirements. In addition,
our data reliability checks identified two states in fiscal year 2022
where the total number of excepted districts in Education’s data was
more than the number of regular or charter school districts in the state
for that year when compared to data from Education’s Common Core
of Data. 17
When we asked about the data inconsistencies we found, Education
officials could not explain them, stating that they “could not fully access
the source documents or other related information that would provide a
basis of comparison or verification of the data.” Education officials also
could not tell us if they followed data-reliability procedures to ensure that
MOEquity data submitted by states were complete and accurate. In
addition, Education did not provide documentation of data reliability
17We also identified multiple instances in Education’s data where the number of districts in
a state was at least 25 percent more or less than the number of districts in the CCD’s
regular or charter school districts (eight instances in fiscal year 2022 and six instances in
fiscal year 2023). The number of districts recorded in CCD data and in Education’s data
on excepted districts may differ because of timing differences or because states may have
treated different types of school districts differently under the MOEquity requirements.
Without comparing Education’s data to state data on the number of excepted school
districts, it is not possible to know whether Education’s total number of school districts is
accurate.
Page 15 GAO-26-107727 K-12 Education
procedures. The officials told us that most of the career employees who
worked on MOEquity were no longer at Education, due to either
retirement, resignation, or reductions in force.
Numerous federal guidelines establish the importance of maintaining
quality information and data. Federal oversight and performance
management principles and practices stress the importance of reliable
data that are reasonably free from error and faithfully represent what they
claim to represent. 18 Federal decision makers need evidence—such as
data—to determine if programs, including grants, are working as intended
and to identify potential improvements.
In addition, OMB established guidelines for ensuring and maximizing the
quality, objectivity, utility, and integrity of information disseminated by
federal agencies. The guidance stressed that it is a core responsibility of
federal agencies to embrace a basic standard of data quality. These
guidelines include using reproduceable data, such as when working with
data that could have a substantial impact on public policies like MOEquity
requirements. Further, each agency should issue their own information
quality guidelines ensuring and maximizing quality and take appropriate
steps to incorporate information quality criteria into agency information
dissemination practices. 19 By establishing procedures to help ensure data
quality and reliability for performance oversight and technical assistance,
Education would be better positioned to determine if grants and programs
are achieving their intended results.
18GAO-25-107721, GAO, Evidence-Based Policymaking: Practices to Help Manage and
Assess the Results of Federal Efforts, GAO-23-105460 (Washington, D.C.: July 12, 2023),
and Office of Management and Budget, Appendix A to OMB Circular No. A-123,
Management of Reporting and Data Integrity Risk, M-18-16 (Washington D.C.: June 6,
2018).
19Office of Management and Budget, Guidelines for Ensuring and Maximizing the Quality,
Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies, 67 Fed.
Reg. 8,452 (Feb. 22, 2002).
Page 16 GAO-26-107727 K-12 Education
Officials in Seven
States Experienced
Similar Challenges
Implementing
MOEquity
Requirements, and
Education Did Not
Document Lessons
Learned
Selected State and District Confusion about purpose of MOEquity. State officials we interviewed
Officials Experienced expressed confusion over the purpose of MOEquity requirements. One
state official we interviewed said she did not understand the purpose of
Challenges with MOEquity
MOEquity requirements and said that most states already had education
Purpose, Timing, and funding practices that considered equity prior to MOEquity. For example,
Implementation officials from one state explained how their state uses its revenues to
bridge differences across districts in local contributions to education.
MOEquity: What’s in a Name? Officials from a second state told us that their state takes excess local
Multiple state officials called the term revenue from districts with high property values to redistribute to districts
“Maintenance of Equity” confusing or with lower property values. Within this context, an official from one
unnecessarily controversial. Officials in one
state noted that because MOEquity sounded national stakeholder group told us that they alerted Education officials
like Maintenance of Effort, it led to confusion that MOEquity may undo states’ efforts to make their education funding
among district officials. Officials in another
state noted that the word “equity” in the
formulas more equitable. Specifically, if state formulas were found
requirements raised fears that the state’s noncompliant with requirements, states may become discouraged and
education system would be labeled change the funding practices that best met their state’s needs.
“inequitable”, because equity was a high-
profile concern among state leaders.
GAO interviews with state and school district officials in Pandemic stressors. MOEquity implementation also came at a
selected states. | GAO-26-107727
particularly challenging time in the COVID-19 pandemic for state and
district education staff. It coincided with students and staff returning to
classrooms during the COVID-19 pandemic. In addition, some state and
district education offices were already experiencing staffing turnover.
