July 2013

MAINTENANCE OF EFFORT IDEA-B Updated July 2013

Denise Dusek Education Service Center, Region 20 1

Presentation developed for Independent School Districts and Open-Enrollment Charter Schools

Where applicable, the differences between ISDs and Charters will be notated in the slide July 2013 Education Service Center, Region 20 2

The information provided in this presentation is subject to change based on revised guidance from TEA and/or USDE

July 2013 Education Service Center, Region 20 3

Beginning with the comparison of 2008-2009 to 2009-2010, the IDEA MOE analysis performed by TEA is ON HOLD, pending clarification from USDE

July 2013 Education Service Center, Region 20 4

Overview

• • • • • • • • Definition of Maintenance of Effort (MOE) Comparison of MOE to State’s 52% Rule and Federal Excess Cost Requirement MOE Data Exceptions to MOE MOE Voluntary Reduction LEA Response to Finding of Noncompliance OSEP Letters Best Practices July 2013 Education Service Center, Region 20 5

Maintenance of Effort (MOE) – Definition

July 2013 Education Service Center, Region 20 6

Federal Requirement – IDEA MOE

• 34 CFR §300.203 (a) http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol2/pdf/CFR-2011-title34 vol2.pdf

• IDEA-B funds provided to an LEA must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year July 2013 Education Service Center, Region 20

Example – IDEA MOE

• Example: If the LEA expended $50,000 from State and/or local funds in

2011-2012

for the education of children with disabilities, the LEA must expend at least $50,000 from State and/or local funds in

2012-2013

for the education of children with disabilities • If at least the same amount is not expended from one year to the next, the LEA will not be in compliance with MOE, unless an exception or adjustment applies Education Service Center, Region 20 July 2013

IDEA MOE Compared to ESEA MOE IDEA ESEA (NCLB)

Percentage of Yr 1 State/local expenditures to be spent in Yr 2: Exceptions Allowed?

Waiver Request Allowed?

Functions:

100% Yes No 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53

Consequence of decline in effort:

Submit refund to TEA 90% No Yes 11, 12, 13, 21, 23, 31, 32, 33, 34, 35 (Deficit Only), 36 (Deficit Only), 41, 51, 53 TEA reduces LEA’s allocation of NCLB funds by same proportion July 2013 Education Service Center, Region 20

Definition – IDEA MOE

• 34 CFR §300.203 (b)(1) • The LEA must budget, for the education of children with disabilities, at least the same total

or

per capita amount from either of the following sources as the LEA spent for that purpose from the same source for the most recent prior year for which information is available: i.

Local funds only ii. The combination of State and local funds July 2013 Education Service Center, Region 20

Four IDEA MOE Calculations

1.

Total special education expenditures

(aggregate)

with a

combination

of State

and

local funds 2.

Total special education expenditures

per capita

(per child with a disability) with a

combination

of State

and

local funds 3.

Total special education expenditures

(aggregate)

with

local

funds

only

4.

July 2013 Total special education expenditures

per capita

(per child with a disability) with

local

funds

only

Education Service Center, Region 20

Most Favorable Calculation

 When calculating MOE based on the four calculations, the most favorable result for the LEA will be used to determine the LEA’s status:  If the LEA meets MOE based on

one

of the four calculations, the LEA will be considered compliant  If the LEA does not meet MOE on of noncompliance

all four

calculations, the calculation showing the lowest amount of decline will be considered the amount July 2013 Education Service Center, Region 20 12

Most Favorable Calculation

Compliant Example: 1) Aggregate Total State and Local Funds NO Decline 2) Per Capita State and Local Funds Decline 3) Aggregate Total Local Funds Only Decline 4) Per Capita Local Funds Only Decline Non-Compliant Example: 1) Aggregate Total State and Local Funds Decline: ($5,000) 2) Per Capita State and Local Funds Decline: ($4,000) 3) Aggregate Total Local Funds Only Decline: ($3,000) 4) Per Capita Local Funds Only Decline: ($2,000) Result: Compliant

July 2013

Result: Non-Compliant By ($2,000)

Education Service Center, Region 20 13

TEA’s Methodology for Determination of Local Funds Only **Methodology may change** Description Year 2 Year 1 Variance (Yr 2-Yr 1)

A Total State and Local Expenditures $151,368 $154,602

($ 3,234)

B State Special Education Allotment (FSP) C Local Funds Only (A minus B) July 2013 -$147,200 $ 4,168 -$131,329 $ 23,273 Education Service Center, Region 20 14

IDEA MOE Compared To: State 52% Rule and Federal Excess Cost Requirement

July 2013 Education Service Center, Region 20

IDEA MOE Compared To: State 52% Rule

July 2013 Education Service Center, Region 20

IDEA MOE vs State 52% Rule

• The State’s 52% Rule is not MOE • 19 TAC §105.11: 52% Rule

http://ritter.tea.state.tx.us/rules/tac/chapter105/ch105b.html#105.11

 MOE is a Federal spending requirement related to maintaining the same level of fiscal effort with local or State and local funds July 2013  52% Rule is a State spending requirement related to direct costs and indirect costs with the State FSP* Special Education allotment *FSP (Foundation School Program) Education Service Center, Region 20

State 52% Rule

State’s 52% Rule (effective 12/26/11):  No more than 48% of the LEA’s FSP State Special Education allotment can be expended for indirect costs related to special education  Therefore, at least 52% of the LEA’s FSP State Special Education allotment must be spent on direct costs related to special education July 2013 Education Service Center, Region 20

State 52% Rule

• Establishes the maximum amount that may be spent on indirect costs • The LEA has the option to spend 100% of their State Special Education allotment on direct costs related to special education – The rule only prohibits the LEA from spending more than 48% on indirect costs – Does not imply that the LEA may only spend 52% on direct costs July 2013 Education Service Center, Region 20

State 52% Rule

• Statement on SOF can be misleading – Percent is actually minimum amount to be spent on direct costs – More accurate statement would be: “23-Special Education Adjusted Allotment (Spend at least 52% on direct costs) July 2013 Education Service Center, Region 20

Indirect Costs in Relation to IDEA MOE

• Although the State Special Education allotment may be spent on both indirect and direct costs, for MOE purposes, the indirect costs coded to the special education program intent code are limited to:  Function 34 Student Transportation  Function 41 General Administration • Therefore, spend cautiously on indirect costs to avoid an adverse impact on MOE July 2013 Education Service Center, Region 20

IDEA MOE and 52% Rule Scenarios

July 2013 Education Service Center, Region 20

MOE vs 52% Rule: Scenario #1

•

2010-2011:

 LEA receives State Special Education funds $

100,000

 LEA spends $

52,000

in Fund 199/420, PIC 23, direct costs  LEA spends $

48,000

in Fund 199/420, PIC 23, indirect costs  Total spent = $100,000  LEA meets 52% Rule •

2011-2012:

 LEA receives State Special Education funds $

100,000

 LEA spends $

52,000

in Fund 199/420, PIC 23, direct costs  LEA spends $

40,000

in Fund 199/420, PIC 23, indirect costs July 2013  Total spent = $92,000  LEA meets 52% Rule,

but not MOE

Education Service Center, Region 20

MOE vs 52% Rule: Scenario #2

•

2010-2011:

 LEA receives State Special Education funds $

100,000

 LEA spends $

52,000

in Fund 199/420, PIC 23, direct costs  LEA spends $

48,000

in Fund 199/420, PIC 23, indirect costs  Total spent = $100,000  LEA meets 52% Rule •

2011-2012:

 LEA receives State Special Education funds $

100,000

 LEA spends $

48,000

in Fund 199/420 PIC 23, direct costs  LEA spends $

52,000

in Fund 199/420, PIC 23, indirect costs July 2013  Total spent = $100,000  LEA meets MOE, but

not 52% Rule

Education Service Center, Region 20

MOE vs 52% Rule: Scenario #3

•

2010-2011:

 LEA receives State Special Education funds $

100,000

 LEA spends $

52,000

in Fund 199/420, PIC 23, direct costs  LEA spends $

48,000

in Fund 199/420, PIC 23, indirect costs  Total spent = $100,000  LEA meets 52% Rule •

2011-2012:

 LEA receives State Special Education funds $

100,000

 LEA spends $

52,000

in Fund 199/420, PIC 23, direct costs  LEA spends $

48,000

in Fund 199/420, PIC 23, indirect costs July 2013  Total spent = $100,000  LEA meets

both

MOE and 52% Rule Education Service Center, Region 20

July 2013

IDEA MOE Compared To: Federal Excess Costs Requirement

Education Service Center, Region 20 26

Excess Costs -

34 CFR §300.202

• IDEA-B funds provided to the LEA must be used only to pay the excess costs of providing special education and related services to children with disabilities • The excess cost requirement prevents an LEA from using IDEA-B funds to pay for all of the costs directly attributable to the education of a child with a disability July 2013 Education Service Center, Region 20 27

SOURCE OF FUNDS PURPOSE OF FUNDS FEDERAL FUNDS:

(IDEA-B) • • • Excess cost of providing special education and related services to children with disabilities, to address the unique needs that result from their disability.

Not allowable for office and routine classroom supplies (those ordinarily purchased for the regular classroom).

Should supplement, not supplant, State, local and other Federal funds.

STATE FUNDS: STATE SPECIAL EDUCATION ALLOTMENT • • Costs specifically related to students with disabilities as determined by individualized education programs (IEPs). Not allowable for office and routine classroom supplies (those ordinarily purchased for the regular classroom).

STATE FUNDS:

FOUNDATION SCHOOL PROGRAM (FSP)

LOCAL FUNDS

July 2013 • • Costs for services, materials, supplies, and equipment provided to all students.

Not limited to students with disabilities.

• • • Costs for services, materials, supplies, and equipment provided to all students.

Not limited to students with disabilities.

Use of funds determined by the LEA.

Education Service Center, Region 20 28

Excess Costs – 34 CFR 300.16

• Excess costs means: – Those costs that are in excess of the average annual per-student expenditure in an LEA during the preceding school year • Computed separately for elementary and secondary school students • • Computed after deducting certain amounts Refer to TEA’s Excess Cost calculator tool http://www.tea.state.tx.us/index2.aspx?id=2147499857 July 2013 Education Service Center, Region 20 29

Excess Costs – When to Expend

• An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before IDEA-B funds are used • For practical purposes, the LEA may expend IDEA-B funds simultaneously with other fund sources provided that the minimum average amount per student is expended by the end of the school year with non-IDEA funds July 2013 Education Service Center, Region 20 30

Excess Costs Calculation

• The calculation must be completed annually by the LEA based on previous year expenditures as soon as possible during the new school year • The calculation and supporting documentation must be maintained by the LEA and made available to auditors July 2013 Education Service Center, Region 20 31

IDEA MOE vs. Excess Costs

• The excess cost requirement is not MOE • Excess cost establishes the minimum average amount an LEA must spend on the education of children with disabilities from non-IDEA fund sources • MOE is the level of the expenditure of local funds or combination of State and local funds for special education purposes that must be maintained from one year to the next, subject to certain exceptions and adjustments July 2013 Education Service Center, Region 20 32

Excess Costs – Additional Information

• View USDE’s presentation from August 2012 concerning Excess Cost at: http://idea.ed.gov/explore/view/p/,root,dynami c,Presentation,31, July 2013 Education Service Center, Region 20 33

IDEA MOE Data Information is subject to change, pursuant to revised guidance from TEA

July 2013 Education Service Center, Region 20

SAMPLE BASED ON IDEA MOE TEMPLATE FROM JULY 2012; FORM IS CURRENTLY UNDER REVISION

July 2013 Education Service Center, Region 20 35

PEIMS Data for MOE Analysis

• TEA uses RAW PEIMS Data for MOE analysis • PEIMS EDIT+ Reports most closely matched to the RAW PEIMS data will be identified as data sources for explanatory purposes • Rounding differences could cause variances in the final calculated numbers when comparing data from PEIMS EDIT+ reports to data on the Summary of Compliance report July 2013 Education Service Center, Region 20 36

Expenditures: PIC 99/ORG 999

• Program Intent Code (PIC) – Codes used to account for the cost of instruction and other services that are directed to a particular need of a specific set of students • Example: PIC 23 = Special Education • Program Intent Code (PIC) 99 Undistributed – Costs that are not clearly attributable to a specific Program Intent Code • PEIMS Allocation Process distributes portions of PIC 99/ORG 999 amounts to specific PICs July 2013 Education Service Center, Region 20 37

Expenditures: PIC 99/ORG 999

• Use PIC 99/ORG 999 sparingly • Refer to TEA’s Financial Accountability System Resource Guide (FASRG) – Financial Accounting and Reporting (FAR) Module – Located at: http://www.tea.state.tx.us/index4.aspx?id=1222 • Improper use of PIC 99/ORG 999 could have an adverse effect on MOE analysis July 2013 Education Service Center, Region 20 38

Estimating Allocation of PIC 99/ORG 999

• The allocation process is complicated – Refer to TEA’s document “The Allocation Process for EDIT+ Reports” located at: http://www.tea.state.tx.us/index4.aspx?id=6564 39 July 2013 Education Service Center, Region 20

Estimating Allocation of PIC 99/ORG 999

• • A simple method for estimating the current year allocation from PIC99/ORG 999: Current year PEIMS EDIT+ PRF1D002 (Fall): • • Page titled “% to Spread ORG 999/PIC 99 Across ORG & PIC” Obtain Total percent listed under PIC 23 Multiply that percent by the total amount of current year special education expenditures obtained from your financial accounting records July 2013 Education Service Center, Region 20 40

Expenditures: Function Codes

• Expenditure amounts for MOE analysis include: – Amounts coded directly by the LEA to the special education program intent code, in: • Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 – Amounts allocated

from

PIC 99/ORG 999

to

the special education program intent code, in: • Functions 11, 12, 13, 21, 23, 31, 32, 33 only July 2013 Education Service Center, Region 20

Expenditures: Function Codes

 Functions: • 11 Instruction • 12 Instructional Resources & Media Services • 13 Curriculum Development & Instructional Staff Development • 21 Instructional Leadership • 23 School Leadership • 31 Guidance, Counseling, & Evaluation Services • 32 Social Work Services • 33 Health Services • 34 Student Transportation

