Funding
Distribution of State Special Education Funds to LEAs
Average Daily Attendance (ADA)
Full Time Equivalents (FTEs)
Use of State Special Education Funds
Special Education Grant
Accountability for Funds
Use of Funds for Personnel
Use of Funds for Materials, Supplies, and Equipment
Use of Funds for Contract Services
Use of Funds for Travel
Maintenance of Effort (MOE)
Requirements for Compliance
Exception to MOE
Early Intervening Services
Adjustment to Local Fiscal Efforts
Excess Costs
Requirements
Excess Costs Calculation
Distribution of IDEA Part B Formula Funds to LEAs
Use of IDEA Part B Formula Amounts Permissive
Use of IDEA Part B Formula Amounts in General
Methods and Payments
Private Schools
Use of Public Benefits and Insurance
Use of Private Insurance
Use of IDEA B Funds
Use of IDEA Part B Funds for Title I Schoolwide Programs
Funding Conditions
Meeting Other Part B Requirements
Proportionate Share Funding for Parentally-Placed Private School Child
Consultation
Proportionate Share Calculation
Limitations
Coordination of Funds to Purchase
Instructional Materials
Distribution of IDEA Part B Preschool Funds to LEAs
Base Payment Allocations
Use of Best Data
Allocation of Remaining Funds
Reallocation of Funds
Limitations
Distribution of High Cost Risk Pool Funds
Effective Dates
High Need Child with a Disability
Reservation of Funds
Direct Costs
Restrictions
Eligibility Criteria
Funding Mechanism for Distribution of the High Cost Fund
Funds Awarded
Use of Funds Awarded
Use of Funds for Contract Services Including Residential Placements
Costs for Residential Placement
Funding Mechanism for Residential Placement
Non-Public Day Schools
Funding for Noneducational Services
Noneducational Community-Based Support Services
Noneducational Public Agencies
Shared Services Arrangements
Funding
Distribution of State Special Education Funds to LEAs
Authorities: Texas Education Code; 19 T.A.C. Chapters 89, 129
Average Daily Attendance (ADA)
19 TAC 89.1121(a)(b); 89.129.21
Procedures for counting the ADA of children receiving special education services in various
instructional settings will be developed by the Commissioner of Education and included in the daily
register for pupil attendance accounting.
State special education funds will be distributed to local educational agencies (LEA) on the basis of
ADA of full time equivalents (FTEs) of eligible children served in accordance with the Requirements
for Student Attendance Accounting for State Funding Purposes.
Full Time Equivalents (FTEs)
19 TAC 89.112(c)(d)(e)(f)(h); 89.1065(9); TEC 42.151(a)(b)(c)(f)(k)(l)
The special education attendance will be converted to contact hours by instructional arrangement and
then to FTEs.
The FTE for each instructional arrangement is multiplied by the LEA's adjusted basic allotment and
then multiplied by the weight for the instructional arrangement.
Contact hours for any one child receiving special education services may not exceed six hours per
day or 30 hours per week for funding purposes.
The total contact hours generated per week will be divided by 30 to determine the FTEs.
Special education FTEs generated will be deducted from the local education agency's ADA for
purposes of the regular education allotment.
Funds generated by FTEs in one instructional arrangement may be spent on the overall special
education program and are not limited to the instructional arrangement which generated the funds.
For each FTE child in ADA in a special education program and in an instructional arrangement other
than a mainstream instructional arrangement, the LEA is entitled to an annual allotment equal to the
adjusted basic allotment multiplied by a weight determined according to instructional arrangement as
follows:
 Funding for the mainstream special education instructional arrangement will be based on the
ADA of the children in the arrangement multiplied by the adjusted basic allotment/adjusted
allotment (ABA/AA) and the 1.1 weight; but
 The attendance will not be converted to contact hours/FTEs as with the other instructional
arrangements.
For funding purposes the contact hours credited per day for the student in the resource room, selfcontained, mild and moderate; and self-contained, severe, instructional arrangements may not
exceed the average of the state-wide total contact hours credited per day for those three instructional
arrangements in the 1992-1993 school year.
For funding purposes the number of contact hours credited per day for each student in the off home
campus instructional arrangement may not exceed the contact hours credited per day for the
multidistrict class instructional arrangement in the 1992-1993 school year.
 For each FTE child in ADA in a special education program in an instructional arrangement
other than a mainstream instructional arrangement, the LEA is entitled to an annual allotment
equal to the adjusted basic allotment multiplied by a weight determined according to
instructional arrangement as follows:
o Homebound 5.0;
o Hospital class 3.0;
o Speech therapy 5.0;
o Resource room 3.0;
o Self-contained, mild and moderate, regular campus 3.0;
o Self-contained, severe, regular campus 3.0;
o Off home campus 2.7;
o Nonpublic day school 1.7; and
o Vocational adjustment class 2.3.
A special instructional arrangement for children with disabilities residing in care and treatment
facilities, whose parents or guardians do not reside in the LEA providing education services must be
established under the rules of the State Board of Education (SBOE):
 The funding weight for other than state schools will be 4.0 for those children who receive their
education service on an LEA campus; but
 The funding weight for children with disabilities residing in state schools will be 2.8.
