VASBO Spring Conference May 19, 2016 Tracie L. Coleman Division of Special Education and Student Services IDEA Local Maintenance of Effort Requirements VASBO Spring Conference May 19, 2016 Tracie L. Coleman

Overview Maintenance of Effort Requirement Background Eligibility Compliance General Federal Grant Requirements

Overview of U.S. ED Changes NPRM Published in September of 2013. Purpose of NPRM: To amend the LEA MOE regulations in 34 CFR 300.203 to clarify existing policy and make changes to: The Compliance Standard The Eligibility Standard The Level of Effort Required of an LEA in the Year after it Fails to Maintain Effort (referred to as the Subsequent Years Rule) Consequences for Failure to Maintain Effort

Overview Continued The US Secretary of Education did not propose any amendments to the LEA MOE Exceptions Provision in 34 CFR 300.204 or the LEA MOE Adjustment Provision in 34 CFR 300.205

What is IDEA? IDEA reauthorized in 2004, implementing federal regulations released 2006 and Virginia’s special education regulations were revised, most recently in 2010. 34 CFR Part 300 Assistance to States for the Education of Children with Disabilities and Preschool Grants for Children with Disabilities. Virginia regulations set forth the requirements of the Board of Education regarding the provision of Special Education Each school division shall provide free and appropriate education, including special education for the children with disabilities residing within its jurisdiction….

MOE Compliance The Individuals with Disabilities Education Act (IDEA), §300.203, requires the VDOE to determine that a school division complies with the maintenance of effort requirement to spend (four tests) at least the same total amount of either local or local plus state dollars or per capita amount of either local or local plus state dollars for the education of children with disabilities that the school division spent from the same source for that purpose in the previous year….. subject to the subsequent years rule

USED Changes to LEA MOE The USED identified a need for revisions to the LEA MOE requirements based upon fiscal monitoring, audits and questions from States. Most of the changes clarify the way in which the Department has previously interpreted LEA MOE regulations and consolidate requirements from GEPA, EDGAR and appropriations language. These regulations became effective on July 1, 2015 and can be found at: http://www.gpo.gov/fdsys/pkg/FR-2015-04-28/pdf/2015-09755.pdf

Categories of Changes Structural Changes Four Methods Comparison Year Use of exceptions and adjustment in eligibility standard Subsequent Years Rule Consequences for Failure to Maintain Effort Added Appendix E The final regulations adopt the proposed amendments with modifications to improve organization, clarity, and flexibility for LEAs.

Structural changes Eligibility standard Compliance Standard In order to make the regulations clearer and to improve organization, USED reorganized the regs and renumbered the subsections under §300.203 as follows: Eligibility standard Compliance Standard Subsequent Years Consequences of failure to maintain effort

Four Methods Most common fiscal monitoring finding. Not a substantive change from the prior regulation. Many commenters suggested the option to use the four methods needed to be more explicit. Clarifies that applies to both standards. Four methods are: local funds only; the combination of State and local funds; local funds only on a per capita basis; or the combination of State and local funds on a per capita basis

Comparison Year for the Eligibility Standard: The comparison year is "the most recent fiscal year for which information is available”, regardless of which method the LEA Uses Change from comparison year for local funds only in the prior regulation Simplifies the requirement for LEAs, States, and auditors

APPLICABILITY of Exceptions and ADJUSTMENT TO the Eligibility Standard Prior regulation silent on applicability of exceptions and adjustment (§§300.204 and 205). Based on comments, decision was made to explicitly allow LEAs to consider the exceptions and adjustment: to the extent the information is available; the LEA took in the intervening year, or years between the most recent fiscal year for which information is available, and the fiscal year for which the LEA is budgeting; and the LEA reasonably expects to take in the fiscal year for which the LEA is budgeting.

