Maintenance of Effort Federal Cross-Cutting & Special Education MoE Daniel Lunghofer Supervisor, School District/ESD Accounting

What is Maintenance of Effort? It is a presumption that Local and State dollar spending levels remain constant between years, so that Federal dollars are not used to replace State & Local dollars for most programs. Maintenance of Effort - WASBO 2011 Spokane 2

What is Maintenance of Effort? Applies to Federal programs with “supplement, not supplant” requirements. There are consequences for not meeting MoE requirements. Maintenance of Effort - WASBO 2011 Spokane 3

MoE Tests OSPI performs two MoE tests upon final submission of all F-196 financial information. Results are communicated with program-related OSPI staff and districts who do not maintain effort. Preliminary models are available at Maintenance of Effort - WASBO 2011 Spokane 4

Applicable Programs Title I Part A Title I Part B Subpart 3 (Even Start) Title I Part D (Neglected & Delinquent programs) Title I Part F (Comprehensive School Reform) Title II Part A (Improving Teacher Quality) Title II Part D (Ed Tech/E 2 T 2 ) Title III Part A (English Acquisition) Title IV Part A (Safe and Drug-Free) Title IV Part B (21 st Century Learning Centers) Title VI Part B Subpart 2 (Rural Education) Maintenance of Effort - WASBO 2011 Spokane 6

Federal Cross-Cutting Statutory Authority: 34 C.F.R. §299.5 Paragraph (a): An LEA whose aggregate or per-student expenditures for State/Local funds for a given year are at least 90% of the prior year have maintained effort. Or: FY 10–11 ÷ FY 09–10 ≥ 0.90 Maintenance of Effort - WASBO 2011 Spokane 7

Federal Cross-Cutting 34 C.F.R. §299.5(d): Only expenditures from State/Local funds may be used, including administration, instruction, attendance/health services, pupil transportation, operation and maintenance of plant, and net expenditures to cover food service deficits. May not include community services, capital outlay, debt service, or any expenditure from funds provided by the Federal government. Maintenance of Effort - WASBO 2011 Spokane 8

Federal Cross-Cutting Let us look at the Excel-based Federal Cross-Cutting MoE test. Maintenance of Effort - WASBO 2011 Spokane 9

Consequences of Failing If a district does not meet the 90% threshold and no waiver is granted, the district’s current year Federal allocations for applicable programs will be reduced by the failure percentage. For example, if a district winds up with an 87% from both tests and does not get a waiver, they will see their current year allocations reduced by 3% (90% minus 87%). Maintenance of Effort - WASBO 2011 Spokane 10

Exceptions/Waivers Specific authority was granted to utilize State Fiscal Stabilization Fund dollars as State/Local instead of Federal for MoE purposes for 2008–09, 2009–10, and 2010– 11. Waivers may be granted for the following: – Exceptional or uncontrollable circumstances such as a natural disaster; or – A precipitous decline in the financial resources of the district. Maintenance of Effort - WASBO 2011 Spokane 11

Special Education MoE As it applies to Special Education, Maintenance of Effort is a year-over- year measure of the expenditures in Program 21. Maintenance of Effort - WASBO 2011 Spokane 13

Special Education MoE Statutory Authority: 34 C.F.R. § Paragraph (b): A district has maintained effort if it budgets* the same in aggregate or per-pupil for the education of children with disabilities in a given fiscal year as it did in the prior fiscal year, either with state/local funds or just local funds only. Cannot use money provided from Federal Government (i.e. IDEA allocations). *OSPI uses final F-196 numbers for determining if districts maintained effort. Maintenance of Effort - WASBO 2011 Spokane 14

MoE Test Let us look at the Excel-based Special Education MoE test. Maintenance of Effort - WASBO 2011 Spokane 15

Special Education MoE Exception: 50% rule (34 C.F.R. § ) If, in any fiscal year, the amount of a district’s allocation under IDEA exceeds the amount of the allocation for the prior year, the district may reduce its MoE requirement by up to 50% of the difference. A district must have “Met Requirements” under a program review to utilize this flexibility. (34 C.F.R. § ) Maintenance of Effort - WASBO 2011 Spokane 16

Special Education MoE 50% rule, exception (34 C.F.R. § (d)): The amount a district spends on Coordinated Early Intervening Services (CEIS), which is limited to 15% of a district’s IDEA allocation, counts against the 50% maximum. Maintenance of Effort - WASBO 2011 Spokane 17

50% Rule/CEIS Example #1 18 Maintenance of Effort - WASBO 2011 Spokane

50% Rule/CEIS Example #2 19 Maintenance of Effort - WASBO 2011 Spokane

Consequences of Failure If a district fails to maintain effort and one of the exceptions does not apply, the district will be required to repay to OSPI the amount supplanted, using non-Federal dollars. There is an opportunity to appeal to OSPI. Maintenance of Effort - WASBO 2011 Spokane 20

Exceptions The voluntary departure of special education or related personnel. A decrease in the number of children with disabilities (considered in per-pupil test). Termination of obligation of LEA to provide special education services to a high-cost student. Termination of costly expenditures for long-term purchase such as equipment or construction. Maintenance of Effort - WASBO 2011 Spokane 21

QUESTIONS? Daniel Lunghofer (360) Full Moon Rising, April 2011