Fiscal Allowability and Flexibility Updates Under IDEA

1. Tiffany R. Winters, Esq.twinters@bruman.comBonnie Little Graham, Esq.bgraham@bruman.comBrustein & Manasevit, PLLCFall Forum 2012 Fiscal Allowability and Flexibility Updates Under IDEA

2. Agenda • ESEA Flexibility • Allowability • Time and Effort Reporting • Maintenance of Effort Updates • Supplanting, CEIS and RTI Brustein & Manasevit, PLLC

3. ESEA Waiver affect on iDEA

4. ESEA Flexibility • Does this flexibility affect the rights of a student with a disability to a free appropriate public education (FAPE) in accordance with the student’s individualized education program (IEP) as required by Part B of the Individuals with Disabilities Education Act (IDEA) or FAPE as required by Section 504 of the Rehabilitation Act of 1973 (Section 504)? Brustein & Manasevit, PLLC

5. ESEA Flexibility (cont.) • No!! • Nothing in the ESEAflexibility affects an SEA’s or LEA’s responsibility to provide FAPE to a student with a disability in accordance with the student’s IEPor as required by Section 504.  • If required under an IEP or Section 504 Plan, services or activities that an LEA/school is providing pursuant to its identification for improvement under ESEA section 1116, must continue even when the LEA and its schools are no longer in improvement status.  • Although a student’s IEP or 504 plan may be modified those revisions must ensure that the student will continue to receive FAPE. • (Modified August 3, 2012) Brustein & Manasevit, PLLC

6. IDEA ALLOWABILITY RULES

7. Allowable Uses of Funds under IDEA • Child Find Obligation • Staff Trainings • Evaluations • IEP Services • Special Education Coordinator • Service Providers • Special Education Teachers • Equipment and Supplies • Coordinated Early Intervening Services Brustein & Manasevit, PLLC

8. Coordinated Early Intervening Services (CEIS) • Set-aside up to 15% of Part B allocation to develop & implement coordinated CEIS: • 15% Required if Significantly Disproportionate!! (Defined by the SEA) • Eligibility: • Students who are NOT currently identified, and • Who need additional academic and behavioral support to succeed in a general education environment • For students in kindergarten through Grade 12 (focus on K-3rd Grade) • May be used in RTI system (depending on level) 34 CFR 300.226 Brustein & Manasevit, PLLC

9. SPP University and Fiscal 101 Beta Test Feedback Submission • Fiscal 101 For Part B: Understanding IDEA Funding Requirements • 4 Courses: •  Introduction and Overview of Part B •  Federal Fiscal Requirements •  Timely Obligation, Liquidation, and Distribution of Federal Funds •  Ensuring the Allowable Use of Federal Funds at the State Level and Summary • http://www.sppuniversity.org/ Brustein & Manasevit, PLLC

10. Allowability According to SPPU… • Advisory Councils? YES • Audit Costs and Related Services? YES • Attorneys’ Fees to the Attorneys of a Prevailing Parent in Due Process? YES • Entertainment Costs? NO • Lobbying? NO • Professional Services Costs? YES • Rearrangement and Alteration of Facilities Costs? YES • Taxes? YES • Training Costs? YES • Travel Costs for Personal Business? NO Brustein & Manasevit, PLLC

11. Attorneys’ Fees – NOT ALLOWABLE!!! • 34 C.F.R. § 300.517 • Funds Under Part B of the Act may not be used to pay attorneys’ fees or costs of a party related to any action or proceeding under section 615 of the Act and subpart E of this Part. • Section 615 – Procedural Safeguards Section (includes due process hearings) • Subpart E – Procedural Safeguards (includes due process hearings) Brustein & Manasevit, PLLC

12. EDGAR Procurement Rules Section 80.36 • All procurement transactions must be • conducted with full and open competition • Follow Your Procurement Rules!! • IDEA (B) requires preapproval for Equipment Purchases! (34 CFR 300.718) • IDEA definition includes instructional equipment, books, periodicals, documents, and other related materials • ARRA IDEA Guidance uses EDGAR definition for pre-approval Brustein & Manasevit, PLLC

