Calculation Tools Help States Implement IDEA Fiscal Regulations

1. Calculation Tools Help States Implement IDEA Fiscal Regulations Laura Johnson, Center for IDEA Fiscal Reporting (CIFR) Shanna Garrett, South Carolina Department of Education – Special Education Services Thomas Boudreau, Bureau of Special Education, Academic Office, Connecticut State Department of Education

2. OSEP Disclaimer 2019 OSEP Leadership Conference DISCLAIMER: The contents of this presentation were developed by the presenters for the 2019 OSEP Leadership Conference. However, these contents do not necessarily represent the policy of the Department of Education, and you should not assume endorsement by the Federal Government. (Authority: 20 U.S.C. 1221e-3 and 3474)

3. South Carolina Story and the Data Collection Reporting Tool Shanna Garrett Team Lead, Fiscal & Grants Management SC Department of Education Office of Special Education Services 1919 Blanding Street Columbia, SC 29201 sgraham@ed.sc.gov

4. The Maintenance of State Financial Support (MFS) Requirement A State must not reduce the amount of State financial support for special education and related services for children with disabilities, or otherwise made available because of the excess costs of educating those children, below the amount of that support for the preceding fiscal year. IDEA section 612(a)(18)(A), 34 CFR section 300.163(a).

5. MFS Basics • Amounts made available, not amounts expended. • Funds made available by the State, not just State Educational Agency (SEA), including any other State agency making funds available for special education and related services: • School of Deaf and Blind • Corrections • Mental Health • Disabilities and Special Needs • May be met on total or per capita basis

6. Consequence of Failure The Secretary shall reduce the allocation of funds under section 611 of the Act for any fiscal year following the fiscal year in which the State fails to comply with the MFS requirement by the same amount by which the State fails to meet the requirement. IDEA section 612(a)(18)(B), 34 CFR section 300.163(b)

7. The South Carolina Story In the midst of recession, South Carolina requested waivers for State fiscal years (SFYs) 2009, 2010, and 2011. The Department: • Granted a waiver for SFY 2009 in full. • Granted a partial waiver for SFY 2010. • Denied the waiver request for SFY 2011.

8. 2015 & 2016 Appropriations Language Reduction by amount of failure of future grant award (may be spread out up to 5 consecutive years). For failures occurring in 2015-2016 and 2016-2017, the Department may recover funds under the General Education Provisions Act (GEPA) as alternative remedy. • Provision used for recovery for most IDEA noncompliance. • Allows for more flexibility in application of mandatory penalty. State must take penalty proportionally from flow-through and State set-aside funds.

9. Basis of the South Carolina Settlement Significant factors in determining whether this settlement was in the best interests of the United States: • Ensured compliance with IDEA. • Maintained funding levels in South Carolina. • Directed additional funds toward improving results for children with disabilities. Shared interest with South Carolina in improving results for children with disabilities.

10. Result of Settlement Agreement • Complicated process, but positive result going forward. • More funds being directed to improve results. • Kids get what they need. IDEA compliance is maintained. • South Carolina has path forward to meet MFS.

11. Ensure that history does not repeat itself. • Failing the MFS requirement can lead to a reduction of a state’s Part B Section 611 grant. • Collecting MFS data from departments or groups within SEA and from other agencies. • Need for an electronic tool that can be readily used by staff to provide consistency and be resource-driven.

12. CIFR’s Data Collection and Reporting Tool (DCRT) • Ensure that South Carolina Department of Education is meeting our federal reporting requirements. • Main sufficient documentation of the MFS. • Enter financial data from the SEA and other state agencies to ensure MFS reporting requirements are met. • Improve accuracy and increase consistency in the collection and reporting of our state’s MFS data.

13. South Carolina and the DCRT • Exposure to the DCRT as a framework for organization and an opportunity to look at MFS in a new way. • Include other expenditures such as special needs bus driver salaries, alternate assessments, and expenditures from other state agencies that provide services to children with disabilities. • Worked with CIFR to get the additional items implemented into the DCRT going back to 2008 and compare to our current approved methodology.

