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Accountability Tools for Terminating Programs

This document was developed by Miriam Whitney, the attorney at USDOE who works on Even Start, to provide guidance on terminating programs. Since most of the document refers to EDGAR, you will find it to be applicable to adult education as well.


Performance Based Funding in Adult Education, Steve Klein, MPR Associates (a national study),


Performance Based Funding in Adult Education, System Design and Implementation Issues (concise presentation version of the above), Steve Klein, MPR Associates and Garland Hankins, Former Adult Education State Director, Arkansas


Performance Based Funding in Adult Basic Education: Opportunities and Challenges for Massachusetts at the Intersection of Program Accountability and Funding

Liz O'Connor,



Sample Funding Formulas


Illinois: Recognizing that a complete review of current funding practices for Adult Education and Family Literacy had not been conducted for a number of years and at the urging of the field and recommendation of the Advisory Council, the Illinois Community College Board (ICCB) in May 2002 approved the establishment of an Adult Education and Family Literacy Funding Study Task Force.


Specific components of the funding recommendations include:

  • Using an updated Index of Need to prorate funds to each Area Planning Council based on its proportion of state need;

  • Instituting a Foundation component to provide base resources needed to open and maintain programs;

  • Using Unit of Instruction and Enrollment components that consider the estimated costs of delivering and "growing" programs;

  • Implementing a Program Excellence Award component; and

  • Allocating Performance Funding that focuses on improvement and rewards providers that a) meet and b) exceed agreed upon performance benchmarks.

A full description of the funding formula is included in the Task Force's draft report.


Funding Formulas from around the Country

Indiana/ Kansas/ Minnesota/ Missouri/

Oregon/ Rhode Island/ South Carolina/

 Tennessee/ Utah/ Washington/ Wisconsin



Base Formula

Performance Formula


·         95% base, 5% performance

Base funding

·         85% of federal and 100% of state funds

·         Federal:  automatically qualify for 90% of resources in their base budget (budget prior to PBF)

·         State:  automatically qualify for 90% of reimbursed expenditures in their base budget

·         Remaining state funds distributed on basis of enrollments to reflect learner demand over time


Performance funding

·         Approximately 15% of federal funding only

·         Based on # of learners who achieve any of the core or secondary measures

·         Secondary measures receive half the amount awarded for core

Incentive funding

·         For providers meeting performance levels for 15 NRS core measures (EFL + follow-up goals)

·         Each measure has an assigned rate equivalent.




Base Formula

Performance Formula


·         12% base, 88% performance)

Base funding

·         50% of state funds evenly divided as base funding among all providers

Performance funding

·         Learner outcomes

o        50% of federal funds on learner outcomes on core and selected secondary measures

o        Educational gain outcomes – doubled for learners in two lowest ABE levels and three lowest ESL levels

·         Program quality

o        50% of federal and 50% of state funds

Based on # of quality points a program earns relative to the statewide total generated that year

·         Quality points

v      Awarded based on provider performance on 25 measures encompassing 10 quality indicators

v      Points awarded based on:

v      Annual state monitoring visit

v      Data in end-of-year reports and learner follow-up surveys

v      Records maintained by state staff




Base Formula

Performance Formula


·         State Aid: Base population aid:  $1.73 per member district resident (total resident population) or $3,844 minimum

·         Base population aid is calculated for all consortia, then of the remaining funds, the following three components are computed according to the following percentages:

·   84% - prior year contact hours (May 1 – April 30) - $4.61/contact hour

·   8% - K-12 LEP count (ESL students enrolled in member school districts) - $34.97/k-12 LEP student

·   8% - Over 20 no diploma (census count) – $4.11 per over-20-no-diploma resident

·         Federal Aid:  Consortium’s proportion of level one contact hours ($.90 per hour).  Level one hours are all hours except ASE high and low.


Comments from Minnesota

·         Two CAPS:

·         Consortia growth limit:  A consortium may not receive more than an 8% increase in its contact hour revenue from one year to the next.

·         Gross revenue limit:  A consortium may not receive more than $21 per prior year contact hour in gross state ABE aid revenue.




Base Formula

Performance Formula


·         81% base, 19% performance)

Base funding

·         Based on audited learner contact hours

·         50% of state and federal funding

o        A provider’s total audited learner contact hours in the first preceding fiscal year for which audited totals are available (i.e., FY 04 for FY 06 program year)

·         Remaining base

o        A provider’s previous three-year average of its total audited contact hours (i.e., using FY 02 – 04 for FY 06

Performance funding

·         Based on # of individuals achieving two core measures

o        Completion of EFLs

o        GED

Categorical funding

·         Earmarked funds

o        Data entry, marketing, technology, One Stop coordination

·         Averages three-year expenditures in each category with a fixed dollar amount awarded based on level of expenditures




Base Formula

Performance Formula


·         In process of revising formula

·         Exploring flat base, need (census data), unemployment, poverty, federally reportable enrollment vs. participation rate (need vs. served), small providers, population density.

