STATE BOARD OF EDUCATION
33-125B. Pay for success contracting — DUTIES OF THE STATE DEPARTMENT OF EDUCATION. (1) The state department of education may enter into contracts for approved services. Notwithstanding the provisions of chapter 92, title 67, Idaho Code, the department may issue a request for information for a contract upon identification of a need for a special service, or interested parties may identify a need for service within the department and submit a proposal to the department to negotiate a contract. Any contract entered into pursuant to this section shall provide for:
(a) An evidence-based program delivered by the service provider designed to enhance student academic achievement;
(b) Mutually agreed upon grade-level performance targets and efficacy standards;
(c) Identified source of moneys from which savings will be realized;
(d) An external evaluator who shall have expertise in all of the following areas:
(ii) Program evaluation and assessment;
(iii) Collection and maintenance of program data;
(iv) Demonstrated ability to link an individual student’s data from grade to grade; and
(v) Knowledge of the Idaho-specific academic performance scores used to demonstrate efficacy of the service provider’s program;
(e) The state’s payment obligations from the money appropriated to the public school support program, if the efficacy standards are met under the contract;
(f) Terms under which the state may terminate the contract;
(g) An annual audit to be performed by a certified public accountant; and
(h) A mutually agreed upon formula for the distribution of savings realized by the service provider program.
An external evaluator shall approve the negotiated contract provisions relating to efficacy standards before the department may enter into any such contract.
(2) Investor moneys shall be adequate to cover all contract costs.
(3) The third-party administrator shall:
(a) Manage all moneys pursuant to subsection (2) of this section;
(b) When appropriate, direct payments to be made under the terms of the contract;
(c) Ensure an annual audit is conducted under the terms of the contract;
(d) Issue financial reports as required by the contract; and
(e) Complete all other compliance requirements of state or federal law.
(4) The department shall approve the school district or public charter school from which each cohort will be chosen. The priority for selection shall be given to:
(a) School districts or public charter schools reporting the greatest number of students who are not proficient to meet grade-level performance targets being used to evaluate the service provider’s program;
(b) School districts or public charter schools reporting the greatest number of students on free and reduced lunch; and
(c) School districts or public charter schools in different regions of the state.
The selection of cohorts shall be made by mutual agreement between the service provider, the approved school district or public charter school and the department.
(5) The department shall withhold distributions to participating school districts or public charter schools for the intervention or remediation efforts identified in the contract. Moneys shall be held in the public school income fund until the external evaluator makes a determination under this subsection. If the external evaluator determines that the efficacy standards have been met, the moneys shall be distributed pursuant to the terms of the contract. If the external evaluator determines that the efficacy standards have not been met, the moneys will be released to the school district or public charter school. Moneys withheld or distributed from this fund shall be subject to appropriation and shall not be included in public school discretionary funding variability pursuant to section 33-1018, Idaho Code. If the contract is terminated for any reason other than the achievement or nonachievement of the efficacy standards, the moneys shall be distributed according to the terms of the contract governing such an event.
(6) The external evaluator shall:
(a) Determine whether the service provider has met the agreed upon efficacy standards under the terms of the contract by determining the outcomes for each cohort based on the following criteria:
(i) Whether there was an increase in the number of children proficient to meet grade-level performance targets at levels specified in the contract; and
(ii) Calculate savings realized for intervention or remediation as specified in the contract;
(b) Annually report the service provider efficacy standards to the department; and
(c) Report the service provider efficacy standards to the third-party administrator for the purpose of determining whether payment should be made under the terms of the contract.
(7) An oversight committee is hereby created for the purpose of deciding whether or not the state department of education will enter into a negotiation with an interested party under this section, and for the purpose of monitoring contracts entered into under this section. The committee shall meet as often as is necessary to fulfill its obligations under this subsection. The committee shall consist of the following people:
(a) The chief financial officer of the state department of education;
(b) The subject matter expert at the state department of education;
(c) A representative from the state controller’s office;
(d) The house of representatives education committee chairman; and
(e) The senate education committee chairman.
(8) The state department of education shall report to the legislature on or before February 1 of each year on all contracts entered into pursuant to this section.
(9) The state board of education may promulgate rules implementing the provisions of this section.
(10) As used in this section:
(a) "Cohort" means a group of individuals who enter the service provider’s program on the same date.
(b) "Department" means the state department of education.
(c) "External evaluator" means the entity that is responsible for determining the efficacy of a service provider’s program.
(d) "Investor" means an individual or entity that provides the capital for the services specified in a contract.
(e) "Service provider" means an organization that implements an evidenced-based program that conforms to the terms of the contract.
(f) "Third-party administrator" means an SSAE-16 compliant firm or a firm licensed under chapter 2, title 54, Idaho Code, that manages all moneys deposited pursuant to this section and controlled by a contract.
[33-125B, added 2015, ch. 299, sec. 1, p. 1179; am. 2016, ch. 289, sec. 6, p. 807; am. 2017, ch. 145, sec. 1, p. 341.]