14. CIFR’s DCRT: Table Summary Tab • Summarizes the MFS information entered on tabs for each year and calculates multiple determinations for MFS. • For each determination, the tool notes either “MFS Met” or “MFS Not Met. • Allows states to track MFS over time. • Allows states to enter projected appropriations to anticipate possible MFS failures.

15. Table Summary Tab in the DCRT

16. The DCRT • The DCRT creates a five-year workbook that allows you to document your state’s MFS calculations and the data supporting those calculations over time. • When five years have passed, you can simply download the workbook again and begin a new five-year cycle, providing history and continuity.

17. Other Resources on MFS Did you find this useful? Check out CIFR’s other MFS resources. https://cifr.wested.org/resources/mfs/

18. IDEA Part B GrantSection 611 and Section 619Local Educational Agency Maintenance of Effort Thomas Boudreau Education Consultant, IDEA Funds Manager, Bureau of Special Education, Academic Office CT State Department of Education Thomas.Boudreau@ct.gov Office: 860-713-6919 Jason Cone Education Associate, IDEA Fiscal Monitor, Office of Special Education Services, South Carolina Department of Education jcone@ed.sc.gov Office: 803-734-0081

19. IDEA Part BLEA MOE Requirement • Grantees must use IDEA Part B funds to supplement, not supplant local and state support for students with disabilities. • LEA MOE requirement: Each LEA is required to budget (Eligibility Standard) and expend (Compliance Standard) at least the same amount of funds for the education of children with disabilities as it spent in the previous year… • Eligibility for IDEA funding is based upon an LEA’s demonstration of its "Maintenance of Effort" (MOE) … both for the Eligibility Standard and Compliance Standard. The LEA is responsible to keep data supporting MOE.

20. Consequences of LEA MOE Failure • An LEA that fails to meet the Eligibility Standard is not eligible for a federal Part B subgrant for the year they failed to budget adequate funds. • If an LEA fails to meet the Compliance Standard, the SEA must return to the U.S. Department of Education, using non-federal funds, an amount equal to the amount by which the LEA failed to maintain its level of expenditures or the amount of the LEA’s Part B subgrant, whichever is lower.

21. Complexities of the LEA MOE Requirement • Two standards: • Eligibility (based on budgeted amounts) • Compliance (based on final expenditures) • Four methods to meet LEA MOE: • Total Local Funds • Total State & Local Funds • Local Per Capita • State & Local Per Capita • Five exceptions LEAs can apply, plus the LEA MOE adjustment.

22. Purpose of the LEA MOE Calculator CIFR developed the LEA MOE Calculator to help: • Document local, or state and local, fiscal effort in an LEA for the education of children with disabilities. • Determine whether that effort meets the IDEA’s LEA MOE requirements (34 CFR §300.203).

23. CT STORY: “Different fields, different grasshoppers; Different seas, different fish.” – Indonesian Proverb

24. Factors That Led CT to Use CIFR’s LEA MOE Calculator • New questions in the required annual eMAPS data submission for reviewing MOE yearly with every LEA. • Finding a graphic way for LEAs to understand MOE and be able to share with their Board of Education.

25. Multi-Year MOE Summary Worksheet in the LEA MOE Calculator • Summary page is filled in using historical data (prior to 2015-2016) and pulling data from data entry tabs (2015-2016 and later). • Shows LEA MOE results for an LEA over time, across all four methods.

26. How CT Implemented CIFR’s LEA MOE Calculator • CIFR staff trained SEA staff on LEA MOE and helped to examine LEAs who had been identified as not meeting LEA MOE.  • Corrected SEA bad practice. • Identified LEAs piloted the Calculator to explain shortfalls. • SEA created a webinar on LEA MOE. • State Education Resources Center (SERC) and staff available to go into LEAs if needed. • Rolled out the Calculator and a training PPT with six Regional Administers of Special Education – SEA/SERC.

27. CT LEAs Begin to Use CIFR’s LEA MOE Calculator • Made the LEA MOE Calculator part of the IDEA Part B subgrantee application. • When a specific LEA failed the LEA MOE Compliance Standard, SEA provided specific training and support on different ways to look at expenditures.

