L O U I S I A N A S TAT E S U P E R I N T E N D E N T O F E D U C AT I O N J O H N W H I T E

Maintenance of Effort (MOE) and Excess Cost Requirements

LASBO Fall Workshop November 7, 2012 2

Objective

Cover aspects of each Requirement:  New Applications in eGMS  No Child Left Behind (NCLB)  -includes applicable NCLB programs  Individuals with Disabilities Education Act (IDEA)  Excess Cost

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New for LDE and LEAs

Maintenance of Effort Calculations

have been included as applications in the eGrants Management System beginning in 2012

IDEA MOE Verification 4

MOE

MOE is calculated for both IDEA B and NCLB using the expenditures recorded in each LEA’s AFR.

If MOE is not met in aggregate, then a per pupil calculation is performed using student count data from SIS and/or SER.

Failure to meet MOE will result in a reduction in allocation for NCLB and repayment of funds for IDEA B.

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NCLB Overview Requirement

NCLB Overview

The RULE:

 MOE requires local educational agencies (LEAs) to demonstrate that the level of state and local funding remains relatively constant from year to year.

 An LEA may receive NCLB funds only if the SEA determines that the LEA has maintained its fiscal effort.

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NCLB REQUIREMENT

LDE must determine that either the combined fiscal effort per student or the aggregate expenditure of the LEA from state and local funds for free public education in the LEA for the preceding fiscal year was not less than 90% of the combined fiscal effort or aggregated expenditure for the second preceding year.

Example: For FY 2012-2013, compare FY 10-11 AFR actual expenditures to FY 09-10 AFR actual expenditures

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Expenditures from state and local funds should include:

1 2 3 4 5 6 7 • Administration • Instruction • Attendance and health services • Pupil transportation services • Operation and maintenance of plant • Fixed charges • Net expenditures to cover deficits for food services and student body activities

Expenditures from state and local funds should exclude:

1 2 3 4 5 • Community services • Capital outlay • Debt service • Supplemental expenses (declared disaster) • Federal funds

NCLB Sample Verification

NCLB MOE Adjustments Tab

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Example

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NCLB Fiscal Effort Per Pupil

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NCLB Fiscal Effort Per Student Calculation

Comparison of Average Per Pupil Expenditure (APPE) 𝐓𝐨𝐭𝐚𝐥 𝐄𝐱𝐩𝐞𝐧𝐝𝐢𝐭𝐮𝐫𝐞𝐬 𝐀𝐏𝐏𝐄 = 𝐒𝐩𝐞𝐜𝐢𝐚𝐥 𝐄𝐝 𝐒𝐭𝐮𝐝𝐞𝐧𝐭 𝐂𝐨𝐮𝐧𝐭  90% rule applies to APPE ($100 per pupil in year 1, then at least $90 per pupil in year 2)

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F AILURE TO M EET NCLB R EQUIREMENT

There are no exceptions for NCLB MOE.

Failure to meet NCLB MOE will result in the LEA’s current allocation being reduced by the same proportion that MOE was not met.

 Based on the calculated outcome most favorable to the LEA.

 This reduction is applied to all affected programs under NCLB for the LEA:           Title I, Part A Even Start Title I, Part C Title I, Part D Title II, Part A Title II, Part D Title III, Part A Title IV, Part A 21 st CCLC Rural and Low Income School Program

NCLB MOE WAIVER OPTION

 If an LEA fails to meet the MOE requirement, the LEA can opt to submit a waiver request to the USDOE.

 The reduction will be in pending status until a waiver is granted to the LEA  LDE will assist in the waiver request efforts

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IDEA O

VERVIEW

R

EQUIREMENT

IDEA Overview

The RULE: IDEA Part B funds must be used to supplement and, to the extent practicable, increase the level of State and local funds expended for the education of children with disabilities and in no way supplant State and local funds.

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IDEA Requirement

LEAs must demonstrate that the total amount, or average per capita amount, of State and local or local only school funds in the current fiscal year for the education of students with disabilities is at least equal to the total amount, or average per capita amount, of State and local or local only school funds actually expended for the education of students with disabilities in the prior year.

Note: There are no waivers for failure to meet IDEA MOE

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New Requirement

Must be able to show that MOE could have been met using the same method in the prior year Calculate all 4 options to meet MOE 1. State and local total expenditures 2. State and local per pupil expenditures 3. Local only expenditures 4. Local only per pupil expenditures

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3 Phase Process

Acknowledge MOE Assurance in eGMS Completed along with grant application (FY12-13Grant) – April to June 2012

Verification of MOE Expenditures

Compare Budget for Grant year (FY12-13) to Actual Expenditures from the most recent available AFR data (FY10-11) – October to December 2012 Confirmation of MOE Expenditures Compare Actual AFR data for Grant year (FY12-13) to Actual AFR data in the most preceding year (FY11-12) - January to February 2014

What does this mean?

Verification Review Districts should budget in one year an amount equal to or greater than actual expenditures in the preceding year in which data is available.

Budgeted vs. Actual Confirmation Review Districts should expend in one year an amount equal to or greater expenditures preceding year.

than in actual the Actual vs. Actual

IDEA Tab selections

• • • • • • • • • • Under Program Specific IDEA Annual MOE Confirmation/Verification IDEA MOE Adjustments IDEA Fiscal Effort Per Pupil IDEA MOE Exceptions IDEA Fiscal Effort Per Pupil w/Exceptions IDEA Local Only Funds Annual MOE Confirmation/Verification IDEA Local Only Funds MOE Adjustments IDEA Local Only funds Fiscal Effort Per Pupil IDEA Local Only Funds MOE Exceptions IDEA Local Only Per Pupil w/Exceptions

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Local Revenue Percentage Calculation available

The resource allocation revenue and expenditure data is published to the LDE website each year immediately after the AFR is closed, and can be accessed using the link below. The file that includes the calculated local revenue % for each fiscal year being compared is uploaded directly into eGMS as a link on the Only” page.