The LEA that provides an extended school year (ESY) program is entitled to receive funds up to 75
percent of the applicable allotment for each FTE child in ADA, multiplied by the amount designated
for the child's instructional arrangement for each day the program is provided and divided by the
number of days in the minimum school year:
 The LEA may use funds received for ESY only in providing an extended year program; and
 LEAs are not eligible for reimbursement for ESY services provided to children for reasons
other than those set forth in the Extended School Year (ESY) Services guidelines.
Children from birth through age two with a visual or auditory impairment or both who are provided
services by the LEA according to an individual family services plan (IFSP) will be enrolled on the
home or regional day school campus and will be considered eligible for ADA on the same basis as
other children receiving special education services.
Children who are at least three but younger than 22 years of age on September 1 of the current
scholastic year who participate in the regional day school program for the deaf (RDSPD) may be
counted as part of the local education agency's ADA if they receive instruction from the LEA's basic
program for at least 50 percent of the school day.
The Commissioner will withhold an amount specified in the General Appropriations Act and distribute
that amount to LEAs that provide education solely to students confined to or educated in hospitals:


This program is required only in LEAs in which the program is financed by funds distributed
under this subsection and any other funds available for the program; and
After deducting the amount withheld under this subsection from the total amount appropriated
for special education, the Commissioner will reduce each LEA's allotment proportionately and
allocate funds to each LEA accordingly.
A special education fund balance may be carried over to the next fiscal year but must be expended
on the special education program in the subsequent year. State special education carryover funds
cannot be used for administrative costs.
LEA Specific Information:
Insert local information here
Use of State Special Education Funds
Authorities: 20 U.S.C. § 1412; 34 C.F.R. Part 300; Texas Education Code; 19 T.A.C. Chapter 89, 105
Special Education Grant
TEC 29.018(a)(b)(1)(2)(c)(d)(e); TEC 29.018(c)
Special education grants will be made available to local educational agencies (LEAs) from funds
appropriated, federal funds, or any other funds available, to assist LEAs in covering the cost of
educating children with disabilities.
The LEA is eligible to apply for a special education grant if:
 The LEA does not receive sufficient funds, including state funds and federal funds,
for the child with disabilities to pay for the special education services provided to the child; or
 The LEA does not receive sufficient funds, including state funds and federal funds, for
all children with disabilities in the LEA to pay for the special education services provided to the
children.
The LEA that applies for a special education grant must provide a report comparing the state and
federal funds received by the LEA for children with disabilities and the expenses incurred by the LEA
in providing special education services to children with disabilities.
The cost of training personnel to provide special education services to the child with disabilities are
expenses that may be included by the LEA when applying for a special education grant.
The LEA that receives a special education grant must educate children with disabilities in the least
restrictive environment that is appropriate to meet the children's educational needs.
Accountability for Funds
TAC 89.63; 89.1121(d)(e); TEC 42.151(e)(h) CFR 300.114(b); 20 USC 1412(a)(5)(A)
The receipt of special education funds must be contingent upon the operation of an approved
comprehensive special education program in accordance with state and federal laws and regulations.
State special education funds, other than an indirect cost allotment, must be used in the special
education program.
No LEA may divert special education funds for other purposes, with the exception of administrative
costs relating to maximum indirect cost allowable on certain Foundation School Program allotments.
Funds generated by full-time equivalents in one instructional arrangement may be spent on the
overall special education program and are not limited to the instructional arrangement which
generated the funds.
The LEA must maintain separate accountability for the total state special education program fund
within the general fund.
The State Board of Education (SBOE) by rule will prescribe the qualifications an instructional
arrangement must meet in order to be funded as a particular instructional arrangement:
In prescribing the qualifications that a mainstream instructional arrangement must meet, the SBOE
will establish requirements that children with disabilities and their teachers receive the direct, indirect,
and support services that are necessary to enrich the regular classroom and enable success.
A special education fund balance may be carried over to the next fiscal year, and the balance must
be expended on the special education program in the subsequent year.
State special education carry-over funds cannot be used for administrative costs.
Use of Funds for Personnel
TAC 89.1125(a)
Persons paid from special education funds must be assigned to instructional or other duties in the
special education program and/or to provide support services to the regular education program in
order for children with disabilities to be included in the regular program with the following limitations:
Support services must include, but not be limited to, collaborative planning, co-teaching, small group
instruction with children in special education and regular education, direct instruction to children in
special education, or other support services determined necessary by the admission, review, and
dismissal (ARD) committee for an appropriate program for the child with disabilities;
Assignments may include duties supportive to school operations equivalent to those assigned to
regular education personnel;
Personnel assigned to provide support services to the regular education program as stated may be
fully funded from special education funds; and
If personnel are assigned to special education on less than a full-time basis, only that portion of time
for which the personnel are assigned to children with disabilities may be paid from state special
education funds.
Use of Funds for Materials, Supplies, and Equipment
TAC 89.1125(d)
State special education funds may be used for special materials, supplies, and equipment which are
directly related to the development and implementation of IEPs of children and which are not
ordinarily purchased for the regular classroom.
Office and routine classroom supplies are not allowable.
The use of special equipment must comply with the Administration of Equipment guidelines.
Use of Funds for Contract Services
TAC 89.1125(e)
State special education funds may be used to contract with consultants to provide staff development,
program planning and evaluation, instructional services, assessments, and related services to
children with disabilities.
Use of Funds for Travel
TAC 89.1125(g)(f)
State special education funds may be used to pay staff travel to perform services directly related to
the education of eligible children with disabilities.
