Letter to the Arkansas Department of Education — Reasonable Level of Tolerance (January 25, 2024)

Summary

This is a letter dated January 25, 2024 from the Office of Elementary and Secondary Education at the United States Department of Education to Jacob Oliva, Secretary of Education at the Arkansas Department of Education (ADE). The letter states that the Department received ADE's written plan for a reasonable level of tolerance when calculating whether Arkansas met State maintenance of equity requirements in fiscal year (FY) 2023 for a subset of its local educational agencies. It states that ADE proposes a tolerance of up to a two percent decline in per-pupil funding for small LEAs, defined as those with average daily memberships of 1,000 or fewer students. It states that the Department determined the approach includes a reasonable level of tolerance for FY 2023 and that Arkansas will need to make additional payments to two LEAs.

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                        UNITED STATES DEPARTMENT OF EDUCATION
                          OFFICE OF ELEMENTARY AND SECONDARY EDUCATION




                                        January 25, 2024

The Honorable Jacob Oliva
Secretary of Education
Arkansas Department of Education
Four Capitol Mall, Room 304-A
Little Rock, AR 72201-1071

Dear Secretary Oliva:

The U.S. Department of Education (Department) received your written plan for a reasonable
level of tolerance when calculating whether the Arkansas Department of Education (ADE) has
met State maintenance of equity requirements in fiscal year (FY) 2023 under the American
Rescue Plan Act of 2021 (ARP Act). This written plan applies only to a subset of Arkansas’ local
educational agencies (LEAs).

The ARP Act State maintenance of equity requirements help ensure that State funding supports
LEAs with high concentrations of poverty and the students who have been subject to
longstanding opportunity gaps in our education system and experienced the greatest impact from
the COVID-19 pandemic. These requirements are vital for ensuring that States maintain funding
to address the impact of the pandemic on students’ education, and for protecting students in high-
need and highest-poverty LEAs from disproportionate cuts if reductions in State effort do occur.

The Department determined that it is consistent with the State maintenance of equity
requirements to allow a State educational agency (SEA) to calculate whether it has maintained
funding equity with respect to its very small high-need and highest-poverty LEAs within a
reasonable “tolerance level.” The Department’s determination is based on the possibility of
significant volatility in the calculated per-pupil funding amounts for very small LEAs caused by
small changes in student enrollment, which may be unrelated to whether an SEA has achieved
the intent of the requirements. (See Frequently Asked Questions, American Rescue Plan
Elementary and Secondary School Emergency Relief Program, Maintenance of Equity
Requirements, July 26, 2022, Question 21(a).)

ADE’s proposal considers LEAs with average daily memberships of 1,000 or fewer students to
be small. Under this proposed threshold, 137 of Arkansas’ 256 LEAs are small. ADE asserts that
calculated per-pupil funding amounts for small LEAs are significantly affected by small changes
in enrollment rates and students’ educational needs. This makes annual per-pupil funding
amounts in Arkansas’ small LEAs an imperfect indicator of whether the SEA has achieved the
intent of maintaining equity in funding across LEAs. For its 137 small LEAs, ADE proposes to
implement a tolerance of up to a two percent decline in per-pupil funding. Applying this
tolerance would impact four small LEAs that the SEA identified as meeting the definition of
high-need or highest-poverty in FY 2023; collectively, these LEAs served 0.37 percent of
Arkansas’ students in FY 2023.
After reviewing ADE’s tolerance proposal and accompanying data, the unique circumstances in
the State, and our further State-specific analysis, we have determined that this approach includes
a reasonable level of tolerance when calculating whether Arkansas has maintained equity for
small LEAs in FY 2023 and is consistent with ADE’s FY 2022 tolerance request.

ADE’s proposal indicates that Arkansas will need to make additional payments to two LEAs that
experienced a disproportionate reduction in per-pupil funding in FY 2023 and are not captured
by this small LEA tolerance proposal. Please advise the Department when these additional
payments have been made.

We appreciate your diligence in developing this proposal. If you have any questions, please
contact your program officer at: Arkansas.OESE@ed.gov.

                                                   Sincerely,

                                      aura Jimenez Laura Jimenez

                                                   Laura Jimenez
                                                   Director, Office of State and Grantee Relations


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