Special Education Maintenance of Effort (MOE) The next training module is on special education maintenance of effort, or MOE.

Objectives Participants will learn: What is MOE? What are the parts of MOE? How is MOE calculated? What might count as exceptions? What do we do if we get a letter from TEA? How do we avoid the problem? Here are the topics we will be covering in this module: What is MOE? What are the parts of MOE? How is MOE calculated? What might count as exceptions? What do we do if we get a letter from TEA? How do we avoid the problem?

Definitions and Reports We often find that problems in understanding MOE come about because people need definitions of some of the concepts. This presentation will, then, spend some time on defining terms and learning the important reports and how to read them and then we will move on to the actual calculations, exceptions, and other concepts so that “no person responsible for MOE is left behind”…

MOE — What Is It? “Except as provided in §§300.204 and 300.205, funds provided to an LEA under Part B of the Act 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.” [ 34 CFR §300.203 (a) ] This is what it says in the Code of Federal Regulations for IDEA 2004. 34 CFR §300.203 (a) General. Except as provided in §§300.204 and 300.205, funds provided to an LEA under Part B of the Act 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.

MOE — What Is It? LEAs must spend . . . 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: Local funds only The combination of State and local funds [ § 300.203 (b) (1) ] Note: In Texas, local and state funds are all in Fund 199. § 300.203 (b) (1) …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. In other words, you are agreeing that by taking the federal money, you will spend at least as much from your general fund from one year to the next to support the special education program. Your spending is your “effort”, therefore you spend at least as much the next year to maintain your effort. Hence the term, maintenance of effort, or MOE. In Texas schools, state and local funds are all in Fund 199. Many of the other federal funds your district receives also have MOE requirements, such as No Child Left Behind, but the formula and rules are completely different. So, today, we are only talking about special education MOE.

What Are Direct Services? TAC 89.1125 defines allowable expenditures 85% includes all allowable expenditures State special education funds may only be used for Personnel, special materials, supplies and equipment Directly related to the development and implementation of the IEPs Not ordinarily purchased for the regular classroom In this presentation we will sometimes use the term direct services and indirect services. In the context of this workshop, direct services means those expenditures allowable under TAC §89.1125, and are therefore allowable in the 85% required to be spent each year from state funds. This is not MOE, but is an important concept to understand to compare 85% and MOE figures. TAC 89.1125 says that state special education funds may only be used for personnel, special materials, supplies and equipment which are directly related to the development and implementation of the IEPs not ordinarily purchased for the regular classroom.

What Is the 85% Rule? District must spend at least 85% of State Special Education Block Grant amount in direct special education services State spending requirement Has nothing to do with the federal MOE requirement Before we go further with what MOE is, let’s look at what MOE is not. Districts often confuse MOE with something called the 85% rule. What is 85%? It is just a calculation of how much of your state special education block grant money you spent that year. It is 85% of the current year’s state special education block grant revenue (general fund). Since it is in the general fund, however, it is some, but not necessarily all, of the money also used in the federal MOE calculations. Let’s look at some examples of how spending the state revenue relates to 85% and relates differently to MOE.

85% versus MOE? Scenario #1 FY03: LEA receives $100,000 in state special education dollars. They spent $95,000 in Fund 199, PIC 23, direct services Result: Met 85% FY04: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85%, but not MOE NOTE TO THE PRESENTER: There are 4 of these slides, similar but different, all covering different scenarios. Read each one, with the important part being the Result in the second year. Point out that these examples look strictly at the numbers for illustration’s sake and do not take exceptions into consideration. Scenario #1 FY03: Met 85% Rule because $95,000 is more than 85% of $100,000 FY04: Met 85% Rule because $85,000 is 85% of $100,000. Did not meet MOE because expenditures decreased from $95,000 to $85,000 from year 1 to year 2.

85% versus MOE? Scenario #2 FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% FY04: LEA receives $120,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met MOE, but not 85% (at least $102,000 required for 85%) Scenario #2 FY03: Met 85% Rule because $85,000 is 85% of $100,000 FY04: Did not meet 85% Rule because $85,000 is less than 85% of $120,000. Met MOE because expenditures remained the same ($85,000) year 1 to year 2.

85% versus MOE? Scenario #3 FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% FY04: LEA receives $120,000 in state special education dollars. They spent $80,000 in Fund 199, PIC 23, direct services Result: Did not meet MOE or 85% Scenario #3 FY03: Met 85% Rule because $85,000 is 85% of $100,000 FY04: Did not meet 85% Rule because $80,000 is less than 85% of $120,000. Did not meet MOE because expenditures decreased from $85,000 to $80,000 from year 1 to year 2.

85% versus MOE? Scenario #4 FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% FY04: LEA receives $120,000 in state special education dollars. They spent $102,000 in Fund 199, PIC 23, direct services Result: Met both MOE and 85% Scenario #4 FY03: Met 85% Rule because $85,000 is 85% of $100,000 FY04: Met 85% Rule because $102,000 is 85% of $120,000. Met MOE because expenditures increased from $85,000 to $120,000 from year 1 to year 2. (Remember that these examples look strictly at the numbers for illustration’s sake and do not take exceptions into consideration.) State: I think you can probably see by these examples that whether or not you spent 85% of your state special education money has nothing to do with whether or not you met MOE.

What Are the Parts of MOE? Now that we have cleared up the 85% misconception, let’s go to topic #2: What are the parts of MOE?

Data Sources for MOE Fund 199, PIC 23, Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 SSA expenditures on behalf of member LEAs, found on the 033 record submitted by SSA IDEA-B Formula maximum entitlement, including Early Intervening Services (EIS) expenses, if any Child count, IDEA eligible, from fall PEIMS submission of 163 records ECI set-aside from Summary of Finances Allocated versus unallocated reports These are the data sources that go into the formula to determine MOE compliance. There are A. certain functions found in program intent code 23 of fund 199, B. the SSA expenditures for a district, if your district is a member of an SSA, C. the IDEA-B Formula maximum entitlements, including expenses for Early Intervening Services (EIS), if any D. the district’s special education child counts, E. the ECI set-aside amount. F. Allocated versus unallocated reports The next section of slides covers each one of these in more detail.