(Indirect Costs)*

• 36 Extracurricular Activities* • 41 General Administration

(Indirect Costs)*

• 51 Facilities Maintenance & Operations* • 53 Data Processing Services* *Functions 34, 36, 41, 51, 53 not used in the allocation of PIC 99/ORG 999 Undistributed July 2013 Education Service Center, Region 20

Expenditures: Data Sources

• TEA utilizes the following data sources for the expenditure amounts: – 2007-2008 and 2008-2009: • PEIMS Mid-Year EDIT+ PRF1D007 Actual Compliance Report – General Fund Allocated – Allocated data (combination of directly coded expenditures and allocation of PIC 99/ORG 999) July 2013 – 2009-2010 and beyond: • Raw data comparable to amounts found in the PEIMS Mid-Year EDIT+ PRF1D008 Actual Compliance Report – General Fund Unallocated – – Unallocated data TEA performs allocation to obtain total expenditure amount Education Service Center, Region 20

PRF1D007 Allocated PIC 23 =

Special education expenditures coded directly to PIC 23 by the LEA

PRF1D008 Unallocated PIC 23 =

Special education expenditures coded directly to PIC 23 by the LEA PLUS Allocated amount from PIC 99 Does NOT include allocated amount from PIC 99

July 2013 Education Service Center, Region 20 44

Expenditures: SFSF Funds

• For 2009-2010 and 2010-2011 ONLY: – SFSF* Fund Codes 266 (and 366 for SSAs)  The portion of SFSF expended for special education (PIC 23) is considered State and local funds for MOE purposes *State Fiscal Stabilization Funds July 2013 Education Service Center, Region 20 45

Expenditures: SFSF Funds - Allocated

• In June 2012, TEA announced that SFSF funds coded to PIC 99/ORG 999 will be allocated by a formula, similar to the allocation of PIC 99/ORG 999 from the General Fund • Due to the allocation of SFSF PIC 99/ORG 999 amounts, it will be difficult for the LEA to verify the expenditures used in the MOE analysis July 2013 Education Service Center, Region 20 46

Expenditures: General Fund and SFSF Funds



2009-2010 & 2010-2011 MOE Expenditures include: 1. General Fund PIC 23

Unallocated Amounts o Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53

2. SFSF PIC 23

Unallocated Amounts o Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 3. Allocation of

portion of PIC 99

in

General Fund

to PIC 23 o Functions 11, 12, 13, 21, 23, 31, 32, 33 only 4. Allocation of

portion of PIC 99

in

SFSF

to PIC 23 o Functions 11, 12, 13, 21, 23, 31, 32, 33 only July 2013 Education Service Center, Region 20

Expenditures: Education Jobs Fund

• For 2010-2011 and 2011-2012 ONLY: • May treat Ed Jobs funds (287/368), as State or local funds for MOE purposes

if

the LEA spent those Ed Jobs funds for the education of children with disabilities • Ed Jobs funds expenditures will NOT automatically be included in TEA’s MOE analysis – LEA must provide data and documentation of special education expenditures with Ed Jobs Funds to TEA during response to preliminary finding of potential noncompliance for MOE July 2013 Education Service Center, Region 20 48

Expenditures: PEIMS Mid-Year 033 Record

 033 Record: Applicable only to Shared Services Arrangements (SSAs) of ISDs*  PRFBD001 Actual SSA Financial Summary by Fund and SSA Type – Unallocated data • Fund Code 437 SSA Special Education only • Fiscal Agent reports expenditures made on behalf of their Member Districts * 033 Record is not applicable to Charter School SSAs – Each Charter School reports its own share of SSA expenses on its own 032 record based on information provided to them by their Fiscal Agent July 2013 Education Service Center, Region 20

Expenditures: PIC 23 vs 32 vs 33

 Should special education prekindergarten (PPCD – Preschool Program for Children with Disabilities) expenditures from State and/or local funds be coded to PIC 23 or PIC 32 or the new PIC 33?

PIC 23 Special Education Program PIC 32 PIC 33 Prekindergarten Program (Effective 2011-2012) This PIC code included all Pre-K expenditures, not limited to Special Education, so TEA unable to automatically include in MOE analysis Prekindergarten – Special Education only (PPCD) (Effective 2013-2014)

July 2013 Education Service Center, Region 20 50

Expenditures: PIC 23 vs 32 vs 33

• Guidance from TEA for expenditures from

2010-2011 through 2012-2013

: – PIC 32 trumps PIC 23 – PIC 32 expenditures from the General Fund for PPCD will not automatically be included in MOE analysis – Remedy: • Use a local option code to uniquely identify and track “PPCD Expenditures from General Fund” • Send documentation of PPCD expenditures to TEA in response to a Preliminary Letter of Finding of potential noncompliance for MOE July 2013 Education Service Center, Region 20 51

Expenditures: PIC 23 vs 32 vs 33

• Guidance from TEA for expenditures effective

2013-2014 and beyond

: – Use PIC 23 for special education expenditures that are not specific to prekindergarten • PIC 23 General Fund expenditures are included in MOE analysis, as always – Use PIC 33 for special education prekindergarten expenditures (PPCD) • PIC 33 General Fund expenditures will be included in MOE analysis – July 2013 (Use PIC 32

only

for prekindergarten expenditures that are not specific to special education, compensatory education, or bilingual) Education Service Center, Region 20 52

Expenditures: Effective 2013-2014 and Beyond

Independent School Districts: Charter Schools: Fund 199 General Fund PLUS Fund 437, if member of SSA Net Asset Code 420 General Fund PLUS Fund 199, if applicable PIC 23 Special Education PIC 23 Special Education PIC 33 Special Education Prekindergarten (PPCD) (Effective 2013-2014) PIC 33 Special Education Prekindergarten (PPCD) (Effective 2013-2014) PIC 99 Amount of allocation from PIC 99 PIC 99 Amount of allocation from PIC 99

July 2013 Education Service Center, Region 20 53

SHARS Reimbursement

• Reimbursement funds received from SHARS (School Health and Related Services) for school-based health services provided to students with disabilities (special education) enrolled in the Medicaid Program • Should be coded to Revenue Code 5931 July 2013 Education Service Center, Region 20 54

SHARS Reimbursement

• SHARS revenue is not considered State or local funds for purposes of MOE (34 CFR 300.154(g)(2)) • Current guidance from TEA (subject to change) : – Original PIC 23 expenditures from Fund 199/Net Asset Code 420 count toward MOE expenditures – Additional special education expenditures from the SHARS revenue do not count toward MOE expenditures • Do NOT code these additional expenditures to PIC 23 July 2013 Education Service Center, Region 20 55

Child Count

 Child Count (special education):  PEIMS Fall Collection EDIT+PRF5D010 Special Education Child/Counts by Funding Type • Record 163 Student Data – Special Education – Special Education Enrollment Records – Funding Type Code 3 (IDEA-B) Only • Inconsistent Comparison of Data for FY10: • • 2008-2009: Includes Codes 3 and 0 2009-2010: Includes Code 3 only July 2013 Education Service Center, Region 20 56

State Special Education Allotment

• LEA’s State Special Education Allotment (from FSP) obtained from: – Summary of Finances (SOF):