·         Exploring percentage of PBF, phase-in, federal performance factors, program quality factors, outcomes vs. targets, etc.



Base Formula

Performance Formula

Rhode Island

·         $40,000 base for every program irrespective of size

·         A workgroup defined all functions to be supported and costed them out to arrive at the $40,000 figure.

·         Design-based portion:  completed a true cost/adequacy work group process and identified that student hourly rates make sense to establish a grant amount in the first year of a multi-year funding cycle.

·         Total design-based requests that fall between $7.50 - $12.50 per hour will result in adequate resources given the cost of doing business in Rhode Island.

·         Requests outside of this range are examined on a case-by-case basis.

·         Will transition to outcome-based funding in FY 2011 and move high performers to “hard” funding streams



Base Formula

Performance Formula

South Carolina

(as submitted by Garland Hankins)

·         70% of total funding

·         70% (of the 70%) based on contact hours

·         30% (of the 70%) based on census data

·         30% of total funding

·         Based on completion of the NRS core measures

Comments from Garland

·         Be careful in using contact hours unless you have a way to audit or verify the hours. 





Base Formula

Performance Formula


·         90% of appropriation

·         Uses a two-year average to calculate funds based on:

·         90% for # of students with a pre-test and 12 hours+ of attendance

·         10% for # of hours spent on instruction

·         Ranked by importance and level of funding

·         Level completions – overall average

·         GED’s as % of setting goal

·         Retention rate – compared to state average

·         Pre and post testing – exceeds national average

·         % of GED’s as per NRS level 5 and 6

·         Level completions as per state goals

·         Outcomes – NRS Table 5

·         # served compared to availability by Census

·         Entered/retained employment, post secondary

·         On time with data requested by State Division of AE

Comments from Tennessee

·         We found it is cheaper per student to serve 1,000 than to serve 100.  Therefore, we divided the 90 vendors into five tiers based on numbers served.  The smaller programs actually get more $$ per student than the larger ones.

·         This section is weighed so the larger systems will get more per student than the smaller ones. 



Base Formula

Performance Formula


·         50% of appropriation

·         7% of appropriation is distributed equally to each district with an approved plan

·         25% based on total number of enrollees

·         16% based on total number of contact hours for both enrollees and participants

·         2% for special program needs or PD

50% based on:

·         Diploma (30% of the 50%)

·         GED (25% of the 50%)

·         Level gains (30% of the 50%)

·         Earned credits (15% of the 50%)

Comments from Utah


·         Current formula places too much emphasis on GED and diplomas and reduces the program focus on ESOL and ABE



Base Formula

Performance Formula


·         Base funds are distributed among six areas/regions by formula.  It includes a hold-harmless clause to assure that existing services remain stable as populations shift.

·         The regional boundaries take into account historic patterns of coordination, service areas established by partner agencies, county lines, and the 12 workforce development areas. 

·         If applicants within each funding area have formed a consortium, they propose how to divvy the available money among the members.  Otherwise, state reviewers recommend and the state office determines funding levels.

·         Factors in the formula include:

·   # of residents in the funding region who are 18 years of age and older who do not have a high school diploma or GED

·   The number of residents in the funding region who are 18-64 years of age, whose first language is not English and who do not speak English very well

·   Existing levels of adult basic education services in the region

·   Region’s share of the State population living in poverty

·         Continuing funding, after the initial application, is based in part on performance.

·         Incentive-based

·         If a provider achieves 100 percent of its performance goal, or 4/3 or more of the state performance average, it would participate in sharing any available incentive funding.

·         # of students making gains at those provider agencies is divided into the incentive set—aside amount. 

·         Eligible programs receive money for each of their students who made gains.

·         Performance is defined as the number and percentage of basic skills students:

o        Scoring five or more points on the post test for students who scored 153 to 210 on the CASAS pre tests or

o        Scoring three or more points on the post test for students who scored 211 or higher on the pre test or

o        Earning a GED or high school diploma

·         Local performance goals/targets are determined in this manner:

o        If a provider’s prior year performance rate was less than 2/3 of the state average performance rate, the new rate will be increased to become 2/3 of the state’s average rate.

o        If the provider’s old performance rate is 4/3 or more of the state average rate, the new rate stays the same.

o        Otherwise, the new performance rate is 1.02 times the provider’s prior year rate.



Base Formula

Performance Formula


·         Federal Aid:   

·         50% distributed based on census figures of percentage of adults without a high school diploma

·         State Aid:

·         50% distributed based on census figures of percentage of adults without a high school diploma

·         50% based on FTE’s ( measure of accumulated hours of service).

·         Federal Aid:

·         50% distributed based on percentage of NRS level completion (i.e., If a district has a 5.4% educational attainment, it gets 5.4% of this sub-pot)

·         Levels are weighted.  ABE and ESL levels 1 -3 are awarded 1.2 units of money per students versus 1 unit for levels 4 – 6.


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