Is It Only Fund 199? 161-198 . . . Locally Defined Classification Used, at the option of the school district, to further classify specific revenues and related expenditures For PEIMS reporting these accounts are converted to Fund 199 One simple part of the MOE formula is that it is only one fund source—fund 199. However, if your district breaks funds out into locally defined classifications, using fund numbers 161 to 198, they will all be rolled into Fund 199 for PEIMS reporting, and therefore MOE, purposes. (Financial Accountability System Resource Guide, 1.4.2 )

What Is PIC? Program Intent Code. Codes used to account for the cost of instruction and other services that are directed toward a particular need of a specific set of students PIC 23 Special Education. Costs incurred to evaluate, place and provide educational and/or other services to students who have Individual Educational Plans (IEP) approved by Admission, Review and Dismissal (ARD) committees PIC 99 Undistributed. Charges not readily distributed to program intent codes are classified here. May be used for costs not clearly attributable to a specific program intent Before we can discuss how MOE is calculated, we are going to define and clarify all the parts that go into the formula. What’s first? One of the most important parts of the coding structure that is part of MOE is the Program Intent Code, or PIC. PICs are codes used to account for the cost of instruction and other services that are directed toward a particular need of a specific set of students. In other words, the intent of spending those funds is aimed at a specific program, hence program intent. For special education MOE we are concerned with only 2 PICs: 23, special education, and 99, undistributed. PIC 23 will be used when you know up front it is a special education expenditure, such as your special education teachers’ salaries. PIC 99 is used when districts have expenses that apply to the whole campus or district, such as expenses for the principal, so those costs are “undistributed” to specific programs, and grouped into PIC 99. Some of the PIC 99 expenditures will be redistributed later by a PEIMS formula, and added to what you coded directly to PIC 23, giving a larger total. We’ll look at a specific example later. Reference: Financial Accountability System Resource Guide, 1.4.15 Program Intent Codes

Where To Find PIC in Coding Example: 199 - 11 - 6411 . 00 - 101 - 7 23 - XXX OR 199 – 11 – 6411 . 00 – 101 – 7 23 - XXX Where does the PIC code occur in the coding structure? Right after the fiscal year designation.

Are There Other PICs Besides 23? Examples: 11 Basic Educational Services 21 Gifted and Talented 22 Career and Technology 24 Accelerated Education 25 Bilingual Education and Special Language These are examples of other PICs districts use, but remember, we’re only concerned today with PIC 23, special education, and the part of PIC 99 that ends up being allocated to PIC 23.

How To Read Edit + Headings Report Number 1 2 3 4 5 Handout page 1: Edit+ PRFBD001 Before we go further, let’s review the important parts of an Edit+ report heading so you will be able to make sense of all the pieces of paper you will have to handle to keep track of MOE. Look at your handout, page 1. Look to the top left hand corner. You will see there a number like this one: PRFBD001. That is the report #, and we will reference these often. The number right under it is a version #, and while it is probably an important number to someone, is not important to how we will be reading reports for MOE, so we will not be using that number at all on any report. Now, look to the right of the report number to the main part of the heading. For ease of reference the slide has numbered each line in the heading. Line 1 tells you it is an Edit+ report. Line 2 tells you the actual name of report PRFBD001. This one is called “Actual SSA Financial Summary by Fund and SSA Type”. Line 3 tells you which PEIMS collection. It is critical to pay attention to the differences between line 3 and line 4. It may have been submitted in January of 06, but it is FOR FY 2005. It is very easy to pull out the wrong report since both fiscal years are at the top of the report. This report has a bottom line that says “Unallocated”. That is important on some of the other Edit+ reports when we will see a report that says “Unallocated” and a different one for the same time frame that says “Allocated”. Now let’s move on to the content of the reports.

What Is 033 Record? Name of PEIMS record used to collect SSA fiscal agent expenditures on behalf of member districts Reported through Edit+ PRFBD001 in mid-year collection Only Fund 437, Code Type 11, Special Education (other than Regional Day School Program for the Deaf or Visually Impaired) Handout pages 1 and 2: Edit+ PRFBD001 for two years One of the factors in MOE calculations is what is found in the PEIMS 033 record, and is reported through Edit+ PRFBD001. You’ll find these in the handout pages 1 and 2, showing 2 different fiscal years. This doesn’t apply to those districts not part of a special education shared service arrangement. SSAs for VI, RDSPD, and other special programs don’t count here—only those “regular” special education SSAs. Fund 437 is a fund classification used by the fiscal agent of a shared services arrangement to account, on a project basis, for funds for special education, other than regional day school for the deaf and State Supplemental Visually Impaired (SSVI). Fund 437 is used to account for the fiscal agent portion of a special education shared services arrangement. (From Financial Accountability System Resource Guide, 1.4.2 Fund Codes) The 033 record is submitted by the SSA fiscal agent in the mid-year PEIMS submission. It is submitted in January of one fiscal year for the fiscal year that just closed. So, the January 2007 mid-year submission reflected the 05-06 fiscal year. Look at your handout, pages 1 and 2, to see an example for FY 2006 and 2005 for our Sample district. See the dollar figure marked. That is how much the SSA reported spending on our sample member district’s behalf. In your reports, the county district numbers would appear for each SSAs, allowing you to identify each member LEAs amount. This report is only accessible by the fiscal agent, so it should be run and shared with each member district.

033 Record Dilemma or… “That’s Not What We Paid the SSA!” District Payment: $33,250 Edit+ Amount from 033 Record: $33,250 District Payment: $59,537 Edit+ Amount from 033 Record: $17,086 District Payment: $91,937 Edit+ Amount from 033 Record: $98,762 Here is a misconception or misunderstanding uncovered when MOE became a common topic. The amount SSA member district pays to a fiscal agent may or may not be the figure the SSA fiscal agent reports on the 033 record as having spent on behalf of the member district. Look at these 3 examples, comparing what the member district paid into the fiscal agent, with the amount the fiscal agent reported having spent on the member district’s behalf. All of these are “legal”, if they follow the SSA agreement on how this will be calculated. The amount a member district pays into the SSA doesn’t have to match the figure the SSA reports having spent on the district’s behalf. Let’s look at Sample ISD How much did Sample ISD pay to the SSA in FY05? Check out Handout page 6. (Answer: $213,159) How much did the SSA report having spent on Sample ISDs behalf that year? Try handout page 1 (Answer: $222,678) So, the SSA spent more on the district’s behalf than they paid in. Is that the same for FY06, pages 2 and 10? (Answer: No. Sample paid in $293,977, but the fiscal agent reported $253,966) Is that legal? Yes.

