MAINTENANCE OF EFFORT - IDEA

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MAINTENANCE OF EFFORT IDEA-B
Updated July 2013
Denise Dusek
July 2013
Education Service Center, Region 20
1
Presentation developed for
Independent School Districts
and
Open-Enrollment Charter Schools
Where applicable,
the differences between ISDs and Charters will be notated in the slide
July 2013
Education Service Center, Region 20
2
The information provided in this
presentation is subject to change
based on revised guidance from
TEA and/or USDE
July 2013
Education Service Center, Region 20
3
Beginning with the comparison of
2008-2009 to 2009-2010,
the IDEA MOE analysis
performed by TEA is
ON HOLD,
pending clarification from USDE
July 2013
Education Service Center, Region 20
4
Overview
• Definition of Maintenance of Effort (MOE)
• Comparison of MOE to State’s 52% Rule and
Federal Excess Cost Requirement
• MOE Data
• Exceptions to MOE
• MOE Voluntary Reduction
• LEA Response to Finding of Noncompliance
• OSEP Letters
• Best Practices
July 2013
Education Service Center, Region 20
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Maintenance of Effort (MOE) –
Definition
July 2013
Education Service Center, Region 20
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Federal Requirement – IDEA MOE
• 34 CFR §300.203 (a)
http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol2/pdf/CFR-2011-title34vol2.pdf
• IDEA-B funds provided to an LEA 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
July 2013
Education Service Center, Region 20
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Example – IDEA MOE
• Example: If the LEA expended $50,000 from
State and/or local funds in 2011-2012 for the
education of children with disabilities, the
LEA must expend at least $50,000 from State
and/or local funds in 2012-2013 for the
education of children with disabilities
• If at least the same amount is not expended
from one year to the next, the LEA will not be
in compliance with MOE, unless an exception
or adjustment applies
July 2013
Education Service Center, Region 20
8
IDEA MOE Compared to ESEA MOE
IDEA
ESEA (NCLB)
Percentage of Yr 1
State/local expenditures
to be spent in Yr 2:
100%
90%
Exceptions Allowed?
Yes
No
Waiver Request Allowed?
No
Yes
Functions:
11, 12, 13, 21, 23, 31, 32,
33, 34, 36, 41, 51, 53
11, 12, 13, 21, 23, 31, 32,
33, 34, 35 (Deficit Only),
36 (Deficit Only), 41, 51, 53
Consequence of decline in
effort:
Submit refund to TEA
TEA reduces LEA’s
allocation of NCLB funds by
same proportion
July 2013
Education Service Center, Region 20
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Definition – IDEA MOE
• 34 CFR §300.203 (b)(1)
• The LEA must budget, for the education of children
with disabilities, 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
July 2013
Education Service Center, Region 20
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Four IDEA MOE Calculations
1. Total special education expenditures (aggregate)
with a combination of State and local funds
2. Total special education expenditures per capita
(per child with a disability) with a combination of
State and local funds
3. Total special education expenditures (aggregate)
with local funds only
4. Total special education expenditures per capita
(per child with a disability) with local funds only
July 2013
Education Service Center, Region 20
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Most Favorable Calculation
 When calculating MOE based on the four
calculations, the most favorable result for the
LEA will be used to determine the LEA’s
status:
 If the LEA meets MOE based on one of the four
calculations, the LEA will be considered compliant
 If the LEA does not meet MOE on all four
calculations, the calculation showing the lowest
amount of decline will be considered the amount
of noncompliance
July 2013
Education Service Center, Region 20
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Most Favorable Calculation
Compliant Example:
Non-Compliant Example:
1)
Aggregate Total
NO Decline
State and Local Funds
1)
Aggregate Total
State and Local Funds
Decline:
($5,000)
2)
Per Capita
Decline
State and Local Funds
2)
Per Capita
State and Local Funds
Decline:
($4,000)
3)
Aggregate Total
Local Funds Only
Decline
3)
Aggregate Total
Local Funds Only
Decline:
($3,000)
4)
Per Capita
Local Funds Only
Decline
4)
Per Capita
Local Funds Only
Decline:
($2,000)
Result:
Non-Compliant
By
Result:
Compliant
July 2013
Education Service Center, Region 20
($2,000)
13
TEA’s Methodology for Determination of
Local Funds Only
**Methodology may change**
Description
Year 2
Year 1
Variance
(Yr 2-Yr 1)
A Total State and
Local Expenditures
B State Special
Education
Allotment (FSP)
C Local Funds Only
(A minus B)
July 2013
$151,368
$154,602
-$147,200
-$131,329
$ 4,168
$ 23,273
Education Service Center, Region 20
($ 3,234)
($19,105)
14
IDEA MOE Compared To:
State 52% Rule
and
Federal Excess Cost Requirement
July 2013
Education Service Center, Region 20
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IDEA MOE Compared To:
State 52% Rule
July 2013
Education Service Center, Region 20
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IDEA MOE vs State 52% Rule
• The State’s 52% Rule is not MOE
• 19 TAC §105.11: 52% Rule
http://ritter.tea.state.tx.us/rules/tac/chapter105/ch105b.html#105.11
MOE is a Federal spending requirement related to
maintaining the same level of fiscal effort with
local or State and local funds
52% Rule is a State spending requirement related
to direct costs and indirect costs with the State
FSP* Special Education allotment
*FSP (Foundation School Program)
July 2013
Education Service Center, Region 20
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State 52% Rule
State’s 52% Rule (effective 12/26/11):
No more than 48% of the LEA’s FSP State Special
Education allotment can be expended for indirect
costs related to special education
Therefore, at least 52% of the LEA’s FSP State
Special Education allotment must be spent on
direct costs related to special education
July 2013
Education Service Center, Region 20
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State 52% Rule
• Establishes the maximum amount that may be
spent on indirect costs
• The LEA has the option to spend 100% of their
State Special Education allotment on direct
costs related to special education
– The rule only prohibits the LEA from spending
more than 48% on indirect costs
– Does not imply that the LEA may only spend 52%
on direct costs
July 2013
Education Service Center, Region 20
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State 52% Rule
• Statement on SOF can be misleading
– Percent is actually minimum amount to be spent on
direct costs
– More accurate statement would be:
“23-Special Education Adjusted Allotment
(Spend at least 52% on direct costs)
July 2013
Education Service Center, Region 20
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Indirect Costs in Relation to IDEA MOE
• Although the State Special Education
allotment may be spent on both indirect and
direct costs,
for MOE purposes, the indirect costs coded
to the special education program intent
code are limited to:
Function 34 Student Transportation
Function 41 General Administration
• Therefore, spend cautiously on indirect costs
to avoid an adverse impact on MOE
July 2013
Education Service Center, Region 20
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IDEA MOE
and
52% Rule Scenarios
July 2013
Education Service Center, Region 20
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MOE vs 52% Rule: Scenario #1
• 2010-2011:
 LEA receives State Special Education funds $100,000
 LEA spends $52,000 in Fund 199/420, PIC 23, direct costs
 LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $100,000
LEA meets 52% Rule
• 2011-2012:
 LEA receives State Special Education funds $100,000
 LEA spends $52,000 in Fund 199/420, PIC 23, direct costs
 LEA spends $40,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $92,000
LEA meets 52% Rule, but not MOE
July 2013
Education Service Center, Region 20
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MOE vs 52% Rule: Scenario #2
• 2010-2011:
 LEA receives State Special Education funds $100,000
 LEA spends $52,000 in Fund 199/420, PIC 23, direct costs
 LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $100,000
LEA meets 52% Rule
• 2011-2012:
 LEA receives State Special Education funds $100,000
 LEA spends $48,000 in Fund 199/420 PIC 23, direct costs
 LEA spends $52,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $100,000
LEA meets MOE, but not 52% Rule
July 2013
Education Service Center, Region 20
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MOE vs 52% Rule: Scenario #3
• 2010-2011:
 LEA receives State Special Education funds $100,000
 LEA spends $52,000 in Fund 199/420, PIC 23, direct costs
 LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $100,000
LEA meets 52% Rule
• 2011-2012:
 LEA receives State Special Education funds $100,000
 LEA spends $52,000 in Fund 199/420, PIC 23, direct costs
 LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs
Total spent = $100,000
LEA meets both MOE and 52% Rule
July 2013
Education Service Center, Region 20
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IDEA MOE Compared To:
Federal Excess Costs Requirement
July 2013
Education Service Center, Region 20
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Excess Costs - 34 CFR §300.202
• IDEA-B funds provided to the LEA must be
used only to pay the excess costs of providing
special education and related services to
children with disabilities
• The excess cost requirement prevents an LEA
from using IDEA-B funds to pay for all of the
costs directly attributable to the education of a
child with a disability
July 2013
Education Service Center, Region 20
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SOURCE OF FUNDS PURPOSE OF FUNDS
FEDERAL FUNDS:
(IDEA-B)
•
•
•
STATE FUNDS: STATE
SPECIAL EDUCATION
ALLOTMENT
•
STATE FUNDS:
FOUNDATION
SCHOOL PROGRAM
(FSP)
•
LOCAL FUNDS
•
•
•
•
•
July 2013
Excess cost of providing special education and related services to
children with disabilities, to address the unique needs that result from
their disability.
