Learning from Your Peers: Maintaining State Financial Support Perspectives from States, OSEP, and the Center for IDEA Fiscal Reporting

Welcome and purpose of session Learn from your colleagues at OSEP, CIFR, and other States about their experiences with maintenance of state financial support (MFS). Help prepare your State for the process of addressing potential MFS concerns.

Overview Background on MFS OSEP overview Panelists’ perspectives States: Gretta Hylton (Kentucky), Karla Miller (KY), John Payne (South Carolina) OSEP: Ruth Ryder, Matthew Schneer CIFR: Wayne Ball, Paula Burdette Open Q&A

The MFS requirement A State must not reduce the amount of State financial support for special education and related services for children with disabilities, or otherwise made available because of the excess costs of educating those children, below the amount of that support for the preceding fiscal year. IDEA section 612(a)(18)(A) 34 CFR section 300.163(a)

MFS basics Amounts made available, not amounts expended. Funds made available by the State, not just SEA, including any other State agency making funds available for special education and related services: Vocational Rehabilitation Corrections Mental Health May be met on total or per capita basis. No exceptions to MFS, only waivers.

Consequence of failure The Secretary shall reduce the allocation of funds under section 611 of the Act for any fiscal year following the fiscal year in which the State fails to comply with the MFS requirement by the same amount by which the State fails to meet the requirement. IDEA section 612(a)(18)(B) 34 CFR section 300.163(b)

Why is the MFS requirement important? Children with disabilities are entitled to a free appropriate public education (FAPE) under IDEA. States provide financial support to LEAs to support the provision of FAPE. The MFS requirement is designed to ensure that LEAs have the resources they need to provide special education and related services for children with disabilities.

Challenges of MFS Resolving MFS issues is challenging. Stakes are high. Every State’s system for funding special education is different, different funding sources, different terminology, different record- keeping. This means that there is no one methodology that is used by all States.

OSEP’s interaction with MFS Prior to the Great Recession the only time MFS was an issue was due to natural disasters (e.g. Hurricane Katrina). OSEP began examining State methodologies for MFS in 2009. OSEP also started receiving waiver requests. With the FFY 2013 application, OSEP added a data reporting requirement on MFS. In FFY 2014 CIFR was established.

Working with States When we learn of potential failures, we start an intensive, collaborative process. Include not just OSEP, but Budget Service and Office of the General Counsel. First step is to notify States informally that we have identified apparent/potential failure State has opportunity to provide additional information and have conversations with ED.

Determining accurate data Multiple calls discussing data to make sure it accurately captures amounts made available. Sometimes may include on-site work (less common now with CIFR). CIFR is a resource to help States with their MFS calculations, among other fiscal issues. Typically a State will send in multiple versions of data prior to arriving at data that is comprehensive and consistent with IDEA.

Panelists’ perspectives Gretta Hylton, State Special Education Director, Kentucky Karla Miller, IDEA Fiscal Analyst, Kentuck John Payne, State Special Education Director, South Carolina Ruth Ryder, Acting Director of OSEP Matthew Schneer, OSEP Associate Division Director Wayne Ball and Paula Burdette, CIFR TA Leads

Context What were the MFS concerns for your State? What prompted those concerns? What were some key challenges in addressing those concerns? What strengths did your State bring to the table? How did your State’s funding formula impact MFS reporting?

The process How, if at all, did you need to change your methodology for collecting and recording MFS data? Were there particular issues with collecting data from other State agencies? Which CIFR tools were most helpful in your work, and how were they used? How would you describe your relationships with and support from OSEP during this process? With/from CIFR? What is the process as CIFR begins work in a State? How can States best prepare for the TA process and address MFS concerns?

Moving forward What is different now and moving forward? What strategies or advice would you recommend to other States? For OSEP: What has OSEP learned during its work with States on MFS? How has that changed how OSEP works on MFS issues? What recommendations does OSEP have to prevent or minimize MFS issues?

What OSEP has learned Most State special education funding formulas are extremely complex. Obtaining MFS data from other State agencies can be challenging. The MFS waiver process is time consuming. Stakeholders do not always understand the consequence of an MFS failure.

OSEP recommendations on MFS Make sure multiple SEA staff members understand your special education funding formula. Document the steps taken to determine MFS levels. Identify key offices in other State agencies that have budget data for special education providers in their agency.

OSEP recommendations (cont’d) Work with your commissioner and legislative affairs office as budgets are being developed. Be proactive. Contact CIFR and/or OSEP if you suspect that MFS will not be met during a fiscal year. Additional funds can be made available the last day of the fiscal year and MFS can be met.

Questions from the audience Do you have questions regarding State-specific issues? Please contact CIFR: cifr_info@wested.org wball@air.org pburdet@wested.org See our website for more information: https://cifr.wested.org/

Thank you! The contents of this presentation were developed under a grant from the U.S. Department of Education, #H373F140001. However, those contents do not necessarily represent the policy of the U.S. Department of Education, and you should not assume endorsement by the Federal Government. Project Officer: Daniel Schreier.