Can Increase in Federal Entitlement Be Used To Help with MOE? Adjustment to local fiscal efforts apply in certain fiscal years “Amounts in excess.… for any fiscal year for which the allocation received by an LEA under §300.705 exceeds the amount the LEA received for the previous fiscal year, the LEA may reduce the level of expenditures otherwise required by §300.203(a) by not more than 50 percent of the amount of that excess.” [ §300.205 (a) ] But… Handouts pages 3 and 4: WebSAS IDEA-B Formula Maximum Entitlements The next figure used in MOE calculations looks at the increase in federal entitlement from one year to the next. This figure is calculated for each district of an SSA, whether or not the fiscal agent flows any of the federal money to the member districts. Look at handout pages 3-4. The handouts are from WebSAS, but eGrants will have something similar. The schedule for a single member district doesn’t, of course, have multiple district information, but it has the same elements. IDEA allows districts to use up to 50% of the increase in maximum IDEA-B Formula entitlement amounts to help you meet MOE. This is calculated using maximum entitlements and doesn’t ask how much you spent—just how much you received. Remember, it is 50% of the increase from one year to the next, not the full entitlement, nor does it have anything to do with how much you spent of your federal funds, only received. IDEA 97 only allowed districts to use 20% of their funds to help meet MOE. IDEA 2004, which went into effect for the 2005-2006 school year moved that to 50%. That sounds good on the surface, but…

Early Intervening Services Early intervening services may impact MOE… “An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, … to develop and implement coordinated, early intervening services, … for students … who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment.” [ §300.226 (a) ] There’s this new “thing” in IDEA called Early Intervening Services, or EIS, that could interfere with a district’s being able to use the increase in federal entitlements to assist in meeting MOE. Let’s see what it says: An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, … to develop and implement coordinated, early intervening services, … for students … who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment. What does this mean? It means that a district could use some federal money, up to 15% of its IDEA-B Formula entitlement, to offer assistance to those students who are struggling but who have not yet been found eligible for special education services. That’s a good thing, isn’t it? Yes, but it could impact MOE.

What Does That Mean? If using up to 15% of the entitlement for early intervening services, it will reduce amount of federal entitlement increase applied toward MOE How much? Up to all of it. See IDEA-B regs Appendix D for examples of how EIS impacts MOE http://www.tea.state.tx.us/special.ed/rules/pdf/idea06fr.pdf [ § 300.205 (d) and §300.226 (a) ] EIS can impact your MOE because if you use up to 15% for EIS, it could reduce the amount of federal entitlement increase you can apply toward MOE. How much? Up to all of it. Appendix D to IDEA 2004 has a very clear example of how this is calculated, if you wish more information on it. If you are currently using 15% or were planning on using it for EIS you certainly need to understand the MOE implications. However, there is one more aspect of EIS that you need to know. A district whose special education data indicates a problem with disproportionality may be required by the State to expend all EIS funds in a manner that specifically addresses the factors resulting in the over-representation. Districts should understand that if a specific EIS-funded program fails to meet this requirement, use of EIS funds for such a program would likely be unallowable. For related reasons, districts with performance-based monitoring in progress should consider avoiding the use EIS funds for specific programs. Reference: http://www.tea.state.tx.us/special.ed/rules/pdf/idea06fr.pdf, page 46817. Reference: http://www.tea.state.tx.us/special.ed/eis/ Reference: § 300.646 (b)(2) Disproportionality

Will Using 50% of the Federal Increase Significantly Help in Meeting MOE? Only if LEA gets large increases 20% of large IDEA increases in prior years might actually be more than 50% of small IDEA increase, especially if IDEA-B funds are used for early intervening services May have to spend more locally to make up difference When the regulations for IDEA 2004 changed the percent of increase from 20% to 50%, it seemed that it would really help districts in meeting MOE. However, it will help only if you get large increases. In fact, 20% of a large IDEA increase in prior years might actually be more than 50% of a small IDEA increase, especially if you use IDEA-B funds for early intervening services. The lesson here is that you may actually have to spend more locally to make up the difference. Let’s look at some examples.

Example 03-04 $35,000 04-05 $50,000 05-06 $60,000 Increase between 03-04 to 04-05 = $15,000 20% of that increase is $3,000 Increase between 04-05 to 05-06 = $10,000 50% of that increase is $5,000 15% of $60,000 is $9,000 Spending $5,000-$9,000 for EIS leaves nothing that will count for MOE, or $3,000 short for MOE A district’s maximum IDEA-B Formula entitlements were $35,000 in 03-04, $50,000 in 04-05, and $60,000 in 05-06. This is an increase of $15,000 between 03-04 to 04-05. 20% of that increase is $3,000 that could be used to help a district with MOE. Why 20%? Because that was all IDEA 97 allowed. Between 04-05 to 05-06, the difference was $10,000, so 50% of that increase is $5,000. IDEA 2004 is the hero—moving 20% to 50%. The dollar increase in entitlement was less than the prior year, but being able to use 50% of the increase rather than 20% makes it $2,000 more that could be used for MOE. Sounds good… But, if a district is using 15% of $60,000 for EIS, they could use as much as $9,000. Spending more than 50% of the increase, or in this case, more than $5,000, means the district can count none of the increase for MOE. This actually puts you $3,000 short from the year before in meeting MOE. Let’s look at another example.

Another Example 03-04 $35,000 04-05 $50,000 05-06 $55,000 03-04 $35,000 04-05 $50,000 05-06 $55,000 Increase between 03-04 to 04-05 = $15,000 20% of that increase is $3,000 Increase between 04-05 to 05-06 = $5,000 50% of that increase is $2,500 Without spending anything for EIS, $500 short from the year before May have to spend more locally to make up difference A district’s maximum IDEA-B Formula entitlements were $35,000 in 03-04, $50,000 in 04-05, and $55,000 in 05-06. This is an increase of $15,000 between 03-04 to 04-05. 20% of that increase is $3,000. Between 04-05 to 05-06, the difference was $5,000, so 50% of that increase is $2,500. 20% of the increase between 03-04 and 04-05 was $3,000, so you are already $500 short, and that is without spending anything locally for EIS. The lesson? You may have to spend more locally to make up the difference. Between EIS and smaller federal increases, it is highly likely you will need to pick up some spending locally to maintain effort, if everything else remained the same.

Sample LEA Example 04-05 $283,504 05-06 $295,365 04-05 $283,504 05-06 $295,365 Increase of $11,861 50% of increase = $5,930.50 for MOE 15% of 05-06 maximum entitlement = $44,304.75 Now look back at the handouts of pages 3 and 4, our Sample LEA. Their maximum entitlement for FY05 was $283,504. For FY06 it was $295,365. That was an increase of $11,861. They can use 50%, or $5,930.50 to count toward meeting MOE, IF… They didn’t spend up to that much for early intervening services. They were eligible to spend 15% of the FY06 maximum entitlement for EIS, or $44,304.75, If they do so, they can use none of the $5,930.50 to help toward MOE.

