1. Allowability Hot Topics Under IDEA
Bonnie Graham, Esq.
Jennifer Castillo, Esq.

2. Allowable Costs for IDEA
For a particular cost to be allowed, it must be an excess cost of providing special education and related services. Only allowed costs may be charged to the flow-through or preschool entitlement grants.
Further, it also must be necessary and reasonable for proper and efficient performance and administration of the grant. A cost is reasonable if it does not exceed what a district would normally incur in the absence of federal funds. See 2 CFR Part 200.

3. What Rules Apply? IDEA Statute IDEA Regulations EDGAR
Administrative Rules
Cost Principles
Audit Requirements

4. Determining Excess Costs
When determining whether a cost is an excess cost, ask the following guiding questions:
In the absence of special education needs, would this cost exist?
Is this cost also generated by students without disabilities?
If it is a child specific service, is the service documented in the student’s IEP?

5. Child Find
Identify, locate and evaluate all children with disabilities in the state
Includes public & private schools
Includes homeless, migrant, & wards

6. Coordinated Early Intervening Services 34 CFR § 300.226(a)(b)
For Students:
Who are NOT currently identified as needing special education or related services, and
Who need additional academic and behavioral support to succeed in a general education environment
Exception: New Significant Disproportionality regulations – CEIS may be used on identified SWDs if district is significantly disproportionate

7. CEIS (cont.) 34 CFR § 300.226(a)(b)
An LEA may set-aside up to 15% of Part B funds to develop & implement CEIS:
May include interagency financing structures, for students in kindergarten through Grade 12 (focus on K-3rd Grade)
15% is Required if Significant Disproportionality!!!
New Federal Definition – delayed implementation
LEAs may not use Part B funds to provide CEIS to non-disabled preschool children (unless significantly disproportionate).

8. Use of IDEA Funds OSEP Policy Letter, MN January 2013
Can CEIS funds be used to support students with disabilities?
No, CEIS could not support services to children with disabilities or nondisabled students who do not need additional academic and behavioral support to succeed in a general education environment
NEW EXCEPTION if significantly disproportionate.
34 CFR

9. Ensuring IDEA Costs Are Allowable Under EDGAR
EDGAR – 2 CFR
All Costs Must Be:
Necessary, Reasonable and Allocable
Conform with federal law & grant terms
Consistent with state and local policies
Consistently treated
In accordance with GAAP
Adequately documented

10. Necessary EDGAR and IDEA
EDGAR – 2 CFR
Consideration must be given to:
Whether cost is a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award
IDEA specific allowable uses of funds
State Administration
Other State-level Activities
Child Find
Coordinating Early Intervening Services
Equitable Services

11. Reasonable Practical Questions Do I really need this?
Is the expense targeted to valid programmatic/administrative need?
In your plan?
Required in a student’s IEP?
Is this the minimum amount I need to spend to meet my need?
Do I have the capacity to use what I am purchasing?
Did I pay a fair rate?
If I were asked to defend this purchase, would I be able to?

12. Tracking Personnel Expenses 200.430(i)
All employees must maintain documentation showing that their salaries are allocable to a federal program (a)
That documentation must be based on records that accurately reflect the work performed.

13. Documentation Requirements 200.430(i)(1)
These records MUST:
Be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and allocable;
Be incorporated into official records;
Reasonably reflect total activity for which employee is compensated;
Encompass all activities (federal and non-federal);
Comply with established accounting polices and practices; and
Support distribution among specific activities or cost objectives.

14. Compliance
For records which meet the standards, the non-federal entity will not be required to provide additional support or documentation for the work performed.
DOL regulations for Fair Labor Standards Act must still be met (i.e. charges must be supported by records indicating the total number of hours worked each day) (i)(2)

15. Non-Compliance
For a non-Federal entity where the records do not meet these standards:
USED may require personnel activity reports (PARs), including prescribed certifications or equivalent documentation that support the records as required in this section.
PARs are not defined!! (i)(8)

16. Reasonable and Procurement
EDGAR – 2 CFR (a)
All nonfederal entities must have documented procurement procedures which reflect applicable Federal, State, and local laws and regulations.

17. Reasonable and Procurement (cont.)
EDGAR – 2 CFR
Methods of procurement:
NEW: Micro-purchase
Small purchase procedures
Competitive sealed bids
Competitive proposals
Noncompetitive proposals

18. Micro-Purchase EDGAR – 2 CFR 200.320(a)
NEW: Acquisition of supplies and services under $3,500 or less.
$2,000 for acquisitions for construction subject to the Davis-Bacon Act
Amount was updated per Federal Acquisition Regulations (FAR) 48 CFR Subpart 2.1 on October 1, 2015 (200.67)
May be awarded without soliciting competitive quotations if nonfederal entity considers the cost reasonable.
To the extent practicable must distribute micro-purchases equitably among qualified suppliers.

19. Small Purchase Procedures
EDGAR – 2 CFR (b)
Good or service that costs $150,000 or less
(Simplified Acquisition Threshold was raised under )
Organization may set lower threshold
Must obtain price or rate quotes from an adequate number of qualified sources
“Relatively simply and informal”

20. Noncompetitive Proposals
EDGAR – 2 CFR (f)
Appropriate only when:
The item is only available from a single source;
There is a public emergency for the requirement that will not permit delay resulting from competitive solicitation;
The Federal awarding agency or pass-through expressly authorizes noncompetitive proposals in response to a written request from non-Federal entity; or
After soliciting a number of sources, competition is determined inadequate.

