Special Education Maintenance of Effort (MOE)

1. Special Education Maintenance of Effort(MOE)

2. Objectives Participants will learn: • What is MOE? • What are the parts of MOE? • How is MOE calculated? • What might count as exceptions? • What do we do if we get a letter from TEA? • How do we avoid the problem?

3. Definitions and Reports

4. MOE — What Is It? “Except as provided in §§300.204 and 300.205, funds provided to an LEA under Part B of the Actmustnot 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.” [ 34 CFR §300.203 (a) ]

5. MOE — What Is It? • LEAs must spend . . . at least the same total or per capita amount from either of the following sources as the LEA spent for that purpose from the same source for the most recent prior year for which information is available: • Local funds only • The combination of State and local funds [ § 300.203 (b) (1) ] • Note: In Texas, local and state funds are all in Fund 199.

6. What Are Direct Services? • TAC 89.1125 defines allowable expenditures • 85% includes all allowable expenditures • State special education funds may only be used for • Personnel, special materials, supplies and equipment • Directly related to the development and implementation of the IEPs • Not ordinarily purchased for the regular classroom

7. What Is the 85% Rule? • District must spend at least 85% of State Special Education Block Grant amount in direct special education services • State spending requirement • Has nothing to do with the federal MOE requirement

8. 85% versus MOE? Scenario #1 • FY03: LEA receives $100,000 in state special education dollars. They spent $95,000 in Fund 199, PIC 23, direct services Result: Met 85% • FY04: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85%, but not MOE

9. 85% versus MOE? Scenario #2 • FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% • FY04: LEA receives $120,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met MOE, but not 85% (at least $102,000 required for 85%)

10. 85% versus MOE? Scenario #3 • FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% • FY04: LEA receives $120,000 in state special education dollars. They spent $80,000 in Fund 199, PIC 23, direct services Result: Did not meet MOE or 85%

11. 85% versus MOE? Scenario #4 • FY03: LEA receives $100,000 in state special education dollars. They spent $85,000 in Fund 199, PIC 23, direct services Result: Met 85% • FY04: LEA receives $120,000 in state special education dollars. They spent $102,000 in Fund 199, PIC 23, direct services Result: Met both MOE and 85%

12. What Are the Parts of MOE?

13. Data Sources for MOE • Fund 199, PIC 23, Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 • SSA expenditures on behalf of member LEAs, found on the 033 record submitted by SSA • IDEA-B Formula maximum entitlement, including Early Intervening Services (EIS) expenses, if any • Child count, IDEA eligible, from fall PEIMS submission of 163 records • ECI set-aside from Summary of Finances • Allocated versus unallocated reports

14. Is It Only Fund 199? 161-198 . . . Locally Defined Classification • Used, at the option of the school district, to further classify specific revenues and related expenditures • For PEIMS reporting these accounts are converted to Fund 199 (Financial Accountability System Resource Guide, 1.4.2 )

15. What Is PIC? • Program Intent Code. Codes used to account for the cost of instruction and other services that are directed toward a particular need of a specific set of students • PIC 23 Special Education. Costs incurred to evaluate, place and provide educational and/or other services to students who have Individual Educational Plans (IEP) approved by Admission, Review and Dismissal (ARD) committees • PIC 99 Undistributed.Charges not readily distributed to program intent codes are classified here. May be used for costs not clearly attributable to a specific program intent

16. Where To Find PIC in Coding Example: 199 - 11 - 6411 . 00 - 101 - 7 23 - XXX OR 199 – 11 – 6411 . 00 – 101 – 7 23 - XXX

17. Are There Other PICs Besides 23? Examples: • 11 Basic Educational Services • 21 Gifted and Talented • 22 Career and Technology • 24 Accelerated Education • 25 Bilingual Education and Special Language

18. How To Read Edit + Headings Report Number 1 2 3 4 5

19. What Is 033 Record? • Name of PEIMS record used to collect SSA fiscal agent expenditures on behalf of member districts • Reported through Edit+ PRFBD001 in mid-year collection • Only Fund 437, Code Type 11, Special Education (other than Regional Day School Program for the Deaf or Visually Impaired)

20. 033 Record Dilemma or…“That’s Not What We Paid the SSA!” • District Payment: $33,250 • Edit+ Amount from 033 Record: $33,250 • District Payment: $59,537 • Edit+ Amount from 033 Record: $17,086 • District Payment: $91,937 • Edit+ Amount from 033 Record: $98,762

21. Can Increase in Federal Entitlement Be Used To Help with MOE? • Adjustment to local fiscal efforts apply in certain fiscal years • “Amounts in excess.… for any fiscal year for which the allocation received by an LEA under §300.705 exceeds the amount the LEA received for the previous fiscal year, the LEA may reduce the level of expenditures otherwise required by §300.203(a) by not more than 50 percent of the amount of that excess.”[ §300.205 (a) ] But…

22. Early Intervening Services Early intervening services may impact MOE… “An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, … to develop and implement coordinated, early intervening services, … for students … 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.” [ §300.226 (a) ]

23. What Does That Mean? • If using up to 15% of the entitlement for early intervening services, it will reduce amount of federal entitlement increase applied toward MOE • How much? Up to all of it. • See IDEA-B regs Appendix D for examples of how EIS impacts MOE http://www.tea.state.tx.us/special.ed/rules/pdf/idea06fr.pdf [ § 300.205 (d) and §300.226 (a) ]

24. Will Using 50% of the Federal Increase Significantly Help in Meeting MOE? • Only if LEA gets large increases • 20% of large IDEA increases in prior years might actually be more than 50% of small IDEA increase, especially if IDEA-B funds are used for early intervening services • May have to spend more locally to make up difference