Multiple state officials noted that their state needed additional staff to
meet MOEquity requirements. The extra tasks associated with the
pandemic, along with regular duties, resulted in numerous delays in
MOEquity implementation. For example, Education officials explained that
some states delayed submitting their initial and final MOEquity data for
fiscal year 2022. These data-submission delays stalled individualized
technical assistance from Education, which hindered states seeking
additional appropriations to cover required supplemental payments.
Page 17 GAO-26-107727 K-12 Education
How Some School Districts Responded to
Timing of state budget cycles. Education and state officials also noted
Receiving a Supplemental Payment. that the timing of state education budget cycles posed challenges for
Challenges arose for two districts that complying with MOEquity requirements. For example, Education officials
received supplemental payments, according
to district officials we interviewed. One official
told us that when ARPA became law in March 2021, most state budgets
noted that the unexpected influx of funds for fiscal year 2022 were already enacted. They said that this was
added stress because it came during the especially problematic for states with biennial budgets because these
district’s union contract negotiations. District
officials worried that if word of the states had already determined their budget for both years of the
supplemental payments came out, it would requirement. Some states that owed supplemental funding to school
look like the district was hiding money from
the union. Ultimately, the supplemental funds
districts could not go back to their legislatures for additional funds and
were placed in a special revenue account had to reallocate money from other areas of the state education budget to
and, as of spring 2025, the district was still cover supplemental payments. For example, one state official explained
deciding how to use them. Officials from
another district also refrained from spending that their state educational agency got lucky in the first year of the
their MOEquity supplemental funds. These requirement because they were able to obtain additional general funds to
officials told us they believed that a collection
of overdue property taxes owed to the state, cover supplemental payments, but in the second year, the state had to
tied to a recent local property tax windfall, shift funding away from other state agency priorities.
would offset any supplemental payments and
ultimately bring no additional funding to their
budget. Limited data. State and district officials collaborated to meet MOEquity
Source: GAO interviews with state and school district officials requirements, but in some states, limited data access posed a challenge
in selected states. | GAO-26-107727
to collaboration. To comply with MOEquity, states were required to submit
data on districts’ behalf. This requirement was challenging for state
educational agencies in two local control states—where school districts or
local school boards make public education decisions—because state
agencies did not have access to district-level data systems. In these
states, officials noted that their reliance on district officials to furnish the
necessary data was a challenge. One official from a local control state
explained that the data requested by Education was unlike typical
What Is the Long-term Impact of financial queries, making it more difficult to ensure data were correct and
Maintenance of Equity?
State officials we interviewed reported no
met Education’s deadlines.
long-term impacts of MOEquity on state and
district education funding, but noted benefits Unclear Consequences for Non-compliance. Officials from two states
related to the MOEquity requirements.
Officials from one state believed the and one national organization we interviewed noted that the
requirements contributed to an ongoing consequences of not meeting MOEquity requirements were not clear.
conversation around equity in state education
funding. Officials from another state said the
Officials in one state reported that they did not know what the
MOEquity tests inadvertently revealed consequences for non-compliance with MOEquity requirements would be,
longstanding district-level accounting errors. and this made communication with districts difficult because, without
Officials in one district we interviewed said consequences, it was difficult to express that MOEquity was a priority
MOEquity gave them a new perspective on
access to resources in local education. The given everything else going on at the time. An official from another state
district realized that schools beyond Title I believed that giving districts the option to self-certify exceptions to
schools may also need extra services;
MOEquity changed the conversation about MOEquity requirements made compliance too easy. He believed a
resources and need. considerable increase in districts self-certifying exceptions between fiscal
Source: GAO interviews with state and school district officials
in selected states. | GAO-26-107727
years 2022 and 2023 in his state was because district officials realized
they would not need corroborating documentation to verify their
compliance.
Page 18 GAO-26-107727 K-12 Education
Education Did Not Education officials told us they learned multiple and varied lessons from
Document or Share their MOEquity experience. Education officials noted that while applying
MOEquity requirements to states—each with their own unique education
Lessons Learned from
funding formulas—presented challenges, it also provided an opportunity
Implementing MOEquity to expand Education officials’ knowledge about state funding and inform
Requirements how they might handle similar situations in the future. For example,
Education officials developed the small-district allowance after
recognizing that small schools and districts faced unique challenges in
trying to reach MOEquity compliance.