ISDs:

“Special Education Adjusted Allotment” amount Tier 1 Allotments Section

Charter Schools Prior to 2012-2013:

Combination of “Special Education Block Grant” and “Mainstream Special Education Grant” amounts Funding Breakdown by Program section

Charter Schools 2012-2013 and later:

“Special Education Adjusted Allotment” amount Tier 1 Allotments section July 2013 Education Service Center, Region 20 57

• ISDs (and Charter Schools 2012-2013 and beyond): • Charter Schools Prior to 2012-2013: July 2013 Education Service Center, Region 20 58

ECI Set Aside (Only Year 2 of the Comparison)

 Early Childhood Intervention (ECI) Set Aside* amount obtained from: – – Summary of Finances (SOF) Tier I Detail Report, Special Education section, Final Allotment column • Negative number in the SOF, but positive number for MOE analysis *ECI Set-Aside is not applicable to Charter Schools July 2013 Education Service Center, Region 20 59

Sample SOF Showing ECI Set-Aside

* ECI Set-Aside is not applicable to Charter Schools July 2013 Education Service Center, Region 20 60

PEIMS EDIT+ PRF3D022 - Misleading

• Does not perform all four calculations – Only performs two calculations – (1) Combination of State and local funds aggregate total expenditures, and (2) Combination of State and local funds per capita • Uses the Grand Total of Codes 3 and 0 for Child Count data, instead of using Code 3 only • Does not include ECI Set-Aside amount • Does not include SFSF or Ed Jobs funds used for special education • Does not include the portion of SFSF funds from PIC 99/ORG 999 allocated to the special education PIC July 2013 Education Service Center, Region 20 61

TEA’s IDEA MOE Template (Summary of Compliance)

• For a more accurate analysis of MOE, the LEA should use the IDEA MOE Template (Summary of Compliance) located on the TEA webpage at: http://www.tea.state.tx.us/index4.aspx?id=4073

This template is currently unavailable on TEA’s website because it is in the process of being revised

July 2013 Education Service Center, Region 20 62

TEA’s IDEA MOE Template

• TEA utilizes the IDEA MOE Template to: – Assist the LEA in understanding the methodology used in MOE analysis • The template is included in the Preliminary Letter of Finding for MOE issued to LEAs from TEA • LEAs are required to monitor MOE • • May use TEA’s tool or a comparable tool Failure to demonstrate to an auditor that MOE is being monitored by the LEA could result in a finding July 2013 Education Service Center, Region 20 63

Exceptions to IDEA MOE

July 2013 Education Service Center, Region 20 64

Allowable Exceptions to IDEA MOE

• Five exceptions notated in 34 CFR §300.204

• An LEA may reduce their MOE level from the previous year

if

the reduction is attributable to any of the five exceptions • TEA specifies required documentation for the exceptions in the MOE Response Forms at http://www.tea.state.tx.us/index4.aspx?id=4073 July 2013 Education Service Center, Region 20 65

IDEA MOE Exception #1

1. Voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel • Following do

not

qualify:  Reduction in Force (RIF)  Non-renewal of a probationary teacher’s contract  Transfer or reassignment  Personnel paid 100% from IDEA-B funds  Contracted services personnel July 2013 Education Service Center, Region 20 66

LEA’s Assertion for Exception #1

• If the LEA receives a Preliminary Letter of Findings of potential noncompliance from TEA, the LEA may use TEA’s response form “C” to assert the decline in effort was due to the departure of special education personnel • The LEA must indicate: – Name and PEIMS Staff ID of departed personnel and reason for departure – – Name and PEIMS Staff ID of replacement personnel, if applicable Payroll Costs (including fringe benefits) July 2013 Education Service Center, Region 20 67

Documentation for Exception #1

• Source Payroll Record indicating reason for departure • Personnel Action Form – Resignation Letter signed and dated by employee • • • • Payroll Journal Schedule indicating agreement of payroll costs to payroll journal Employee’s SBEC Record (i.e., certification) Job Description, signed and dated by employee July 2013 Education Service Center, Region 20 68

Strategies for Exception #1

• Determine potential retirees and move from Federal funds to State/local funds, if applicable – Use caution – Make an equal swap so State/local funds are not increased • Assign position numbers to easily track separated employees and their replacements, if applicable July 2013 Education Service Center, Region 20 69

IDEA MOE Exception #2

2. Decrease in the enrollment of children with disabilities   Must still spend the same amount per pupil Reduction in number of students with disabilities will not be accepted as an exception if the LEA’s State Special Education allotment increased in the second year

Year 1

Year 2

$200,000

$240,000

525 Students

498 Students

$380.95/pupil

$481.93/pupil July 2013 Education Service Center, Region 20 70

LEA’s Assertion for Exception #2

• Response Form “D” – May be eliminated FY11 (comparison of 2009 2010 to 2010-2011) • Prior to FY 11, Form “D” was used to assert decline in effort was due to decreased enrollment – TEA’s calculations in the Summary of Compliance already account for a decrease in enrollment – LEA must still spend the same amount per pupil – Look for other exceptions that could be impacted as a result of a reduction in special education population July 2013 Education Service Center, Region 20 71

LEA’s Assertion for Exception #2

 Erroneous PEIMS data may be the factor when the decline in fiscal effort is based on child count  Important note: Ensure that any data exported into PEIMS from the LEA’s system is accurate July 2013 Education Service Center, Region 20 72

IDEA MOE Exception #3

3. Termination of the obligation of the LEA to provide a

program

of special education to a

particular child

with a disability that is an

exceptionally costly program

, as determined by the State, because the child:  Has left the jurisdiction of the LEA;  Has reached the age at which the obligation of the LEA to provide FAPE to the child has terminated;  No longer needs the program of special education July 2013 Education Service Center, Region 20 73

LEA’s Assertion for Exception #3

• • If the LEA receives a Preliminary Letter of Findings of potential noncompliance from TEA, the LEA may use TEA’s response form “E” to assert the decline in effort was due to the termination of an exceptionally costly program for a particular child The LEA must indicate: – – – – Student ID (PEIMS Record 163 Student ID) Description of the exceptionally costly program Date and reason program was terminated Total expenditures for the program July 2013 Education Service Center, Region 20 74

Documentation for Exception #3

• • • • • General Ledger Source records Summary Schedule of Costs that agrees with the ledger and source records Copy of child’s ARD/IEP documenting requirement of the program, at TEA’s request Copy of child’s ARD/IEP documenting date the program is no longer needed by the student, upon request by TEA July 2013 Education Service Center, Region 20 75

Strategies for Exception #3

• Things to consider for claiming this exception: – Was a student moved from a more restrictive environment to a less restrictive environment? – Did the student have a one-on-one teacher or aide or a nurse?

– Was the student in a behavior unit?

– Was the student in a residential facility, non-public day school, or RDSPD?

– Did the student receive related services, including transportation?