25. Example • 03-04 $35,000 • 04-05 $50,000 • 05-06 $60,000 • Increase between 03-04 to 04-05 = $15,000 • 20% of that increase is $3,000 • Increase between 04-05 to 05-06 = $10,000 • 50% of that increase is $5,000 • 15% of $60,000 is $9,000 • Spending $5,000-$9,000 for EIS leaves nothing that will count for MOE, or $3,000 short for MOE

26. Another Example • 03-04 $35,000 • 04-05 $50,000 • 05-06 $55,000 • Increase between 03-04 to 04-05 = $15,000 • 20% of that increase is $3,000 • Increase between 04-05 to 05-06 = $5,000 • 50% of that increase is $2,500 • Without spending anything for EIS, $500 short from the year before • May have to spend more locally to make up difference

27. Sample LEA Example • 04-05 $283,504 • 05-06 $295,365 • Increase of $11,861 • 50% of increase = $5,930.50 for MOE • 15% of 05-06 maximum entitlement = $44,304.75

28. Child Count • Includes eligible students, ages 3 through 21, who: • meet the requirements of 19 TAC §89.1040 (Disabling Conditions) and 19 TAC §89.1050 (ARD Committee) • are enrolled and receiving special education and related services through an IEP or individualized services plan as of the PEIMS snapshot date • have on file a current individualized education program or individualized services plan and • have on file a current full and individual evaluation • Students with disabilities who graduate under 19 TAC §89.1070(c) and return to school may not be counted on the IDEA Part B child count [ Pursuant to 34 CFR §300.102(a)(3) ]

29. What Is ECI Set-Aside? • Found on the District’s Summary of Finances • http://www.tea.state.tx.us/school.finance/funding/sofweb7.html • Shown as negative number • Adjustment taken “off the top” or “set aside” at state level

30. What Is the Most Confusing Part of Understanding MOE?

31. ALLOCATION… Or, how to decide how much of PIC 99 belongs to special education?

32. Unallocated Report vs. Allocated Report What is the difference between an unallocated report and an allocated report? • Unallocated matches the “books,” or general ledger • Allocated is what is on the general ledger for PIC 23, PLUS part of what had been in PIC 99

33. What Is Allocation? • Allocation process • Is a report type of template • Does not change transaction information within the general ledger system • Uses payroll and staff data for instructional FTEs (full time equivalents of staff), as recorded under function 11, Instruction, as a basis to allocate costs from PIC 99 • Full use of specific program intent codes in function 11 is essential for the optimum functionality of the allocation process • Undistributed Program Intent Code 99 used when a school district elects not to allocate costs

34. What Allocates? • Amounts dispersed from the General Fund, PIC 99 (Note: The use of PIC 99 is district choice in most instances) • Fund 199 (including local use of 161-198) • Objects 6XXX • DC Functions 11, 12, 13, 21, 23, 31, 32, 33 • IC Functions None • Not Org 998 or 7XX

35. Not All Functions Used for MOE Allocate to PIC 99… MOE Functions Allocated Functions 11 11 12 12 13 13 21 21 23 23 31 31 32 32 33 33 34 35 36 41 51 53 What you code in these functions to PIC 23 is what counts for MOE. Functions not used at all in MOE: 35, 52, 61, 71, 81, 91-99

36. 1. Report # 2. PEIMS Collection 4. Allocated or Unallocated 3. FY 8. PIC 99 Page 2 7. PIC 23 5. Direct Functions 6. Indirect Functions

37. Difference Between Allocated and Unallocated Figures Is there a lot of difference between the allocated and unallocated figures? It depends on your district’s financial accounting and how much PIC 99 is used.

38. Difference Between Allocated and Unallocated Figures

39. PIC 99 Lesson • Use PIC 99 as little as possible (Then more direct control over meeting MOE with direct expenses) • Remember, use of PIC 99 is optional in most cases • Not all PIC 99 coding affects MOE. Review the slide “What Allocates”

40. Estimating How Much PIC 99 Will Allocate to PIC 23 Is there a spreadsheet we can use for estimating how much PIC 99 will allocate to PIC 23? • No . . . but . . . • PEIMS EDIT+ User Technical Documentation: Tips for the Allocation Process for PEIMS (EDIT+) Reports http://www.tea.state.tx.us/peims/editplus/documents/tips_allocproc.pdf

41. Estimating PIC 99 Allocation Amounts? Can we just estimate our PIC 99 allocation amounts? • Maybe. Look at the information historically. Is this LEAs allocation consistent enough to predict for future years?

42. Estimating PIC 99 Allocation Amounts? Can we just estimate our PIC 99 allocation amounts? • Maybe. Look at the information historically. Is this LEAs allocation consistent enough to predict for future years?

43. How Is MOE Calculated?

45. Edit + PRF3D022 • New Edit+ report available in mid-year PEIMS found in the Edit+ Turnaround Reports

46. Source of Excel Spreadsheet • For a prediction of how the spreadsheets will look for 05-06 and following years, Region 8 ESC has developed an Excel spreadsheet • Available at following link: http://www.reg8.net/docs/14-MOE%20FY05%20to%20FY06.xls

47. MOE Exceptions

48. Allowable Exceptions to MOE • §300.204 Exception to maintenance of effort “Notwithstanding the restriction in § 300.203(a), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following:” • 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

49. Allowable Exceptions to MOE • The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— (1) Has left the jurisdiction of the agency (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education

50. Allowable Exceptions to MOE • The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities • The assumption of cost by the high cost fund operated by the SEA under § 300.704(c)