Education staff did not identify, document, or share these lessons learned
until we asked about them during this audit. Officials confirmed that
Education does not require or have procedures that would ensure they
identify, document, and share any lessons that may have been learned
when overseeing or implementing grant programs or large-scale
initiatives. Education officials told us that they often conduct “after action
reviews” that may include discussing lessons learned. However, they said
that generally they have not seen the value or need to develop
procedures that would ensure they considered if there were any lessons
learned given the variety of the agency’s programs, requirements,
initiatives, and circumstances.
Documenting lessons learned and applying them to future decisions—
which can be done in a variety of ways—remains a key practice for
effectively managing and accessing the results of federal efforts. 20 For
example, Education shared lessons learned from MOEquity
implementation with us when we asked about them in August of 2024 and
again in September 2025. These lessons learned included developing
thorough and comprehensive guidance that Education characterized as
applicable to initiatives Education might oversee in the future.
In addition, state officials we interviewed stated they were interested in
knowing more about the outcomes of MOEquity and the lessons learned
from Education and other states’ implementation. One state official noted
that Education missed an opportunity to engage states in sharing
experiences and best practices, which could facilitate Education’s other
oversight activities. Congress also expressed interest in knowing about
lessons learned during MOEquity implementation.
20GAO, Veterans Employment: Identifying Lessons Learned from Rapid Retraining
Program Could Benefit Future Efforts, GAO-23-106191 (Washington, D.C.: September 28,
2023).
Page 19 GAO-26-107727 K-12 Education
Documenting and sharing lessons learned from programs and projects
also limits the chance of recurrence of difficulties. Education noted it had
not taken additional steps to codify or disseminate lessons learned about
MOEquity because staff felt it was not a good use of resources given a
belief that similar legislation in the future was unlikely. However,
unexpected widescale efforts to quickly disseminate funding to states
have happened periodically over the last several decades, including
COVID-19 relief funding in 2020, the American Recovery and
Reinvestment Act of 2009, and Hurricane Katrina relief in 2006.
Developing procedures for documenting and sharing lessons learned
would help Education ensure any insights that may inform oversight and
technical assistance of future grants are not lost.
MOEquity requirements offered an opportunity to address long held
Conclusions concerns about the disproportionate effect on disadvantaged students
when states and districts reduce or terminate funding to K-12 schools
when additional federal funds are made available. Education assisted
states in complying with MOEquity requirements, but did not have
documented procedures for doing so. Absent such procedures, there is a
risk that Education’s guidance was not consistently applied across states.
Further, Education’s lack of data-reliability procedures prevented
Education and us from determining whether the application of state
MOEquity requirements had the intended effect of targeting the highest-
need school districts. In addition, without a way to identify, document, and
share lessons learned with key stakeholders, including Congress, any
insights gained from MOEquity implementation that could inform future
grants oversight may be limited or lost.
We are making the following three recommendations to Education:
Recommendations for
Executive Action The Secretary of Education should develop internal written procedures to
use when engaging in technical assistance to ensure staff have a
common understanding of the information program managers provide to
grantees when overseeing grants. (Recommendation 1)
The Secretary of Education should establish procedures to ensure the
quality and reliability of data collected for grants oversight and technical
assistance. (Recommendation 2)
The Secretary of Education should develop a way to ensure that, as
appropriate, staff timely identify, document, and share any lessons
learned from implementing new and ongoing initiatives that may inform
future grants oversight. (Recommendation 3)
Page 20 GAO-26-107727 K-12 Education
We provided a draft of this report to Education for review and comment.
Agency Comments In its comments, reproduced in appendix II, Education disagreed with our
first and second recommendations and agreed, in part, with our third
recommendation.
Education disagreed with our first recommendation that Education
develop internal written procedures when engaging in technical
assistance to ensure staff have a common understanding of the
information provided to grantees. Education stated that is has a multi-
tiered framework for providing technical assistance through internal staff
and technical assistance providers. A description of how Education
provides technical assistance was included in a draft of this report, on
which Education commented. Education also noted that for some
programs such as Title I, Title II, or Title V of the Elementary and
Secondary Education Act (ESEA), Education program offices retain
internal banks of grantee questions and answers that are continually
refreshed and vetted by attorneys and senior leadership to ensure
consistent technical assistance to grantees. However, as discussed in the
report, Education officials told us they did not document procedures—
such as a MOEquity technical assistance plan—for how program
managers would ensure they delivered consistent information to
grantees. We continue to believe that all technical assistance efforts
should be guided by internal written procedures to ensure guidance is
applied consistently—in line with federal oversight and performance
management principles and practices that stress the importance of doing
so.
