(REVISED) New Eligibility Requirements for Compensatory Education Alternative Reporting

Word Version 

Date:    September 10, 2015


Subject:   (REVISED) New Eligibility Requirements for Compensatory Education Alternative Reporting

We are writing to inform you about recent statutory changes related to the eligibility of students to generate state compensatory education (SCE) funding that were made in House Bill (HB) 1305, 84th Texas Legislature, 2015, which amended Texas Education Code (TEC), §42.152. The changes may increase your school district's or open-enrollment charter school's number of students who generate SCE funding. This letter describes when to use the alternative reporting method and explains income eligibility guidelines, data collection, and 2015–2016 compensatory education funding.  

School Districts and Open-Enrollment Charter Schools

In prior years, the TEC, §42.152(b) allowed school districts and open-enrollment charter schools to use the alternative reporting method only if no campuses participated in the NSLP or SBP. Changes in the law made by HB 1305 now permit districts and open-enrollment charter schools to generate SCE funding for students who participate in the National School Lunch Program (NSLP) or School Breakfast Program (SBP) at one or more campuses in the district and for students who participate in a locally-funded program at one or more campuses in the district.

Districts and open-enrollment charter schools will continue to report students who participate in the NSLP and SBP to the Texas Department of Agriculture (TDA) and will submit locally funded program educationally disadvantaged student numbers to the TEA using the alternative reporting method.

Texas Virtual School Network

A school district or open-enrollment charter school must request prior approval from the commissioner to claim students receiving a full-time virtual education through the state virtual school network in its counts of educationally disadvantaged students. The request must include a plan detailing the enhanced services to be delivered to full-time state virtual school network students. The TEA will provide additional information for submitting plans later this fall.

If you intend to claim students receiving a full-time virtual education in your economically disadvantaged student counts you must collect income eligibility forms from students' households beginning in August 2015. Income eligibility forms SF-141R08 (English) and        SF-141R208 (Spanish) should be used for this purpose. You must ensure that students who are reported through the alternative reporting system are not also reported through the NSLP/SBP program. Read below for more information on income eligibility guidelines, forms, and data collection.

Income Eligibility Guidelines

Under commissioner's rules adopted in 19 Texas Administrative Code §61.1027, the count of students used for the alternative reporting method is based on those students that would otherwise meet the income requirements for eligibility under the NSLP, if it were offered. You must retain the qualification information for each child for audit purposes. Also, you must record the counts of eligible students each month and report them to the TEA as described in the
Data Collection section below. Note that changes in family income status through the year may affect whether a student remains or becomes eligible for this funding count.

In general, students in families that receive Supplemental Nutrition Assistance Program (SNAP) benefits (formerly known as food stamps) or Temporary Assistance for Needy Families (TANF) automatically qualify for the funding count, and districts can satisfy the documentation requirements by recording the appropriate case numbers. Students in families that do not receive such assistance may qualify if they are in families that meet the same income guidelines used for the NSLP and SBP. The income guidelines are a function of family size and total income of all family members. The table entitled Income Eligibility Guidelines for 2015-2016, found on the TEA website at http://tea.texas.gov/index2.aspx?id=25769817590, shows the maximum income for a given family size.

Data Collection

The following documents, posted to the TEA website at the link above, may be helpful in gathering the proper income eligibility information for families:

  • sample letter to households to qualify the district for compensatory education funding (both English and Spanish versions available)
  • form for compensatory education funding qualification (both English and Spanish versions available)
  • instructions for completing the compensatory education funding qualification form (both English and Spanish versions available)

The letter to households explains the need for personal income data. The standard form for qualification and the related instructions provide direction to parents or heads of households on reporting the necessary information. On receipt of the qualification forms, school district or charter school personnel must determine the qualifications of the applicant for funding in each case. Personnel must complete relevant fields at the bottom of each form, and your school district or charter school must retain the form for audit purposes. Each of these documents may be customized with your district's or charter school's identifying information.

Your school district or charter school must use the Foundation School Program State Compensatory Education subsystem to report the number of eligible students to receive funding. The alternative compensatory education count requires only aggregated counts of eligible students in each month. Enter the highest number of students in the district approved for free or reduced-price meals for the claim month. The highest number of students is determined by the day in the month that had the highest number of approved students. Do not use cumulative monthly enrollment or obtain the data from reports that use Public Education Information Management System economic indicator codes. Your district or charter school must review records monthly to determine whether students are still enrolled and whether family income status has changed. You must report the number of eligible students by the fifteenth of each month with the prior month's student count. For example, the claims for October will be due on November 15.

Funding for 2015–2016 (REVISED)

Changes in the law made by HB 1305 will not impact SCE funding for the 2015–2016 school year. Funding for the provisions made in law will become available for the first time with the 2016–2017 school year.

Beginning now, a school district or open-enrollment charter school may use the compensatory education alternative reporting method if the district does not report income-eligible students to the TEA through the Child Nutrition Programs administered by the TDA on one or more campuses. The average of the highest six-month count of pupils, collected from the 2015–2016 school year, will be used to fund the SCE program in the 2016–2017 school year.

District Responsibilities

If your school district or open-enrollment charter school receives funding from the alternative compensatory education allotment, it is responsible for obtaining the appropriate data from the families of potentially eligible students, verifying the information, and retaining records. The TEA will conduct an audit of the data submitted by districts and charter schools. For this reason, your district or charter school should retain records for a minimum of five years after the end of each school year.


Please contact Ashley Behnke in the Office of School Finance at (512) 463-4834 if you have questions about this letter or the SCE alternative reporting method.


Amy Copeland
FSP Manager, State Funding Division