Local Maintenance of Effort (MOE)

With certain exceptions, funds provided to an administrative unit or State operated program under IDEA must not be used to reduce the level of expenditures for the education of children with disabilities below the level of those expenditures for the preceding fiscal year.

34 CFR §300.203(a)

An administrative unit or State operated program may reduce the level of its State and local expenditures (in total or per capita) below the level of those expenditures for the preceding fiscal year under the following circumstances:◦ Voluntary departure, by retirement or otherwise, or departure

for just cause, of special education or related services personnel;

◦ Decrease in the enrollment of children with disabilities;◦ Termination of costly expenditures for long-term purchases,

such as the acquisition of equipment or the construction of school facilities; or

◦ Termination of an exceptionally costly obligation to a particular child with a disability because the child: Has left the jurisdiction of the administrative unit; Has reached the age at which the obligation to provide a free

appropriate public education (FAPE) to the child is terminated; or

No longer needs the program of special education.

34 CFR §300.204

Funds under IDEA must be used to supplement State, local and other Federal funds and not to supplant them.

300 CFR §300.202(a)(3) 

If an administrative unit or State operated program maintains its fiscal effort, it will only be using IDEA fund to supplement local, or State and local funds, and not to supplant them.

Supplement, Not Supplant

With certain exceptions, for any fiscal year for which an administrative unit’s or State operated program’s IDEA Part B allocation exceeds the amount the administrative unit or State operated program received for the previous fiscal year, the administrative unit or State operated program may reduce the level of expenditures otherwise required for maintenance of effort by not more than 50 percent of the amount of the excess.

34 CFR §300.205(a)

MOE Adjustment

An administrative unit or State operated program is eligible to make the 50 percent reduction if the administrative unit or State operated program:

◦ Receives an increase in IDEA Part B funds

◦ “Meets requirements” under the Section 616

requirements

◦ Has not had action taken against it by the State

Education Agency (SEA) under IDEA Section 616

◦ Has not had responsibility for providing FAPE taken from it

by the SEA

◦ Has not been found by the SEA to have significant

disproportionality under 34 CFR §300.646

When an administrative unit or State operated program reduces its maintenance of effort (MOE) pursuant to 34 CFR §§300.204 or 300.205, the adjusted amount is the administrative unit’s or State operated program’s new MOE level until the administrative unit or State operated program, on its own, increases the level of special education expenditures using local, or State and local funds.

Reference Question D-9 of the ARRA Guidance

MOE ExampleEligibility: An administrative unit or State operated program

expends $900,000 in 2009-10 and budgets $1,000,000 in fiscal year 2011-12; therefore, the administrative unit or State operated program meets the IDEA maintenance of effort eligibility requirement for a 2011-12 grant award.

Compliance: An administrative unit or State operated program

expends $900,000 in 2009-10 and expends $950,000 in fiscal year 2010-11; therefore, the administrative unit or State operated program complied with the maintenance of effort requirement from fiscal year 2009-10 to fiscal year 2010-11.

The amount of funds expended by an administrative unit or State operated program for early intervening services (Project D: EIS) must count toward the maximum amount of expenditures that the administrative unit or State operated program may reduce under the 50 percent flexibility under 34 CFR §300.205(a).

This means that, no matter how much is available for CEIS (up to 15 percent) or for MOE reduction (up to 50 percent of the increase in the allocation), the total amount expended on CEIS and MOE reduction together cannot exceed the lesser of the total amount available for MOE reduction or the amount available for CEIS.

34 CFR §§300.205(d) and 300.226(a)

Reference the IDEA Regulations, Appendix D to Part 300 – Maintenance of Effort and Early Intervening Services for specific examples of calculations.

MOE and CEIS

In order to determine an administrative unit’s or State operated program’s eligibility for an IDEA allocation, the State Education Agency must ensure that:

With certain exceptions, an administrative unit or State operated program budgets for the education of children with disabilities at least the same total or per capita amount of either local, or State and local, funds as was spent from those same sources in the most recent prior year for which the information is available.

34 CFR §300.203(b)(1)

Funding Eligibility

Excess Cost

Amounts provided to an administrative unit or State operated program under IDEA may be used only to pay the excess costs of providing special education and related services to children with disabilities. Excess costs are those costs for the education of an elementary school or secondary school student with a disability that are in excess of the average annual per student expenditure in an administrative unit or State operated program during the preceding school year.

Excess Cost

An administrative unit or State operated program must spend at least the average annual per student expenditure on the education of an elementary school or secondary school child with a disability before funds under IDEA are used to pay the excess cost of providing special education and related services.

34 CFR §300.202

Appendix A – Excess Cost Calculation

Section 602(8) of the Act and §300.16 require the administrative unit or State operated program to compute the minimum average amount separately for children with disabilities in its elementary schools and for children with disabilities in its secondary schools. Administrative units and state operated programs may not compute the minimum average amount it must spend on the education of children with disabilities based on a combination of the enrollments in its elementary schools and secondary schools.

An excess cost calculator that has been developed by the North Central Resource Center can be found at the following website:

http://www.northcentralrrc.org/calculators/Excess_Cost_Calc_v1.html

Fiscal Monitoring

OSEP Monitoring of Colorado in 2012-13

OSEP will be looking at Colorado’s monitoring systems that ensure that fiscal requirements are met

OSEP Critical Elements Analysis Guide (CrEAG)

Fiscal Critical element 3:

Does the State have procedures that are reasonably designed to ensure appropriate use of IDEA funds?

The big question

How does the SEA ensure that funds provided to LEAs are not used to reduce the level of expenditures, except as provided in 34 CFR §§300.204 and 300.205 … below the level of those expenditures for the preceding fiscal year?

If there was an increase in an LEA’s Federal formula funding, how does the SEA verify that, if the LEA reduces its MOE, it reduces it by no more than 50% of the amount of the increase?

If an LEA reduces its MOE based on an increase how does the State ensure that those monies are used on allowable expenses?

What procedures does the State have to prohibit an LEA from exercising its authority to reduce its MOE based on an increased allocation under 34 CFR §300.705 because it determined that an LEA was unable to establish and maintain programs of FAPE OR because of a State’s LEA determination under section 616?