Child Count Includes eligible students, ages 3 through 21, who: meet the requirements of 19 TAC §89.1040 (Disabling Conditions) and 19 TAC §89.1050 (ARD Committee) are enrolled and receiving special education and related services through an IEP or individualized services plan as of the PEIMS snapshot date have on file a current individualized education program or individualized services plan and have on file a current full and individual evaluation Students with disabilities who graduate under 19 TAC §89.1070(c) and return to school may not be counted on the IDEA Part B child count [ Pursuant to 34 CFR §300.102(a)(3) ] The fourth piece of this puzzle, and the simplest piece, is how many students you have in special education as of the fall PEIMS snapshot date. That number is reported in Edit+ PRF5D010 Child Count by Funding Type. Handouts pages 14-15: Edit+ PRF5D010 This is from the fall PEIMS collection for the 2 years being compared. Look on the handouts on pages 14-15 and you see the counts for our Sample District. This count is taken from the 163 PEIMS special education records and is a head count as of the October snapshot date. TEA did not count ineligible students in the letters mailed in the fall of 2006, so you use the total number of eligible IDEA-B students. Ineligible students fall into 4 categories: Too young (younger than 3 on September 1—ECI) Too old (older than 22 on Sept. 1) Full Individual Evaluations on the snapshot date are older than 3 years old—out of date FIEs Students who graduated under 19 TAC 89.1070 (c) and returned to school Our district didn’t have any ineligible students in 05, and had 1 in 06. Resource: PEIMS instructions for the 163 Record.

What Is ECI Set-Aside? Found on the District’s Summary of Finances http://www.tea.state.tx.us/school.finance/funding/sofweb7.html Shown as negative number Adjustment taken “off the top” or “set aside” at state level Handout, page 5: Summary of Finance The next factor in the MOE calculation is the ECI set-aside. The figure for your district is found on the District’s Summary of Finances in the special education section. It would always be shown as a negative number, because it is being “set aside” out of your district’s money to help with some joint TEA/ECI ventures at the state level. Look at page 5 of your handout. You will see several things marked. At the top of the page two column headings are marked: LPE for Legislative Planning Estimate, and FIN for Final. Depending on the time of year you run the report, the headings might change. The important part here is that there are 2 columns that correspond to the bottom figures marked in the Early Childhood Intervention Set-Aside row. The dollar figures don’t match, but are very close. Which one do you use? It doesn’t matter because TEA’s figure might be slightly different because they may have more current SOF data than what is posted to the web. and when they are within a few dollars of each other, it doesn’t matter in the long run. When we get to TEA’s official report, you will see they didn’t use either figure, hence the question mark on Handout 5. Just pick one and move on. LEAs have no influence over this figure. This is a state calculation. There is nothing the district can due to change this figure. This might appear to be taking state revenue from districts, but it is a positive when considering MOE because you can add it back in to help in MOE. This is the only figure used in MOE where you don’t need the information from 2 fiscal years. You just need it for the most current of the 2 years you are comparing. So, if you are comparing 04-05 and 05-06, you only need the ECI Set-Aside figure from the 05-06 summary of finance.

What Is the Most Confusing Part of Understanding MOE? Now that we have cleared up the 85% misconception, let’s go to topic #2: What are the parts of MOE?

Or, how to decide how much of PIC 99 belongs to special education? ALLOCATION… Or, how to decide how much of PIC 99 belongs to special education? ALLOCATION… Or, how do you decide how much of PIC 99 belongs to special education? What in the world does that mean?

Unallocated Report vs. Allocated Report What is the difference between an unallocated report and an allocated report? Unallocated matches the “books,” or general ledger Allocated is what is on the general ledger for PIC 23, PLUS part of what had been in PIC 99 What is the difference between an unallocated report and an allocated report? Unallocated matches the “books”, or your general ledger. Allocated is what is on the general ledger for PIC 23, PLUS part of what had been in PIC 99. Let’s look at the definition.

What Is Allocation? Allocation process Is a report type of template Does not change transaction information within the general ledger system Uses payroll and staff data for instructional FTEs (full time equivalents of staff), as recorded under function 11, Instruction, as a basis to allocate costs from PIC 99 Full use of specific program intent codes in function 11 is essential for the optimum functionality of the allocation process Undistributed Program Intent Code 99 used when a school district elects not to allocate costs The next new vocabulary word is allocation, talking about program intent code 99. Remember earlier in the presentation we discussed where in the coding structure the program intent code can be found—right after the fiscal year? And the example showed it as PIC 23? You would also look there to find anything your district was coding to PIC 99. The allocation process is a report type of template and does not change transaction information within the general ledger system. The allocation process uses payroll and staff data for instructional FTEs, as recorded under function 11, Instruction, as a basis to allocate costs from PIC 99. Full use of specific program intent codes in function 11 is essential for the optimum functionality of the allocation process. The Undistributed Program Intent Code 99 is to be used when a school district elects not to allocate costs. In other words, if you have a choice, code to a more specific PIC, and you have less in PIC 99. Having less in PIC 99 means less to allocate. Having less to allocate means you have more control over MOE because it is closer to what you spent directly. Reference: Financial Accountability System Resource Guide, 1.4.15.4 Compliance Monitoring - Program Intent Codes

What Allocates? Amounts dispersed from the General Fund, PIC 99 (Note: The use of PIC 99 is district choice in most instances) Fund 199 (including local use of 161-198) Objects 6XXX DC Functions 11, 12, 13, 21, 23, 31, 32, 33 IC Functions None Not Org 998 or 7XX What allocates from PIC 99 to PIC 23 and other PICs? We’re only talking about Fund 199 PIC 99 all the objects and sub-objects only functions 11, 12, 13, 21, 23, 31, 32, and 33 What doesn’t allocate? The indirect cost functions Organization codes 998 or 7XX.

Not All Functions Used for MOE Allocate to PIC 99… MOE Functions Allocated Functions 11 11 12 12 13 13 21 21 23 23 31 31 32 32 33 33 34 36 41 51 53 Here is another way to look at what allocates. The functions on the left are all part of MOE, but the functions below the dotted line should match your general ledger books. They count for MOE, but nothing from PIC 99 adds to them. The functions above the dotted line on the right could allocate some of PIC 99 to PIC 23. The bottom right of the screen lists functions that are not part of the MOE calculations at all, even if your district had expenses coded to them. What you code in these functions to PIC 23 is what counts for MOE. Functions not used at all in MOE: 35, 52, 61, 71, 81, 91-99

4. Allocated or Unallocated 3. FY 2. PEIMS Collection 1. Report # 5. Direct Functions 6. Indirect Functions 7. PIC 23 8. PIC 99 Page 2 4. Allocated or Unallocated 3. FY 2. PEIMS Collection 1. Report # First, let’s look at pages 8 and 9, an allocated report. How do you read the page? Edit+ report # The PEIMS collection, and what year. The fiscal year of the data reported. Allocated or unallocated. Functions called direct functions. Indirect functions. PIC 23 column On page 2 of the report, PIC 99 column These are the important parts for MOE purposes. FYI—The title of this particular report has changed slightly over the past 4 years—look for the report # to be sure you have the right one. 1

Difference Between Allocated and Unallocated Figures Is there a lot of difference between the allocated and unallocated figures? It depends on your district’s financial accounting and how much PIC 99 is used. Is there a lot of difference between the allocated and unallocated figures? It depends on your district’s financial accounting and how much PIC 99 is used.