Education also disagreed with the second recommendation to establish
procedures to ensure the quality of data collected for oversight and
technical assistance. Education noted that the agency has procedures in
place to ensure the quality and reliability of data collected for grant
oversight, as well as a Data Governance Board and data stewards in
each office. However, during the course of our review, Education did not
provide us with data reliability procedures or information about
procedures used to review MOEquity data. In written responses it
submitted to us in June 2025, Education officials stated that they could
not answer questions about what steps they took or if they followed data-
reliability procedures to ensure the data submitted by states were
complete and accurate. Education also did not address why there were
inconsistences in its MOEquity data—inconsistencies that prevent
Education and us from determining whether the application of state
MOEquity requirements had the intended effect of targeting the highest-
need school districts. In its comments on this report, Education reiterated
that the MOEquity data collection was particularly challenging for the
Page 21 GAO-26-107727 K-12 Education
department and states—as we discuss in the report—because it was an
entirely new requirement. As part of our recommendation follow-up
process, we will request the procedures Education mentions in its
comments to determine the extent to which they address the intent of our
recommendation.
Education agreed in part with our third recommendation to develop a way
to ensure that staff identify, document, and share lessons learned from
implementing new and ongoing initiatives that may inform future grants
oversight. Education noted that the agency has procedures in place to
document lessons learned over time. However, as discussed in the
report, Education officials told us during our review that they do not have
such procedures and generally have not identified a need for them. In its
comments, Education stated that it would consider setting up a site on an
internal website for maintaining and sharing internal lessons learned.
Education noted that if lessons learned include information useful to
external parties, Education could share the lessons through conferences,
webinars, or through other means of distribution. We are encouraged by
the department’s acknowledgement of the actions it could take to
implement our recommendation and will continue to monitor Education’s
related efforts.
We are sending copies of this report to the appropriate congressional
committees, the Secretary of Education, and other interested parties. In
addition, the report is available at no charge on the GAO website
at https://www.gao.gov.
If you or your staff have any questions about this report, please contact
me at nowickij@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made key contributions to this report are listed in
appendix III.
Jacqueline M. Nowicki
Director, Education, Workforce and Income Security Issues
Page 22 GAO-26-107727 K-12 Education
Appendix I: Objectives, Scope, and
Appendix I: Objectives, Scope, and
Methodologies
Methodologies
This report examines (1) how the Department of Education assisted
states and districts in their efforts to comply with Maintenance of Equity
(MOEquity) requirements; (2) what data show about state and district
implementation of MOEquity and (3) what challenges states and districts
faced in implementing MOEquity requirements and what lessons
Education learned in overseeing implementation.
Education’s Guidance and To assess how Education assisted states and districts in complying with
Data on MOEquity MOEquity requirements, we reviewed relevant provisions of the American
Rescue Plan Act of 2021 (ARPA) and Education’s MOEquity guidance,
including webinars for states and districts.
To assess what data show about the ways states and districts met
MOEquity requirements, we reviewed Education’s response letters to
states’ small-district allowance proposals and Education data on districts
that received supplemental payments from states, small-district
allowances, and state’s use of district exceptions. More specifically, we
used:
• Education’s response letters to states to analyze state usage of small-
district allowances to exempt school districts from MOEquity
requirements.
• Education’s data on supplemental payments to analyze the frequency
and value of supplemental payments that states made to districts to
reach state MOEquity compliance.
• Education’s data on district exceptions to analyze the frequency of
districts’ use of exceptions from MOEquity requirements.
We assessed the reliability of Education’s data through electronic testing
and comparison with other sources. Education data on supplemental
payments were incomplete and required additional verification from
selected states and districts. We determined such data were sufficently
reliable to report a range of payment amounts rather than individual
district payment amounts.
Page 23 GAO-26-107727 K-12 Education
Appendix I: Objectives, Scope, and
Methodologies
We compared Education’s guidance and data to federal internal control
standards and Office of Management and Budget guidance on federal
program oversight and performance management principles and
practices. 1
Selected State and District To identify any challenges selected states and districts experienced
Interviews during the implementation of MOEquity, we interviewed officials in seven
states and three districts. To determine the states to interview, we
analyzed multiple factors, informed by available documentation on
MOEquity implementation in all 50 states and the District of Columbia.