July 2013 Education Service Center, Region 20 76

IDEA MOE Exception #4

4. Termination of costly expenditures for long term purchases, such as the acquisition of equipment.

 TEA will only consider capital outlay • •

ISDs

– Fund 199, class object series

6600 Charters

– Net Asset Code 420, asset series

1500

 The LEA’s capitalization threshold is used to determine “costly” expenditures, provided the expenditure is coded to

6600/ 1500

July 2013 Education Service Center, Region 20 77

LEA’s Assertion for Exception #4

• If the LEA receives a Preliminary Letter of Findings of potential noncompliance from TEA, the LEA may use TEA’s response form “F” to assert the decline in effort was due to the termination of costly expenditures for long term purchases • The LEA must indicate: – – – – – Description of the long-term purchase Object Code (or Asset Code, if a Charter School) Date of purchase Total expenditures Explanation/Justification for the purchase July 2013 Education Service Center, Region 20 78

Documentation for Exception #4

• • General Ledger and Source Records Schedule listing the items purchased, including:  Classification of the purchase indicated in the General Ledger and reported in the PEIMS Record 032 • • Fund/Net Asset Code Function Code • Object/Asset Code  Schedule must agree to the LEA’s detailed general ledger and source records – Have available the LEA’s policy on capitalization and LEA’s plan supporting the explanation/justification for the purchase July 2013 Education Service Center, Region 20 79

Strategies for Exception #4

• Things to consider for claiming this exception: – Portable building – Remodel of existing building – Patient lift – Communication device – Assistive technology July 2013 Education Service Center, Region 20 80

IDEA MOE Exception #5

5. Assumption of cost by the High Cost Fund.

 LEA must have received a High Cost Fund Grant (Fund 226/315) award July 2013 Education Service Center, Region 20 81

LEA’s Assertion for Exception #5

• If the LEA receives a Preliminary Letter of Findings of potential noncompliance from TEA, the LEA may use TEA’s response form “G” to assert the decline in effort was due to the assumption of cost by the High Cost Fund • The LEA must indicate: – – Description of cost charged to the High Cost Fund Total expenditures July 2013 Education Service Center, Region 20 82

Documentation for Exception #5

• • • General Ledger documenting  Expenditures formerly recorded to Fund Code 199 (or Net Asset Code 420 – Charters), and  Subsequently recorded to Fund 226/315 (IDEA-B Discretionary High Cost Fund) Source Records Receipt of High Cost Fund Grant Award July 2013 Education Service Center, Region 20 83

Strategies for Exception #5

• If the LEA is considering applying for a High Cost Fund award, the LEA should try to use State or local funds for the expenditures – If the LEA receives a High Cost Fund award, the expenditures made from State or local funds could then be recoded to Fund 226/315 – The LEA would then have a legitimate exception to a decline in effort July 2013 Education Service Center, Region 20 84

New MOE Level Established

• If an LEA reduces their MOE level through any of these exceptions and has documentation to support the exception(s), this becomes the LEA’s new MOE level until such time when the LEA increases its local, or State and local, effort to support the special education program July 2013 Education Service Center, Region 20 85

IDEA MOE Voluntary Reduction (Adjustment to Local Fiscal Effort)

86 July 2013 Education Service Center, Region 20

IDEA MOE Voluntary Reduction

• • 34 CFR §300.205

Under certain circumstances, in any fiscal year that an LEA’s IDEA-B Formula entitlement exceeds their IDEA-B Formula entitlement received in the previous fiscal year, the LEA may reduce their MOE level by up to 50%* of the increase in entitlement • This is optional *Minus CEIS funds reserved during the year of the reduction July 2013 Education Service Center, Region 20 87

New MOE Level Established

• Once an LEA legitimately reduces their MOE base level through this option, it becomes the LEA’s new MOE level until such time when the LEA increases its local, or State and local, effort to support the special education program July 2013 Education Service Center, Region 20 88

Condition: Required Use of “Freed Up” Funds

• “Freed Up” funds must be spent on ESEA (NCLB) activities – “Freed Up” funds: The amount of the reduction to the LEA’s base level for MOE – If not spent on ESEA activities, the LEA may incur a finding July 2013 Education Service Center, Region 20 89

“Freed Up” Funds Example

• Without Option to Reduce • Local or State and Local Funds: 2010-2011 MOE level for special education = $200,000 2011-2012 MOE level for special education must equal at least $200,000 July 2013 With Option to Reduce • Local or State and Local Funds: 2010-2011 MOE level for sped = $200,000 • 2011-2012 Voluntarily Reduces MOE by $25,000 • • 2011-2012 MOE level for sped must equal at least $175,000 2011-2012 “Freed Up” funds of $25,000

must

be spent on ESEA activities Education Service Center, Region 20 90

ESEA Activities (Examples)

Examples of ESEA Activities for the “Freed-Up Funds” (Title I Activities): • • • • • • Improving Basic Programs Operated by LEAs Improving Student Reading Skills Education of Migratory Children Prevention and Intervention Programs for Neglected, Delinquent, or At-Risk Children National Assessment Comprehensive School Reform July 2013 Education Service Center, Region 20 91

ESEA Activities (Examples), continued

Examples of ESEA Activities for the “Freed-Up Funds” (Title I Activities): • • • • Advanced Placement Programs School Drop-Out Prevention Preparing, Training, and Recruiting High Quality Teachers and Principals Language Instruction for Limited English Proficient and Immigrant Students July 2013 Education Service Center, Region 20 92

ESEA Activities (Examples), continued

Examples of ESEA Activities for the “Freed-Up Funds” (Title I Activities): • • • • • • Promoting Informed Parental Choice and Innovative Programs Flexibility and Accountability Parental Involvement Activities Family Literacy Services Activities to Promote Family Support for Higher Education Mentor Programs July 2013 Education Service Center, Region 20 93

Voluntary Reduction Criteria

To be eligible to voluntarily reduce the LEA’s MOE level,

all three

of the following criteria must be met: 1.

2.

The LEA must have an

increase

in their IDEA-B Formula entitlement (Fund Code 224/313) from the previous year,

and

The LEA must have a determination level of “

Meets Requirements

” (34 CFR §300.608),

and

3.

The LEA

cannot

be identified as having

significant disproportionality *

under 34 CFR §300.646

 The letters described above (2 & 3) that are received in the spring or summer, determine eligibility for voluntarily reducing MOE in the new school year

*

(Significant Disproportionality Criteria N/A for 2011-2012 and 2012-2013) July 2013 Education Service Center, Region 20 94

Voluntary Reduction Calculation

• If the LEA meets all three eligibility criteria and chooses to exercise the option to reduce: Step 1: Subtract the Year 1 IDEA-B Formula maximum entitlement from the Year 2 IDEA B Formula maximum entitlement • July 2013 Step 2: If the calculation from Step 1 demonstrates an increase in entitlement, divide the increase in half Education Service Center, Region 20 95

Voluntary Reduction Calculation, continued

• Step 3: If the LEA reserved CEIS (Coordinated Early Intervening Services) funds in Year 2, subtract the CEIS amount from the amount calculated in Step 2 (TEA currently has different guidance for this step. Refer to following slides) • Step 4: The result of Step 3 (or Step 2, if Step 3 is N/A) is the maximum amount the LEA may voluntarily reduce their MOE level for Year 2 July 2013 Education Service Center, Region 20 96

