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Understanding IDEA and MOE

The basicsof

maintenance of effort

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Maintenance of Effort

• MOE requirements have been around for awhile

• Feds allow certain flexibility• School Districts should keep track of this

from year to year.• Forms to calculate are also available in

conference documents and at: http://www.doe.mass.edu/sped/advisories/11_1ta.html

Administrative Advisory SPED 2008-1at: http://www.doe.mass.edu/sped/advisories/?section=admin

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For the purposes of this presentation

• The presentation focuses on how the district shows that it is maintaining its state and local fiscal effort in the area of special education.

• IDEA considers that districts are meeting “non-supplanting” requirements if state and local effort is maintained. Therefore, this presentation focuses on maintenance of effort and does not use the terminology “non-supplanting” --- although it is covered.

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Examples of State and Local Funds

Local Funds• Funds appropriated

by your local community for the district’s use.

• Includes c. 70 funds as they go through your community first.

State Funds• Funds coming

directly from the state to the district.

• Includes circuit breaker reimbursements

• Grants funded by the state and administered by DESE.

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We’ll pretend this district STARTS in 2014How much did the district spend on special

education in FY2014?• $100,000 in state

funds• $50,000 in local funds• $75,000 in federal

funds• TOTAL = $225,000• Simple Maintenance of

Effort = total spending from state and local funds =$150,000 Let’s call this sMOE.

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MOE can be demonstrated in the aggregate or per/student with

disabilities

• 150 students w/disabilities (SWD) in FY2014

• So sMOE (simple maintenance of effort)/SWD is either

150/$150,000 or $1,000/SWD.

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Simple Maintenance of Effort (sMOE)FY 2015

For FY2015, the district must spend at least as much on special education from state and local funds

• Either in the aggregate ($150K) …Or

• per/student w/disabilities (#students x $1,000).

• Let’s say there are 100 students with IEPs in FY2015. (NOTE: a decrease of 50 students)

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Simple Maintenance of Effort (sMOE)FY 2015

For FY2015, the district must spend

• either a total of $150K in state and local funds in the area of special education

• OR $100K (100 students x $1,000) in state and local funds on a per/student with disability basis. (fiscally prudent choice)

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Which would you choose?

• Using Per/Student?• Student #s

decreased from 2014 to 2015

• Decreased student #s means MOE will be less using per/student

• In this case CHOOSE PER/STUDENT method.

• Using the Aggregate?

• If student #s increase from one year to the next, the Aggregate method will be less.

• In this case, student #s decreased – so this is not the MOE method to choose.

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How do the federal funds fit in?

• IDEA 2004 allows some of the federal funds to “supplant” state and local funds.

• Why?Because the Congress had promised to pay 40%

of the costs of special education and it realizes it has not yet met that promise.

• So?So, 50% of NEW Federal Dollars can be treated

as state and local funds until the federal money catches up to the promised level!

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How can federal money be treated as state and local money?

• NEW federal money only• 50% of new money only• To explain, we need to go back to

spending in FY2014.

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How much did the district spend on special education in FY2014?

• $100,000 in state funds

• $50,000 in local funds

• $75,000 in federal funds

• TOTAL = $225,000• Simple Maintenance of

Effort = total spending from state and local funds =$150,000

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How much federal money does the district get in FY2015?

The district gets• $90,000 in federal

special education money.

• More than 2014• So, new money =

($90,000-$75,000) or $15,000

• Remember we can use 50% of new money.

• 50% of $15,000 = $7,500

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Therefore, in FY2015, $7,500 of federal money can be used to “supplant” state and local money in meeting

the MOE requirement.• The sMOE requirement was $150,000 for FY2014,

but since our student numbers decreased, we are aiming for $100,000 in state and local monies for FY2015. Even that looks hard with our state belt tightening, so we look to the offset of $7,500 to see if we can make it even easier on ourselves.

• $100,000-$7,500 = $92,500 -- that is the amount of the MOE that must be funded with state and local money. The remaining $7,500 can be funded with the offset federal money.

• We can call that combination of state, local, and offset federal money the final Maintenance of Effort, or fMOE that we want to budget for FY2015.

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If the SWD numbers increase, then it will be fiscally prudent for the district to demonstrate fMOE in the aggregate (as it will be the lower amount)

If the SWD numbers decrease, however, the fMOE calculated per student will be less than the aggregate fMOE, and the district should choose this method to demonstrate fMOE.

Demonstrate fMOE either in the aggregate or per/ student with a disability (SWD)

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Can the district spend more than it is required under the fMOE?

• Yes, our fictional district could actually spend $200,000 in state and local money (regardless of federal offset) in FY2015, HOWEVER, if it did, then the sMOE required amount would be higher for FY2016, as the district would be required to maintain its effort. If possible, it is the better fiscal choice to spend more federal money instead (if you have it).

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Interesting info on the federal offset

• The federal offset is CUMULATIVE. • If the offset is used, it can only be used

once.• The advisory 2008-1 calculated the

cumulative offset for every district from FY97 up to FY2007. From that point forward, we expected districts to maintain the calculation locally.