We selected states with variation in their MOEquity implementation
experiences. Specifically, we assessed state’s use of small district
allowances, dates of reaching compliance, and total number of students
and school districts in the state. 2
Additionally, officials from Education provided a list of recommended
states for GAO to consider based on Education’s experience working with
states. Education referred us to states in the following categories, those
with (1) broad positive outcomes/lessons learned, (2) numerous
challenges, and (3) smooth implementation. Within three of the selected
states, we selected the school district that received the highest
supplemental payment for fiscal years 2022 and 2023 and interviewed
officials in those districts. Our interviews with state and school district
officials are not generalizable to all states or districts but provide
illustrative examples of the implementation of MOEquity.
We also interviewed representatives at national organizations, including
EdTrust; AASA, the School Superintendents Association; the Council of
Chief State School Officers; and The Bruman Group, a law firm with
expertise in federal grants and education policy, to learn about their views
on challenges and experiences assisting states and districts with
MOEquity requirements and implementation. We selected these
organizations based upon information we gathered from Education
1GAO, Standards for Internal Control in the Federal Government, GAO-25-107721
(Washington, D.C.: May 15, 2025) and Office of Management and Budget, OMB Circular
No. A-123, Management’s Responsibility for Enterprise Risk Management and Internal
Control, Revised July 15, 2016.
2For example, we selected states that did not propose small district allowances, proposed
them both years, and proposed them in 1 of the 2 years to better understand how and why
states were and were not using this flexibility.
Page 24 GAO-26-107727 K-12 Education
Appendix I: Objectives, Scope, and
Methodologies
officials about who aided states in their implementation and our
background research on MOEquity.
Data From Selected To examine how states and districts implemented MOEquity formulas, we
States on District analyzed school-level data for fiscal year 2022, the most recent year of
data for which MOEquity was in place, from Georgetown University’s
MOEquity
Edunomics Lab’s National Education Resource Database on Schools
(NERD$) (school-level financial data); Education’s Common Core of Data
(CCD), and Civil Rights Data Collection (CRDC); state data on high-
poverty schools; 3 and the Urban Institute’s Model Estimates of Poverty in
Schools (MEPS). We assessed the reliability of these datasets by
reviewing relevant documentation and conducting electronic testing. For
NERD$ and MEPS, we also interviewed knowledable officials about the
data. We determined the data were sufficiently reliable for our purposes.
Our sample consisted of all schools across six states that were identified
as either high-poverty or were not identified as high-poverty. 4 Three
states provided lists of both high-poverty and non-high-poverty schools,
while the other three states only provided lists of their high-poverty
schools. 5 For states that provided lists of only their high-poverty schools,
we defined non-high-poverty schools as all other schools in each district
that had a high-poverty school defined. We used this definition for non-
high-poverty schools for states that only provided a list of high-poverty
schools to avoid including excepted districts that did not have state-
defined high-poverty schools. We excluded one of our selected states
from the analysis because of data reliability concerns.
For each of our six selected states, we compared average school
characteristics, such as poverty (as measured by free or reduced-price
lunch [FRPL] and MEPS), school-level student characteristics
(race/ethnicity, students with disabilities, English learners, and gifted
students), rural status, Title I status, student-teacher ratio, and
3State data were retrieved from state websites or from Education’s website and verified by
the state.
4We excluded one of our selected states from this analysis due to data reliability
concerns.
5In addition, a fourth state provided lists of their high-poverty schools; however, we
determined that this state’s data were determined to be unreliable and did not use them in
our analysis.
Page 25 GAO-26-107727 K-12 Education
Appendix I: Objectives, Scope, and
Methodologies
expenditures (federal, state and local, and total) of high-poverty schools
to non-high-poverty schools across districts.
For the within district analysis, we explored the relationship between two
different measures of poverty (FRLP and MEPS) and high-poverty
schools for each district and state. First, we compared each school’s
MEPS poverty estimates and percent of students eligible for FRPL for the
wealthiest district and the poorest district separately for each state. 6 Next,
we compared each school’s MEPS poverty estimates and percent of
students eligible for FRPL for MOEquity high-poverty schools and non-
high-poverty schools for all eligible districts in the state. 7 Lastly, we
compared each school’s MEPS poverty estimate and percent of students
eligible for FRPL, after adjusting for district average poverty.