Funds may also be used to pay travel of staff (including administrators, general education teachers,
and special education teachers and service providers) to attend staff development meetings for the
purpose of improving performance in assigned positions directly related to the education of eligible
children with disabilities.
The purpose for attending such staff development meetings must not include time spent in performing
functions relating to the operation of professional organizations.
In accordance with federal regulations, funds may also be used to pay for the joint training of parents
and special education, related services, and general education personnel.
To use state special education funds for transportation to and from a residential facility, the LEA must
comply with the Use of Funds for Contract Services Including Residential Placements guidelines.
LEA Specific Information:
Insert local information here
Maintenance of Effort (MOE)
Authorities: 20 U.S.C. § 1413; 34 C.F.R. Part 300; Appendix D to Part 300 - Maintenance of Effort and Early Intervening
Services.34 CFR 300.203(a); 20 USC 1413(a)(2)(A)(iii)
Funds provided the LEA under IDEA Part B 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.
Requirements for Compliance
34 CFR 300.154(g)(2); 300.203(b)(2); 20 USC 1413(a)(2)(A)
An LEA complies with MOE requirements if the LEA:
 Budgets for the education of children with disabilities from local funds or a combination of local
and state funds;
 Spends funds for the same purpose and from the same source as the most recent prior year
for which information is available; and
 Ensures that the amount of local funds budgeted for the education of children with
disabilities is at least the same, either in total or per capita, as the amount the LEA spent for
that purpose in the most recent fiscal year for which information is available.
Exception to MOE
34 CFR 300.204(a)(b)(c)(d)(e);20 USC 1413 (a)(2)(b)(i-iv)
The LEA may reduce the level of expenditures by the LEA under IDEA Part B below the level of those
expenditures for the preceding fiscal year if the reduction is attributable to any of the following:
 The assumption of cost by the high cost fund (HCF) operated by the TEA;
 The termination of costly expenditures for long-term purchases, such as the acquisition of
equipment or the construction of school facilities;
 The voluntary departure, by retirement or otherwise, or departure for just cause, of special
education or related services personnel;
 A decrease in the enrollment of children with disabilities; or
 The 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
TEA, because the child:
o Has left the jurisdiction of the LEA;
o Has reached the age at which the obligation of the LEA to provide FAPE to the
child has terminated; or
o No longer needs the program of special education.
If an LEA spends reimbursements from federal funds (e.g., Medicaid) for IDEA Part B services, those
funds will not be considered to be state or local funds for purposes of MOE.
Early Intervening Services
34 CFR 300.226(e); 20 USC 1413(f)(5) Appendix D
Funds made available to provide early intervening services that are coordinated and aligned with
activities funded by and carried out under the ESEA consistent with use of IDEA Part B formula funds
must supplement, and not supplant, funds available under the ESEA.
Adjustment to Local Fiscal Efforts
34 CFR 300.205(a)(b)(c)(d); 20 USC (a)(2)(C)(i-iv)
For any fiscal year for which the IDEA Part B formula fund allocation received by the LEA exceeds
the amount the LEA received for the previous fiscal year, the LEA:
 May reduce the level of expenditures by not more than 50 percent of the amount of such
excess; and
 Must use an amount of local funds equal to the reduction of expenditures to carry out activities
authorized under the ESEA when it exercises its authority to reduce funding.
The TEA will prohibit the LEA from reducing the level of expenditures for that fiscal year, if the TEA
determines that an LEA is unable to establish and maintain programs of FAPE or the TEA has taken
action against the LEA as part of its monitoring, technical assistance, and enforcement
responsibilities.
The amount of IDEA Part B formula funds expended by an LEA will count toward the maximum
amount of expenditures such LEA may reduce.
LEA Specific Information:
Insert local information here
Excess Costs
Authorities: 20 U.S.C. § 1401, 1413; 34 C.F.R. Part 300; Appendix A to Part 300 - Excess Costs Calculation
Excess costs mean those costs that are in excess of the average annual per student expenditure in
the LEA during the preceding school year for an elementary or secondary school child, as may be
appropriate, that may be computed:
 After deducting amounts received under IDEA and Title I and Title III of the ESEA; and
 Any state or local funds spent for services under the IDEA and Title I and Title III of the ESEA,
excluding any amounts spent for capital outlay for debt services.
Requirements
34 CFR 300.202(b)(1)(2)
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 using IDEA Part B funds.
The excess cost requirement prevents an LEA from using IDEA Part B funds to pay for all the costs
directly attributable to the education of a child with a disability, except:
 The excess cost requirement does not prevent an LEA from using IDEA Part B funds, in
compliance with the no supplanting and other requirements of this document, to pay for all
costs directly attributable to the education of a child with a disability in any of the ages 3, 4, 5,
18, 19, 20, or 21, if no local or state funds are available for nondisabled children of these
ages.
Excess Costs Calculation
34 CFR 300.16(a)(b); 300.202; Appendix A
Before the LEA may access IDEA Part B funds, the LEA must compute the minimum average amount
it must spend separately for children with disabilities in its elementary schools and for children with
disabilities in its secondary schools.
To calculate the minimum amount the LEA must spend (on the average) for each of its elementary
school children with disabilities before it may use IDEA Part B funds, the LEA must:
 Determine the total amount of its expenditures for elementary school students from all
sources--local, state, and federal (including IDEA Part B) - in the preceding school year,
excluding capital outlay and debt services.
o The LEA must subtract from the total expenditures amounts spent for:
 IDEA Part B allocation;
 Title I, Part A of the ESEA allocation;
 Title III, Parts A and B of the ESEA allocation;
 State and local funds for children with disabilities; and
 State or local funds for programs under Title I, Part A and Title III, Parts A and B of
the ESEA; and

Divide by the average number of students enrolled in the elementary schools of the LEA
during the preceding year (including its children with disabilities).