Voluntary Reduction and CEIS

• There are two relationships between the Voluntary Reduction option and CEIS: – Choosing to voluntarily reserve IDEA-B funds for CEIS can limit the amount the LEA voluntarily reduces MOE – Choosing to voluntarily reduce MOE can limit the amount the LEA voluntarily reserves for CEIS July 2013 Education Service Center, Region 20 97

Voluntary Reduction and CEIS

• The following slides will provide examples from Appendix D of the IDEA regulations pertaining to the relationship between the MOE Voluntary Reduction and CEIS •

However, TEA is currently not using this guidance from USDE

•

Instead, TEA states: When setting aside CEIS and determining the Voluntary MOE Reduction amount, the amounts used for both, when added together, cannot exceed the lesser of the two available amounts

July 2013 Education Service Center, Region 20 98

Voluntary Reduction Calculation Example 1*

 2011-2012 IDEA-B Formula maximum entitlement = $250,000  2012-2013 IDEA-B Formula maximum entitlement = $200,000 • • • • Step 1: $200,000 - $250,000 =

($50,000)

Step 2: N/A Step 3: N/A Step 4: The LEA

may not

voluntarily

reduce

their MOE level for 2012-2013 because the LEA did not receive an increase in entitlement *TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.

July 2013 Education Service Center, Region 20 99

Voluntary Reduction Calculation Example 2*

 2011-2012 IDEA-B Formula maximum entitlement = $250,000  2012-2013 IDEA-B Formula maximum entitlement = $300,000  2012-2013 For CEIS purposes, 15% of the IDEA-B entitlement is $45,000 but the LEA only reserves $5,000 for CEIS • • • • Step 1: $300,000 - $250,000 = $50,000 Step 2: $50,000/2 = $25,000 Step 3: $25,000 - $5,000 (CEIS) = $20,000 Step 4: The LEA

may

voluntarily

reduce

their MOE level for 2012-2013 by any amount not to exceed $20,000 *TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.

July 2013 Education Service Center, Region 20 100

Voluntary Reduction Calculation Example 3*

 2011-2012 IDEA-B Formula maximum entitlement = $250,000  2012-2013 IDEA-B Formula maximum entitlement = $300,000  2012-2013 LEA reserves the full 15% of their IDEA-B funds for CEIS, which is $45,000 • Step 1: $300,000 - $250,000 = $50,000 • • Step 2: $50,000/2 = $25,000 Step 3: $25,000 - $45,000 (CEIS) =

($20,000)

• Step 4: The LEA

may not

voluntarily

reduce

their MOE level for 2012-2013 because their CEIS amount exceeded 50% of the increase in entitlement *TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.

July 2013 Education Service Center, Region 20 101

Voluntary Reduction Calculation Example 4*

 2011-2012 IDEA-B Formula maximum entitlement = $250,000  2012-2013 IDEA-B Formula maximum entitlement = $350,000  2012-2013 15% of IDEA-B entitlement = $52,500 • • • • Step 1: $350,000 - $250,000 = $100,000 Step 2: $100,000/2 = $50,000 Step 3: LEA chooses to voluntarily reduce MOE Step 4: The LEA

may

only voluntarily

reserve

up to $2,500 for CEIS *TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.

July 2013 Education Service Center, Region 20 102

Voluntary Reduction Calculation Example 5*

 2011-2012 IDEA-B Formula maximum entitlement = $250,000  2012-2013 IDEA-B Formula maximum entitlement = $350,000  2012-2013 15% of IDEA-B entitlement = $52,500 • • • • Step 1: $350,000 - $250,000 = $100,000 Step 2: $100,000/2 = $50,000 Step 3: LEA chooses not to voluntarily reduce MOE Step 4: The LEA

may

voluntarily

reserve

up to $52,500 for CEIS *TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.

July 2013 Education Service Center, Region 20 103

Impact of ARRA Funds on Voluntary Reduction

• •

New Guidance on Impact of ARRA – Jan 2012

Previous Guidance from TEA:  ARRA IDEA-B Formula maximum entitlement funds are included as 2009-2010 entitlements

only

when comparing 2008-2009 to 2009-2010

Corrected

Guidance from TEA:  ARRA IDEA-B Formula maximum entitlement funds are included as 2009-2010 entitlements when comparing 2008-2009 to 2009-2010

AND

when comparing 2009-2010 to 2010-2011 July 2013 Education Service Center, Region 20 104

Old Guidance: 2008-2009

Fund 224/313

Old Guidance: 2009-2010

Fund 224/313 (Exclude 283/364) July 2013

Comparison of 08-09 to 09-10 Chart New Guidance: 2009-2010 2008-2009 2009-2010

Fund 224/313 Fund 224/313 Fund 224/313

AND AND

Fund 283/364 Fund 283/364

Definite Increase Definite Increase Comparison of 09-10 to 10-11 2010-2011

Fund 224/313

New Guidance: 2009-2010

Fund 224/313

AND 2010-2011

Fund 224/313 Fund 283/364

Possible Increase No Increase *

* Unless LEA did not receive ARRA funds, then possible increase Education Service Center, Region 20 105

Condition: Timing of Decision

• If the LEA is eligible to voluntarily reduce their MOE level and exercises the option, the decision must be made at the

beginning

of the year of the reduction – To ensure that the LEA actually reduces their spending by the eligible amount – To ensure the “freed up” funds are spent on ESEA activities during the year of the reduction  Code the “freed up” funds to a PIC other than PIC 23/33  Use a locally defined option code to uniquely identify the “freed-up” expenditures as ESEA activities July 2013 Education Service Center, Region 20 106

Reporting Voluntary Reduction

 All LEAs must report to TEA on their decision to voluntarily reduce MOE  Special Education Consolidated Grant application  BS6006 Budget Summary, Part 2 MOE Reduction section  Report one of the following choices: 1. The LEA is not eligible to reduce MOE 2. The LEA is eligible to reduce MOE but chooses not to exercise the option 3. The LEA is eligible to reduce MOE and chooses to July 2013 exercise the option  Must report the actual dollar amount of the reduction Education Service Center, Region 20 107

Reporting Voluntary Reduction

• TEA will verify the reduction amount during their MOE analysis – If the MOE analysis determines the LEA was not eligible to reduce but did reduce, or was eligible but exceeded the maximum eligible amount, the LEA may incur a finding July 2013 Education Service Center, Region 20 108

Reporting Voluntary Reduction

• Prior to 2013-2014, the LEA reported the voluntary reduction data on the following year’s Special Education Consolidated Grant application – The LEA was required to report on the 2011-2012 Special Education Consolidated Grant application on whether they voluntarily reduced MOE in 2010-2011 July 2013 Education Service Center, Region 20 109

Reporting Voluntary Reduction – Revision Effective 2013-2014

• Effective 2013-2014, the LEA will begin reporting on their decision concerning the voluntary reduction during the current year – 2013-2014: Report two sets of data: • • Voluntary Reduction data from 2012-2013

and

Voluntary Reduction data for 2013-2014 – 2014-2015 and beyond: Report current year • Example, report Voluntary Reduction data for 2014 2015 on the 2014-2015 SPED Consolidated application July 2013 Education Service Center, Region 20 110