For the district analysis, we also adjusted for the average poverty rate of
each district using a procedure called demeaning or centering. We
subtracted each school’s MEPS poverty estimate by the district average
MEPS poverty estimate. After this adjustment, schools with poverty rates
below the district average will have adjusted rates below 0, and schools
with poverty rates above the district average will have adjusted rates
above 0. This adjustment allows us to compare schools in different
districts within the same state when poverty rates may be different across
districts. Similarly, we adjusted district average FRPL level by subtracting
the district average FRPL percentage. We then compared the resulting
adjusted (demeaned) MEPS poverty estimates to the adjusted FRPL
rates for MOEquity high-poverty and non-high-poverty schools for all
eligible districts.
Literature Review To describe approaches to equitable funding in K-12 education, we
performed a literature review peer-reviewed studies published between
2015 and 2025. To identify potential studies for inclusion in our review,
we worked with a GAO research librarian to conduct searches of Scopus,
ProQuest, EBSCOhost, and Dialog databases. We performed these
searches using variations of keywords related to equitable school funding
(such as “educational equity [finance],” “equalization aid,” “weighted
6We used the average MEPS poverty estimate for the district to define the wealthiest and
the poorest districts in a state. MEPS and FRPL are highly correlated.
7Selected states either reported high-poverty schools for districts that were not excepted
from MOEquity or reported high-poverty schools for all districts. This analysis uses all
districts that had high-poverty schools reported. Therefore, the number of schools that
were included in each state’s analysis varied from 59 schools in one state to 2,053
schools in another state.
Page 26 GAO-26-107727 K-12 Education
Appendix I: Objectives, Scope, and
Methodologies
student funding,” “school funding,” or “educational finance”). Our search
yielded 39 studies including reviews, journal articles, state case studies,
and books or book sections.
To assess the relevance of these studies, we reviewed their abstracts to
determine whether they discussed equitable education funding. We
restricted our review to peer-reviewed journals and reports. Of the 12
peer-reviewed studies, we determined 8 could be relevant for our
purposes. Each of the 8 studies were independently reviewed by two
separate reviewers to evaluate the quality and robustness of the
methodology and whether the study met the inclusion criteria. To be
considered in scope a study must meet the following criteria:
• Focused on comparison across different funding types OR mentioned
at least two of the following: a) multiple studies, b) weighted funding
formula, c) equitable funding, d) school funding for low-income or
specific student groups
• Focused on United States
• Data from 2015 or later, if applicable
• Must not focus on a specific funding policy that cannot be applied
broadly to school funding in general (e.g., Title I grant formula)
• Must have an applied or case study aspect, it cannot be only
theoretical (e.g. uses only conceptual lens as criteria, applies a model
without data, simulations)
• Must focus on a result of school funding (e.g., funding distribution by
characteristics) and not only on policy implementation or secondary
effects of funding (e.g. academic outcomes)
• Sound methodological approach
Three studies met our criteria for inclusion. Two studies came from the
literature search described above, and the third study was found while
conducting related searches and deemed relevant for our purposes.
We conducted this performance audit from August 2024 to January 2026
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Page 27 GAO-26-107727 K-12 Education
Appendix II: Comments from the Department
Appendix II: Comments from the Department
of Education
of Education
Page 28 GAO-26-107727 K-12 Education
Appendix II: Comments from the Department
of Education
Page 29 GAO-26-107727 K-12 Education
Appendix II: Comments from the Department
of Education
Page 30 GAO-26-107727 K-12 Education
Appendix II: Comments from the Department
of Education
Page 31 GAO-26-107727 K-12 Education
Appendix III: GAO Contact and Staff
Appendix III: GAO Contact and Staff
Acknowledgements
Acknowledgements
Jacqueline M. Nowicki, NowickiJ@gao.gov
GAO Contact
In addition to the contact named above, Alison Grantham (Assistant
Staff Director), Melissa J. Jaynes (Analyst in Charge), Christina Cantor, and
Acknowldgements Katherine McElroy made key contributions to this report. Elizabeth
Calderon, Caroline Christopher, Abigail Loxton, Mimi Nguyen, Trevor
Osaki, Jason (Jay) Palmer, Amrita Sen, and Joy Solmonson provided
additional support.
Page 32 GAO-26-107727 K-12 Education
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