IDEA Part B funds can only be used for elementary school children with disabilities for excess costs
over and above the minimum obtained when the LEA multiplies the number of elementary school
children with disabilities in the LEA by the average annual per student expenditure.
To calculate the minimum amount the LEA must spend (on the average) for each of its secondary
school children with disabilities before it may use IDEA Part B funds, the LEA must use the formula
provided in Appendix A to Part 300 for elementary school children referenced above.
IDEA Part B funds can only be used for secondary school children with disabilities for excess costs
over and above the minimum obtained when the LEA multiplies the number of secondary school
children with disabilities in the LEA by the average annual per student expenditure.
LEA Specific Information:
Insert local information here
Distribution of IDEA Part B Formula Funds to LEAs
Authorities: 20 U.S.C. § 1411(d)(f), 34 C.F.R. Part 300.705
For each fiscal year for which funds are allocated to states, the TEA will allocate funds as follows:
 Each eligible LEA will be awarded first the base payment amount it would have received for
fiscal year 1999 if the TEA had distributed 75 percent of its grant for that year according to
what was then in effect; and
 After making base payment allocations, the TEA will allocate:
o 85 percent of any remaining funds to those LEAs on the basis of the relative
numbers of children enrolled in public and private elementary schools and
secondary schools within the LEA's jurisdiction; and
o 15 percent of those remaining funds to those LEAs in accordance with their relative
numbers of children living in poverty, as determined by the TEA.
LEA Specific Information:
Insert local information here
Use of IDEA Part B Formula Amounts Permissive
Authorities: 20 U.S.C. § 1413; 34 C.F.R. Part 300
When the LEA has complied with the Maintenance of Effort and Excess Costs portions of this
document, Individuals with Disabilities Education Act (IDEA) Part B funds provided to the LEA may be
used for the following activities:
 For the costs of special education and related services, and supplementary aids and services,
provided in a regular class or other education-related setting to a child with a disability in
accordance with the IEP of the child, even if nondisabled children benefit from such services;
 To develop and implement coordinated, early intervening educational services in compliance
with Child Find and Administration guidelines, including:
o Early intervening services, which may include interagency financing structures, for
children in kindergarten through grade 12 (with a particular emphasis on children in
kindergarten through grade 3) who are not currently identified as needing special
education or related services but who need additional academic and behavioral
support to succeed in a general education environment; and
o The LEA may not use more than 15 percent of the amount received under IDEA Part B
for any fiscal year, less any adjustments by the LEA to local fiscal effort, if any, in
combination with other amounts (which may include amounts other than education
funds), to develop and implement coordinated, early intervening services; and
 To establish and implement cost or risk-sharing funds, consortia, or cooperatives for the LEA
itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high-cost
special education and related services consistent with the Distribution of High Cost Risk Pool
Funds guidelines.
The LEA may use IDEA Part B funds to purchase appropriate technology for recordkeeping, data
collection, and related case management activities of teachers and related services personnel
providing services described in the IEP that is needed for the implementation of such case
management activities.
LEA Specific Information:
Insert local information here
Use of IDEA Part B Formula Amounts in General
Authorities: 20 U.S.C. §§ 1412, 1413; 34 C.F.R. Part 300
Methods and Payments
34 CFR 300.103(a)(b)(c); 300.202(a)(1)(3); 20 USC1413(a)(2)(A)
The TEA may use whatever state, local, federal, and private sources of support available to the state,
including the use of joint agreements between agencies involved, to provide FAPE for children with
disabilities.
Nothing in IDEA relieves an insurer or similar third party from an otherwise valid obligation to provide
or to pay for services provided to a child with a disability.
The TEA will ensure that there is no delay in implementing a child's IEP, including any case in which
the payment source for providing or paying for special education and related services to the child is
being determined.
IDEA Part B amounts provided to the LEA must:
 Comply with the Maintenance of Effort guidelines;
 Be used to supplement state, local, and other federal funds and not supplant such funds; and
 Comply with the Excess Cost guidelines in this document.
Private Schools
34 CFR 300.142
To meet the requirement to provide services for parentally-placed private school children with
disabilities, IDEA Part B funds must be used consistent with the Proportionate Share Funding for
Parentally-Placed Private School Child and Private Schools portions of this document.
The LEA may use IDEA Part B funds to make personnel available for parentally-placed private school
children with the special education and related services personnel information in this guidance.
Use of Public Benefits and Insurance
34 CFR 300.154(d)(1)(2)(i-iii)
The LEA must comply with the Consent to Access Public Benefits guidelines.
The LEA may use the Medicaid or other public benefits or insurance programs in which a child
participates to provide or pay for IDEA Part B services, except that the LEA may not:
 Require parents to sign up for or enroll in public benefits or insurance programs for their child
to receive FAPE;
 Require parents to pay a deductible or co-pay amount incurred in filing a claim for services;
 Use the child's benefits under a public benefits or insurance program if that use would:
o Decrease available lifetime coverage or any other insured benefit;
o Risk loss of eligibility for home and community-based waivers, based on aggregate
health-related expenditures;
o Increase premiums or lead to the discontinuation of benefits or insurance; or
o
Result in the family paying for services that would otherwise be covered by the
public benefits or insurance program; and
o The services are required for the child outside of the time the child is in
school.