Not allowable for office and routine classroom supplies (those ordinarily
purchased for the regular classroom).
Should supplement, not supplant, State, local and other Federal funds.
Costs specifically related to students with disabilities as determined by
individualized education programs (IEPs).
Not allowable for office and routine classroom supplies (those ordinarily
purchased for the regular classroom).
Costs for services, materials, supplies, and equipment provided to all
students.
Not limited to students with disabilities.
Costs for services, materials, supplies, and equipment provided to all
students.
Not limited to students with disabilities.
Use of funds determined by the LEA.
Education Service Center, Region 20
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Excess Costs – 34 CFR 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
• Computed separately for elementary and secondary
school students
• Computed after deducting certain amounts
• Refer to TEA’s Excess Cost calculator tool
http://www.tea.state.tx.us/index2.aspx?id=2147499857
July 2013
Education Service Center, Region 20
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Excess Costs – When to Expend
• An LEA meets the excess cost requirement if it has
spent at least a minimum average amount for the
education of its children with disabilities before
IDEA-B funds are used
• For practical purposes, the LEA may expend IDEA-B
funds simultaneously with other fund sources
provided that the minimum average amount per
student is expended by the end of the school year
with non-IDEA funds
July 2013
Education Service Center, Region 20
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Excess Costs Calculation
• The calculation must be completed annually by
the LEA based on previous year expenditures
as soon as possible during the new school year
• The calculation and supporting documentation
must be maintained by the LEA and made
available to auditors
July 2013
Education Service Center, Region 20
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IDEA MOE vs. Excess Costs
• The excess cost requirement is not MOE
• Excess cost establishes the minimum average
amount an LEA must spend on the education
of children with disabilities from non-IDEA
fund sources
• MOE is the level of the expenditure of local
funds or combination of State and local funds
for special education purposes that must be
maintained from one year to the next, subject
to certain exceptions and adjustments
July 2013
Education Service Center, Region 20
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Excess Costs – Additional Information
• View USDE’s presentation from August 2012
concerning Excess Cost at:
http://idea.ed.gov/explore/view/p/,root,dynami
c,Presentation,31,
July 2013
Education Service Center, Region 20
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IDEA MOE Data
Information is subject to change,
pursuant to
revised guidance from TEA
July 2013
Education Service Center, Region 20
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SAMPLE BASED
ON IDEA MOE
TEMPLATE FROM
JULY 2012; FORM
IS CURRENTLY
UNDER REVISION
July 2013
Education Service Center, Region 20
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PEIMS Data for MOE Analysis
• TEA uses RAW PEIMS Data for MOE
analysis
• PEIMS EDIT+ Reports most closely matched
to the RAW PEIMS data will be identified as
data sources for explanatory purposes
• Rounding differences could cause variances in
the final calculated numbers when comparing
data from PEIMS EDIT+ reports to data on the
Summary of Compliance report
July 2013
Education Service Center, Region 20
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Expenditures: PIC 99/ORG 999
• Program Intent Code (PIC)
– Codes used to account for the cost of instruction
and other services that are directed to a particular
need of a specific set of students
• Example: PIC 23 = Special Education
• Program Intent Code (PIC) 99 Undistributed
– Costs that are not clearly attributable to a specific
Program Intent Code
• PEIMS Allocation Process distributes portions
of PIC 99/ORG 999 amounts to specific PICs
July 2013
Education Service Center, Region 20
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Expenditures: PIC 99/ORG 999
• Use PIC 99/ORG 999 sparingly
• Refer to TEA’s Financial Accountability
System Resource Guide (FASRG)
– Financial Accounting and Reporting (FAR)
Module
– Located at:
http://www.tea.state.tx.us/index4.aspx?id=1222
• Improper use of PIC 99/ORG 999 could have
an adverse effect on MOE analysis
July 2013
Education Service Center, Region 20
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Estimating Allocation of PIC 99/ORG 999
• The allocation process is complicated
– Refer to TEA’s document “The Allocation Process
for EDIT+ Reports” located at:
http://www.tea.state.tx.us/index4.aspx?id=6564
July 2013
Education Service Center, Region 20
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Estimating Allocation of PIC 99/ORG 999
A simple method for estimating the current year
allocation from PIC99/ORG 999:
• Current year PEIMS EDIT+ PRF1D002 (Fall):
• Page titled “% to Spread ORG 999/PIC 99 Across
ORG & PIC”
• Obtain Total percent listed under PIC 23
• Multiply that percent by the total amount of
current year special education expenditures
obtained from your financial accounting
records
July 2013
Education Service Center, Region 20
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Expenditures: Function Codes
• Expenditure amounts for MOE analysis
include:
– Amounts coded directly by the LEA to the special
education program intent code, in:
• Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51,
53
– Amounts allocated from PIC 99/ORG 999 to the
special education program intent code, in:
• Functions 11, 12, 13, 21, 23, 31, 32, 33 only
July 2013
Education Service Center, Region 20
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Expenditures: Function Codes
Functions:
•
•
•
•
•
•
•
•
•
•
•
•
•
11 Instruction
12 Instructional Resources & Media Services
13 Curriculum Development & Instructional Staff Development
21 Instructional Leadership
23 School Leadership
31 Guidance, Counseling, & Evaluation Services
32 Social Work Services
33 Health Services
34 Student Transportation (Indirect Costs)*
36 Extracurricular Activities*
41 General Administration (Indirect Costs)*
51 Facilities Maintenance & Operations*
53 Data Processing Services*
*Functions 34, 36, 41, 51, 53 not used in the allocation of PIC 99/ORG 999
Undistributed
July 2013
Education Service Center, Region 20
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Expenditures: Data Sources
• TEA utilizes the following data sources for the
expenditure amounts:
– 2007-2008 and 2008-2009:
• PEIMS Mid-Year EDIT+ PRF1D007 Actual
Compliance Report – General Fund Allocated
– Allocated data (combination of directly coded expenditures
and allocation of PIC 99/ORG 999)
– 2009-2010 and beyond:
• Raw data comparable to amounts found in the PEIMS
Mid-Year EDIT+ PRF1D008 Actual Compliance
Report – General Fund Unallocated
– Unallocated data
– TEA performs allocation to obtain total expenditure amount
July 2013
Education Service Center, Region 20
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PRF1D007
Allocated
PRF1D008
Unallocated
PIC 23 =
PIC 23 =
Special education
expenditures coded
directly to PIC 23 by the
LEA
Special education
expenditures coded
