SEC. 5121. STATE USES OF FUNDS.

A State educational agency may use funds made available for State use under section 5112(b) only for one or more of the following:

(1) State administration of programs under this part, including —

(A) allocating funds to local educational agencies;

(B) planning, supervising, and processing State educational agency funds; and

(C) monitoring and evaluating programs under this part.

(2) Support for the planning, design, and initial implementation of charter schools as described in part B.

(3) Statewide education reform, school improvement programs and technical assistance and direct grants to local educational agencies, which assist such agencies under section 5131.

(4) Support for the design and implementation of high-quality yearly student assessments.

(5) Support for implementation of challenging State and local academic achievement standards.

(6) Support for arrangements that provide for independent analysis to measure and report on school district achievement.

(7) Support for the program described in section 321 of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2001 (as enacted into law by section 1(a)(1) of Public Law 106-554).

(8) Support for programs to assist in the implementation of the policy described in section 9507 which may include payment of reasonable transportation costs and tuition costs for such students.

SEC. 5122. STATE APPLICATIONS.

(a) APPLICATION REQUIREMENTS- Any State that desires to receive assistance under this part shall submit to the Secretary an application that includes each of the following:

(1) Designation of the State educational agency as the State agency responsible for administration and supervision of programs assisted under this part.

(2) Provision for an annual statewide summary of how assistance under this part is contributing toward improving student academic achievement or improving the quality of education for students.

(3) Information setting forth the allocation of funds required to implement section 5142.

(4) A provision that the State educational agency will keep such records, and provide such information to the Secretary, as may be required for fiscal audit and program evaluation (consistent with the responsibilities of the Secretary under this section).

(5) An assurance that, apart from providing technical and advisory assistance and monitoring compliance with this part, the State educational agency has not exercised, and will not exercise, any influence in the decisionmaking processes of local educational agencies as to the expenditure made pursuant to an application submitted under section 5133.

(6) An assurance that there is compliance with the specific requirements of this part.

(7) Provision for timely public notice and public dissemination of the information provided under paragraph (3).

(b) STATEWIDE SUMMARY- The statewide summary referred to in subsection (a)(2) shall be submitted annually to the Secretary and shall be derived from the evaluation information submitted by local educational agencies to the State educational agency under section 5133(b)(8). The State educational agency shall determine the format and content of such summary and may include in the summary statistical measures, such as the number of students served by each type of innovative assistance program described in section 5131 and the number of teachers trained.

(c) PERIOD OF APPLICATION- An application submitted by the State educational agency under subsection (a) shall be for a period not to exceed 3 years. The agency may amend the application annually, as may be necessary to reflect changes, without filing a new application.

(d) AUDIT RULE- A local educational agency that receives less than an average of $10,000 under this part for any 3 consecutive fiscal years shall not be audited more frequently than once every 5 years.

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