13. Procurement According to SPPU… • In many cases, files lack documentation: • Didn’t check whether vendor was suspended or debarred; • Sole source purchase without justification; • Purchase over $5,000 was made without grantor approval, etc. • Prove: • Purchase was allowable; • Result would have been the same had the proper procedures been followed; • No harm to the federal interest; and • Evidence that the same process errors are not recurring. Brustein & Manasevit, PLLC

14. Time and Effort Documentation

15. OMB Circular A-87 Federal Cost Principles • 43 Specific Items of Costs detailed (alphabetical order) • Example: Salaries and Wages • Allowable if proper time distribution records • Single Cost Objective: Semi-annual certification • Multiple Cost Objectives: PAR Report Brustein & Manasevit, PLLC

16. WHO MUST PARTICIPATE? • Any employee who is working on a federal program • Not contractors • All employees paid with federal funds • Some employees paid with non-federal funds Brustein & Manasevit, PLLC

17. Time and Effort according to SPPU… • “Time and Effort is what is commonly referred to as a “cross-cutting” finding, … but it can also occur in situations that involve employees who are paid solely out of IDEA funds..” • If the employee works on more than one grant award, then there must be personnel activity reports. • Getting Closer! Brustein & Manasevit, PLLC

18. Personnel Costs • Type of documentation depends on how many “cost objectives” the employee worked on • These cost objectives must be connected to the employee’s salary source • What is a cost objective? • A specific grant award, or other category of costs, that requires the grantee to track specific cost information Brustein & Manasevit, PLLC

19. IDEA, Part B Cost Objectives • LEA-Level • Administration (as applicable) • IDEA Part B program • Coordinated Early Intervening Services (CEIS) • Equitable Services Proportionate Share • SEA-Level • IDEA Part B State-level Administration for Part B • IDEA Part B State Administration for Part C • Other State-level activities Brustein & Manasevit, PLLC

20. New Time and Effort Guidance by OCFO!! http://www2.ed.gov/policy/fund/guid/gposbul/time-and-effort-reporting.html Brustein & Manasevit, PLLC

21. OCFO Guidance • It is possible for multiple programs to have the same cost objective, which creates confusion over whether the presence of a single cost objective or being funded by multiple programs should determine what time-and-effort documentation and employee must complete. Brustein & Manasevit, PLLC

22. OCFO Guidance (cont.) • It is possible to work on a single cost objective even if an employee works on more than one Federal award or on a Federal award and a non-Federal award. • The key to determining whether it is a single cost objective is whether the employee’s salary and wages can be supported in full from each of the Federal awards on which the employee is working or from the Federal award along if the employee’s salary is also paid with non-Federal funds. Brustein & Manasevit, PLLC

23. IDEA OCFO Guidance Examples of Single Cost Objectives: • Funds under Sections 611 and 619 of the Individuals with Disabilities Education Act (IDEA) • A preschool special education teacher is funded with 50 percent IDEA section 611 funds and 50 percent with IDEA section 619 funds. • Teaching preschool special education is an allowable activity under both IDEA sections 611 and 619. • Accordingly, the teacher is performing a single cost objective even though she is supported with funds from two separate Federal awards; therefore, she need only file a semiannual certification. Brustein & Manasevit, PLLC

24. IDEA OCFO Guidance Examples of Single Cost Objectives: • Title I, Part A funds and CEIS (comprehensive early intervening services) funds under IDEA • A teacher works with low-achieving students and is supported with 60 percent Title I, A funds and 40 percent CEIS funds. • Teaching low-achieving students is a single cost objective because it can be fully supported under both Title I, A and CEIS. • Only a semiannual certification, therefore, is required even though the employee’s salary is supported by two Federal awards. Brustein & Manasevit, PLLC

25. Time and Effort Questions • A special education teacher spends 100% of her time working with students with disabilities, but is paid 50% with IDEA, Part B funds and 50% with State funds. • Semi-annual or PAR?? Brustein & Manasevit, PLLC

26. Time and Effort Questions • A general education teacher provides coordinated early intervening services (CEIS) in 3 out of her 7 classes this year. • Semi-annual or PAR?? Brustein & Manasevit, PLLC

27. Time and Effort Questions • A general education teacher provides coordinated early intervening services (CEIS) one day when the CEIS teacher is absent. • Semi-annual or PAR?? Brustein & Manasevit, PLLC