directly to PIC 23 by the
LEA
PLUS
Allocated amount from PIC Does NOT include allocated
99
amount from PIC 99
July 2013
Education Service Center, Region 20
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Expenditures: SFSF Funds
• For 2009-2010 and 2010-2011 ONLY:
– SFSF* Fund Codes 266 (and 366 for SSAs)
The portion of SFSF expended for special
education (PIC 23) is considered State and local
funds for MOE purposes
*State Fiscal Stabilization Funds
July 2013
Education Service Center, Region 20
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Expenditures: SFSF Funds - Allocated
• In June 2012, TEA announced that SFSF funds
coded to PIC 99/ORG 999 will be allocated by
a formula, similar to the allocation of PIC
99/ORG 999 from the General Fund
• Due to the allocation of SFSF PIC 99/ORG
999 amounts, it will be difficult for the LEA to
verify the expenditures used in the MOE
analysis
July 2013
Education Service Center, Region 20
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Expenditures: General Fund and SFSF Funds
 2009-2010 & 2010-2011 MOE Expenditures include:
1. General Fund PIC 23 Unallocated Amounts
o Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53
2. SFSF PIC 23 Unallocated Amounts
o Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53
3. Allocation of portion of PIC 99 in General Fund to
PIC 23
o Functions 11, 12, 13, 21, 23, 31, 32, 33 only
4. Allocation of portion of PIC 99 in SFSF to PIC 23
o Functions 11, 12, 13, 21, 23, 31, 32, 33 only
July 2013
Education Service Center, Region 20
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Expenditures: Education Jobs Fund
• For 2010-2011 and 2011-2012 ONLY:
• May treat Ed Jobs funds (287/368), as State or local
funds for MOE purposes if the LEA spent those Ed
Jobs funds for the education of children with
disabilities
• Ed Jobs funds expenditures will NOT automatically
be included in TEA’s MOE analysis
– LEA must provide data and documentation of special
education expenditures with Ed Jobs Funds to TEA during
response to preliminary finding of potential noncompliance
for MOE
July 2013
Education Service Center, Region 20
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Expenditures: PEIMS Mid-Year 033 Record
 033 Record: Applicable only to Shared Services
Arrangements (SSAs) of ISDs*
PRFBD001 Actual SSA Financial Summary by Fund
and SSA Type – Unallocated data
• Fund Code 437 SSA Special Education only
• Fiscal Agent reports expenditures made on behalf of their Member
Districts
*033 Record is not applicable to Charter School SSAs
– Each Charter School reports its own share of SSA expenses on its own
032 record based on information provided to them by their Fiscal Agent
July 2013
Education Service Center, Region 20
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Expenditures: PIC 23 vs 32 vs 33
 Should special education prekindergarten (PPCD – Preschool
Program for Children with Disabilities) expenditures from
State and/or local funds be coded to PIC 23 or PIC 32 or the
new PIC 33?
PIC 23
Special Education Program
PIC 32
Prekindergarten Program (Effective 2011-2012)
This PIC code included all Pre-K expenditures, not
limited to Special Education, so TEA unable to
automatically include in MOE analysis
PIC 33
Prekindergarten – Special Education only (PPCD)
(Effective 2013-2014)
July 2013
Education Service Center, Region 20
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Expenditures: PIC 23 vs 32 vs 33
• Guidance from TEA for expenditures from
2010-2011 through 2012-2013:
– PIC 32 trumps PIC 23
– PIC 32 expenditures from the General Fund for PPCD will
not automatically be included in MOE analysis
– Remedy:
• Use a local option code to uniquely identify and track “PPCD
Expenditures from General Fund”
• Send documentation of PPCD expenditures to TEA in response to a
Preliminary Letter of Finding of potential noncompliance for MOE
July 2013
Education Service Center, Region 20
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Expenditures: PIC 23 vs 32 vs 33
• Guidance from TEA for expenditures effective
2013-2014 and beyond:
– Use PIC 23 for special education expenditures that are not
specific to prekindergarten
• PIC 23 General Fund expenditures are included in MOE analysis,
as always
– Use PIC 33 for special education prekindergarten
expenditures (PPCD)
• PIC 33 General Fund expenditures will be included in MOE
analysis
– (Use PIC 32 only for prekindergarten expenditures that are
not specific to special education, compensatory education,
or bilingual)
July 2013
Education Service Center, Region 20
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Expenditures:
Effective 2013-2014 and Beyond
Independent School Districts:
Charter Schools:
Fund 199 General Fund
PLUS
Fund 437, if member of SSA
Net Asset Code 420 General Fund
PLUS
Fund 199, if applicable
PIC 23 Special Education
PIC 23 Special Education
PIC 33 Special Education Prekindergarten
(PPCD)
(Effective 2013-2014)
PIC 33 Special Education Prekindergarten
(PPCD)
(Effective 2013-2014)
PIC 99 Amount of allocation from PIC 99
PIC 99 Amount of allocation from PIC 99
July 2013
Education Service Center, Region 20
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SHARS Reimbursement
• Reimbursement funds received from SHARS
(School Health and Related Services) for
school-based health services provided to
students with disabilities (special education)
enrolled in the Medicaid Program
• Should be coded to Revenue Code 5931
July 2013
Education Service Center, Region 20
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SHARS Reimbursement
• SHARS revenue is not considered State or local funds
for purposes of MOE (34 CFR 300.154(g)(2))
• Current guidance from TEA (subject to change):
– Original PIC 23 expenditures from Fund 199/Net Asset
Code 420 count toward MOE expenditures
– Additional special education expenditures from the SHARS
revenue do not count toward MOE expenditures
• Do NOT code these additional expenditures to PIC 23
July 2013
Education Service Center, Region 20
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Child Count
Child Count (special education):
PEIMS Fall Collection EDIT+PRF5D010 Special
Education Child/Counts by Funding Type
• Record 163 Student Data – Special Education
–Special Education Enrollment Records
–Funding Type Code 3 (IDEA-B) Only
• Inconsistent Comparison of Data for FY10:
• 2008-2009: Includes Codes 3 and 0
• 2009-2010: Includes Code 3 only
July 2013
Education Service Center, Region 20
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State Special Education Allotment
• LEA’s State Special Education Allotment
(from FSP) obtained from:
– Summary of Finances (SOF):
ISDs:
Charter Schools
Prior to 2012-2013:
“Special Education
Combination of “Special
Adjusted Allotment” Education Block Grant”
amount
and “Mainstream Special
Education Grant”
amounts
Charter Schools
2012-2013 and later:
“Special Education
Adjusted Allotment”
amount
Tier 1 Allotments
Section
Tier 1 Allotments
section
July 2013
Funding Breakdown by
Program section
Education Service Center, Region 20
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• ISDs (and Charter Schools 2012-2013 and beyond):
• Charter Schools Prior to 2012-2013:
July 2013
Education Service Center, Region 20
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ECI Set Aside
(Only Year 2 of the Comparison)
Early Childhood Intervention (ECI) SetAside* amount obtained from:
