LOUISIANA STATE SUPERINTENDENT OF EDUCATION JOHN WHITE

1. LOUISIANA STATE SUPERINTENDENT OF EDUCATION JOHN WHITE

2. Maintenance of Effort (MOE) and Excess Cost Requirements LASBO Fall Workshop November 7, 2012

3. Objective • Cover aspects of each Requirement: • New Applications in eGMS • No Child Left Behind (NCLB) • -includes applicable NCLB programs • Individuals with Disabilities Education Act (IDEA) • Excess Cost

4. New for LDE and LEAs Maintenance of Effort Calculations have been included as applications in the eGrants Management System beginning in 2012 IDEA MOE Verification

5. MOE MOE is calculated for both IDEA B and NCLB using the expenditures recorded in each LEA’s AFR. If MOE is not met in aggregate, then a per pupil calculation is performed using student count data from SIS and/or SER. Failure to meet MOE will result in a reduction in allocation for NCLB and repayment of funds for IDEA B.

6. NCLB Overview Requirement

7. NCLB Overview • The RULE: • MOE requires local educational agencies (LEAs) to demonstrate that the level of state and local funding remains relatively constant from year to year. • An LEA may receive NCLB funds only if the SEA determines that the LEA has maintained its fiscal effort.

8. NCLB REQUIREMENT LDE must determine that either the combined fiscal effort per student or the aggregate expenditure of the LEA from state and local funds for free public education in the LEA for the preceding fiscal year was not less than 90% of the combined fiscal effort or aggregated expenditure for the second preceding year. Example: For FY 2012-2013, compare FY 10-11 AFR actual expenditures to FY 09-10 AFR actual expenditures

9. Expenditures from state and local funds should include:

10. Expenditures from state and local funds should exclude:

11. NCLB Sample Verification

12. NCLB MOE Adjustments Tab

13. Example

14. NCLB Fiscal Effort Per Pupil

15. NCLB Fiscal Effort Per Student Calculation • Comparison of Average Per Pupil Expenditure (APPE) • 90% rule applies to APPE ($100 per pupil in year 1, then at least $90 per pupil in year 2)

16. Failure to Meet NCLB Requirement • There are no exceptions for NCLB MOE. • Failure to meet NCLB MOE will result in the LEA’s current allocation being reduced by the same proportion that MOE was not met. • Based on the calculated outcome most favorable to the LEA. • This reduction is applied to all affected programs under NCLB for the LEA: • Title I, Part A • Even Start • Title I, Part C • Title I, Part D • Title II, Part A • Title II, Part D • Title III, Part A • Title IV, Part A • 21st CCLC • Rural and Low Income School Program

17. NCLB MOE WAIVER OPTION • If an LEA fails to meet the MOE requirement, the LEA can opt to submit a waiver request to the USDOE. • The reduction will be in pending status until a waiver is granted to the LEA • LDE will assist in the waiver request efforts

18. IDEAOverviewRequirement

19. IDEA Overview The RULE: IDEA Part B funds must be used to supplement and, to the extent practicable, increase the level of State and local funds expended for the education of children with disabilities and in no way supplant State and local funds.

20. IDEA Requirement LEAs must demonstrate that the total amount, or average per capita amount, of State and local or local only school funds in the current fiscal year for the education of students with disabilities is at least equal to the total amount, or average per capita amount, of State and local or local only school funds actually expended for the education of students with disabilities in the prior year. Note: There are no waivers for failure to meet IDEA MOE

21. New Requirement Must be able to show that MOE could have been met using the same method in the prior year Calculate all 4 options to meet MOE State and local total expenditures State and local per pupil expenditures Local only expenditures Local only per pupil expenditures

22. 3 Phase Process

23. What does this mean? Verification Review Districts should budget in one year an amount equal to or greater than actual expenditures in the preceding year in which data is available. Budgeted vs. Actual Confirmation Review Districts should expend in one year an amount equal to or greater than actual expenditures in the preceding year. Actual vs. Actual

24. IDEA Tab selections • Under Program Specific • IDEA Annual MOE Confirmation/Verification • IDEA MOE Adjustments • IDEA Fiscal Effort Per Pupil • IDEA MOE Exceptions • IDEA Fiscal Effort Per Pupil w/Exceptions • IDEA Local Only Funds Annual MOE Confirmation/Verification • IDEA Local Only Funds MOE Adjustments • IDEA Local Only funds Fiscal Effort Per Pupil • IDEA Local Only Funds MOE Exceptions • IDEA Local Only Per Pupil w/Exceptions

25. Local Revenue Percentage Calculation available The resource allocation revenue and expenditure data is published to the LDE website each year immediately after the AFR is closed, and can be accessed using the link below. The file that includes the calculated local revenue % for each fiscal year being compared is uploaded directly into eGMS as a link on the “Local Funds Only” page. http://www.louisianaschools.net/divisions/edfn/resource_allocation.html