SUBSEQUENT YEARS RULE First Set Out in Letter to Boundy (2012) Enacted into law in the 2014 and 2015 Appropriations Acts Final Regulations make the rule permanent and provide details on implementation and implications

WHAT IT MEANS? Defines what level of effort an LEA must meet in order to maintain effort in the year after an MOE failure The level of effort an LEA must meet in the fiscal year after it fails to maintain effort is the level of effort that would have been required in the absence of that failure, not the LEA’s reduced level of expenditures. This has an impact on both the eligibility and compliance standards

LEA’s Eligibility for IDEA Established under Subpart C of regs An LEA is eligible for assistance under IDEA for a fiscal year if the agency submits a plan that provides assurances to the SEA that the LEA meets each of the conditions in § § 300.201 through 300.213 Assurances are included with the division’s Annual Plan Application

Annual Plan Application The Annual Application (aka Annual Plan) is the LEA’s application to request federal special education funding. Includes, in part, the following: Assurances of legal compliance; Updated information regarding local special education advisory committees (LAC), local & regional jails, implementation of previous application; and Proposed budgets 16

Workbook Tabs Welcome LEA Instructions Cover & Certifications LEA Assurances & Certifications LEA Local & Regional Jails (Not applicable for SOPs) Implementation Narrative MOE Eligibility (Not applicable for SOPs) CEIS & PSA (Not applicable for SOPs) Section 611 Section 619

MOE Eligibility LEAs Required to Meet MOE Requirements Spend at least the Same Amount in Local or Local plus State Funds in Current Year as Spent in Prior Year Further Requires LEA to Both Budget in each Subsequent Year at least the Same Amount that it Expended in the Most Recent Prior Year for Which Information is Available and Expend Year to Year the Amount it Expended in the Prior Year May Consider Allowable Exceptions from FY2015-16

MOE Planning/Eligibility Report the projected budget for 2016-2017 and compare against actual 2014-2015 expenditures; subject to the subsequent years rule Divisions Must Budget Enough to Meet MOE Requirements If enough wasn’t budgeted, ineligible to receive funding the next year and Divisions may have to repay funds if MOE is not met, further analysis by VDOE will be required. 19

Impact of Method on the Subsequent Years Rule To determine required level of effort, must look back to most recent fiscal year in which LEA maintained effort. But must look back to the most recent fiscal year in which the LEA met MOE using the same method. For example, LEA wants to use State and local funds (total) to meet the compliance standard in FY 2016-2017 LEA failed to meet MOE in FY 2015-2016 using that method LEA met MOE in FY 2013-2014 using that method LEA must use FY 2013-2014 as the comparison year

SUBSEQUENT YEARS RULE AND ELIGIBILITY STANDARD Follows the method: comparison year = the most recent fiscal year for which information is available and for which LEA met MOE using the same method For example, LEA wants to use State and local funds (total) to meet the eligibility standard in FY 2016-2017 LEA has information for FY 2014-2015, but failed to meet MOE in FY 2014-2015 using that method LEA Met MOE in FY 2013-2014 using that method LEA must use FY 2013-2014 as the comparison year

Meeting Eligibility Standard No MOE Failure Example of How an LEA May Meet the Eligibility Standard in 2016-2017 Using Different Methods (same table as Table 7 in Appendix E) Fiscal Year Local State and local funds Local funds Per capita State/local Child Count 2014–2015   $500* $1,000* $50* $100* 10 2015–2016 Required Amount 2016-17 $500 $1,000 $50 $100 *The LEA met the compliance standard using all 4 methods.

Meeting Eligibility Standard With MOE Failure Fiscal Year Local State and local funds Local funds Per capita State/local Child Count 2013-2014 $550* $1,200* $55* $120* 10 2014–2015   $500** $1,000** $50** $100** 2015–2016 Required Amount 2016-17 $550 $1,200 $55 $120 *=Met MOE ** =Failed MOE

Comparison Year for the Compliance Standard The comparison year is “the preceding fiscal year”, regardless of which method the LEA uses Simplifies the requirement for LEAs, States, and auditors

SUBSEQUENT YEARS RULE AND COMPLIANCE STANDARD Follows the method: comparison year= the most recent fiscal year in which the LEA met MOE using the same method For example: LEA wants to use State and local funds (total) to meet the compliance standard in FY 2016-17 LEA failed to meet MOE in FY 2015-2016 using that method LEA Met MOE in FY 2014-2015 using that method LEA must use FY 2014-2015 as the comparison year

Meeting Compliance Standard With MOE Failure and Subsequent Years Rule Fiscal Year Local State and local funds Local funds Per capita State/local Child Count 2014–2015   $500* $1,000* $50* $100* 10 2015–2016  $450**  $900** $45**  $90**  10 Amount required to meet MOE 2016-17 $500 $1,000 $50 $100 *= Met MOE **= Failed MOE