– Summary of Finances (SOF)
– Tier I Detail Report, Special Education section,
Final Allotment column
• Negative number in the SOF, but positive
number for MOE analysis
*ECI Set-Aside is not applicable to Charter Schools
July 2013
Education Service Center, Region 20
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Sample SOF Showing ECI Set-Aside
*ECI Set-Aside is not applicable to Charter Schools
July 2013
Education Service Center, Region 20
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PEIMS EDIT+ PRF3D022 - Misleading
• Does not perform all four calculations
– Only performs two calculations – (1) Combination of State
and local funds aggregate total expenditures, and (2)
Combination of State and local funds per capita
• Uses the Grand Total of Codes 3 and 0 for Child Count data,
instead of using Code 3 only
• Does not include ECI Set-Aside amount
• Does not include SFSF or Ed Jobs funds used for special
education
• Does not include the portion of SFSF funds from PIC 99/ORG
999 allocated to the special education PIC
July 2013
Education Service Center, Region 20
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TEA’s IDEA MOE Template
(Summary of Compliance)
• For a more accurate analysis of MOE, the LEA
should use the IDEA MOE Template (Summary of
Compliance) located on the TEA webpage at:
http://www.tea.state.tx.us/index4.aspx?id=4073
This template is currently unavailable on TEA’s
website because it is in the process of being
revised
July 2013
Education Service Center, Region 20
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TEA’s IDEA MOE Template
• TEA utilizes the IDEA MOE Template to:
– Assist the LEA in understanding the methodology
used in MOE analysis
• The template is included in the Preliminary Letter of
Finding for MOE issued to LEAs from TEA
• LEAs are required to monitor MOE
• May use TEA’s tool or a comparable tool
• Failure to demonstrate to an auditor that MOE is being
monitored by the LEA could result in a finding
July 2013
Education Service Center, Region 20
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Exceptions to IDEA MOE
July 2013
Education Service Center, Region 20
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Allowable Exceptions to IDEA MOE
• Five exceptions notated in 34 CFR §300.204
• An LEA may reduce their MOE level from the
previous year if the reduction is attributable to
any of the five exceptions
• TEA specifies required documentation for the
exceptions in the MOE Response Forms at
http://www.tea.state.tx.us/index4.aspx?id=4073
July 2013
Education Service Center, Region 20
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IDEA MOE Exception #1
1. Voluntary departure, by retirement or
otherwise, or departure for just cause, of
special education or related services
personnel
• Following do not qualify:
Reduction in Force (RIF)
Non-renewal of a probationary teacher’s contract
Transfer or reassignment
Personnel paid 100% from IDEA-B funds
Contracted services personnel
July 2013
Education Service Center, Region 20
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LEA’s Assertion for Exception #1
• If the LEA receives a Preliminary Letter of
Findings of potential noncompliance from
TEA, the LEA may use TEA’s response form
“C” to assert the decline in effort was due to
the departure of special education personnel
• The LEA must indicate:
– Name and PEIMS Staff ID of departed personnel and reason for
departure
– Name and PEIMS Staff ID of replacement personnel, if applicable
– Payroll Costs (including fringe benefits)
July 2013
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Documentation for Exception #1
• Source Payroll Record indicating reason for
departure
• Personnel Action Form
– Resignation Letter signed and dated by employee
• Payroll Journal
• Schedule indicating agreement of payroll costs
to payroll journal
• Employee’s SBEC Record (i.e., certification)
• Job Description, signed and dated by employee
July 2013
Education Service Center, Region 20
68
Strategies for Exception #1
• Determine potential retirees and move from
Federal funds to State/local funds, if applicable
– Use caution
– Make an equal swap so State/local funds are not
increased
• Assign position numbers to easily track
separated employees and their replacements, if
applicable
July 2013
Education Service Center, Region 20
69
IDEA MOE Exception #2
2. Decrease in the enrollment of children with
disabilities
 Must still spend the same amount per pupil
 Reduction in number of students with disabilities
will not be accepted as an exception if the LEA’s
State Special Education allotment increased in the
second year
July 2013
Year 1
$200,000
525 Students
$380.95/pupil
Year 2
$240,000
498 Students
$481.93/pupil
Education Service Center, Region 20
70
LEA’s Assertion for Exception #2
• Response Form “D”
– May be eliminated FY11 (comparison of 20092010 to 2010-2011)
• Prior to FY 11, Form “D” was used to assert decline in
effort was due to decreased enrollment
– TEA’s calculations in the Summary of Compliance
already account for a decrease in enrollment
– LEA must still spend the same amount per pupil
– Look for other exceptions that could be impacted
as a result of a reduction in special education
population
July 2013
Education Service Center, Region 20
71
LEA’s Assertion for Exception #2
 Erroneous PEIMS data may be the factor when the
decline in fiscal effort is based on child count
 Important note: Ensure that any data exported into
PEIMS from the LEA’s system is accurate
July 2013
Education Service Center, Region 20
72
IDEA MOE Exception #3
3. Termination of the obligation of the LEA 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, because the child:
 Has left the jurisdiction of the LEA;
 Has reached the age at which the obligation of the
LEA to provide FAPE to the child has terminated;
 No longer needs the program of special education
July 2013
Education Service Center, Region 20
73
LEA’s Assertion for Exception #3
• If the LEA receives a Preliminary Letter of
Findings of potential noncompliance from
TEA, the LEA may use TEA’s response form
“E” to assert the decline in effort was due to
the termination of an exceptionally costly
program for a particular child
• The LEA must indicate:
–
–
–
–
Student ID (PEIMS Record 163 Student ID)
Description of the exceptionally costly program
Date and reason program was terminated
Total expenditures for the program
July 2013
Education Service Center, Region 20
74
Documentation for Exception #3
• General Ledger
• Source records
• Summary Schedule of Costs that agrees with
the ledger and source records
• Copy of child’s ARD/IEP documenting
requirement of the program, at TEA’s request
• Copy of child’s ARD/IEP documenting date
the program is no longer needed by the
student, upon request by TEA
July 2013
Education Service Center, Region 20
75
Strategies for Exception #3
• Things to consider for claiming this exception:
– Was a student moved from a more restrictive
environment to a less restrictive environment?
– Did the student have a one-on-one teacher or aide
or a nurse?
– Was the student in a behavior unit?
– Was the student in a residential facility, non-public
day school, or RDSPD?
– Did the student receive related services, including
transportation?
July 2013
Education Service Center, Region 20
76
IDEA MOE Exception #4
4. Termination of costly expenditures for longterm purchases, such as the acquisition of
equipment.