Actual Amount of Reduction Reported

• TEA must report the actual amount of the LEA’s Voluntary Reduction to the Federal Government by May of the following year of the reduction – If the LEA voluntarily reduced MOE during the 2011-2012 school year, TEA reported the amount to the Federal government by May 2013 • It is imperative that the LEA report the actual amount of the Voluntary Reduction accurately to TEA • Submit an amendment before the amendment deadline to make any necessary corrections to the Voluntary Reduction data July 2013 Education Service Center, Region 20 111

Only Report Voluntary Reduction

• The reporting of MOE on the Special Education Consolidated Grant application is

only

applicable to the

Voluntary

MOE Reduction • Do

not

report on the Special Education Consolidated Grant application: – Decline in effort based on one of the five exceptions – Failure to maintain fiscal effort (noncompliance) – The amount of a refund due to TEA for MOE noncompliance from a previous year July 2013 Education Service Center, Region 20 112

Voluntary Reduction vs MOE Compliance

• Do not confuse MOE Voluntary Reduction with MOE compliance – Voluntary Reduction is an optional choice made by the LEA – Voluntary Reduction looks at entitlements, not expenditures, to determine eligibility – MOE compliance looks at expenditures, not entitlements – Voluntary Reduction looks at Federal IDEA-B entitlements, while MOE compliance looks at State and local expenditures July 2013 Education Service Center, Region 20 113

LEA’s Assertion for Voluntary Reduction

• If the LEA receives a Preliminary Letter of Findings of potential noncompliance from TEA for a decline in effort and the LEA had voluntarily reduced MOE, the LEA must use TEA’s response form “B” to justify that the decline in effort was actually a voluntary reduction • The LEA must indicate: – – – Eligibility criteria for MOE Voluntary Reduction was met Entitlement amounts for the comparison years CEIS amount reserved in the second year, if applicable July 2013 Education Service Center, Region 20 114

Documentation for Voluntary Reduction

• Letter of Determination from TEA, showing “Meets Requirements” – If the LEA does not have the letter available, the LEA may notate that on on their response form • TEA will be able to verify the LEA’s Determination status by other methods • Detailed general ledger: – Include expenditures for CEIS, if applicable – Include expenditures supporting “freed up” funds were spent for ESEA activities July 2013 Education Service Center, Region 20 115

Response to Finding of Potential Noncompliance

July 2013 Education Service Center, Region 20 116

Preliminary Letter of Findings

• After completion of MOE analysis, every LEA will be issued written notification from TEA:  Preliminary Letter of Findings, and  Preliminary Summary of Compliance with IDEA MOE Requirement (TEA’s IDEA MOE Template) • Prior to May 2012, only LEAs with a decline in fiscal effort were notified • Effective July 2012, all LEAs will receive a Preliminary Letter of Findings, showing either compliance or potential noncompliance July 2013 Education Service Center, Region 20 117

Response to TEA from All LEAs

• LEA in compliance – no action required • LEA identified as potentially noncompliant must submit a response to TEA within 30 days 118 July 2013 Education Service Center, Region 20

Response to TEA from LEA with Decline

• Review the data carefully and verify the data: – Verify Expenditure amounts • Ensure SFSF expenditures for special education were included, if applicable • Determine if Ed Jobs Funds were used for special education; if so, provide data to TEA in response – Verify Child Count numbers – If member of an SSA (ISDs only), verify Fiscal Agent expenditures on behalf of member are listed and are accurate – Review “local funds only” amount July 2013 Education Service Center, Region 20 119

Response to TEA from LEA with Decline

• Look for possible exceptions • Determine if the LEA utilized the option to voluntarily reduce MOE • Utilize response forms on TEA’s website: http://www.tea.state.tx.us/index4.aspx?id=4073 • All LEAs that receive a finding of potential noncompliance must submit Form “A” to TEA by the deadline • Do not send a refund to TEA at this point July 2013 Education Service Center, Region 20 120

Response to TEA from LEA with Decline

• Form “A”:  Concur with findings of noncompliance OR  Identify why the LEA does not concur: • Exceptions to MOE • Voluntary MOE Reduction (Local Adjustment to Fiscal Effort) •

Erroneous PEIMS data*

(TEA no longer allows this assertion)

*If TEA decides to allow this assertion in the future, use with caution because it may result in additional monitoring

July 2013 Education Service Center, Region 20 121

LEA Does Not Concur

• If the LEA does not concur with the findings, the LEA must submit Form “A”

AND

the applicable form(s): • • Exceptions to MOE Exception 1 Departure of Sped Personnel Exception 2 Decrease in Student Enrollment SPED • • Forms “C” through “G” Exception 1 – Form “C” Exception 2 – Form “D”

(This form may be eliminated by TEA in the future)

• • • Exception 3 Termination of Costly Program Exception 4 Termination of Long-Term Purchases Exception 5 Assumption of Cost by High Cost Fund Voluntary Reduction (local adjustment to fiscal effort) • • • Exception 3 – Form “E” Exception 4 – Form “F” Exception 5 – Form “G” Form “B”

Erroneous PEIMS Data –TEA no

Form “H”

This form has been longer allows this assertion

July 2013

discontinued

Education Service Center, Region 20 122

TEA’s Review of LEA’s Response

• After the LEA submits their response, TEA will review the LEA’s response and supporting documentation IF Response and Documentation justifies decline in fiscal effort:

Sufficiently Partially Insufficiently

THEN Amount due TEA will:

Be Zero Be adjusted Remain the same

July 2013 Education Service Center, Region 20 123

Final Determination

• After reviewing LEA’s response and supporting documentation, the LEA will receive:  Final Letter of Findings,  Final Summary of Compliance with IDEA MOE Requirement (TEA’s IDEA MOE Template) • A separate letter will be sent to the LEA with instructions for repayment of the noncompliant amount, if applicable July 2013 Education Service Center, Region 20 124

FY10 MOE Final Determination ON HOLD

• The Final Letters of Findings for FY10 (comparison of 2008-2009 to 2009-2010, July 2012 letters) are

ON HOLD

•

Pending clarification from USDE

July 2013 Education Service Center, Region 20 125

If Noncompliant

• If an LEA fails to maintain fiscal effort, the LEA must refund to TEA an amount equal to the amount by which the LEA failed to maintain effort, unless that amount exceeds the LEA’s IDEA-B Formula maximum entitlement for the year of the decline July 2013 Education Service Center, Region 20 126

Maximum Amount Due

• • If the amount due TEA exceeds the LEA’s IDEA-B Formula maximum entitlement for the year of the decline, the LEA will only be required to refund an amount that equals the entitlement Example: – 2010-2011 Decline in Fiscal Effort = $50,000 – 2010-2011 LEA’s IDEA-B Formula maximum entitlement = $40,000 – Amount Due TEA = $40,000 (the lesser of the two amounts) July 2013 Education Service Center, Region 20 127

Repayment

• Repayment amount to TEA must be made from non-Federal funds or from Federal funds for which accountability to the Federal government is not required • For SSAs, the Member District with the decline in fiscal effort will be required to refund TEA July 2013 Education Service Center, Region 20 128

OSEP Letters

(United States Department of Education Office of Special Education Programs)

July 2013 Education Service Center, Region 20 129

Letter to Gill

• LEAs may reduce their MOE level simultaneously with applicable exceptions AND with Voluntary Reduction – – Five exceptions to MOE: 34 CFR §300.204

Voluntary Reduction: 34 CFR §300.205

• The LEA is not restricted to using only one of these methods in a fiscal year for reducing MOE July 2013

Per OSEP Director Melody Musgrove; 57 IDELR 261 (OSEP 2011) http://www2.ed.gov/policy/speced/guid/idea/letters/2011-1/gill010611bmoe1q2011.pdf

Education Service Center, Region 20 130

Letter to Baglin

• If an LEA fails to meet the MOE requirement, the level of recovery of funds will depend on the degree to which the LEA failed to meet the MOE requirement, but would not, under any circumstances, exceed the amount of the LEA’s IDEA subgrant [IDEA-B Formula entitlement] for the year in question

Per OSEP Director Alexa Posny; July 26, 2006

July 2013 131

Letter to State Directors

• If an LEA fails to maintain fiscal effort, the... repayment must be from non-Federal funds or from Federal funds for which accountability to the Federal government is not required.