Difference Between Allocated and Unallocated Figures Direct Costs: PIC 23 PIC 99 Unallocated Allocated (Page 6) (Page 8) (Page 7) (Page 9) 11 Instruction $576,401 $579,465 $20,859 $0 12 Inst Res/Med $24,544 $181,335 13 Cur/Stf Dev $1,893 $15,997 $106,503 21 Inst Leader $14,473 $109,031 23 Schl Leader $63,681 $478,185 31 Guid/Cnsel $26,907 $201,903 32 Soc Wk Svc 33 Health Svc $6,282 $50,328 Totals $578,294 $731,349 Difference $153,055 Look at the PIC 23 column on page 6, the unallocated report. Not much there, huh? Now compare it with the PIC 23 column on page 8, the same budget year, but these are the allocated figures. PIC 23 increased by $153,055. How? Now look at the PIC 99 column on page 7, the unallocated report. Compare it with the PIC 99 column on page 9. How did it get from page 9 to page 7? It was “allocated,” based on a formula that uses the full time equivalents of instructional staff. It is a complicated formula we will discuss later.

PIC 99 Lesson Use PIC 99 as little as possible (Then more direct control over meeting MOE with direct expenses) Remember, use of PIC 99 is optional in most cases Not all PIC 99 coding affects MOE. Review the slide “What Allocates” So, what does this all tell us? Use PIC 99 as little as possible, then you have more direct control over meeting MOE with direct expenses. Remember, the use of PIC 99 is optional in most cases. Not all PIC 99 coding affects MOE. And no, you cannot eliminate the use of PIC 99 completely. Just use it as little as possible.

Estimating How Much PIC 99 Will Allocate to PIC 23 Is there a spreadsheet we can use for estimating how much PIC 99 will allocate to PIC 23? No . . . but . . . PEIMS EDIT+ User Technical Documentation: Tips for the Allocation Process for PEIMS (EDIT+) Reports http://www.tea.state.tx.us/peims/editplus/documents/tips_allocproc.pdf Is there a spreadsheet we can use for calculating or at least estimating how much PIC 99 will allocate to PIC 23? No. But, if you would like to try doing the same calculations as in PEIMS, the math is outlined in TEA’s document on allocation. Here is the website. We may some day figure out how to simplify this process to give LEAs a spreadsheet to use, but it isn’t here today.

Estimating PIC 99 Allocation Amounts? Can we just estimate our PIC 99 allocation amounts? Maybe. Look at the information historically. Is this LEAs allocation consistent enough to predict for future years? FY PIC 23 Unallocated Allocated Difference 06 $ 396,500 $ 445,000 $ 48,500 05 $ 382,539 $ 442,355 $ 59,816 04 $ 355,206 $ 404,543 $ 49,337 03 $ 373,396 $ 427,684 $ 54,288 4 year average $ 52,985 Even if we never figure out the math of allocation so that you can calculate it yourself, you might be able to look at the dollar amount that allocates to PIC 23 each year and use it for making an estimate. This district looked at their amount that allocated from PIC 99 to PIC 23, over a 4 year period, looking for patterns. What they found was a fairly consistent amount that allocated from one year to the next. This district, if they have not made significant changes in PIC 99 accounting or district staffing patterns, could probably estimate the amount that would allocate and be close enough because their 4 year average is pretty close to each year’s amount that allocated.

Estimating PIC 99 Allocation Amounts? Can we just estimate our PIC 99 allocation amounts? Maybe. Look at the information historically. Is this LEAs allocation consistent enough to predict for future years? FY PIC 23 Unallocated Allocated Difference 06 $ 525,000 $ 615,000 $ 90,000 05 $ 516,270 $ 620,989 $ 104,719 04 $ 575,289 $ 694,080 $ 118,791 03 $ 615,512 $ 817,693 $ 202,181 4 year average $ 128,923 This district, however, has no pattern and should probably not use this average as a reliable figure for predicting allocation.

How Is MOE Calculated? Now, on to the math.

1 Handout page 16: Spreadsheet Look at handout page 16 that looks like this slide. This is a spreadsheet made to look like the last TEA letters, with 2 exceptions: This spreadsheet is corrected to allow for 50% of IDEA-B Formula increase, and it allows for the use of 15% IDEA-B Formula funds for early intervening services. It is certainly possible that when TEA sends out letters comparing 04-05 to 05-06 it may look differently, but it is all we have to use until then. Let’s walk through the parts and the sources of data. First, when we are talking about line #’s, we are talking about this first column, typed in with row #’s, NOT Excel spreadsheet row #’s. Next, notice that the right 3 columns have letter designations: (a), (b), and (c), with (a) being the most recent year being compared, (b) the older of the 2 years being compared, and (c) the answers. Data for lines 1-13, columns (a) and (b) comes from your handouts on pages 8 and 12. See if you can find the numbers. Line 14 figures can be found on handout pages 1 and 2. Find those. For line 18, check handout pages 14-15. Line 22 comes from handout page 5. Lines 25 and 26 are on handout pages 3 and 4. If Sample LEA had used any IDEA-B Formula funds for early intervening services, that figure would have to come from their books. Right now there is no Edit+ report that can identify that. That’s the data, now let’s look at the math. Line 15 tells us that it is a total of lines 1-14, in both columns (a) and (b). Line 15 column (c) is column (a) minus column (b). This is a negative number for Sample ISD. Line 16 tells us that is the figure found in Line 31. The figure just transfers here. What is the figure from Line 31? For that, we have to start with lines 25 and 26, the IDEA-B Formula Maximum Entitlements for the 2 years. Line 27 is Line 25 minus Line 26. Line 28 multiplies line 25 by 50%, showing us how much of the increase in IDEA-B Formula Maximum Entitlements could be used. Except… Line 29 looks at how much of the IDEA-B Formula Maximum Entitlement could be used, if we so chose, for early intervening services. In this case, it is 1% of $295,365, or $44,305. If the district had used any EIS dollars, they would enter that amount in Line 30. Our district did not. Line 31 is Line 28 minus Line 30. When no EIS funds were used, then Line 31 is the same amount of Line 28. How large could Line 30 have been before Line 31 was zero? Up to the amount in Line 28. So, that takes us back to Line 16, transferred from Line 31. Line 17 is Line 15 (c) Line 19 starts calculating the expenditures per pupil. Why? Because you can meet MOE two ways: by total expenditures, or by a per pupil expenditure calculation. You only have to meet it one of the two ways. The amount per pupil for column [a] was calculated as: ( 15[a] + 16[c] ) ÷ 18[a]. Similar math was used for 19(b). (b) is subtracted from (a) to get 19(c). Sample ISD also had a negative number here, so we move on. Line 20 takes the amount in 19(c) and multiplies it by the number of students in 18(a), the total amount of decrease when you look at the total # of students. Line 21 is the decline in MOE is the greater of the amount in line 17, column c or in line 20, column c. Line 23 adds line 21 and 22. If it is still a negative number, it is compared against the figure in Line 25. You can’t pay back more than you earned in IDEA-B Formula maximum entitlement. But Sample ISDs maximum entitlement was larger than Line 23, so the figure in Line 23 is transferred to Line 24 as a positive number, showing the amount due to TEA—maybe… 1

