Title 1, Part A - Comparability of Service Testing Requirement: What is the Best Test?

Cindy Watson

Over the years, one of the most frequent questions we’ve received from Local Education Agencies (LEAs) is “What is the best test for demonstrating compliance with the Title I, Part A Comparability of Services Testing requirement?”.

LEAs can demonstrate compliance with the testing requirement using three different comparison tests. Test 1 compares state and local expenditures (budgets); Test 2 compares state and local base salaries; and Test 3 compares state and local Full-Time Equivalents (FTEs).

When conducting Comparability testing, some LEAs take the approach of just pulling the reports, making the necessary changes, and entering the data. However, all allocations should be itemized. In addition, all expenditure/salary/FTE removals and all salary changes should be documented and justified. While the itemizations and documentation aren’t required to be submitted to TEA as part of the annual requirement, it is required to be maintained locally in the event of an audit or if selected for random validation by TEA.

LEAs are only required to complete and demonstrate compliance with one of the three tests – and they can choose which test they want to use. The question as to which one is the best test for demonstrating compliance is a very valid question.

So, what is the BEST test? We have the answer.

Test 1 – We believe that TEST 1 is the BEST TEST for demonstrating comparability. This test compares state and local expenditures (budgets), and we recommend this test for several reasons:

  • First – the data analysis conducted pinpoints inequities down to the campus and object codes making it much easier to remedy the non-compliance issue.
  • Second – in the event of an audit or if selected for random validation by TEA, the supporting documentation maintains data integrity.

Test 2 – We rarely recommend utilizing Test 2. This test compares state and local base salaries (employee’s salary minus benefits, stipends, and merit increases). This test has data integrity issues and is also the issue of an ongoing federal debate. *

  • First – the data integrity is lost as the test requires self-reported data for all the employees’ base salaries.
  • Second – the documentation is extensive since it requires pulling the employees’ salary data and reducing them (most often manually) to exclude benefits, stipends, and merit increases, and then justifying and supporting every salary that is changed.
  • Third – if the test has a non-compliance result, it is much harder to determine how to make needed adjustments since the comparison is based on base salaries and not actual salaries.
  • Fourth – there is an ongoing federal debate over the test. Over the past years, there has been a great push at the federal level to have this testing option changed or removed due to many of the issues associated with the test, particularly that it does not utilize actual expenditures (budgets). Groups lobbying to have the test changed or removed refer to this test as a “Loophole.” The most recent letter sent to congress regarding this issue can be found here:  May 6, 2022 – Letter to Congress – Groups Request Congress to Prioritize Whole Child Equity in FY23 Appropriations – The issue is discussed under the heading Advancements to Funding Equity and Targeting Needs. 

Test 3 – Under certain circumstances, we recommend utilizing Test 3 as an alternative test. This test compares state and local FTEs. It is recommended if Test 1 has resulted in a non-compliance result AND the data analysis indicates that there are multiple but minor inequities across various functions. Before transferring funds or adding/removing FTEs, we recommend utilizing Test 3 to see if the FTE test is compliant.

Conclusion – BFS believes that Test 1 comparing state and local expenditures is the best test for demonstrating compliance with the comparability testing requirement. The data integrity is maintained during the process, inequities are identifiable, and the test presents the clearest picture of an LEA. When documented correctly, there are rarely any questions during audits/validations. 

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