The LEA may pay the cost the parents would be required to pay, such as payment of a deductible or
co-pay amount incurred in filing a claim for services provided under the IDEA.
The LEA must notify parents that the parents' refusal to allow access to their public benefits or
insurance does not relieve the LEA of its responsibility to ensure that all required services are
provided at no cost to the parents.
Use of Private Insurance
34 CFR 300.154(e)
The LEA may access the parents' private insurance proceeds to pay for services required to provide
a FAPE to a child with a disability only if:
 Each time the LEA proposes to access the private insurance proceeds, the LEA must comply
with the Consent to Access Private Insurance guidelines; and
 The LEA must inform the parents that their refusal to permit the LEA to access their private
insurance does not relieve the LEA of its responsibility to ensure that all required services are
provided at no cost to the parents.
Use of IDEA B Funds
34 CFR 300.154(f)(1)(2)
The LEA may use IDEA Part B funds to pay for a specified service required under the IDEA to ensure
the child receives a FAPE, when:
 The LEA is unable to obtain parental consent to use the parents' private insurance or public
benefits or insurance; and
 The parents would incur a cost for a specified service required under the IDEA.
The LEA may use its IDEA Part B funds to pay the cost that the parents otherwise would have to pay
to use the parents' benefits or insurance, such as the deductible or co-pay amounts, when:
 The parents would incur a cost; and
 The parents would provide consent for the LEA to use private insurance or public benefits or
insurance to pay for services required to ensure the child with a disability receives a FAPE if
they could avoid financial cost.
LEA Specific Information:
Insert local information here
Use of IDEA Part B Funds for Title I Schoolwide Programs
Authorities: 20 U.S.C. §1413; 34 C.F.R. Part 300
Notwithstanding any other provisions related to commingling of funds, the LEA may use IDEA Part B
funds received for any fiscal year to carry out a Title I, Part A schoolwide program under the ESEA
except that the amount may not exceed:
 The amount received by the LEA under IDEA Part B for that fiscal year; divided by
 The number of children with disabilities in the jurisdiction of the LEA; and multiplied by
 The number of children with disabilities participating in the school wide program.
Funding Conditions
34 CFR 300.206(b)
The funds must be considered to be IDEA Part B funds in compliance with the Maintenance of Effort
and Excess Cost guidelines.
Meeting Other Part B Requirements
34 CFR 300.206(c)(1)(2)
All other requirements of IDEA Part B must be met by the LEA using IDEA Part B funds consistent
with IDEA Part B Formula Amounts Permissive and the Use of IDEA Part B Formula Amounts in
General guidelines, including ensuring that children with disabilities in school-wide program schools:
 Receive services in accordance with a properly developed IEP; and
 Are afforded all of the rights and services guaranteed to children with disabilities under the
IDEA.
LEA Specific Information:
Insert local information here
Proportionate Share Funding for Parentally-Placed Private School Child
Authorities: 20 U.S.C. §§ 1401, 1412; 34 C.F.R. Part 300; Appendix B to Part 300 - Proportionate Share Calculation; Texas
Consolidated Application Accountability Workbook
Administration of Funds
34 CFR 300.133(a); 300.144(a); 20 USC 1412(a)(10)(A)(i, vii)
The LEA must control and administer for the purposes consistent with the Private Schools component
of this document:
 The IDEA Part B funds used to provide special education and related services to parentallyplaced private school children with disabilities; and
 The title to materials, equipment and property purchased with IDEA Part B funds consistent
with the Administration of Equipment section of the Operating Guidelines.
Amounts to be expended for the provision of services for parentally-placed private school children
must be equal to a proportionate amount of IDEA Part B funds.
The LEA must comply with the Special Education and Related Services Personnel and the Highly
Qualified Special Education Teachers legal guidelines.
Consultation
34 CFR 300.134(b); 20 USC 1412(a)(10((A)(iii)
The LEA must consult with private school representatives and representatives of parents of
parentally-placed private school children with disabilities regarding:
 The determination of the proportionate amount of federal funds available to serve parentallyplaced private school children with disabilities consistent with the Private Schools guidelines;
 The determination of how the amount was calculated; and
 A discussion of how services will be apportioned if funds are insufficient to serve all children,
and how and when these decisions will be made.
Proportionate Share Calculation
34 CFR 300.122(a)(b)(c)(1)(2); 20 USC 1412 (a)(10)(A)(i)
After the consultation, the LEA must determine the number of parentally-placed private school
children with disabilities attending private schools located in the LEA.
 The LEA must ensure that the count is taken on the last Friday in October; and
 The LEA must use the count to determine the amount the LEA must spend on providing
special education and related services to parentally-placed private school children in the next
subsequent fiscal year.
For children aged three through 21, the proportionate share is the same proportion as the number of
private school children with disabilities aged three through 21 who are enrolled by their parents in
private, including religious, elementary schools and secondary schools located in the LEA to the total
number of children with disabilities in the LEA aged three through 21.
For children aged three through five, the proportionate share is equal to the ratio of the number of
parentally-placed private school children with disabilities who are enrolled by their parents in a
private, including religious, elementary school located in the LEA to the total number of children with
disabilities aged three through five located in the LEA.