28. LEA MOE Failure in the LEA MOE Calculator • Any LEA MOE failure appears in red on the Multi-Year MOE Summary. • Repayment amounts due to failure of the LEA MOE Compliance Standard are calculated.

29. Changes Observed in CT Since Implementation • Increased confidence with the information and discussion points. • Most LEAs very receptive. • Business office is working more collaboratively with the programmatic side. • More accurate information that the LEAs can provide to their auditors.

30. Challenges/Lessons Learned • Make it manageable. • Just do it • No regrets and doing well with the system. • Would be lost without this!!

31. Next Steps for CT • Currently working on Compliance Standard for 2017-18 using final expenditures. • LEAs must complete all relevant data entry and enter results in their grant application. • If they fail the Compliance Standard, contact the Bureau of Special Education. • Also working on Eligibility Standard for 2019-20 using budget information. • LEAs must complete all relevant data entry and enter results in their grant application.

32. SC STORY: “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – Socrates

33. Factors That Led SC to Use CIFR’s LEA MOE Calculator • South Carolina had an in-house LEA MOE Calculator for multiple years but it did not capture activity for the subsequent years rule for LEA MOE effectively. • South Carolina agreed to use CIFR’s LEA MOE Calculator version 1.2 in State Fiscal Year 2016-2017. It was not implemented until January of 2018 (State Fiscal Year 2017-2018). • South Carolina went through extensive training with CIFR staff and then shared knowledge with 86 LEAs for roughly one year before requiring use of the calculator in South Carolina.

34. Subsequent Years Rule • Subsequent Years rule. The comparison year for determining if an LEA meets the eligibility and compliance standards is the last year the LEA met MOE using the same method. The comparison year is subject to the Subsequent Years rule at 34 CFR §300.203(c). If an LEA fails MOE, the level of expenditures required in the following year is the amount that would have been required in the absence of that failure, not the LEA’s reduced level of expenditures.

35. Example of SC’s Historical LEA MOE Calculator

36. SC and the Subsequent Years Rule • The state of South Carolina realized that by only comparing two years side by side there was not a reliable way to track how LEAs were performing over an extended period of time with IDEA LEA MOE.

37. The Subsequent Years Rule in the LEA MOE Calculator • Determines the last year met for each of the four methods. • Compares data for year being tested with the last year the LEA met MOE for each method.

38. Benefits of CIFR’s LEA MOE Calculator • Instructions provided by CIFR on instructions and dashboard have been clear and concise. • Consolidation of exceptions and adjustments information in the same Excel file (previously these were separate worksheets in SC before changing over). • Discussion between the SEA and LEAs on each of the 4 methods, exceptions & adjustments, and the MOE reduction. • More transparency when looking at the non-federal expenditure calculations (broken down by function code).

39. Benefits of CIFR’s LEA MOE Calculator (Continued) • Addresses if the state has a high cost fund. Previously, South Carolina did not declare on prior MOE forms whether or not a high cost fund was applicable. • South Carolina has benefited from the LEA being able to elect if they can effectively separate state and local funds from their general fund.

40. Improved Documentation Through CIFR’s LEA MOE Calculator • A historical reference for the LEAs on their child count and prior federal awards. • Documentation of any recent non-federal paybacks for a MOE shortfall. South Carolina did not have this record keeping on historical documents.

41. Other Resources on LEA MOE Did you find this useful? Check out CIFR’s other LEA MOE resources. http://cifr.wested.org/resources/lea-moe

42. Chinese Proverb • “The best time to plant a tree is 20 years ago…. The next best time is today.”

43. Discussion Questions • How might these CIFR tools help your state fiscal processes for MFS or LEA MOE? What benefits might be gained? • What challenges might your state face in introducing new fiscal tools? How might they be mitigated?

44. OSEP Disclaimer 2019 OSEP Leadership Conference DISCLAIMER: The contents of this presentation were developed by the presenters for the 2019 OSEP Leadership Conference. However, these contents do not necessarily represent the policy of the Department of Education, and you should not assume endorsement by the Federal Government. (Authority: 20 U.S.C. 1221e-3 and 3474)