Performance-based Funding in Adult Education
The Adult Education and Family Literacy Act (AEFLA), Title II of the Workforce Investment Act of 1998, requires states to establish a comprehensive performance accountability system to assess the effectiveness of eligible agencies in making continuous improvement in their adult education and literacy activities. To motivate local adult education providers to improve the quality and effectiveness of their services, some states are adopting performance-based funding (PBF) systems to allocate federal, state, or both, types of adult education resources.
Performance-based funding systems are designed to distribute resources to local providers based on state-defined criteria, which may include learner, administrative, or other programmatic measures. Performance outcomes are used to determine how much money a provider receives and, in some circumstances, whether funds should be added or deducted from a provider’s allocation.
To gain a better understanding of how these systems operate, the Office of Vocational and Adult Education (OVAE), U.S. Department of Education, commissioned a study of adult education fiscal policies in selected states using PBF to allocate program resources. This cross-case analysis report summarizes findings from case study site visits conducted in three states— Indiana, Kansas, and Missouri—which are among the most experienced in using performancebased funding to allocate federal, state, or both, types of resources. It is intended to assist state policymakers and adult education administrators in making more informed decisions when designing state allocation formulas using performance funding.