Children aged three through five are considered to be parentally-placed private school children if they
are enrolled in a private school that meets the definition of elementary school as determined by state
law.
The LEA must carry over any unused proportionate share funds for one additional year for use in
providing special education and related services (including direct services) to parentallyplaced private school children.
The cost of transportation of a parentally-placed private school child from the child's school or home
to a site other than the private school and from the service site to the home or private school,
depending on the timing of the services, may be included in determining whether the LEA has
satisfied the requirement to provide proportionate share services to the child consistent with this
document.
Limitations
34 CFR 300.133(d); 300.141(a)(e); 20 USC 1412(a)(10)(A)(ii)
State and local funds may supplement and in no case supplant the proportionate amount of IDEA
Part B funds required to be expended for parentally-placed private school children with disabilities.
The LEA must use IDEA Part B funds to meet the special education and related services needs of
parentally-placed private school children with disabilities, but not for meeting:
 The needs of a private school; or
 The general needs of the students enrolled in the private school.
The LEA may not use IDEA Part B funds:
 For repairs, minor remodeling, or construction of private school facilities;
 To finance the existing level of instruction in a private school or to otherwise benefit the private
school; and
 For the costs of carrying out Child Find, including evaluation, to satisfy its obligation to provide
proportionate share services to children with disabilities placed by their parents in private
schools.
LEA Specific Information:
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Coordination of Funds to Purchase
Authorities: 20 U.S.C. §§ 1412(a)(23), 1413(a)(6)(A)(B); 34 C.F.R. Part 300.210(a)
Instructional Materials
20 USC §1412(a)(23), 1413(a)(6)(A), 1413(a)(6)(B), 34 CFR part 300.210(a), 300.210(b)(1), 300.210(b)(2)
Not later than December 3, 2006, the LEA that chooses to coordinate with the National Instructional
Materials Access Center, when purchasing print instructional materials, must acquire the print
instructional materials in the same manner and subject to the same conditions as the TEA acquires
print instructional materials.
The LEA is not required to coordinate with the National Instructional Materials Access Center.
If the LEA chooses not to coordinate with the National Instructional Materials Access Center, the LEA
must provide an assurance to the TEA that the LEA will provide instructional materials to blind
persons or other persons with print disabilities in a timely manner.
LEA Specific Information:
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Distribution of IDEA Part B Preschool Funds to LEAs
Authorities: 20 U.S.C. §§ 1419; 34 C.F.R. Part 300
The TEA will distribute all of the grant funds that the TEA does not reserve to eligible LEAs.
Base Payment Allocations
34 CFR 300.815; 20 USC 1419(c)(3); 1419(g)(1)
The eligible LEA will be awarded first the base payment amount it would have received for fiscal year
1997 if the TEA had distributed 75 percent of its grant for that year according to what was then in
effect.
Use of Best Data
34 CFR 300.816(c)
The TEA will apply on a uniform basis across all LEAs the best data that are available to them on the
numbers of children enrolled in public and private elementary and secondary schools and the
numbers of children living in poverty.
Allocation of Remaining Funds
34 CFR 300.816(c); 20 USC 1419(g)(1)(B)
After making base payment allocations, the TEA will allocate:
 85 percent of any remaining funds to those LEAs on the basis of the relative numbers of
children enrolled in public and private elementary schools and secondary schools within the
LEA's jurisdiction; and
 15 percent of those remaining funds to those LEAs in accordance with their relative numbers
of children in poverty, as determined by the TEA.
Reallocation of Funds
34 CFR 300.817;;20 USC 1419(g)(2)
The TEA may reallocate any portion of the IDEA Part B funds that are not needed by the LEA who is
providing FAPE to all children with disabilities aged three through five residing in the area served by
the LEA to other LEAs that are not adequately providing special education and related services to all
children with disabilities aged three through five residing in the areas the other LEAs serve.
Limitations
34 CFR 300.817;;20 USC 1419(h))
IDEA Part C does not apply to any child with a disability receiving FAPE using IDEA Part B funds.
LEA Specific Information:
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Distribution of High Cost Risk Pool Funds
Authorities: 20 U.S.C. §§ 1411, 7801; 34 C.F.R. Part 300; High Cost Fund Preamble and State Plan
Effective Dates
The High Cost Fund (HCF), formerly known as Rider 55, are awarded October 1st through August
31st.
High Need Child with a Disability
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(3)(i)(A)(1); 20 USC 1411(e)(3)(C)(ii)(l)(bb); 7801(2)
A high need child with a disability financially impacts the budget of the LEA due to the high costs
associated with providing direct special education and related services to the high need child with
disabilities.
The cost of a high need child with a disability is greater than three times the average per pupil
expenditure in the state as defined in the ESEA.
Reservation of Funds
IDEA Part B funds provided to the LEA may be used according to the Use of IDEA Part B Formula
Funds Permissive guidelines, when the LEA has complied with the Maintenance of Effort and Excess
Cost guidelines.
For the purpose of assisting LEAs, including a charter school that is the LEA or a consortium of LEAs,
in addressing the needs of high need children with disabilities, the state will reserve 10% of the
amount of funds reserved for other state-level activities to be under state control until disbursed to the
LEA to support a specific child who qualifies under the state plan for the HCF.
