1. Special Education Funding Education Service Center, Region 20 Sherry Marsh sherry.marsh@esc20.net 1

2. Supplement/Not Supplant Under IDEA, Section 613 (a)(2)(ii) (34 CFR §300.202(a)(3)), Part B funds must be used to supplement state, local, and other Federal funds used for providing services to children with disabilities. Prior to 1992, the Part B regulations included a "particular cost test" for determining whether supplanting had occurred. For example, if an LEA spent Part B funds to pay for a teacher's salary that was previously paid for with state and local funds, a supplanting violation had occurred. This "particular cost test" was removed from the regulations by an amendment published on August 19, 1992 (37 FR 37652) and that became effective on October 3, 1992. No requirement currently exists related to supplanting "particular costs." If an LEA maintains local, or state and local, effort, it will not violate the supplement/not supplant requirements of the IDEA. 2

3. So What? As long as the LEA maintains or exceeds its level of local OR state and local expenditures for special education and related services from year to year, either in total or per capita, then the Part B funds are, supplementing those local, or state and local expenditures and the LEA has met both its MOE and its supplement/not supplant requirements. 3

4. IDEA-B Allowable Expenditures Cost items that are used by all students should not be funded with Part B funds. For example, software curriculum that is used by all students should not be funded with Part B funds. Only supplemental software required by students with disabilities is allowable with Part B funds. Part B funds may be used for the costs of special education and related services, and supplementary aids and services, provided in a regular classroom or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. 34 CFR §300.208(a)(1). For a complete list of allowable expenditures, please review your eGrant Program Guidelines (Pages 39-81) 4

5. So, what about excess costs? 34 CFR §300.202(b)(1) stipulates that Part B funds must not be used to pay all of the costs directly attributable to the education of a child with a disability. 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 funds under Part B of the Act are used. (CFR §300.202(b)(2)(i)) An excess cost calculator (excel spreadsheet) is at: http://portal.esc20.net/portal/page/portal/esc20public/SpecialEducati on/ComplianceFundingIssues The LEA should calculate the excess cost based on previous year expenditures before applying for the new year's Part B entitlement. 5

6. Where does MOE come in? After meeting excess cost requirements, LEAs must also meet the MOE requirements from year to year 34 CFR §300.203 requires that each LEA receiving IDEA-B funds maintain fiscal effort from its local and state funds to support students with disabilities This state and local effort should be the amount it takes to provide core special education services if federal funds were not available 6

7. 7 Requirements Use of Funds Federal Special Education Funds State Special Education Block Grant Foundation School Program (FSP) And Local Funds Maintenance of Effort (34 CFR §300.203) Excess cost of serving students with disabilities (34 CFR §300.202) Coordinated early intervening services (CEIS) (34 CFR § 300.226 ) Services over/above what is funded with state/local funds At least 55% must be spent for services for students with disabilities (TEC §42.151(h), TAC §89.1125 and TAC §105.11) Generated by all students enrolled in the district (TEC §42.003) Special services, materials, supplies, and equipment directly related to the development and implementation of IEPs, not ordinarily purchased for the regular classroom. Services, materials, supplies, and equipment provided to all students

8. State Special Education IDC November 2009, the SBOE adopted a 45% indirect cost (IDC) rate for the state special programs (special education, gifted and talented and bilingual) and 40% for career and technology. However, no matter what the IDC rate, districts will still need to maintain fiscal effort of direct services with State and Local funds. So, districts will have to make up the increased percentage that goes toward indirect costs from another local fund source. Please note, the indirect cost rate for IDEA-B remains at the federal restricted indirect cost rate, or 8%, whichever is less. 8

9. MidYearReminders Special Education Maintenance of Effort Special Education Maintenance of Effort PEIMS EDIT+ Turnaround Reports PRF3D022 Special Education Maintenance of Effort (MOE) This report parallels the Maintenance of Effort report produced by the Special Education Division of TEA. It is used to ensure that school districts comply with the MOE requirements of the Individuals with Disabilities Education Act (IDEA). The report gives districts an early indication of their compliance or non- compliance with MOE so that districts can take action either to correct erroneous data or to prepare the necessary documentation. See the PRF3D022 Addendum for information about algorithm rules and rules for determining compliancy.PRF3D022 Addendum Note 1: This report is available only: (1) after 1st Submission is closed and no extensions are outstanding OR (2) in an Approved collection. 9

10. Where does the data come from? PEIMS Submissions PEIMS Midyear Submission Record 032 Record 033 PEIMS Summer Submission Record 163 Fund Code Districts-199; Charters-Net Asset Code 420; SSA-437 Only For FY 2010 & 2011 fund 266 or 366 (SSA) will be used Program Intent Codes PIC 23 vs. PIC 99 Function Codes 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 10

11. SCHOOL FINANCE CODES An Administrator’s Guide To 11

12. PRF3D022: Special Education Maintenance of Effort PRF3D022: Special Education Maintenance of Effort 12

13. Special Education Maintenance of Effort Special Education Maintenance of Effort MOE – Lines 1 and 2 The Actual Allocation Process references the following: OBJECT CODE 6xxxx FUNCTION CODE = 11, 12, 13, 21, 23, 31, 32, 33 FUNCTION CODE = 34, 36, 41, 51, 53 FUND CODE = 199, 420 Special Ed MOE Process limits the data where PROGRAM CODE = 23 Shared Service Arrangements SSA TYPE CODE = 11 FUND CODE = 437 FISCAL_DISTRICT_ID = District Requested Amount attributed is reported by the fiscal agent for districts on the 033 record. Charter schools will have reported direct expenditures on 032 record per information provided by fiscal agent. 13

14. Special Education Maintenance of Effort Special Education Maintenance of Effort MOE – Lines 4 and 6 PEIMS data related to 08-09 figures: PEIMS collection : MidYear 09-10 (actual 08-09 audit report) Line 4: - Prior Year Count of Special Education Students : Fall 07-08 collection reference PRF5D010 for total Special Education Child/Counts (equals total number of Fall PEIMS 163 Special Education enrollment records reported). Line 6: - Current Year Count of Special Education Students : Fall 08-09 collection (reference PRF5D010 for total Special Education Child/Counts (equals total number of Fall PEIMS 163 Special Education enrollment records reported). For a roster of students in each collection reference PRF5D027 – Special Education Roster by Grade. 14

15. Exceptions 1.The voluntary departure, by retirement or otherwise, or departure for just cause, of special education personnel RIF/transfer of employee to non-special ed. role does not qualify Position does NOT have to be replaced 2.A decrease in the enrollment of children with disabilities 3.The termination of the obligation of the LEA to provide a program of special education to a particular child with a disability that is exceptionally costly (TAA Letter Coming!) 4.The termination of costly expenditures for long-term purchases, such as acquisition of equipment or the construction of school facilities (Capital Outlay Expenditures) 5.The assumption of cost by the high cost fund 15

16. Exceptions & Documentation LEAs may adjust MOE Baseline with proper documentation related to each of the exceptions If found out of compliance TEA will request submission of this documentation TEA Forms D-G: http://www.tea.state.tx.us/index4.aspx?id=4073 16

17. FOR MORE INFORMATION, PLEASE CONTACT: SPECIAL EDUCATION FUNDING: Sherry Marsh 210-370-5411 sherry.marsh@esc20.net PEIMS SUPPORT: Judi Sparks 210-370-5322 judi.sparks@esc20.net 17