TEA will only consider capital outlay
• ISDs – Fund 199, class object series 6600
• Charters – Net Asset Code 420, asset series 1500
The LEA’s capitalization threshold is used to
determine “costly” expenditures, provided the
expenditure is coded to 6600/1500
July 2013
Education Service Center, Region 20
77
LEA’s Assertion for Exception #4
• If the LEA receives a Preliminary Letter of
Findings of potential noncompliance from
TEA, the LEA may use TEA’s response form
“F” to assert the decline in effort was due to
the termination of costly expenditures for longterm purchases
• The LEA must indicate:
–
–
–
–
–
July 2013
Description of the long-term purchase
Object Code (or Asset Code, if a Charter School)
Date of purchase
Total expenditures
Explanation/Justification for the purchase
Education Service Center, Region 20
78
Documentation for Exception #4
• General Ledger and Source Records
• Schedule listing the items purchased, including:
 Classification of the purchase indicated in the General Ledger
and reported in the PEIMS Record 032
• Fund/Net Asset Code
• Function Code
• Object/Asset Code
 Schedule must agree to the LEA’s detailed general ledger and
source records
– Have available the LEA’s policy on capitalization and
LEA’s plan supporting the explanation/justification for the
purchase
July 2013
Education Service Center, Region 20
79
Strategies for Exception #4
• Things to consider for claiming this exception:
– Portable building
– Remodel of existing building
– Patient lift
– Communication device
– Assistive technology
July 2013
Education Service Center, Region 20
80
IDEA MOE Exception #5
5. Assumption of cost by the High Cost Fund.
 LEA must have received a High Cost Fund Grant
(Fund 226/315) award
July 2013
Education Service Center, Region 20
81
LEA’s Assertion for Exception #5
• If the LEA receives a Preliminary Letter of
Findings of potential noncompliance from
TEA, the LEA may use TEA’s response form
“G” to assert the decline in effort was due to
the assumption of cost by the High Cost Fund
• The LEA must indicate:
– Description of cost charged to the High Cost Fund
– Total expenditures
July 2013
Education Service Center, Region 20
82
Documentation for Exception #5
• General Ledger documenting
Expenditures formerly recorded to Fund Code 199
(or Net Asset Code 420 – Charters), and
Subsequently recorded to Fund 226/315 (IDEA-B
Discretionary High Cost Fund)
• Source Records
• Receipt of High Cost Fund Grant Award
July 2013
Education Service Center, Region 20
83
Strategies for Exception #5
• If the LEA is considering applying for a High
Cost Fund award, the LEA should try to use
State or local funds for the expenditures
– If the LEA receives a High Cost Fund award, the
expenditures made from State or local funds could
then be recoded to Fund 226/315
– The LEA would then have a legitimate exception
to a decline in effort
July 2013
Education Service Center, Region 20
84
New MOE Level Established
• If an LEA reduces their MOE level through any
of these exceptions and has documentation to
support the exception(s), this becomes the
LEA’s new MOE level until such time when the
LEA increases its local, or State and local, effort
to support the special education program
July 2013
Education Service Center, Region 20
85
IDEA MOE Voluntary Reduction
(Adjustment to Local Fiscal
Effort)
July 2013
Education Service Center, Region 20
86
IDEA MOE Voluntary Reduction
• 34 CFR §300.205
• Under certain circumstances, in any fiscal year
that an LEA’s IDEA-B Formula entitlement
exceeds their IDEA-B Formula entitlement
received in the previous fiscal year, the LEA
may reduce their MOE level by up to 50%* of
the increase in entitlement
• This is optional
*Minus CEIS funds reserved during the year of the reduction
July 2013
Education Service Center, Region 20
87
New MOE Level Established
• Once an LEA legitimately reduces their MOE
base level through this option, it becomes the
LEA’s new MOE level until such time when the
LEA increases its local, or State and local, effort
to support the special education program
July 2013
Education Service Center, Region 20
88
Condition: Required Use of
“Freed Up” Funds
• “Freed Up” funds must be spent on ESEA
(NCLB) activities
– “Freed Up” funds: The amount of the reduction to
the LEA’s base level for MOE
– If not spent on ESEA activities, the LEA may incur a
finding
July 2013
Education Service Center, Region 20
89
“Freed Up” Funds Example
Without Option to Reduce
With Option to Reduce
Local or State and Local Funds:
Local or State and Local Funds:
• 2010-2011 MOE level for
special education =
$200,000
• 2010-2011 MOE level for sped
= $200,000
• 2011-2012 MOE level for
special education must
equal at least $200,000
July 2013
• 2011-2012 Voluntarily
Reduces MOE by $25,000
• 2011-2012 MOE level for sped
must equal at least $175,000
• 2011-2012 “Freed Up” funds
of $25,000 must be spent on
ESEA activities
Education Service Center, Region 20
90
ESEA Activities (Examples)
Examples of ESEA Activities for the “Freed-Up Funds”
(Title I Activities):
•
•
•
•
Improving Basic Programs Operated by LEAs
Improving Student Reading Skills
Education of Migratory Children
Prevention and Intervention Programs for Neglected,
Delinquent, or At-Risk Children
• National Assessment
• Comprehensive School Reform
July 2013
Education Service Center, Region 20
91
ESEA Activities (Examples), continued
Examples of ESEA Activities for the “Freed-Up Funds”
(Title I Activities):
• Advanced Placement Programs
• School Drop-Out Prevention
• Preparing, Training, and Recruiting High Quality
Teachers and Principals
• Language Instruction for Limited English Proficient
and Immigrant Students
July 2013
Education Service Center, Region 20
92
ESEA Activities (Examples), continued
Examples of ESEA Activities for the “Freed-Up Funds”
(Title I Activities):
• Promoting Informed Parental Choice and Innovative
Programs
• Flexibility and Accountability
• Parental Involvement Activities
• Family Literacy Services
• Activities to Promote Family Support for Higher
Education
• Mentor Programs
July 2013
Education Service Center, Region 20
93
Voluntary Reduction Criteria
To be eligible to voluntarily reduce the LEA’s MOE level,
all three of the following criteria must be met:
1.
The LEA must have an increase in their IDEA-B Formula
entitlement (Fund Code 224/313) from the previous year, and
2.
The LEA must have a determination level of “Meets
Requirements” (34 CFR §300.608), and
3.
The LEA cannot be identified as having significant
disproportionality* under 34 CFR §300.646
 The letters described above (2 & 3) that are received in the
spring or summer, determine eligibility for voluntarily reducing
MOE in the new school year
*(Significant Disproportionality Criteria N/A for 2011-2012 and 2012-2013)
July 2013
Education Service Center, Region 20
94
Voluntary Reduction Calculation
If the LEA meets all three eligibility criteria and
chooses to exercise the option to reduce:
•
Step 1: Subtract the Year 1 IDEA-B Formula
maximum entitlement from the Year 2 IDEAB Formula maximum entitlement
•
Step 2: If the calculation from Step 1
demonstrates an increase in entitlement, divide
the increase in half
July 2013
Education Service Center, Region 20
95
Voluntary Reduction Calculation,
continued
• Step 3: If the LEA reserved CEIS (Coordinated
Early Intervening Services) funds in Year 2,
subtract the CEIS amount from the amount
calculated in Step 2 (TEA currently has different
guidance for this step. Refer to following slides)
• Step 4: The result of Step 3 (or Step 2, if Step 3
is N/A) is the maximum amount the LEA may
voluntarily reduce their MOE level for Year 2
July 2013
Education Service Center, Region 20
96
Voluntary Reduction and CEIS
• There are two relationships between the
Voluntary Reduction option and CEIS:
– Choosing to voluntarily reserve IDEA-B funds for
CEIS can limit the amount the LEA voluntarily
reduces MOE
– Choosing to voluntarily reduce MOE can limit the
amount the LEA voluntarily reserves for CEIS
July 2013
Education Service Center, Region 20
97
Voluntary Reduction and CEIS
• The following slides will provide examples from
Appendix D of the IDEA regulations pertaining to the
relationship between the MOE Voluntary Reduction
and CEIS
• However, TEA is currently not using this guidance
from USDE
• Instead, TEA states: When setting aside CEIS and
determining the Voluntary MOE Reduction
amount, the amounts used for both, when added
together, cannot exceed the lesser of the two
available amounts
July 2013
Education Service Center, Region 20
98
Voluntary Reduction Calculation Example 1*
 2011-2012 IDEA-B Formula maximum entitlement = $250,000
 2012-2013 IDEA-B Formula maximum entitlement = $200,000
•
•
•
•
Step 1:
Step 2:
Step 3:
Step 4:
$200,000 - $250,000 = ($50,000)
N/A
N/A
The LEA may not voluntarily reduce their
MOE level for 2012-2013 because the LEA
did not receive an increase in entitlement
*TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.