Direct Costs
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(4)(ii)); 20 USC 1411(e)(3)(D)
The costs associated with educating the high need child with a disability are only those costs
associated with providing direct special education and related services to the child that are identified
in that child's IEP including the cost of room and board for a residential placement determined
necessary, consistent with the LRE requirements to implement the child's IEP.
Costs incurred during the HCF program effective dates.
Restrictions
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(5)(8);; 20 USC 1411(e)(3)(E)
The LEA must not use the HCF to:


Limit or condition the right of a child with a disability who is assisted under the IDEA to receive
FAPE in the LRE;
Support legal fees, court costs, or other costs associated with a cause of action brought on
behalf of a child with a disability to ensure FAPE for the child; and

Pay costs that otherwise would be reimbursed as medical assistance for a child with a
disability under the state Medicaid program.
Disbursements from the HCF for the cost of residential care and treatment will be limited to the
portion of the LEA's twenty five percent residential set aside amount being used for the specific high
need student and may not be fully funded.
Eligibility Criteria
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(3)(i)(C(B); 20 USC 1411(e)(3)(C)(ii)
The LEA may request a HCF award provided that the LEA:
 Has not violated the LRE requirements of the IDEA;
 Has not lapsed IDEA Part B Formula or Formula Deaf funds from the previous year;
 Does not roll forward 50% or more of its IDEA Part B Formula funds from the previous year;
however, this requirement is waived for the HCF; and
 Has complied with all systems of accountability and reporting to the TEA according to the
Administration of Program Information guidelines, including but not limited to, accountability
ratings, performance-based monitoring, compliance, fiscal reports, and dispute resolution
processes.
Funding Mechanism for Distribution of the High Cost Fund
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(3)(i)(D); 20 USC 1411(e)(3)(C)(ii)
The LEA or fiscal agent of a SSA must complete an HCF eligibility application which consists of the
child-specific application for each specific high need child with a disability who meets the definition of
a high need child in the state plan.
The LEA must submit each completed application to the TEA Division of Federal and State Education
Policy by the submittal method and deadline specified by the TEA.
If an application does not meet the eligibility criteria, a denial letter will be mailed to the
superintendent of the LEA or the fiscal agent of an SSA, and a copy will be sent to the LEA's director
of special education and to the special education contact at the Education Service Center (ESC).
Funds Awarded
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(3)(i)(D); 20 USC 1411(e)(3)(C)(ii)
The LEA award amounts will be calculated based on the total amount being requested statewide and
the amount of funds available.
The award amounts may not be fully funded based on the total dollar amount requested by the LEAs.
After receiving approval from the TEA chief deputy commissioner, an award letter will be generated
and mailed to the superintendent of the single member LEA or the fiscal agent of an SSA, and a copy
will be sent to the LEA's director of special education and to the special education contact at the ESC.
Once the award letter is received, the LEA must budget for the HCF using the IDEA Part B High Cost
Grant application through the TEA eGrants Standard Application System.
Failure to budget the awarded funds will result in loss of the funds.
The TEA will issue a Notice of Grant Award (NOGA) after completion of program and fiscal reviews of
the eGrants IDEA Part B High Cost Grant application.
Use of Funds Awarded
High Cost Fund Preamble and State Plan; 34 CFR 300.704(c)(3)(i)(D)
The LEAs must draw down reimbursements on the HCF NOGA using the Expenditure Reporting (ER)
system.
The LEAs must create and maintain adequate and sufficient documentation demonstrating that
expenditures pertained to the HCF.
The LEA can meet the documentation requirements by:
 Maintaining routine records (e.g., purchase orders, invoices, payroll records, etc.) and utilizing
a locally defined subobject code or other local option code to track expenditures; or
 Indicating on all documentation (e.g., purchase orders, contracts, etc.) that the transaction will
be reimbursed out of the HCF.
The LEA must also maintain sufficient documentation to demonstrate that expenditures pertained to
the specific high need child for whom the HCF award was granted.
LEA Specific Information:
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Use of Funds for Contract Services Including Residential Placements
Authorities: 20 U.S.C. § 1412; 34 C.F.R. Part 300; Texas Education Code; 19 T.A.C. Chapter 89
If placement in a public or private residential program is necessary to provide special education and
related services to a child with a disability, the program, including non-medical care and room and
board, must be at no cost to the parents of the child.
Costs for Residential Placement
34 CFR 300.104. TAC 89.61(a);TEC 29.008)(b)(c); TEC 42.151(g); TEC 42.252
Costs of an approved educationally-based contract for residential placement may be paid from a
combination of federal, state, and local funds.
 The local share of the total contract cost for each child is that portion of the local tax effort that
exceeds the LEA’s local fund assignment, divided by the average daily attendance in the LEA;
o For purposes of this document, "local tax effort" means the total amount of money
generated by taxes imposed for debt service and maintenance and operation less any
amounts paid into a tax increment fund under Chapter 311, Tax Code;
 The education cost of residential contracts must be funded with state funds on the same basis
as nonpublic day school contract costs:
o If the contract involves a private facility, the state share of the total contract cost is that
amount remaining after subtracting the local share; and
o If the contract involves a public facility, the state share is that amount remaining after
subtracting the local share from the portion of the contract that involves the costs of
instructional and related services;
 State special education funds may be used for transportation only to and from residential
placements;

Prior to using federal funds for transportation costs to and from a residential facility, the LEA
must use state or local funds based on actual expenses up to the state transportation
maximum for private transportation contracts;
 After expending any other available funds, the LEA must expend its local tax share per ADA
and 25 percent of its IDEA Part B formula tentative entitlement (or an equivalent amount of
state and/or local funds) for related services and residential costs:
o If this is not sufficient to cover all costs of the residential placement, the LEA through
the residential application process may receive additional IDEA Part B discretionary
funds to pay the balance of the residential contract placement(s) costs; and
o Funds generated by the formula for residential costs must not exceed the daily rate
recommended by the Texas Department of Protective and Regulatory Services for the
specific level of care in which the child is placed.