• Suppose the offset cumulatively was $62,000 for our fictional district heading into 2015. The district could have used all of the offset to reduce the state and local burden from $100K to $38K (100-62=38). The sMOE going into 2016 would then be 38K, and the cumulative offset would be ZERO. In essence, starting fresh again with 2016.

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final Maintenance of Effort (fMOE)(more)

• fMOE can be demonstrated by the district by spending either in the

• Aggregate (the whole pie)• Or per/student with an IEP

(#students x an equal amount).

• There is no individual student entitlement implied by these calculations. fMOE is about the “state and local” spending planned for special education.

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Find out your district’s accumulated federal offset

The ESE has calculated it for you up to FY2007:

http://www.doe.mass.edu/sped/advisories/moe.html

Check the full ESE advisory because there are other exceptions that this Powerpoint does not address.

http://www.doe.mass.edu/sped/advisories/?section=admin

Calculate your federal offsets each year, and add them to the accumulated offset or, if you use federal funds from this offset to meet your state and local MOE, then subtract from the cumulative amount.

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Potential exceptions• District Accountability Level 4 or 5 --- You

may not use any new federal offset funds for the year or years you have that accountability level.

• If you use 15% of the funds for instructional supports --- that will impact how much you can use of the federal offset funds.

• If you receive a written finding of non-compliance for disproportionality you will be required to spend funds for specific remediation.

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Potential additional flexibility• Allowable exceptions

– Voluntary departure or disciplinary departure of staff

– Termination of costly obligation– Termination of large expenditure

• Four actual ways to figure MOE – State and local aggregate– State and local per/pupil– Local aggregate– Local per/pupil The state cannot calculate this for districts.

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Special Education Calculations

Excess Costs & Proportionate Share

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Take a Deep Breath

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EXCESS COSTS

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What does Excess Costs mean?

• A requirement for spending federal special education funds.

• It means “those costs for the education of an elementary or secondary school student that are in excess of the average per student expenditure during the preceding school year.”

• School districts are required to annually compute the average expenditures at each of the elementary and secondary levels.

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A form is available on line• http://www.doe.mass.edu/sped/forms.html • First choose your method of allocating costs.

Once you have chosen a method, you should stay with that method. If you wish to change methods, you should calculate using the new method for at least one prior year for which you have made the calculation. That is, you must be able to show a fair comparison year.

• Document your choices.

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Examples of methods for allocating expenditures

ELEMENTARY SECONDARY

Allocate expenditures based on elementary schools.

Allocate expenditures based on secondary schools.

Allocate expenditures based on proportionate #s of students and students with IEPs at the elementary level.

Allocate expenditures based on proportionate #s of students and students with IEPs at the secondary level.

Allocate expenditures made on behalf of elementary services.

Allocate expenditures made on behalf of secondary services.

ACTUAL expenditures from the previous fiscal year from all sources (state, local, and federal)

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See EC Handout• The methodology you choose affects the

first line in the calculation on the form (line A).

• E.g. how do you allocate “total expenditures” Key questions at each level, meant to be outlined for successive years in the form (so you remember from year to year) include:– Removal of preschool costs from

calculation– Allocation of out-of-district student costs– Allocation of district-wide expenses– Allocation of middle school expenses.

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THEN JUST DO THE MATH• For elementary and secondary --- must be

done separately. • Calculations must be done annually –

using prior year’s spending. • Do the calculations in the summer so you

feel confident that the FEDERAL special education money is only being used for excess costs.

• Maintain the calculations locally. Auditors may look at it in regards to questioned costs or to ensure appropriate procedures.

• Use the same methodology from year to year.

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Getting to “L”• You want to know the minimum amount of

funds that must be spent at each level for the education of all students with IEPs at that level to ensure that federal Part B funds are spent on costs over that level --- “excess costs”

• You are, in essence, determining for your district the average per/pupil general education expenditure --- kindof like the “foundation” amount for elementary and secondary pupils, except that it is calculated according to federal requirements.

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PROPORTIONATESHARE

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IF YOUR PUBLIC SCHOOL DISTRICT PROVIDES SPECIAL EDUCATION SERVICES

TO PRIVATE SCHOOL STUDENTS.• You will need to calculate proportionate

share.• Administrative Advisory SPED 2007-2 gives

full background and some examples at:http://www.doe.mass.edu/sped/advisories/07_2.html • Advisory includes attachment for

calculating proportionate share. (Handout) Attachment A: Proportionate Share Spending for Private School Students:   http://www.doe.mass.edu/sped/advisories/07_2attachA.doc

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Concept:

• Federal funds are provided to serve all students with disabilities, and the entitlement grant takes into account the enrollment of private schools in the community, THEREFORE, private school students with disabilities should have access to a proportionate share of the federal funds provided. From previous data reviews, in most communities these numbers will be small.

• Form in conference materials: Do calculations annually and maintain them locally if you have identified eligible private school students.

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Questions?