Data on intradistrict funding inequities in many large school districts confirm what most would guess--high-poverty schools actually receive less money per pupil than more affluent schools. These funding inequities have real repercussions for the quality of education offered at high-poverty schools and a district's ability to overcome the achievement gap between groups of students defined by family income or ethnicity. Aside from concerns about the inequitable distribution of veteran and novice teachers across schools, students attending high-poverty schools actually need more funding to achieve at the level of their wealthier counterparts. The federal government recognizes this fact with its allocation of federal funds under Title I of the Elementary and Secondary Education Act, or ESEA. One condition of receiving Title I funds is that districts allocate state and local funds equitably to non-Title I and Title I schools before spending federal monies. The "comparability" provision was implemented to ensure that schools spend Title I funds on services meant to enhance educational opportunities for students at high-poverty schools and not to make up for unfair shares of state and local resources stemming from conventional management and budgeting practices. The comparability provision should be a strong tool to correct the funding disparities created by an inequitable distribution of higher- and lower-paid teachers. But for years, districts have been able to evade true comparability between schools due to a loophole in the law. The loophole allows districts to demonstrate compliance without comparing the amount of actual dollars spent at each school. Instead, districts can show comparability by placing equal numbers of teachers, on a per pupil basis, at high- and low-poverty schools. The Center for American Progress (CAP) previously discussed the need to close the comparability loophole in the next reauthorization of ESEA. One necessary element of this goal is requiring districts to report the actual amount of money each school in the district receives in its annual allocation of state and local funds. CAP has proposed that a phase-in period will be necessary for districts to reach full compliance with a revised comparability provision. During this phase-in period, districts would have the opportunity to experiment with policies that allow them to meet the requirements of the new law. Districts that have taken aggressive steps to make school funding more transparent and equitable will have a significant advantage in adapting to a new comparability provision. For now, these districts provide a prospective view of the changes needed to fund schools fairly and the implications such reforms have on school and district operations. This report will highlight relevant issues that arise as districts attempt to design fair and transparent school funding systems. (Contains 40 endnotes.)