Under No Child Left Behind, states and school districts have unprecedented flexibility in how they use federal education funds, in exchange for greater accountability for results.

It is possible for most school districts to transfer up to 50 percent of the federal formula grant funds they receive under the Improving Teacher Quality State Grants, Educational Technology, Innovative Programs, and Safe and Drug-Free Schools programs to any one of these programs, or to their Title I program, without separate approval. This allows districts to use funds for their particular needs, such as hiring new teachers, increasing teacher pay, and improving teacher training and professional development. Similarly, the law's consolidation of bilingual education programs gives states and districts more control in planning programs to benefit all limited English proficient students.

A new demonstration program allows selected states and school districts to consolidate funds received under a variety of federal education programs so that they can be used for any educational purpose authorized under the Elementary and Secondary Education Act, as amended by the NCLB Act in order to assist them in making adequate yearly progress and narrowing achievement gaps. In addition, the new Improving Teacher Quality State Grants program gives states and districts greater flexibility to choose the teacher professional development strategies that best meet their needs to help raise student achievement.