July 2013
Education Service Center, Region 20
99
Voluntary Reduction Calculation Example 2*
 2011-2012 IDEA-B Formula maximum entitlement = $250,000
 2012-2013 IDEA-B Formula maximum entitlement = $300,000
 2012-2013 For CEIS purposes, 15% of the IDEA-B entitlement
is $45,000 but the LEA only reserves $5,000 for CEIS
•
•
•
•
Step 1:
Step 2:
Step 3:
Step 4:
$300,000 - $250,000 = $50,000
$50,000/2 = $25,000
$25,000 - $5,000 (CEIS) = $20,000
The LEA may voluntarily reduce their MOE
level for 2012-2013 by any amount not to
exceed $20,000
*TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.
July 2013
Education Service Center, Region 20
100
Voluntary Reduction Calculation Example 3*
 2011-2012 IDEA-B Formula maximum entitlement = $250,000
 2012-2013 IDEA-B Formula maximum entitlement = $300,000
 2012-2013 LEA reserves the full 15% of their IDEA-B funds
for CEIS, which is $45,000
•
•
•
•
Step 1:
Step 2:
Step 3:
Step 4:
$300,000 - $250,000 = $50,000
$50,000/2 = $25,000
$25,000 - $45,000 (CEIS) = ($20,000)
The LEA may not voluntarily reduce their
MOE level for 2012-2013 because their CEIS
amount exceeded 50% of the increase in
entitlement
*TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.
July 2013
Education Service Center, Region 20
101
Voluntary Reduction Calculation Example 4*
 2011-2012 IDEA-B Formula maximum entitlement = $250,000
 2012-2013 IDEA-B Formula maximum entitlement = $350,000
 2012-2013 15% of IDEA-B entitlement = $52,500
•
•
•
•
Step 1:
Step 2:
Step 3:
Step 4:
$350,000 - $250,000 = $100,000
$100,000/2 = $50,000
LEA chooses to voluntarily reduce MOE
The LEA may only voluntarily reserve up to
$2,500 for CEIS
*TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.
July 2013
Education Service Center, Region 20
102
Voluntary Reduction Calculation Example 5*
 2011-2012 IDEA-B Formula maximum entitlement = $250,000
 2012-2013 IDEA-B Formula maximum entitlement = $350,000
 2012-2013 15% of IDEA-B entitlement = $52,500
•
•
•
•
Step 1:
Step 2:
Step 3:
Step 4:
$350,000 - $250,000 = $100,000
$100,000/2 = $50,000
LEA chooses not to voluntarily reduce MOE
The LEA may voluntarily reserve up to
$52,500 for CEIS
*TEA does not use this methodology. Refer to slide 98 for TEA’s methodology.
July 2013
Education Service Center, Region 20
103
Impact of ARRA Funds on Voluntary Reduction
New Guidance on Impact of ARRA – Jan 2012
• Previous Guidance from TEA:
ARRA IDEA-B Formula maximum entitlement
funds are included as 2009-2010 entitlements only
when comparing 2008-2009 to 2009-2010
• Corrected Guidance from TEA:
ARRA IDEA-B Formula maximum entitlement
funds are included as 2009-2010 entitlements
when comparing 2008-2009 to 2009-2010 AND
when comparing 2009-2010 to 2010-2011
July 2013
Education Service Center, Region 20
104
Old Guidance:
Comparison of 08-09 to 09-10 Chart
New Guidance:
2008-2009
Fund 224/313
2009-2010
Fund 224/313
2008-2009
Fund 224/313
2009-2010
Fund 224/313
AND
AND
Fund 283/364
Fund 283/364
Definite Increase
Definite Increase
Comparison of 09-10 to 10-11
New Guidance:
Old Guidance:
2009-2010
Fund 224/313
2009-2010
2010-2011
Fund 224/313
Fund 224/313
2010-2011
Fund 224/313
AND
(Exclude 283/364)
Fund 283/364
Possible Increase
No Increase *
*Unless LEA did not receive ARRA funds, then possible increase
July 2013
Education Service Center, Region 20
105
Condition: Timing of Decision
• If the LEA is eligible to voluntarily reduce their
MOE level and exercises the option, the
decision must be made at the beginning of the
year of the reduction
– To ensure that the LEA actually reduces their
spending by the eligible amount
– To ensure the “freed up” funds are spent on ESEA
activities during the year of the reduction
Code the “freed up” funds to a PIC other than PIC 23/33
Use a locally defined option code to uniquely identify the
“freed-up” expenditures as ESEA activities
July 2013
Education Service Center, Region 20
106
Reporting Voluntary Reduction
 All LEAs must report to TEA on their decision
to voluntarily reduce MOE
 Special Education Consolidated Grant application
 BS6006 Budget Summary, Part 2 MOE Reduction section
 Report one of the following choices:
1. The LEA is not eligible to reduce MOE
2. The LEA is eligible to reduce MOE but chooses
not to exercise the option
3. The LEA is eligible to reduce MOE and chooses to
exercise the option
 Must report the actual dollar amount of the reduction
July 2013
Education Service Center, Region 20
107
Reporting Voluntary Reduction
• TEA will verify the reduction amount during
their MOE analysis
– If the MOE analysis determines the LEA was not
eligible to reduce but did reduce, or was eligible but
exceeded the maximum eligible amount, the LEA
may incur a finding
July 2013
Education Service Center, Region 20
108
Reporting Voluntary Reduction
• Prior to 2013-2014, the LEA reported the
voluntary reduction data on the following
year’s Special Education Consolidated Grant
application
– The LEA was required to report on the 2011-2012
Special Education Consolidated Grant application
on whether they voluntarily reduced MOE in
2010-2011
July 2013
Education Service Center, Region 20
109
Reporting Voluntary Reduction –
Revision Effective 2013-2014
• Effective 2013-2014, the LEA will begin
reporting on their decision concerning the
voluntary reduction during the current year
– 2013-2014: Report two sets of data:
• Voluntary Reduction data from 2012-2013 and
• Voluntary Reduction data for 2013-2014
– 2014-2015 and beyond: Report current year
• Example, report Voluntary Reduction data for 20142015 on the 2014-2015 SPED Consolidated application
July 2013
Education Service Center, Region 20
110
Actual Amount of Reduction Reported
• TEA must report the actual amount of the LEA’s
Voluntary Reduction to the Federal Government by
May of the following year of the reduction
– If the LEA voluntarily reduced MOE during the 2011-2012
school year, TEA reported the amount to the Federal
government by May 2013
• It is imperative that the LEA report the actual amount of
the Voluntary Reduction accurately to TEA
• Submit an amendment before the amendment deadline
to make any necessary corrections to the Voluntary
Reduction data
July 2013
Education Service Center, Region 20
111
Only Report Voluntary Reduction
• The reporting of MOE on the Special Education
Consolidated Grant application is only
applicable to the Voluntary MOE Reduction
• Do not report on the Special Education
Consolidated Grant application:
– Decline in effort based on one of the five exceptions
– Failure to maintain fiscal effort (noncompliance)
– The amount of a refund due to TEA for MOE
noncompliance from a previous year
July 2013
Education Service Center, Region 20
112
Voluntary Reduction vs MOE Compliance
• Do not confuse MOE Voluntary Reduction with
MOE compliance
– Voluntary Reduction is an optional choice made by
the LEA
– Voluntary Reduction looks at entitlements, not
expenditures, to determine eligibility
– MOE compliance looks at expenditures, not
entitlements
– Voluntary Reduction looks at Federal IDEA-B
entitlements, while MOE compliance looks at State
and local expenditures
July 2013
Education Service Center, Region 20
113
LEA’s Assertion for Voluntary Reduction
• If the LEA receives a Preliminary Letter of Findings