Funding Mechanism for Residential Placement
TAC 89.61(a)(b)(c)
The LEA may contract for a residential placement of a student only with either public or private
residential facilities which maintain current and valid licensure by the Texas Department of Mental
Health and Mental Retardation, Texas Department of Human Services, Texas Department of Health,
Texas Department of Protective and Regulatory Services, or Texas Council on Alcohol and Drug
Abuse for the particular disabling condition and age of the student.
The LEA which intends to contract for residential placement of a child for educational purposes with a
residential facility to meet some or all of the child's special education needs must notify the TEA of its
intent to contract for the residential placement through the residential application process.
Requests for approval of state and federal funding for residentially-placed students must be
negotiated on an individual student basis through a residential application submitted by the LEA to
the TEA.
When a child who is residentially placed by the LEA changes his residence to another LEA in Texas,
and the child continues in the contracted placement, the LEA which negotiated the contract must be
responsible for the residential contract for the remainder of the school year.
Residential facilities which provide educational services must have their educational programs
approved for contracting purposes by the Commissioner of Education.
For out-of-state residential facilities, the facility must be approved by the appropriate agency in the
state in which the facility is located, and the LEA must follow the TEA application process.
Non-Public Day Schools
34 CFR 300.146; 300.147; TAC 89.1075(f)
LEAs that contract for services from non-public day schools must comply with procedures developed
by the TEA for monitoring the provision of special education and related services at no cost to the
parents in conformance with the IEP.
LEA Specific Information:
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Funding for Noneducational Services
Authorities: 34 C.F.R. Part 300; Texas Education Code
Noneducational Community-Based Support Services
34 CFR 200.154(a)(b); TEC 29.013(a)(b)(c)(d)
The TEA will establish procedures and criteria for the allocation of funds to LEAs for the provision of
noneducational community-based support services to certain children with disabilities and their
families so that those children may receive FAPE in the LRE.
The funds may be used only for eligible children with disabilities who would remain or would have to
be placed in residential facilities primarily for educational reasons without the provision of
noneducational community-based support services.
The provision of noneducational community-based support services does not supersede or limit the
responsibility of other agencies to provide or pay for costs of noneducational community-based
support services necessary to enable any child with disabilities to receive a FAPE in
the LRE.
The support services may include in-home family support, respite care, and case management for
families with a child who otherwise would have been placed by the LEA in a private residential facility.
Noneducational community-based support services provided may not be used for a child with
disabilities who is currently placed or who needs to be placed in a residential facility primarily for
noneducational reasons.
Noneducational Public Agencies
34 CFR 300.154(a)(b)(c)
The state will develop a mechanism (including state statute or regulation, signed agreements
between respective agency officials that clearly identify the responsibilities of each agency relating to
the provision of services, or other appropriate written materials) to ensure interagency coordination of
services to provide a FAPE to the child with a disability, including:
 Identification of, or a method for defining, the financial responsibility of each agency for
providing services;
 Conditions, terms, and procedures under which the LEA must be reimbursed by other
agencies;
 Procedures for resolving interagency disputes to secure reimbursement from other agencies
or otherwise implement the provisions of the agreement; and
 Policies and procedures for agencies to determine and identify the interagency coordination
responsibilities of each agency to promote the coordination and timely and appropriate
delivery of services to ensure the provision of a FAPE for the child with a disability.
The financial responsibility of each agency for providing services to ensure FAPE, including the state
Medicaid agency and other public insurers of children with disabilities, must precede the financial
responsibility of the LEA (or the state agency responsibility for developing the child's IEP).
If a public agency other than an education agency is required to provide or pay for services that are
also considered special education and related services, the public agency must fulfill that obligation
either directly through contract or other arrangement consistent with this document.
A noneducational public agency may not disqualify an eligible service for Medicaid reimbursement
because that service is provided in a school context.
If a public agency other than an educational agency fails to provide or pay for special education and
related services needed to ensure a FAPE, the LEA (or state agency responsible for developing the
child's IEP) must provide or pay for these services in a timely manner:
 The LEA or state agency is authorized to claim reimbursement for the services from the
noneducational public agency that failed to provide or pay for these services; and
 The noneducational public agency must reimburse the LEA or state agency in accordance
with the terms of the agreement or other mechanism developed by the state consistent with
this document.
LEA Specific Information:
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Shared Services Arrangements
Authorities: Texas Education Code; 19 T.A.C. Chapter 89
TAC 89.1075(e); 89.1141(f); TEC 29.007
LEAs may enter into written contracts to jointly operate their special education programs.
Funds to which the cooperating LEAs are entitled may be allocated to the LEAs jointly as shared
services arrangement units or shared services arrangement funds in accordance with the shared
services arrangement agreement.
Shared services contracts must be approved by the Commissioner of Education.
Regional ESCs may serve as the fiscal agent for shared services arrangements in compliance with
general program requirements and local district procedures under state law.
LEA Specific Information:
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