28. Time and Effort Questions • A school counselor spends 25% of her time providing general counseling services and 75% of her time providing counseling services under IEPs. • Semi-annual or PAR?? Brustein & Manasevit, PLLC

29. IDEA, Part B State and Local Maintenance of Effort Brustein & Manasevit, PLLC

30. State Maintenance of Effort (MOE) • A State must not reduce the amount of State financial support for special education and related services for children with disabilities below the amount of that support for the preceding fiscal year. • Must use ALL State funds!! • May not use Medicaid reimbursements towards SEA MOE requirements. Brustein & Manasevit, PLLC

31. Grant Application FY 2013 MOE Section • Compute how much is spent each year on special education and related services • Monitor spending for children with IEPs by other state agencies • Include a grand total for the application • Previously, States only affirmed that they were in compliance with MOE requirements Brustein & Manasevit, PLLC

32. State MOE Waiver • IDEA Waiver ONLY applies to State MOE! (not LEA MOE) • ED may waive SEA MOE (for one FY at a time) if ED determines that a waiver would be equitable due to: • Exceptional or uncontrollable circumstances such as a natural disaster or a precipitous & unforeseen decline in State financial resources; or • The SEA meets Supplement Not Supplant Waiver Requirements. IDEA Regs §§300.163(c) and 300.164 • Does not reduce State MOE for subsequent years Brustein & Manasevit, PLLC

33. State MOE Waiver (cont.) • ED wants to make sure any reduction in State SPED funds is not greater than the % reduction in revenues experienced by the State (SPED treated equitably). • Factors considered: • State’s revenues and extent of decrease based on exceptional or uncontrollable circumstances • State’s total appropriations for current versus prior year • State’s appropriations for other agencies • State’s compliance with Implementing IDEA, Part B and performance record • Other available funds to mitigate effects of waiver Brustein & Manasevit, PLLC

34. Failure to Meet State MOE • Consequences for failure to maintain support: • ED reduces allocation for any FY following the FY in which the State fails to comply. • Reduction is the same amount by which the State fails to meet the requirement. • Following year reverts back to previous level of effort. • Ability of SEA to reduce its MOE is VERY • RARE! Brustein & Manasevit, PLLC

35. Local-level Maintenance of Effort (MOE) • An LEA may not use its Part B funds 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. (IDEA Regs Section 300.203(a)) Brustein & Manasevit, PLLC

36. Local-level MOE (cont.) • Four ways to calculate Local MOE: • Comparison of total expenditures using local funds only, • Comparison of total expenditures using state and local funds, • Comparison of the per pupil amount using local funds only, or • Comparison of the per pupil amount using state and local funds. (IDEA Regs Section 300.203(b)) Brustein & Manasevit, PLLC

37. Local-level MOE Reductions Allowable reductions: • Voluntary departure of special education or related services personnel • A decrease in the enrollment of children with disabilities • The assumption of cost by the SEA’s high cost fund • An exceptionally costly child has left the agency’s jurisdiction, aged out of the eligibility age-range, or no longer needs the program of special education, or • The termination of costly expenditures for long-term purchases, such as the acquisition of equipment. (IDEA Regs Section 300.204) Brustein & Manasevit, PLLC

38. Local-level MOE - Optional Flexibility • Ifthere is an increase in the LEA’s allocation, compared to the previous FY allocation, • Then the LEA may reduce the level of expenditures otherwise required by not more than 50% of the amount of excess in allocation, • But the LEA must use an amount of local funds equal to the MOE reduction to carry out activities that could be supported with ESEA funds, regardless of whether the LEA is using ESEA funds for those activities. (IDEA Regs Section 300.205) • This will reduce next year’s MOE as well! Brustein & Manasevit, PLLC

39. Local-level MOE - Optional Flexibility (cont.) • Flexibility may be unavailable if: • SEA determines that LEA is unable to establish and maintain programs of FAPE that comply with Part B and § 613(a); or • The SEA took action against an LEA under § 613(a) of IDEA; • SEA has taken action against an LEA under § 616 and subpart F of regulations; or • LEA is identified as “significantly disproportionate”. Brustein & Manasevit, PLLC