of potential noncompliance from TEA for a decline in
effort and the LEA had voluntarily reduced MOE, the
LEA must use TEA’s response form “B” to justify
that the decline in effort was actually a voluntary
reduction
• The LEA must indicate:
– Eligibility criteria for MOE Voluntary Reduction was met
– Entitlement amounts for the comparison years
– CEIS amount reserved in the second year, if applicable
July 2013
Education Service Center, Region 20
114
Documentation for Voluntary Reduction
• Letter of Determination from TEA, showing
“Meets Requirements”
– If the LEA does not have the letter available, the
LEA may notate that on on their response form
• TEA will be able to verify the LEA’s Determination
status by other methods
• Detailed general ledger:
– Include expenditures for CEIS, if applicable
– Include expenditures supporting “freed up” funds
were spent for ESEA activities
July 2013
Education Service Center, Region 20
115
Response to Finding of Potential
Noncompliance
July 2013
Education Service Center, Region 20
116
Preliminary Letter of Findings
• After completion of MOE analysis, every LEA will
be issued written notification from TEA:
 Preliminary Letter of Findings, and
 Preliminary Summary of Compliance with IDEA MOE
Requirement (TEA’s IDEA MOE Template)
• Prior to May 2012, only LEAs with a decline in fiscal
effort were notified
• Effective July 2012, all LEAs will receive a
Preliminary Letter of Findings, showing either
compliance or potential noncompliance
July 2013
Education Service Center, Region 20
117
Response to TEA from All LEAs
• LEA in compliance – no action required
• LEA identified as potentially noncompliant
must submit a response to TEA within 30 days
July 2013
Education Service Center, Region 20
118
Response to TEA from LEA with Decline
• Review the data carefully and verify the data:
– Verify Expenditure amounts
• Ensure SFSF expenditures for special education were
included, if applicable
• Determine if Ed Jobs Funds were used for special
education; if so, provide data to TEA in response
– Verify Child Count numbers
– If member of an SSA (ISDs only), verify Fiscal
Agent expenditures on behalf of member are listed
and are accurate
– Review “local funds only” amount
July 2013
Education Service Center, Region 20
119
Response to TEA from LEA with Decline
• Look for possible exceptions
• Determine if the LEA utilized the option to
voluntarily reduce MOE
• Utilize response forms on TEA’s website:
http://www.tea.state.tx.us/index4.aspx?id=4073
• All LEAs that receive a finding of potential
noncompliance must submit Form “A” to TEA by the
deadline
• Do not send a refund to TEA at this point
July 2013
Education Service Center, Region 20
120
Response to TEA from LEA with Decline
• Form “A”:
Concur with findings of noncompliance
OR
Identify why the LEA does not concur:
• Exceptions to MOE
• Voluntary MOE Reduction (Local Adjustment to Fiscal
Effort)
• Erroneous PEIMS data* (TEA no longer allows this
assertion) *If TEA decides to allow this assertion in the future,
use with caution because it may result in additional monitoring
July 2013
Education Service Center, Region 20
121
LEA Does Not Concur
• If the LEA does not concur with the findings, the LEA
must submit Form “A” AND the applicable form(s):
Exceptions to MOE
Forms “C” through “G”
•
•
Exception 1 Departure of Sped Personnel
Exception 2 Decrease in Student EnrollmentSPED
•
•
Exception 1 – Form “C”
Exception 2 – Form “D” (This form may be
eliminated by TEA in the future)
•
•
Exception 3 Termination of Costly Program
Exception 4 Termination of Long-Term
Purchases
Exception 5 Assumption of Cost by High Cost
Fund
•
•
•
Exception 3 – Form “E”
Exception 4 – Form “F”
Exception 5 – Form “G”
•
Voluntary Reduction (local
adjustment to fiscal effort)
Form “B”
Erroneous PEIMS Data –TEA no
Form “H” This form has been
longer
allows this assertion
discontinued
July 2013
Education Service Center, Region 20
122
TEA’s Review of LEA’s Response
• After the LEA submits their response, TEA will
review the LEA’s response and supporting
documentation
IF
Response and
Documentation justifies
decline in fiscal effort:
Sufficiently
Partially
Insufficiently
July 2013
THEN
Amount due TEA will:
Be Zero
Be adjusted
Remain the same
Education Service Center, Region 20
123
Final Determination
• After reviewing LEA’s response and
supporting documentation, the LEA will
receive:
Final Letter of Findings,
Final Summary of Compliance with IDEA MOE
Requirement (TEA’s IDEA MOE Template)
• A separate letter will be sent to the LEA with
instructions for repayment of the noncompliant
amount, if applicable
July 2013
Education Service Center, Region 20
124
FY10 MOE Final Determination ON HOLD
• The Final Letters of Findings for FY10
(comparison of 2008-2009 to 2009-2010, July
2012 letters) are ON HOLD
• Pending clarification from USDE
July 2013
Education Service Center, Region 20
125
If Noncompliant
• If an LEA fails to maintain fiscal effort, the
LEA must refund to TEA an amount equal to
the amount by which the LEA failed to
maintain effort, unless that amount exceeds the
LEA’s IDEA-B Formula maximum entitlement
for the year of the decline
July 2013
Education Service Center, Region 20
126
Maximum Amount Due
• If the amount due TEA exceeds the LEA’s IDEA-B
Formula maximum entitlement for the year of the
decline, the LEA will only be required to refund an
amount that equals the entitlement
• Example:
– 2010-2011 Decline in Fiscal Effort = $50,000
– 2010-2011 LEA’s IDEA-B Formula maximum entitlement
= $40,000
– Amount Due TEA = $40,000 (the lesser of the two
amounts)
July 2013
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127
Repayment
• Repayment amount to TEA must be made
from non-Federal funds or from Federal funds
for which accountability to the Federal
government is not required
• For SSAs, the Member District with the
decline in fiscal effort will be required to
refund TEA
July 2013
Education Service Center, Region 20
128
OSEP Letters
(United States Department of Education
Office of Special Education Programs)
July 2013
Education Service Center, Region 20
129
Letter to Gill
• LEAs may reduce their MOE level
simultaneously with applicable exceptions
AND with Voluntary Reduction
– Five exceptions to MOE: 34 CFR §300.204
– Voluntary Reduction: 34 CFR §300.205
• The LEA is not restricted to using only one of
these methods in a fiscal year for reducing
MOE
Per OSEP Director Melody Musgrove; 57 IDELR 261 (OSEP 2011)
http://www2.ed.gov/policy/speced/guid/idea/letters/2011-1/gill010611bmoe1q2011.pdf
July 2013
Education Service Center, Region 20
130
Letter to Baglin
• If an LEA fails to meet the MOE requirement,
the level of recovery of funds will depend on
the degree to which the LEA failed to meet the
MOE requirement, but would not, under any
circumstances, exceed the amount of the
LEA’s IDEA subgrant [IDEA-B Formula
entitlement] for the year in question
Per OSEP Director Alexa Posny; July 26, 2006
July 2013
http://www2.ed.gov/policy/speced/guid/idea/letters/revpolicy/tpmtseff.html
Education Service Center, Region 20
131
Letter to State Directors
• If an LEA fails to maintain fiscal effort, the...
repayment must be from non-Federal funds or
from Federal funds for which accountability to
the Federal government is not required.