Compliance Standard and Subsequent Years Rule: Different Methods FY Local Funds Total State and Local Total Local Funds Per Capita State and Local Per Capita Child Count 2015–2016  $500* $950* $50* $95* 10 2016–2017   $450** $45** 2017-2018 $900** $90** 2018-2019 *= Met MOE **= Failed MOE

Consequences for Failure to Maintain Effort If LEA Fails MOE Compliance Standard, SEA is Required to Repay Federal Government Using Non-Federal Funds (or non-accountable Federal Funds) May require repayment from LEA Using Non-Federal Funds (or non-accountable Federal Funds) This is not new: based on section 452 of GEPA (20 U.S.C. 1234a) Clarify by making it explicit in regulations. Also clarifies how much must be returned

Amount to be repaid in case of LEA MOE failure …an amount equal to the amount by which the LEA failed to maintain its level of expenditures in accordance with paragraph (b) of this section in that fiscal year, or the amount of the LEA’s Part B subgrant in that fiscal year, whichever is lower. 34 CFR §300.203(d)

Appendix E Eligibility and compliance standards Subsequent years rule Appendix E Includes 10 Tables That Provide Examples of How to Calculate LEA MOE, including: Eligibility and compliance standards Subsequent years rule Applying exceptions and adjustment to eligibility Calculating per capita We encourage you to review these tables;VDOE will continue to provide additional guidance

Effective Date Effective Date was July 1, 2015. However, Subsequent Years Rule took affect for FYs 2014-2015 and 2015-2016….included in U.S. Appropriations Act

Effective Date and Eligibility Determinations Eligibility determinations for LEAs’ 2016-2017 IDEA Part B sub-grants are in the process of being reviewed States not required to apply the new eligibility standard, if they are making the determination before July 1. However, VDOE implemented this standard for 2014-2015 determinations

MOE Requirement There is no flexibility in the IDEA for any waiver or variance to a school division’s MOE requirement Under certain conditions specified in the IDEA regulations, a school division may reduce the expenditures needed to meet its MOE requirement

MOE Allowable Exceptions/Adjustments The possible allowable exceptions specified in IDEA are below. §300.204(a), “ … The voluntary departure, by retirement or otherwise, or departure for just cause of special education or related services personnel.” §300.204(b), “ … A decrease in the enrollment of children with disabilities.” §300.204(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–” §300.204(d), “ … The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.” §300.205, “ … Adjustment to local fiscal efforts in certain fiscal years up to 50% of excess in allocation.” CEIS and Local Determination status are a factor.

IDEA MOE Not Met? The VDOE will be required to pay the amount of the division’s shortfall to the U.S. Department of Education The VDOE will then establish a payment plan for the division to reimburse the VDOE Federal funds cannot be used to make this payment

LEA Responsibilities Be familiar with the newly published Uniform Guidance Regulations (2 CFR Part 200) http://www2.ed.gov/policy/fund/guid/uniform-guidance/index.html Expend Funds in Accordance with Approved Plan Ensure Procurement mechanisms conform to Federal and State laws and standards Document time & effort for employees funded from federal grant sources Maintain financial & programmatic records as required by Federal & State law General Rule – Sole Use of property purchased with Part B funds Maintain a physical inventory of property purchased with Part B funds (Ipads, computers, etc.,) Submit Timely & Accurate Reimbursement Requests

Throughout the School Year? Spend Funds in Accordance with Approved Application Submit Application Amendments, if major change to how funds are being used Submit Budget Amendments, if necessary for category spending changes Submit Timely Reimbursement Requests Maintain Time & Effort Reports and other Supporting Documentation

SESS Budget & Finance Staff Members’ Contact Information Pat Brooks – 804-786-9153 Patricia.Brooks@doe.virginia.gov Emily Boothe – 804-225-2701 Emilia.Boothe@doe.virginia.gov Tracie Coleman – 804-225-2704 Tracie.Coleman@doe.virginia.gov Sherry Hubbard – 804-225-2339 Sherry.Hubbard@doe.virginia.gov Deneen Jackson – 804-225-4854 Deneen.Jackson@doe.virginia.gov

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