2015-16 LEA Academy
SPED Finance
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ARKANSAS DEPARTMENT OF EDUCATION
SPED Finance-Grants and Data
9-15-2015
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Maintenance of Effort Requirement
IDEA Fiscal Requirements
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Individuals with Disabilities Education Act (IDEA)
Fiscal Requirements:
Maintenance of Effort (MOE)
Excess Costs
Private School Proportionate Set Aside
Coordinated Early Intervening Services (CEIS)
IDEA Fiscal Requirements
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

Districts should consider their MOE status (Eligibility
and Compliance), Excess Cost requirement, Private
School Proportionate Set Aside amount and
Coordinated Early Intervening Services possible set
aside when developing their annual budgets.
All four of these additional fiscal requirements
impact a district’s use of its Part B funds.
MOE Requirement
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IDEA Maintenance of Effort
The Individuals with Disabilities Education Act (IDEA),
§300.203, requires the Arkansas Department of
Education to determine that a school division complies
with the maintenance of effort requirement to spend
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.
MOE Eligibilty Standard
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

The first MOE requirements for districts to meet is
the Eligibility/Budget Standard
Eligibility Standard: a district must budget, for
the education of children with disabilities, at
least the same total or per capita amount of
local or local plus state dollars as the district
spent for that purpose from the same source
for the most recent prior year available
MOE Eligibility Standard
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
Districts provide the documentation that
demonstrates a plan to budget the required amount
in their Local Application for Part B funds.
MOE Compliance Standard
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The second MOE requirements for districts to meet is
the Compliance/Expenditure Standard
Compliance Standard: a district must expend at
least the same total or per capita amount of
local or local plus state dollars for a current
school year on the delivery of special education
and related services, as were spent the previous
year (comparison year).
MOE Compliance Standard
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
ADE will determine whether a district has met its
MOE Compliance requirement by reviewing final
district expenditures reported in the Cycle 9 data
collection.
COMPARISON YEAR:
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ELIGIBILITY STANDARD:
The comparison year is "the most recent fiscal year for
which information is available”, regardless of which
method the LEA Uses
COMPLIANCE STANDARD:
The comparison year is “the preceding fiscal year”,
regardless of which method the LEA uses.
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Using Allowable Exceptions for
Eligibility Standard
To the extent the information is available;
 the (exceptions) 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 (exceptions) the LEA reasonably expects to take in the fiscal
year for which the LEA is budgeting
The 4 Tests of MOE
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Section 300.203 of the IDEA Regulations specifies
the four MOE tests districts can use to Eligibility
and Compliance Standards status:
1.
2.
3.
4.
Local expenditures only
Local and State combined expenditures
Local per pupil expenditure
Local and State per pupil expenditure
New Clarification on Passing
MOE Tests
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


The level of effort a district 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
Districts must figure all 4 “tests” for MOE
compliance and keep track of these amounts (AFR)
for reference in each subsequent year (see
Compliance example).
Districts must meet at least one MOE test.
Impact of Method of the
Subsequent Years Rule
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

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.
Impact of Method of the
Subsequent Years Rule
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
For example,
 LEA wants to use State and local funds (total)
to meet the compliance standard in FY 20162017.
 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.
Eligibility/Budget Example
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Fiscal Year
Local Only
State + Local
Local per Capita
State + Local per
capita
2011 – 2012
$400
*
$1,100
*
$40
*
$110
*
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2012 – 2013
$450
*
$1,300
*
$45
*
$130
*
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2013 – 2014
$550
*
$1,200
**
$55
*
$120
**
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2014 – 2015
$500…**
$1,300
*
$50
**
$130....*
2015 – 2016
Required Amount to
Budget for 2016 –
2017
$550
• Met MOE
** Failed MOE
$1,300
$55
$130
Child Count
10
Compliance Example/AFR
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Fiscal Year
Local Only
State + Local
10
$10,500
2012
$10,400
**
$21,600
*
$1,040
**
$2,160
*
10
2013
$10,650
*
$21,500
**
$1,065
*
$2,150
**
10
2014
$10,800
*
$22,200
*
$ 1,080
*
$2,220
*
10
2015
$ 8,900
**
$22,000
**
$ 890
**
$2,200…… **
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*Met MOE
**Failed MOE
$10,800
$1,050
Child
Count
State + Local per capita
2011
Required MOE
2015-2016
$21,000
Local per Capita
$22,200
$2,100
$1,080
$2,220
Exceptions to IDEA MOE
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§300.204a
A school division may reduce the level of expenditures
below the previous year’s spending if the reduction is
attributable to the voluntary departure, by retirement
or otherwise, or departure for just cause, of special
education or related service personnel.
 Excludes positions eliminated through RIF
 Includes positions eliminated through attrition from
State/Local funds
 Includes savings between high salary of departing
teaching and low salary of new teacher (only from
State/Local funds)
Exceptions to IDEA MOE
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§300.204b
A school division may reduce the level of expenditures
below the previous year’s spending if the reduction is
attributable to a decrease in the enrollment of children
with disabilities.
Exceptions to IDEA MOE
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§300.204c
A school division may reduce the level of
expenditures below the previous year’s spending
if the reduction is attributable to 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, as determined by the state’s education
agency.
Exceptions to IDEA MOE
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§300.204d
A school division may reduce the level of
expenditures below the previous year’s spending if
the reduction is attributable to the termination of
costly expenditures for long-term purchases.
Adjustment to MOE
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
In accordance with section §300.205 of the IDEA
regulations, in any fiscal year that a district’s
subgrant allocation exceeds the amount that the LEA
received in the previous fiscal year, that district may
reduce the level of local, or state and local,
expenditures otherwise required by the district’s
MOE requirements in IDEA, section 613(a)(2) by up
to 50 percent of the increase in the district’s
subgrant allocation.
Adjustment to MOE
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