Per OSEP Acting Director Alexa Posny; December 2, 2009 (OSEP 10-5)
http://www2.ed.gov/policy/speced/guid/idea/monitor/mfs-12-2-2009.pdf
July 2013
Education Service Center, Region 20
132
Letter to Copenhaver
• Medicaid funds may not be treated as State and
local funds for the purposes of maintenance of
effort calculations
– Question: Are Medicaid funds that a district receives in the form of
reimbursement considered to be Federal or local funds?
– Question: Are Medicaid funds expended by a district for support of special
education and related services required to be included in the calculation of
maintenance of fiscal effort?
Per OSEP Acting Director Patricia Guard; January 24, 2008
http://pattan.net-website.s3.amazonaws.com/files/materials/osep/CY2008/Copenhaver012408.pdf
July 2013
Education Service Center, Region 20
133
Letter to East (Retracted 2012)
• New MOE level established each year
– The LEA’s MOE level is readjusted each fiscal
year based on the level of expenditures for the
immediately preceding fiscal year
– Each year’s MOE obligation is based on the actual
amount expended in the immediate prior fiscal
year
Per OSEP Director Melody Musgrove; 57 IDELR 108 (OSEP 2011)
• This guidance was withdrawn in the letter
to Boundy dated April 4, 2012
July 2013
Education Service Center, Region 20
134
Letter to Boundy
• Withdraws the guidance to East (2011)
• The level of effort an LEA must meet in the
year after if fails to maintain effort is the level
of effort it should have met in the prior year;
not the LEA’s actual expenditures
Per OSERS Assistant Secretary Alexa Posny and OSEP Director Melody
Musgrove; 112 LRP 16608 (OSERS/OSEP 04/04/12)
http://www2.ed.gov/policy/speced/guid/idea/memosdcltrs/osep-04-04-2012.pdf
July 2013
Education Service Center, Region 20
135
Effective Date of Boundy Letter
Original guidance from TEA stated:
• East letter effective FY10 and FY11
– LEAs with a decline in effort establish a new base level
based on the reduced spending amount
• Boundy letter might be effective FY12
– LEAs with a decline in effort (not based on exceptions or
Voluntary Reduction) may not establish a new base level;
– Instead, the LEA will be required to maintain the level from
the last year in which MOE was maintained
Now, TEA is waiting on further clarification
from USDE before determining effective date
July 2013
Education Service Center, Region 20
136
EAST LETTER
Year 1 Spent:
$50,000
Year 2 Spent:
$40,000
Year 3 Must Spend:
$40,000
Decline of
Paid questioned
$10,000 (did not cost to TEA
qualify for
exception or
voluntary
reduction)
Established new
base level of
$40,000
Decline of
Paid questioned
$10,000 (did not cost to TEA
qualify for
exception or
voluntary
reduction)
Does NOT
establish new
base level
BOUNDY LETTER
Year 1 Spent:
$50,000
Year 2 Spent:
$40,000
Year 3 Must Spend:
$50,000
July 2013
Education Service Center, Region 20
137
Best Practices
July 2013
Education Service Center, Region 20
138
Best Practices
Requirement:
• LEAs are required to monitor MOE
Best Practice:
• Use TEA’s IDEA MOE Template to monitor and
forecast MOE
• Monitor MOE often during the current year to
avoid a decline in effort, at a minimum:
• At mid-year (February)
• When proposing a new budget
• Review MOE after-the-fact to be prepared for a
possible finding of noncompliance
July 2013
Education Service Center, Region 20
139
Best Practices, continued
If SSA, Fiscal Agent should share data with
Member Districts:
– Amounts expended by the Fiscal Agent on behalf
of the Member District
• If an ISD, Fund 437 amounts that will be indicated on
the PEIMS EDIT+PRFBD001 (SSA Financial
Summary) so member can monitor MOE compliance
• If a Charter School, FA expenditures on behalf of
Member District so member can indicate these amounts
when submitting their 032 Record
– IDEA-B Formula entitlement amounts
July 2013
• For purposes of determining eligibility for the Voluntary
Reduction
Education Service Center, Region 20
140
Best Practices, continued
Develop a documentation/record-keeping
system
• Supporting documentation for possible exceptions
Be proactive, not reactive
July 2013
Education Service Center, Region 20
141
Documents
•
•
•
•
•
Independent Audit Reports
Spending Trend Analyses
Spreadsheets that Track MOE
Copies of PEIMS EDIT+ Reports
Supporting Documentation for Possible MOE
Exceptions or Voluntary Reduction
July 2013
Education Service Center, Region 20
142
Foster Relationships
Foster strong relationships among business
manager, special education director, and
PEIMS coordinator
• Determine responsibilities for record-keeping and
decision-making
All appropriate personnel need to understand
MOE
• Business managers need to understand MOE
implications before changing bookkeeping and/or
coding procedures
July 2013
Education Service Center, Region 20
143
Business Manager’s Role
• Ensure funds are properly accounted for
• Ensure expenditures are properly coded
• If a Fiscal Agent of an SSA, ensure that
expenditures made on behalf of the Member
District are correctly reported in the PEIMS
033 Record (applicable only to ISDs)
July 2013
Education Service Center, Region 20
144
Business Manager’s Role
• Monitor current year expenditures
– Use PEIMS Fall Submission PRF1D002 to
estimate current year allocation of PIC 99
• Understand data allocation methodology
– The Allocation Process for EDIT+ Reports:
http://www.tea.state.tx.us/uploadedFiles/PEIMS/EDI
T+/attachments/tips_allocproc.pdf
July 2013
Education Service Center, Region 20
145
PEIMS Coordinator’s Role
• Ensure PEIMS data is accurate
– Run EDIT+ reports and compare to internal reports
– Query data to identify unexpected variances
July 2013
Education Service Center, Region 20
146
Special Education Director’s Role
• Ensure PEIMS data accurately reflects the
special education program
– Visit with business manager and PEIMS
coordinator
– Review and approve special ed budget
– Review and approve special ed expenditures
• Ensure compliance with State and Federal
program and fiscal requirements
July 2013
Education Service Center, Region 20
147
Contacts:
• ESC-20:
• TEA:
Denise Dusek
Federal Funding Specialist
[email protected]
210-370-5378
OR
Sherry Marsh
Component Director, SPED
[email protected]
210-370-5411
July 2013
Division of Federal Fiscal
Compliance and Reporting
[email protected]
512-463-9127
Education Service Center, Region 20
148
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