26. Exceptions to IDEA MOE • An LEA may reduce its level of local expenditures below preceding fiscal year levels if the reduction is due to any of the following circumstances:

28. MOE 50% Flexibility Option • The 50% Rule • If an LEA receives an increase in its IDEA flow-through allocation (611 funds) from one fiscal year to the next, the LEA may reduce its MOE obligations by up to 50% of the increased amount (34 CFR §300.205 (a)). • An increase in the IDEA preschool allocation (619 funds) is not taken into consideration. • Local funds “freed up” must be used to carry out activities authorized by the NCLB.

29. Provisions that limit MOE Flexibility Option • Under IDEA section 616, the SEA determines that an LEA is not meeting the requirements of Part B of the Act, including meeting targets in the state’s performance plan (SPP). Therefore, if an LEA does not receive an SPP indicator determination of “Meets Requirements,” then the LEA cannot use the flexibility option. • LEAs that have been identified as having significant disproportionality cannot use the flexibility option. • If the SEA has taken responsibility for students with disabilities in an LEA because the LEA is unable to establish and maintain programs of FAPE or the SEA has taken action against the LEA under IDEA section 613(a), then the LEA cannot use the flexibility option.

30. Grant Application – Program Specific for IDEA Part B

31. Sample Calculation Prior Year’s Allocation $9,000,000 Current Year’s Allocation $9,100,000 Increase $100,000 Max Avail. For MOE Reduction (50%) $50,000 Max Avail for EIS (15%) $150,000** FY 10-11 ExpendituresFY 11-12 Expenditures $275,000 $50,000 MOE reduction $225,000$257,000 MOE reduction amount may be limited by amounts used for Early Intervening Services (EIS)**

32. Failure to Meet IDEA Requirement • Funds may be recovered from the LEA from a non-federal funding source(general fund) to pay the liability in the exact amount in which an LEA fails to meet the requirement. • Based on the calculated outcome most favorable to the LEA. • Waiver from USDOE not available!

33. Supplement not SupplantA Quick Look

34. Supplement – Federal Regulation • Federal funds should be used to pay for services, staff, programs, or materials that supplement base expenditures paid for with state or local funds. • Designed to ensure federal funds pay for something “extra”.

35. Supplement – How to Avoid Ask Yourself… What would you do in the absence of federal funds? • LEA can rebuttal presumption of supplanting by demonstrating it would not have provided services if the federal funds were not available. • Documentation for support includes: • Fiscal or programmatic documentation to confirm that, in the absence of federal funds, LEA would eliminate staff or services in question • Budget histories and related information • State or local legislative action

36. Excess Cost Requirement

37. Excess Cost – The Federal Regulation • Excess costs are the educational costs of any elementary or secondary school student with a disability that are in excess of the average per pupil expenditure in an LEA during the preceding fiscal school year. • The minimum average per pupil amount for children with disabilities in elementary schools must be computed separately from the minimum average per pupil amount for children with disabilities in secondary schools. • I

38. Excess Cost - Expenditure Requirement • The LEA must provide funds from state and local sources for the education of special education students in amounts equal to or greater than those provided for regular education students.

39. Excess Cost - Measurement • Spend at least the average per student expenditure (APPE) on an elementary or secondary child with a disability before Part B funds are used to pay the excess costs of providing special education and related services. • Determined by calculation completed by LDOE

40. Current Year Excess Cost Calculation & Data Sources • Calculated by LDE • AFR – Annual Financial Report • Total Expenditures (local, state, and federal) • Minus: Capital Outlay Expenditures • Minus: Debt Service Expenditures • Minus: Federal IDEA Part B Expenditures • Minus: Federal, State, and local Title I, Part A Expenditures • Minus: Federal, State, and local Title III, Parts A and B Expenditures • Minimum Average Calculated Expenditures • SIS – Student Information System • ISIS – Integrated Statewide Information System • SER – Special Education Report Database • SPS – Sponsor/Site Database

41. Excess Cost Assurance • LEAs complete assurance in eGMS • Acknowledge that previous data to support calculation is accurate • Knowledge of meeting or failing requirement

42. Contact Information • FedAudit@la.gov • Nakia Jason, Audit Supervisor, LDOE • Email Nakia.Jason@la.gov • Marella Houghton, CPA, Audit Manager, LDOE • Email Marella.Houghton@la.gov P.O. Box 94064 1201 N. Third St. Ste. 5-130 Baton Rouge, Louisiana 70804-9064 Telephone: (225) 342-8848 Toll Free: 1-(877)-342-453-2721 Fax: (225) 342-3523