Edit + PRF3D022 New Edit+ report available in mid-year PEIMS found in the Edit+ Turnaround Reports Handouts: Pages 17-18 TEA has a new Edit+ report that mirrors the TEA letter, with some exceptions. It is Edit+ PRF3D022, and is Handout page 17. You should still check the math on it using a spreadsheet to be sure you agree with the figures because, while it gets to the same answer, it doesn’t show you all the detail it used to get to the answer. The far right column of the handout was added to show you where they relate to the spreadsheet cells and is not found in the TEA report. There are 2 lines in the Edit+ report that do not appear in the spreadsheet. This isn’t really important, as the math for these 2 lines is embedded in the various formulas to get to the same answer. Handout page 18 shows the spreadsheet cross-referenced to this Edit+ report. You will see the 2 lines from the Edit+ report inserted here, just FYI.

Source of Excel Spreadsheet For a prediction of how the spreadsheets will look for 05-06 and following years, Region 8 ESC has developed an Excel spreadsheet Available at following link: http://www.reg8.net/docs/14-MOE%20FY05%20to%20FY06.xls If you wish to do your own MOE pondering, you may wish to use a spreadsheet similar to one developed by Region 8 ESC. They have added the prediction of how the EIS figure might be reflected. The IDEA regulations clearly outline the math. All this spreadsheet does is predict how it might be shown on the page. A caution on this and all web addresses: they could change as entities rearrange their web pages. So, if 6 months from now a link doesn’t work, you may have to do some investigation to find the document’s new location. The formula for MOE seems to be a work of art that is in progress. TEA might change, add to, or delete from these categories for FY 05-06 and beyond. All we can use today is what we have seen for 04-05 and previous years, add EIS, and change 20% of IDEA-B Formula entitlement increases to 50%.

MOE Exceptions Topic 3: Are there exceptions? We didn’t maintain MOE, but we had a great reason why we didn’t!

Allowable Exceptions to MOE §300.204 Exception to maintenance of effort “Notwithstanding the restriction in § 300.203(a), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following:” The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel A decrease in the enrollment of children with disabilities Yes, under the old regulations there were 4 possible exceptions. The new regulations of IDEA 2004 have 5. The wording in the new regulations for the first exception is: The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel.

Allowable Exceptions to MOE The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— (1) Has left the jurisdiction of the agency (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education The second and third exceptions are the same in the old and new regulations. (b) A decrease in the enrollment of children with disabilities (c) The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— (1) Has left the jurisdiction of the agency; (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education.

Allowable Exceptions to MOE The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities The assumption of cost by the high cost fund operated by the SEA under § 300.704(c) The fourth exception hasn’t changed from the old regulations. (d) The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities. The fifth exception is new with IDEA 2004. (e) The assumption of cost by the high cost fund operated by the SEA under § 300.704(c).

State Enforcement “If an SEA determines that an LEA is not meeting the requirements of Part B of the Act, including the targets in the State’s performance plan, the SEA must prohibit the LEA from reducing the LEAs maintenance of effort under § 300.203 for any fiscal year.” [ § 300.608 (a) ] Exceptions are great! But, before you get too excited, let’s review the wording in CFR § 300.608. What does this mean? According to TEA, OSEP said that the exceptions still apply and may be used. What 306.608 is really addressing is that services cannot decrease based upon an exception being granted.

What Records Do We Need To Keep for Each Exception? Topic 3: Are there exceptions? We didn’t maintain MOE but we had a great reason why we didn’t!

Exception A: Voluntary Departure The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. All staff must be properly certified, and TEA may check SBEC records prior to approving this exception This exception is LEA employees only, not contract Exception: a)(1)The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. What we have learned from the last batch of letters mailed by TEA: All staff must be properly certified, and TEA may be checking SBEC records prior to approving this exception. In other words, if the teacher who left was not special education certified, then you may not be able to use this as an exception. This exception is LEA employees only, not contract.

Exception A: Voluntary Departure Does this exception apply if we reduce staff by reassigning outside of the special education program? In other words, if the teacher is still in the district, just no longer in the special education program, does it count under this exception? Does this exception apply if we reduce staff by reassigning outside of the special education program? In other words, if the teacher is still in the district, just no longer in the special education program, does it count under this exception? No.  The law and the rule clearly state departure, not transfer or reassignment. NOTE to presenter: This answer from an e-mail from Ramon Medina, TEA, to Martha Collins, Region 8 ESC, 3/19/2007. No.  The law and the rule clearly state departure, not transfer or reassignment.

Special Education Staff Records To Keep Each Year List of special education staff assigned to and paid from special education funds List of special education staff who leave Changes in special education staff in the middle of the year Staff schedules, time and effort documentation, and job descriptions or other record of assigned job duties Well, if we don’t really know for sure what staff changes would count, what records would we keep? Suggestions: List of special education staff assigned to and paid from special education funds List of special education staff who leave Changes in special education staff in the middle of the year Staff schedules, time and effort documentation, and job descriptions or other record of assigned job duties.

Special Education Staff Records To Keep Each Year Documentation of appropriate certification or licensure, including emergency and temporary permits Rationale for not replacing leaving staff, Reduction in the # of special education students High cost student leaves Documentation of appropriate certification or licensure, including emergency and temporary permits Rationale for not replacing leaving staff, Reduction in the # of special education students High cost student leaves

Exception B: Decrease in Special Education Enrollment Reduction in # of special education students will not be accepted as exception if district actually earned more state special education block grant funds in second year Year 1 $200,000, 525 students Year 2 $240,000, 498 students Only eligible IDEA-B student counts were used in letters mailed in 2006 Now let’s move to exception 2: A decrease in the enrollment of children with disabilities. You had, on the October PEIMS snapshot date, fewer students this year than last year. Great! Does it help with MOE? Maybe. A reduction in # of special education students will not be accepted as an exception if the district actually earned more state special education block grant funds the second year. Year 1 $200,000, 525 students Year 2 $240,000, 498 students How could this be??? You had fewer students but collected more special education block grant money? It could be due to better attendance the second year (flu epidemic in the first year?), or a change in instructional arrangements that earned more money for the fewer students. Remember that only eligible IDEA-B student counts were used in the letters mailed in 2006.

