 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
                   SUBCHAPTER XIV--GENERAL PROVISIONS
 
    Part B--Flexibility in the Use of Administrative and Other Funds
 
Sec. 8824. Administrative funds studies


(a) Federal funds study

                           (1) In general

        The Secretary shall conduct a study of the use of funds under 
    this chapter for the administration, by State and local educational 
    agencies, of all covered programs, including the percentage of grant 
    funds used for such purpose in all covered programs.

                           (2) State data

        Beginning in fiscal year 1995 and each succeeding fiscal year 
    thereafter, each State educational agency which receives funds under 
    subchapter I of this chapter shall submit to the Secretary a report 
    on the use of subchapter I funds for the State administration of 
    activities assisted under subchapter I of this chapter. Such report 
    shall include the proportion of State administrative funds provided 
    under section 6513 of this title that are expended for--
            (A) basic program operation and compliance monitoring;
            (B) statewide program services such as development of 
        standards and assessments, curriculum development, and program 
        evaluation; and
            (C) technical assistance and other direct support to local 
        educational agencies and schools.

                      (3) Federal funds report

        The Secretary shall complete the study conducted under this 
    section not later than July 1, 1997, and shall submit to the 
    President and the appropriate committees of the Congress a report 
    regarding such study within 30 days of the completion of such study.

                             (4) Results

        Based on the results of the study described in subsection (a)(1) 
    of this section, which may include collection and analysis of the 
    data under paragraph (2) and section 9009(b) of this title, the 
    Secretary shall--
            (A) develop a definition of what types of activities 
        constitute the administration of programs under this chapter by 
        State and local educational agencies; and
            (B) within one year of the completion of such study, 
        promulgate final regulations or guidelines regarding the use of 
        funds for administration under all programs, including the use 
        of such funds on a consolidated basis and limitations on the 
        amount of such funds that may be used for administration where 
        such limitation is not otherwise specified in law.

(b) General administrative funds study and report

    Upon the date of completion of the pilot model data system described 
in section 9009(b) of this title, the Secretary shall study the 
information obtained through the use of such data system and other 
relevant information, as well as any other data systems which are in use 
on such date that account for administrative expenses at the school, 
local educational agency, and State educational agency level, and shall 
report to the Congress not later than July 1, 1997, regarding--
        (1) the potential for the reduction of administrative expenses 
    at the school, local educational agency, and State educational 
    agency levels;
        (2) the potential usefulness of such data system to reduce such 
    administrative expenses;
        (3) any other methods which may be employed by schools, local 
    educational agencies or State educational agencies to reduce 
    administrative expenses and maximize the use of funds for functions 
    directly affecting student learning; and
        (4) if appropriate, steps which may be taken to assist schools, 
    local educational agencies and State educational agencies to account 
    for and reduce administrative expenses.

(Pub. L. 89-10, title XIV, Sec. 14204, as added Pub. L. 103-382, title 
I, Sec. 101, Oct. 20, 1994, 108 Stat. 3892.)