“Local Funds http://www.louisianaschools.net/divisions/edfn/resource_allocation.html

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Exceptions to IDEA MOE

An LEA may reduce its level of local expenditures below preceding fiscal year levels if the reduction is due to any of the following circumstances:

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The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel.

• A Reduction In Force is not allowable A decrease in the enrollment of children with disabilities.

• Its affects on LEA staffing, purchases, services, etc.

The termination of the obligation of the agency to provide special education services to a child with a disability that is an exceptionally costly program because the child - • Has left the jurisdiction; has reached the age at which the obligation has terminated or no longer need the services The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.

MOE 50% Flexibility Option

The 50% Rule • • If an LEA receives an increase in its IDEA flow-through allocation (611 funds) from one fiscal year to the next, the LEA may reduce its MOE obligations by up to 50% of the increased amount (34 CFR §300.205 (a)).

• An increase in the IDEA preschool allocation (619 funds) is not taken into consideration.

Local funds “freed up” must be used to carry out activities authorized by the NCLB.

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Provisions that limit MOE Flexibility Option

 Under IDEA section 616, the SEA determines that an LEA is not meeting the requirements of Part B of the Act, including meeting targets in the state’s performance plan (SPP). Therefore, if an LEA does not receive an SPP indicator determination of “Meets Requirements,” then the LEA cannot use the flexibility option.

 LEAs that have been identified as disproportionality cannot use the flexibility option.

having significant  If the SEA has taken responsibility for students with disabilities in an LEA because the LEA is unable to establish and maintain programs of FAPE or the SEA has taken action against the LEA under IDEA section 613(a), then the LEA cannot use the flexibility option.

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Grant Application – Program Specific for IDEA Part B

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Sample Calculation

Prior Year’s Allocation Current Year’s Allocation Increase Max Avail. For MOE Reduction (50%) Max Avail for EIS (15%) $9,000,000 $9,100,000 $100,000 $50,000 $150,000** FY 10-11 Expenditures $275,000 $50,000 MOE reduction $225,000 FY 11-12 Expenditures $257,000 MOE reduction amount may be limited by amounts used for Early Intervening Services (EIS)**

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F AILURE TO M EET IDEA R EQUIREMENT

Funds may be recovered from the LEA from a non-federal funding source (general fund) to pay the liability in the exact amount in which an LEA fails to meet the requirement.

 Based on the calculated outcome most favorable to the LEA.

 Waiver from USDOE not available!

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S

UPPLEMENT NOT

S

UPPLANT

A Q

UICK

L

OOK

Supplement – Federal Regulation

 Federal funds should be used to pay for services, staff, programs, or materials that supplement base expenditures paid for with state or local funds.

 Designed to ensure federal funds pay for something “extra”.

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Supplement – How to Avoid

Ask Yourself…

What would you do in the absence of federal funds?

LEA can rebuttal presumption of supplanting by demonstrating it would not have provided services if the federal funds were not available.

• • • Documentation for support includes: Fiscal or programmatic documentation to confirm that, in the absence of federal funds, LEA would eliminate staff or services in question Budget histories and related information State or local legislative action

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E

XCESS

C

OST

R

EQUIREMENT

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Excess Cost – The Federal Regulation

• Excess costs are the educational costs of any elementary or secondary school student with a disability that are in excess of the average per pupil expenditure in an LEA during the preceding fiscal school year.

I • The minimum average per pupil amount for children with disabilities in elementary schools must be computed separately from the minimum average per pupil amount for children with disabilities in secondary schools.

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Excess Cost - Expenditure Requirement

The LEA must provide funds from state and local sources for the education of special education students in amounts equal to or greater than education students.

those provided for regular

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Excess Cost - Measurement

Spend at least the average per student expenditure (APPE) on an elementary or secondary child with a disability before Part B funds are used to pay the excess costs of providing special education and related services.

Determined by calculation completed by LDOE

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Current Year Excess Cost Calculation & Data Sources

Calculated by LDE • AFR – Annual Financial Report o o o o o o Total Expenditures (local, state, and federal) Minus: Capital Outlay Expenditures Minus: Debt Service Expenditures Minus: Federal IDEA Part B Expenditures Minus: Federal, State, and local Title I, Part A Expenditures Minus: Federal, State, and local Title III, Parts A and B Expenditures Minimum Average Calculated Expenditures Minimum Average Per Pupil Amount Current Year SER Count Amount of state and local Special Education Expenditures that must be spent • • • • SIS – Student Information System ISIS – Integrated Statewide Information System SER – Special Education Report Database SPS – Sponsor/Site Database

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Excess Cost Assurance

 LEAs complete assurance in eGMS o o Acknowledge that previous data to support calculation is accurate Knowledge of meeting or failing requirement

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Contact Information

[email protected]

Nakia Jason, Audit Supervisor, LDOE − Email [email protected]

Marella Houghton, CPA, Audit Manager, LDOE − Email [email protected]

P.O. Box 94064 1201 N. Third St. Ste. 5-130 Baton Rouge, Louisiana 70804-9064 Telephone: (225) 342-8848 Toll Free: 1-(877)-342-453-2721 Fax: (225) 342-3523

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