21. Allowability Documentation
EDGAR – 2 CFR (g)
To meet allowability requirements… costs must be adequately documented.

22. Allowability Documentation (cont.)
EDGAR – –
A State and subgrantee shall keep records that fully show:
The amount of funds;
How funds were used;
Total cost of the project;
Share of the cost provided from other sources; and
Other records to facilitate an effective audit.
Shall keep records to show compliance with program requirements.

23. Allowability Documentation (cont.)
Retention Requirements For Records EDGAR – 2 CFR
Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report.
BUT, need to keep records for 5 years because…

24. Allowability Documentation (cont.)
GEPA - Statute of Limitations 34 CFR 81.31(c)
No recipient under an applicable program shall be liable to return funds which were expended in a manner not authorized by law more than 5 years before the recipient received written notice of a preliminary departmental decision.
Case law established that the 5 year statute of limitations period ran from the date of obligation.
Appeal of the State of Michigan, Dkt. No. 8(272)88 (Nov. 27, 1987) (“ED and the EAB have consistently held that ‘expended’ as used in the statute means ‘obligated.’”)

25. Allowability Documentation (cont.)
Methods for Collection, Transmission and Storage of Information EDGAR - 2 CFR
When original records are electronic and cannot be altered, there is no need to create and retain paper copies.
When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media provided they:
Are subject to periodic quality control reviews;
Provide reasonable safeguards against alteration; and
Remain readable.

26. Record Retention in Due Process and State-Level Reviews
SEAs must retain and make available to the general public, findings and decisions issued in due process hearings and State-level reviews conducted pursuant to IDEA. 34 CFR § (d)(2); § (c)(2)
Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report. 2 CFR §

27. Records Continued… Keep in mind…
Under 2 CFR § (a), the three-year period runs from when the final expenditure report is submitted on a grant (and it is due 90 days from the end of the performance period).
If an SEA does not obligate all of its IDEA Part B grant funds by the end of the fiscal year for which Congress appropriated the funds, it may obligate those funds during a carryover period of one additional year. 34 CFR §76.709,
FY 2017 as an Example…
under IDEA Part B grant for FY 2017 awarded on July 1, 2017, a State could obligate such FFY 2017 funds during the period of July 1, 2017 through September 30, 2019.
The final expenditure report for that FFY 2014 award is due and generally submitted on December 30, 2019.
Thus, all records created during that period pertinent to that FFY 2014 grant would need to be retained until December 30, 2019.
Given that the State generally submits its final expenditure report two and a half years after it receives its IDEA Part B grant, the record retention period can extend to five and a half years from the date the record was created.
 OSEP Policy Letter, NY 2017

28. Specific Items of Cost 28

29. 1. Advertisement
Are costs associated with advertising in media such as newspapers, radio and television, direct mail, or allowable?
Yes No
It Depends

30. 2. Bus Driver
Is the salary of a bus driver that transports students, including students with disabilities allowable?
Yes No
It Depends

31. 3. Clerical Staff
Can IDEA funds be used to pay for salaries of clerical support staff?
Yes No
It Depends

32. 4. Smart Technology
Roosevelt Elementary is one of the district's tech smart schools. At Roosevelt, classrooms are equipped with smart boards, computers, and tablets. Can IDEA funds be used to pay for the smart technology needed for the independent living classroom?
Yes No
It Depends

33. 5. Computer Networks
Are the costs associated with an LEA’s district wide networks allowable?
Yes No
It Depends

34. 6. Due Process Hearing
Can IDEA funds be used to pay the costs of conducting a due process hearing? For example, paying a hearing officer and providing a location for the hearing?
Yes No
It Depends

35. 7. Security Measures to Protect Equipment
A school wants to purchase cameras and other related security devices to protect assistive technology and other equipment purchased with IDEA funds. Is this allowable?
Yes No
It Depends

36. 8. Equipment Can an LEA purchase a vehicle using IDEA funds? Yes No
It Depends

37. 9. Extended School Year
Can IDEA funds be used to pay for personnel, supplies, transportation and other necessary costs related to a student with disability attending extended school year?
Yes No
It Depends
Yes. The need for ESY must be documented in the student’s IEP. A district must provide ESY services when a child's IEP team determines, on an individual basis, that the services are necessary for the provision of FAPE to the child. 34 CFR  

38. 10. School Nurse
May IDEA funds be used to pay for a school nurse that provides related services to students with disabilities?
Yes No
It Depends

39. 11. Professional Development
Are costs associated with registration fees, travel, conference expenses, and other related fees for professional development conferences allowable under IDEA?
Yes No
It Depends

40. 12. Translation Services
Can an LEA contract with a private vendor for translation services for IEP documents?
Yes No
It Depends
Yes. Costs incurred by the LEA for translating IEP documents into the native language of the child’s parents are allowable. These expenditures are related are considered an excess costs of special education.

42. Legal Disclaimer
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