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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations
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techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.
The Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action, and we are issuing these final requirements only on a reasoned determination that their benefits justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows and the reasons stated elsewhere in this document, the Department believes that the final requirements are consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action does not unduly interfere with State, local, or Tribal governments in the exercise of their governmental functions.
In this regulatory impact analysis, we discuss the need for regulatory action, the potential costs and benefits, and net budget impacts. The main benefit of this regulatory action is that funded services will get to more students identified as homeless in more LEAs more quickly in order to support them and address the impact of lost instructional time and the other impacts of the pandemic and virtual instruction. The estimated costs and net budget impacts are described below.
Elsewhere, under the Paperwork Reduction Act of 1995, we identify and explain burdens specifically associated with information collection requirements.
Need for Regulatory Action and Analysis of Benefits These final requirements are intended to expedite the award of emergency funds to serve homeless children and youth. As discussed elsewhere in this document, the ARPHCY program provides vital emergency funding to one of the most vulnerable populations. The Department believes this regulatory action is needed to ensure that SEAs can allocate funds to LEAs in a timeeffective manner so that LEAs can begin serving homeless children and youth.
Requiring SEAs to make LEA subgrants by formula allows funds to reach more LEAs, and therefore more students experiencing homelessness. These funds will support the work of the designated Homeless Liaison in each LEA, as required by the McKinney-Vento Act, and build capacity in LEAs, which will help to identify greater numbers of students experiencing homelessness and
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better coordinate services for those students in LEAs receiving funding through this formula. In addition, the funding under ARP is more than seven times greater than the usual appropriation for this program. This onetime emergency appropriation provides a unique opportunity to make funds more widely available than would be possible with the current appropriation of $106.5 million for the Education for Homeless Children and Youth program under the McKinneyVento Homeless Assistance Act.
The alternative, requiring SEAs to conduct competitions before making awards, would place an additional burden on SEAs and LEAs, increase the time needed to distribute funds, and result in fewer LEAs receiving funds. At the SEA level, a typical competition may take three to six months and requires developing selection criteria, publishing those criteria, providing technical assistance and allowing time for LEAs to develop applications, recruiting and training reviewers, reviewing the applications, and making awards. In addition to the staff time needed to conduct a fair and transparent competition, other expenses may include compensation for reviewers and logistical support for the review process.
At the LEA level, costs are incurred in the time needed to develop an application, including identifying and collaborating with partners, and the administrative processes needed to complete the application and obtain approval for submission. Some LEAs, even those with high need, will decline to apply for competitive grants due to these costs and the uncertainty of receiving a grant. In contrast, SEAs already have access to the data and expertise required to run the proposed allocations formula as well as to systems to award the funding to LEAs, as they already administer other Federal formula programs.
We estimate that running a State-level grant competition will take four to six months, and hundreds of staff hours, depending on the number of LEAs in the State who apply for a grant.
However, awarding subgrants via a formula would take on average 1020
hours, with an additional one to two weeks for outreach and technical assistance. At the LEA level, applying for a competitive subgrant could take two weeks to develop and finalize an application; a formula subgrant might take up to 10 hours.
In both scenarios, the reporting burden from the SEA to the Department is small, since the only new information the Department expects to collect is a list of grantees for ARP Homeless I and
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II disbursements. The Department already collects data from all LEAs in each State for homeless children and youth, whether they receive a McKinney-Vento subgrant or not.
Analysis of Costs The Departments cost analysis shows that making subgrants by formula is a less costly option overall. As discussed in the previous section, carrying out a competition is a complex, multistep process that occurs over months. The Department estimates that it would take an SEA between 160 to 320 hours to conduct a competition, at an approximate cost of $707,000 to $1,415,000 for 49 SEAs. SEAs that consist of only one LEA would not need to carry out a competition. The cost estimates in this section are based on an hourly wage of $45.11, the mean wage estimate for education administrators, other, reported by the U.S. Bureau of Labor Statistics, which is multiplied by two to account for overhead and benefits.
In addition, we estimate that LEAs applying for grants under a competition would need 80 to 100 hours to prepare an application. Because more funding is available under the ARP than under the regular appropriation for the Education for Homeless Children and Youth program, we estimate that more LEAs would apply and receive subgrants than the 4,400 that currently receive subgrants, and the cost estimate assumes that 5,000 LEAs would apply for funds. Using wages as described above, the estimated cost for applications for subgrants would be approximately $36.1 million to $45.1
million, and the total cost for distributing funds via a competition would be approximately $36.8 million to $46.5 million.
In order to distribute funds via formula the Department estimates that SEAs would need 10 to 15 hours to run the formula and distribute funds, and another 40 to 80 hours to conduct outreach to LEAs and help LEAs that would receive less than $5,000 to create consortia with other LEAs. Using wages as described above, the estimated cost for 49 SEAs for these activities would be $221,000 to $420,000. The estimated cost for LEAs to receive subgrants assumes 5 to 10 hours to complete forms and minimal applications for formula funding. The estimate also assumes that approximately 15,000 LEAs would receive funding under the formula, far more than the 5,000 LEAs we estimate would receive funding under a competition for subgrants. The estimated costs to LEAs would be $6.8
million to $13.5 million, and the total
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