The district must spend the ‘freed-up’ local (or state
and local) funds on activities that are authorized
under the Elementary and Secondary Education Act
(ESEA) of 1965.
This provision cannot be used by any district that
has been identified as having significant
disproportionality and is required to reserve 15
percent of their federal Part B award for
Coordinated Early Intervening Services (CEIS).
Adjustment to MOE
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
However, if a district voluntarily chooses to set aside
up to, but not to exceed, 15 percent of its federal
Part B grant award, the amount the district chooses
to set aside is reduced by the amount taken for the
allowable exception under this provision.
Consequences of MOE Failure
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If school division doesn’t meet its MOE requirement:



ADE pays back USED using non-federal funds
ADE may require the district to pay back
The threshold for the next MOE calculation will
revert back to the last year that the district did
meet MOE.
Required MOE Form for the 4 “Tests”
Calculation
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
Soon to be posted on the web is a new required
form for the calculation of all 4 MOE tests.
https://arksped.k12.ar.us/FundingAndFinance/FinanceForms.html



This form will need to be completed in addition to
the Budget Checklist in MYSPED
When completed, mail to SPED Finance.
Tab 1 of the excel form includes a basic guidance.
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MAIL ORIGINAL
DOCUMENTS
Special Education Unit
Attn: Grants & Data
1401 West Capitol, Suite 450
Little Rock, AR 72201
OFFICE: 501-682-4223
FAX: 501-682-4313
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Excess Cost Requirement
Federal Definition of Excess Cost
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

§300.16
Excess costs means those costs that are in excess of
the average annual per-student expenditure in an
LEA during the preceding school year for an
elementary school or secondary school student.
§300.202
The excess cost requirement prevents an LEA from
using funds provided under Part B to pay for all of
the costs directly attributable to the education of a
child with a disability.
Excess Cost Intent
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
At both the elementary and secondary school levels
(computed separately), the excess cost requirement
stipulates you must be spending (in state and local
funds) at least as much (average amount per pupil)
on special ed kids, as you’re spending on all your
other kids (average amount per pupil).
Excess Cost Intent
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

In summary, you must document that you’re spending
at least as much (in state and local funding) on your
disabled kids, as you spend on your non-disabled
kids.
By meeting both the MOE and EC requirements…
you’re in compliance with the non-supplanting
provisions of federal law and regulation.
Excess Cost Calculation
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
1.
2.
3.
4.
Four components to the Excess Cost Calculation:
Compute total expenditures
Subtract certain expenditures
Compute average annual per pupil amount
Determine minimum amount of funds to spend for
Students With Disabilities
Excess Cost v. MOE
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Excess Cost:
 Spending on Special
Education students
compared to nonSpecial Education
students
 By grade range
 Expenditures
compared in same
year
MOE:
 Spending only on
Special Education
students
 At district level
 Expenditures
compared to prior
year
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Private School Proportionate Share
Private School Proportionate
Set Aside
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
Under section § 300.132 of the IDEA regulations,
districts are required to complete a formula to
identify the amount they must set aside of their Part
B award to be used to provide special education
and related services, through a Services Plan, to
children whose parents have placed their child in a
private school but who still want their child to
receive some special education
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Private School Proportionate
Set Aside
Number of eligible children with disabilities in the District (December 1, 2014 Child
Count)
Number of parentally placed or home school eligible children with disabilities in
private schools or home school located in the district and number identified as
needing services but services not being provided.
Use Dec. 1, 2014 Child Count and Private School Survey Questions 4 & 5.
Total Title VI Part B allocation to the District (current year only)
Average allocation per eligible child (#3 divided by #1)
Amount to be expended for parentally placed children and home school children
with disabilities (PSPS) (#4 multiplied by #2)
148
2
246,269.34
1,663.98
3,327.96
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Coordinated Early Intervention Services (CEIS)
Coordinated Early Intervening
Services (CEIS)
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