Per OSEP Acting Director Alexa Posny; December 2, 2009 (OSEP 10-5) http://www2.ed.gov/policy/speced/guid/idea/monitor/mfs-12-2-2009.pdf

July 2013 Education Service Center, Region 20 132

Letter to Copenhaver

• Medicaid funds may not be treated as State and local funds for the purposes of maintenance of effort calculations – Question: Are Medicaid funds that a district receives in the form of reimbursement considered to be Federal or local funds?

– Question: Are Medicaid funds expended by a district for support of special education and related services required to be included in the calculation of maintenance of fiscal effort?

Per OSEP Acting Director Patricia Guard; January 24, 2008

http://pattan.net-website.s3.amazonaws.com/files/materials/osep/CY2008/Copenhaver012408.pdf

July 2013 Education Service Center, Region 20 133

Letter to East (Retracted 2012)

• New MOE level established each year – The LEA’s MOE level is readjusted each fiscal year based on the level of expenditures for the immediately preceding fiscal year – Each year’s MOE obligation is based on the actual amount expended in the immediate prior fiscal year

Per OSEP Director Melody Musgrove; 57 IDELR 108 (OSEP 2011)

•

This guidance was withdrawn in the letter to Boundy dated April 4, 2012

July 2013 Education Service Center, Region 20 134

Letter to Boundy

• Withdraws the guidance to East (2011) • The level of effort an LEA must meet in the year after if fails to maintain effort is the level of effort it should have met in the prior year; not the LEA’s actual expenditures

Per OSERS Assistant Secretary Alexa Posny and OSEP Director Melody Musgrove; 112 LRP 16608 (OSERS/OSEP 04/04/12)

http://www2.ed.gov/policy/speced/guid/idea/memosdcltrs/osep-04-04-2012.pdf

July 2013 Education Service Center, Region 20 135

Effective Date of Boundy Letter

•

Original guidance from TEA stated:

East letter effective FY10 and FY11 – LEAs with a decline in effort establish a new base level based on the reduced spending amount • Boundy letter

might

be effective FY12 – LEAs with a decline in effort (not based on exceptions or Voluntary Reduction) may not establish a new base level; – Instead, the LEA will be required to maintain the level from the last year in which MOE was maintained

Now, TEA is waiting on further clarification from USDE before determining effective date

July 2013 Education Service Center, Region 20 136

EAST LETTER

Year 1 Spent: Year 2 Spent: $50,000 $40,000 Decline of $10,000 (did not qualify for exception or voluntary reduction) Paid questioned cost to TEA Established new base level of $40,000 Year 3 Must Spend: $40,000

BOUNDY LETTER

Year 1 Spent: Year 2 Spent: $50,000 $40,000 Decline of $10,000 (did not qualify for exception or voluntary reduction) Paid questioned cost to TEA Does NOT establish new base level Year 3 Must Spend: July 2013 $50,000 Education Service Center, Region 20 137

Best Practices

July 2013 Education Service Center, Region 20 138

Best Practices

 Requirement: • LEAs are required to monitor MOE  Best Practice: • Use TEA’s IDEA MOE Template to monitor and forecast MOE • Monitor MOE often during the current year to avoid a decline in effort, at a minimum: • At mid-year (February) • When proposing a new budget • Review MOE after-the-fact to be prepared for a possible finding of noncompliance July 2013 Education Service Center, Region 20 139

Best Practices, continued

 If SSA, Fiscal Agent should share data with Member Districts: – Amounts expended by the Fiscal Agent on behalf of the Member District • If an ISD, Fund 437 amounts that will be indicated on the PEIMS EDIT+PRFBD001 (SSA Financial Summary) so member can monitor MOE compliance • If a Charter School, FA expenditures on behalf of Member District so member can indicate these amounts when submitting their 032 Record July 2013 – IDEA-B Formula entitlement amounts • For purposes of determining eligibility for the Voluntary Reduction Education Service Center, Region 20 140

Best Practices, continued

 Develop a documentation/record-keeping system • Supporting documentation for possible exceptions  Be proactive, not reactive July 2013 Education Service Center, Region 20 141

Documents

• • • • • Independent Audit Reports Spending Trend Analyses Spreadsheets that Track MOE Copies of PEIMS EDIT+ Reports Supporting Documentation for Possible MOE Exceptions or Voluntary Reduction July 2013 Education Service Center, Region 20 142

Foster Relationships

 Foster strong relationships among business manager, special education director, and PEIMS coordinator • Determine responsibilities for record-keeping and decision-making  All appropriate personnel need to understand MOE • Business managers need to understand MOE implications before changing bookkeeping and/or coding procedures July 2013 Education Service Center, Region 20 143

Business Manager’s Role

• Ensure funds are properly accounted for • Ensure expenditures are properly coded • If a Fiscal Agent of an SSA, ensure that expenditures made on behalf of the Member District are correctly reported in the PEIMS 033 Record (applicable only to ISDs) July 2013 Education Service Center, Region 20 144

Business Manager’s Role

• Monitor current year expenditures – Use PEIMS Fall Submission PRF1D002 to estimate current year allocation of PIC 99 • Understand data allocation methodology – The Allocation Process for EDIT+ Reports: http://www.tea.state.tx.us/uploadedFiles/PEIMS/EDI T+/attachments/tips_allocproc.pdf

July 2013 Education Service Center, Region 20 145

PEIMS Coordinator’s Role

• Ensure PEIMS data is accurate – Run EDIT+ reports and compare to internal reports – Query data to identify unexpected variances July 2013 Education Service Center, Region 20 146

Special Education Director’s Role

• Ensure PEIMS data accurately reflects the special education program – Visit with business manager and PEIMS coordinator – Review and approve special ed budget – Review and approve special ed expenditures • Ensure compliance with State and Federal program and fiscal requirements July 2013 Education Service Center, Region 20 147

Contacts:

• ESC-20: Denise Dusek Federal Funding Specialist [email protected]

210-370-5378 OR Sherry Marsh Component Director, SPED [email protected]

210-370-5411 • TEA: Division of Federal Fiscal Compliance and Reporting [email protected]

512-463-9127 July 2013 Education Service Center, Region 20 148