Special Ed Student Enrollment Records To Keep Each Year Edit+ PRF5D010 Special Education Child/Counts by Funding Type Roster of the students in the Edit+ report. Could be Edit+ PRF5D027 Special Education Roster by Grade or list from your district software Notes about high cost students or any other special circumstances that could impact MOE So what records do you need to keep to show what happened with a reduction in student count? Edit+ PRF5D010 Special Education Child/Counts by Funding Type Roster of the students in the Edit+ report. It could be Edit+ PRF5D027 Special Education Roster by Grade or a list from your district software Notes about high cost students or any other special circumstances that could impact MOE

Exception C: Termination of Exceptionally Costly Program The termination of the obligation of the agency… to provide a program of special education to a particular child with a disability that is an exceptionally costly program,… because the child— (1) Has left the jurisdiction of the agency; (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education. This brings us to the third allowable exception: Exception: (c) The termination of the obligation of the agency… to provide a program of special education to a particular child with a disability that is an exceptionally costly program,… because the child— (1) Has left the jurisdiction of the agency; (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education. Advice from TEA: Interpret these exceptions literally. Interpret these exceptions literally

High Cost Records To Keep Each Year List of high cost students who leave during or at end of the year, or who do not return to school in fall, and the documentation proving this list Copies of student ARDs/IEPs documenting requirement of services POs and other records proving high cost expenses, such as special equipment Costs of related services to an individual student, which may also require payroll or contracted services costs, logs or other documentation of services provided, etc. What records do you need to keep about high cost situations? Here are some suggestions: List of high cost students who leave during or at the end of the year, or who do not return to school in the fall, and the documentation proving this list Copies of student ARDs/IEPs documenting requirement of services POs and other records proving high cost expenses, such as special equipment Costs of related services to an individual student, which may also require payroll or contracted services costs, logs or other documentation of services provided, etc.

Exception D: Termination of Long-Term Purchase Expenditures The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities. Payment of a large obligation limited to LEAs definition of capitalization (6600). So, if LEA only capitalizes individual items >$5,000, then large purchases of <$5,000 per item will not count Long-term means taking 2 or more years to pay the debt AND Item must have an anticipated life span of >12 months Supplies and consumable items won’t count This brings us to the fourth allowable exception: The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities. What do we know about it? Payment of a large obligation is going to be limited to the LEAs definition of capitalization (6600). So, if an LEA only capitalizes individual items >$5,000, then large purchases of <$5,000 per item will not count, AND Long-term means taking 2 or more years to pay the debt, AND The item must have an anticipated life span of >12 months. Supplies and consumable items won’t count.

Long-term Purchase Records To Keep Each Year POs and other records proving long-term purchases, and records to show payment took more than one year LEA policies or guidelines on capitalization of equipment TEA may ask you to explain how item(s) purchased is/are directly attributable to and necessary for provision of special education services What records do you need to keep about long-term purchases? POs and other records proving long-term purchases, and records to show the payment took more than one year LEA policies or guidelines on capitalization of equipment TEA may ask you to explain how the item(s) purchased is/are directly attributable to and necessary for the provision of special education services.

Exception E: High Cost Fund The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). What does this mean? Another good example of what we don’t know yet about the new regs. This brings us to the last and newest exception: The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). What does this mean? Another good example of what we don’t know about the new regs. In order to address the changes in the new CFR, TEA auditors have developed rules that address the fiscal requirements discussed in Section 613 of Public Law 108-446 and 34 CFR 300.  The new rules will be published in the Texas Register prior to the start of the 07-08 fiscal year. So, stay tuned for updates on this topic.

What Do We Do If We Get an MOE Letter from TEA? OK. We’ve done our math. We’ve collected records. What do we do if we get a letter from TEA?

MOE Letter from TEA What do we do if we get a letter from TEA? Read the letter carefully Verify the data See if you qualify for exceptions Submit only what they want, in the format requested, by the deadline set Read the letter carefully. Verify the data. See if you qualify for exceptions. Submit only what they want, in the format requested, by the deadline set.

What If We Owe Money? Don’t send a check until TEA asks you to do so. What if we owe more than we received in federal dollars? It is lesser of the absolute value of decline in MOE or IDEA-B maximum entitlement for the year Who writes the check if the district is an SSA member? LEA, from local funds, not the SSA Repayment also from local funds for single member district You’ve done the best you could in creative writing and you still had a reduction in MOE that fell outside of the allowable exceptions. You know you will have to pay back money. Now what? Don’t send a check until they ask you to do so. What if we owe more than we received in federal dollars? It is the lesser of the absolute value of your decline in MOE or your IDEA-B maximum entitlement for the year. Who writes the check if the district is an SSA member? The LEA, from local funds, not the SSA. The repayment is from local funds also for a single member district.

How Do We Avoid an MOE Problem? Which brings us to what could be the most important part of the presentation: How do we avoid the problem?

How Do We Avoid MOE Problem? Give Special Education staff access to budget and expenditure information to assist in catching errors—at budgeting and during the fiscal year Give Special Education staff access to PEIMS reports prior to final submission deadlines These sharing practices are important for all special populations, not just special education We’ve learned a lot about MOE through the last 4 years. Give Special Education staff access to budget and expenditure information to assist in catching errors—at budgeting and during the fiscal year. How can any special education director make fiscally sound budget and expenditure decisions without training on and access to financial information? Give Special Education staff access to PEIMS reports prior to final submission deadlines. Special education cannot be a partner with PEIMS submissions if they don’t see the information. These sharing practices are important for all special populations, not just special education.

What If We Had Bad Data? Bad data, bad data, bad data! Staff or expenses miscoded in budgets That’s between you and TEA as to whether they accept it as an MOE explanation Expenses miscoded in budgets is the largest problem. You are no longer going to be able to use “oops—we didn’t mean it” and have it accepted. The largest challenge is keeping a handle on staff reassignments at the campus level without telling anyone. These reassignments that aren’t discovered until you receive an MOE letter are too late to fix and can be very costly. If you had bad data, that will be between you and TEA as to whether they accept it.