As permitted by section § 300.226 of the IDEA
regulations, a school district may use 15 percent (or
up to 15 percent) of their Part B award to provide
certain services to students who ARE NOT identified
under the IDEA as students with disabilities.
The first way is that a school district might be
identified as having significant disproportionality
and will be required to set aside 15 percent of its
Part B award.
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Coordinated Early Intervening
Services (CEIS)


The second way is that a school district might choose
to voluntarily set up to 15 percent of their Part B
award for Coordinated Early Intervening Services
(CEIS). This situation is described as follows.
Districts that voluntarily set aside up to 15 percent
of its Part B award will have to be aware of the
implications with Section 300.205 and a possible
adjustment to its MOE status.
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Coordinated Early Intervening
Services (CEIS)



Each LEA that develops and maintains coordinated,
early intervening services must annually report to the
SEA on—
The number of children served under this section who
received early intervening services; and
The number of children served under this section that
received early intervening services and subsequently
receive special education and related services under
Part B of the Act during the preceding two year
period.
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Key Changes
Key Changes in Post-Award Activities
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
Notable Key Changes:
 Greater emphasis on internal controls to ensure
compliance and fiscal responsibility;
 Enhanced
oversight requirements of
subrecipients, which includes risk assessment to
develop an appropriate monitoring plan and tools;
 Enhanced
 Greater
results
oversight of contracts; and
focus on performance expectations and
Key Changes in Post-Award Activities
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
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Longstanding grantee flexibilities known as the “Expanded
Authorities” are still there, just moved to 2 CFR 200.308:

Pre-award costs allowable up to 90 days before award

Extension one time, up to 12 months

“Carry forward” of unobligated balances

Budget transfers
Key Changes for Pass-Through Entities
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
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Under 2 CFR 200.331, pass-through entities are required to:

Provide subaward information to their subrecipients, including the
indirect cost rate for the Federal award

Perform a risk assessment for the purpose of subrecipient monitoring

Verify that every subrecipient is audited (as required by the Single Audit
Act)
Key Changes: Risk-Based Monitoring
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
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Increased responsibilities for pass-through entities:

2 CFR 200.331 (b) Pass-through entities must evaluate each
subrecipient’s risk of noncompliance with Federal statutes, regulations,
and the terms and conditions of the subaward for the purpose of
determining the appropriate monitoring actions.

Risk Assessment does not have to be completed before subawards are
made, but recipients can decide to make assessments before making the
subawards.
Key Changes: Risk-Based Monitoring (cont.)
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
Considerations for pass-through entities in evaluating sub-recipient
risk:




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Prior experience with the same or similar subaward
History of audits
New personnel or new systems
Relevant Federal monitoring
Key Changes: Risk-Based Monitoring (cont.)
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
Increased responsibilities for pass-through entities:

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Under 2 CFR 200.331 (d) Pass-through entity monitoring must include:
 Review of financial and performance reports;
 Issuance of management decisions for audit findings on subrecipients;
and
 Follow-up activities ensuring subrecipients take timely, appropriate
action to cure deficiencies
Key Changes: Risk-Based Monitoring(cont.)
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
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Under 2 CFR 200.331 (e) the pass-through entity must assess risk to
determine monitoring approach. Monitoring and follow up may
include:

Providing training and technical assistance,

Performing an on-site review of entity’s program operations, and

Arranging for agreed-upon-procedures for audit services
Required Self-Review



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In November, SPED Finance will post a Self-Review
form to be completed before January 1 and mailed
to SPED Finance.
The Self-Review will provide baseline data for the
monitoring process.
Questions on the Self-Review reflect the Fiscal
Monitoring Protocol.
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MAIL ORIGINAL
DOCUMENTS
Special Education Unit
Attn: Grants & Data
1401 West Capitol, Suite 450
Little Rock, AR 72201
OFFICE: 501-682-4223
FAX: 501-682-4313
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