40. Local-level MOE - Optional Flexibility & CEIS • The amount of LEA MOE reduction that an LEA can take is affected by an LEA’s use of Part B funds for coordinated early intervening services (CEIS). • Therefore, must subtract any CEIS set-aside from any potential LEA MOE reduction! Brustein & Manasevit, PLLC

41. Local-level MOE (cont.) • Consequences for violation: SEA can not reduce an LEA’s current or future allocation. • ED would handle an LEA MOE violation by seeking a recovery of funds from the SEA. • The level of recovery would depend on the degree to which the LEA failed to maintain effort, but would not exceed the amount of the LEA’s subgrant for the year in question. (See OSEP policy letter, July 26, 2006, to Carol Ann Baglin on www.bruman.com ) • Up to SEA to recover funds from LEA. Brustein & Manasevit, PLLC

42. Local-level MOE (cont.) Consequences for violation: • The LEA’s MOE requirement reverts to the level set the last time the LEA met MOE! • Letter to the Center for Law and Education, Kathleen Boundy, dated April 4, 2012 on www.bruman.com • Rescinds previous Letter to NASDSE Executive Director Bill East, dated June 16, 2011. • What about LEAs that relied on June 2011 letter to reduce effort levels??? Brustein & Manasevit, PLLC

43. Supplement not supplant Brustein & Manasevit, PLLC

44. IDEA, Part C MOE/SNS • Under Part C, the lead agency meets the Supplement Not Supplant requirement if it meets MOE: • The total amount of State and local funds budgeted for expenditure in the current fiscal year for early intervention services must be at least equal to the total amount of state and local funds actually expended for early intervention services in the most recent preceding fiscal year for which information is available. • . • No Waiver Authority. • Notice of Proposed Rulemaking to address Part C MOE/SNS flexibility?? Brustein & Manasevit, PLLC

45. Treatment of Funds - IDEA Part C • • Federal Funds: Reimbursements from federal finds (e.g., Medicaid) is not “state and local” funds for purposes of MOE. Section 303.520(d)(2) • •Private Insurance: Private insurance is notconsidered State or local funds for MOE purposes. Section 303.520(d)(3) • However, if a State has enacted a statute regarding the use of private health insurance coverage to pay for early intervention services under Part C, the State may reestablish a new baseline of State and local expenditures in the next Federal fiscal year following the effective date of the statute. Section 303.520(b). • • Family Fees: Funds from a parent or family member under the State’s system of payments established under §303.521 are considered program income under 34 CFR 80.25. These funds are considered neither State nor local funds for MOE purposes under §303.225(b). Sections 303.520(e) and 303.521(d)(2) . Brustein & Manasevit, PLLC

46. Sea Supplement Not Supplant • Part B funds must be used to supplement and increase the level of Federal, state and local funds expended for special education and related services provided to children with disabilities, and in no case supplant those Federal, State and local funds. • A state may use funds it retains for state admin and other state-level activities without regard to the prohibition on supplanting other funds 34 CFR 300.164 Brustein & Manasevit, PLLC

47. Lea Supplement Not Supplant • Part B funds must be used to supplement state, local and other Federal funds (used for providing services to children with disabilities). • If LEA meets MOE, then LEA meets supplement /not supplant requirements • No particular cost test • ARRA Guidance, April 2009 34 CFR 300.202 Brustein & Manasevit, PLLC

48. LEA Supplement Not Supplant (cont.) • Notwithstanding 300.202 (SNS), 300.203 (MOE), and 300.162 (Commingling), fund provided to an LEA may be used for: • Services and aids that also benefit nondisabled children • Early intervening services • High cost special education and related services 34 CFR 300.208 Brustein & Manasevit, PLLC

49. CEIS and Supplement Not Supplant • CEIS must supplement any ESEA activities or services. 34 CFR 300.226(e) • Model example: • CEIS and local funds serve total population – CEIS for eligible CEIS students • Title I provides Response to Intervention to Title I students and CEIS supplements Brustein & Manasevit, PLLC

50. Supplement Not Supplant (cont.) IDEA, Part B funds must be used to supplement and not supplant State, local, and other Federal funds. Brustein & Manasevit, PLLC