MOE: What We Have (and Haven’t) Learned Districts can be in a grey area—where total expenditures increase or remain the same and expenditures per pupil decline, or visa versa SSVI and Medicaid Administrative Claiming (MAC) are NOT coded to the general fund (199) SHARS should be coded to the general fund (199) Districts can be in a grey area—where total expenditures increase or remain the same and expenditures per pupil decline, or visa versa SSVI and Medicaid Administrative Claiming (MAC) are NOT coded to the general fund (199). MAC should be fund 272, and SSVI should be either 434 or 385, depending on whether the district receiving funds from the ESC flows money on out to another district. SHARS should be coded to the general fund (199) Anything in the general fund , PIC 23 and PIC 99. has the potential to impact MOE.

MOE: What We Have (and Haven’t) Learned Bad data in 033 record 033 record is hand entered data, not extracted Errors in entering wrong fiscal year or amount LEAs being left off Mismatch between child count year and expenditure year on 033 records Share with member districts Bad data 033 record is hand entered data, not extracted Errors in entering wrong fiscal year or amount LEAs being left off Mismatch between child count year and expenditure year—if your SSA uses a child count of one year to distribute 033 amounts in the following year, you could be creating problems, especially with smaller districts. Consider keeping the child count and fiscal year on the same schedule. This is, of course, if the SSA uses a head count to distribute expenses. There are other ways to do it. The fiscal agent LEA MUST give to each member district what will be submitted on the 033 record, to enable the member districts to predict their own MOE.

MOE: Where Do We Go from Here? Devise a record keeping system and systematically keep anything that might possibly apply to MOE Let everyone know where those records are filed Devise a record keeping system and systematically keep anything that might possibly apply to MOE. Let everyone know where those records are filed in case you win the lottery before next year. It is taking TEA longer to process MOE responses, so we don’t know if there will be a time break between a fiscal year and the actual MOE letters. Just keep good records and you’ll be prepared.

General Records To Collect Independent audit reports Spending trends analysis Spreadsheets run to track MOE Copies of Edit+ reports Maximum entitlements Any board policies that impact MOE (capitalization, voluntary retirements/resignations, etc.) In general, records to keep are: Independent audit reports Spending trends analysis Spreadsheets you run to track MOE Copies of Edit+ reports Maximum entitlements Any board policies that impact MOE (capitalization, voluntary retirements/resignations, etc.)

Times To Check MOE When you: Propose a new budget Prepare to close a fiscal year Review the real figures for the prior fiscal year after the mid-year PEIMS collection Handout: Page 19 There are, ideally, 3 times a year to check MOE: When you: Propose a new budget Prepare to close a fiscal year Review the real figures for the prior fiscal year after the mid-year PEIMS collection In order to do the first two, you are going to have to decide how you will predict or calculate that allocation figure. You also have a handout, page 19, that summarizes all of the reports you would need to gather to work on MOE, for two years already closed, Documents Needed to Calculate Special Education Maintenance of Effort, 2005-2006 Compared to 2004-2005. You may also use it for subsequent years, just adding “1” to each of the fiscal year references.

Next Steps When fiscal agent closes books for year, member districts should be provided with amount that will be reported on 033 record When mid-year collection is submitted, fiscal agent should give copy of Edit+ PRFBD001 to each member district After mid-year submission, each LEA should run MOE figures as pre-look at MOE status before TEA letters are mailed What do you do now? When the fiscal agent closes the books for the year, the member districts should be provided with the amount that will be reported on the 033 record. When the mid-year collection is submitted, the fiscal agent should give a copy of Edit+ PRFBD001 to each member district. After the mid-year submission, each LEA should run the MOE figures as a pre-look at MOE status before TEA letters are mailed.

Next Steps Fiscal agent should provide amount of the maximum IDEA-B Formula entitlement to SSA members Documentation system should be developed for any potential MOE issue - Should be collected at that time since letters will be months later coming from TEA - Should be collected in such a way to answer directly one or more of allowable reasons for reduction of MOE The fiscal agent should provide the amount of the maximum IDEA-B Formula entitlement to SSA members. A documentation system should be developed for any potential MOE issue. The documentation needs to be collected at that time since the letters will be months later coming from TEA, and should be collected in such a way to answer directly one or more of the allowable reasons for reduction of MOE.

Next Steps Foster strong working relationship among special education director, PEIMS coordinator, and business manager Establish who keeps what records and makes what decisions Make sure all know what affects MOE Make sure new business managers understand MOE implications before they change bookkeeping and/or coding procedures Foster a strong working relationship between the special education director, PEIMS coordinator, and business manager. Sit down and establish who keeps what records and makes what decisions. Make sure you all know what affects MOE. Make sure new business managers understand MOE implications before they change bookkeeping/coding procedures.

MOE Reference Documents Individuals With Disabilities Education Act http://www.tea.state.tx.us/special.ed/rules/ WebSAS or eGrants Program Guidelines http://www.tea.state.tx.us/special.ed/funding/ IDEA-B Formula Maximum Entitlements http://barton.tea.state.tx.us/websas/Pg_Admin_Pub_Login.asp Here are some of the reference documents you may need to be able to access. There aren’t any letters on the TEA website since 2003, but some day there may be! IDEA regulations And eGrants program guidelines, taking the place of webSAS, predicted in 08-09

MOE Reference Documents Financial Accounting and Reporting Module, TEA Financial Accountability System Resource Guide http://www.tea.state.tx.us/school.finance/audit/resguide12/index.html Texas laws and regulations on spending state special education funds, such as TEC §21.003, TAC § 89.1125, 89.1131, 230.501, 230.551 http://www.tea.state.tx.us/special.ed/rules/sbs.html IDEA-B Formula Maximum Entitlements WebSAS now, eGrants starting 08-09 TEA Financial Accountability System Resource Guide Texas laws and regulations on spending state special education funds

MOE Reference Documents PEIMS Data Standards http://www.tea.state.tx.us/peims/standards/index.html Edit+ Reports http://www.tea.state.tx.us/peims/editplus/index.html August 2006 TEA PowerPoint on MOE: http://www.tea.state.tx.us/school.finance/audit/2006_0824_resc_iv_idea_moe.ppt PEIMS Data Standards Edit+ Reports Ramón Medina’s August 2006 PowerPoint

Disclaimer There are some variations to this content for charter schools Call your ESC for more assistance if needed There are some variations to this content for charter schools. Call your ESC for more assistance if you don’t know what they are.

Summary During this module, participants learned: What is MOE? What are the parts of MOE? How is MOE calculated? What might count as exceptions? What do we do if we get a letter from TEA? How do we avoid the problem? During this training module, you have learned: What is MOE? What are the parts of MOE? How is MOE calculated? What might count as exceptions? What do we do if we get a letter from TEA? How do we avoid the problem?