IDEA Maintenance of effort - Florida School Finance Officers

IDEA MAINTENANCE OFEFFORTFlorida School Finance Officer’s AssociationNovember 9, 2011Martha K. AsburyMark Eggers

Federal RequirementExcept as provided in §300.204 and §300.205, fundsprovided to an LEA under Part B of the Act mustnot be used to reduce the level of expenditures forthe education of children with disabilities made bythe LEA from local funds below the level of theseexpenditures for the preceding fiscal year.[emphasis added] 34 CFR §300.203Note: The threshold for IDEA is 100% unlike Title Iwhich is 90%2

Multiple Ways of Calculating MOE• Use both state and local expenditures (excludes allfederal expenditures)• Use local only expenditures• Aggregate• Per studentUse the calculation most advantageous to thedistrict; however, the LEA must calculateexpenditures from the same source from oneyear to the next in order to have a validcomparison3

Timeline• Compare expenditures for the most recentcompleted fiscal year to the preceding fiscal year• For example, compare expenditures in 2010-11 to2009-10. Expenditures in 2010-11 must equal orexceed those in 2009-10• Each year a new threshold is established (lower orhigher depending on the level of expenditures)4

Flexibility and Exceptions• The MOE threshold can be reduced by thefollowing documented circumstances:• Departure of special education or related servicespersonnel (e.g., high-salary teacher retires)• Termination of a program with significant costs for aparticular student (e.g., high-cost student moves toanother district)• Termination of costly expenditures for long-termpurchases (e.g., acquisition of equipment or a bus)5

Flexibility and Exceptions• Under certain circumstances, the MOE thresholdcan be reduced by 50% of the increase in IDEAfunding from year to year.• Certain districts are required to use a portion oftheir IDEA funds for Coordinated EarlyIntervening Services – others choose to do so.• The amount of funds used for CEIS count towardthe maximum amount that MOE may be reduced.6

Flexibility and Exceptions• Example of MOE reduction calculations• State and Local Expendituresfor year 1 $500,000• Amount of increase in IDEAfor year 2 100,000• Amount of CEIS expenditure inyear 2 20,000• Amount by which MOE thresholdcan be reduced for year 2 30,000• MOE requirement for year 2 $470,0007

Process for Determining MOE• Office of Funding and Financial Reporting preparesMOE calculations based on cost reports.• Formerly this calculation was sufficient; currentlyDOE is taking additional steps to verify MOE.• After audits are complete, staff from Office of AuditResolution and Monitoring work with the district,using audited financial data to achieve the bestpossible outcome with respect to MOE.• If MOE is not met, district will have to restore theamount of the deficit to the program using non-Federal funds.• DOE will work with district to establish “paymentplan” if necessary.8

OFFR Procedure• Using the program cost report, capture totaldistrict costs for exceptional student educationprograms (programs 111, 112, 113, 254, and 255).• Calculate expenditures for gifted students andsubtract from ESE expenditures (gifted FTE ismultiplied by basic cost factor by grade group,then multiplied by the BSA and the District CostDifferential).• A per FTE amount for the ESE GuaranteedAllocation is also included for grades K-8.9

OFFR Procedure (continued)• Deduct from expenditures, Community Services,Capital Outlay, Debt Services, and any non-recurringIncentive or Bonus Programs.• Deduct expenditures from federal funds – federaldirect and federal through state (an exception is madefor SFSF expenditures which may count as statefunds).• Determine the outcome of MOE analysis in both theaggregate and per FTE.• Compare against the previous year.• For any district that does not meet the MOErequirement, apply the flexibility and exceptions.10

OFFR Procedure (continued)Calculation of Exceptions• Enrollment decline – Bureau of Exceptional Educationand Student Services calculates the decline using thestudent data base.• Departure of Personnel – district submits list ofpersonnel who have left the district and individualshired to replace them along with salary/benefitsinformation.• Termination of program of high-cost purchases –district must provide documentation includingdescriptions, actual costs, dates costs incurred andcompleted, etc.11

Post-Audit Procedures(Office of Audit Resolution and Monitoring)• Review auditor’s findings and data.• Consider both options – state and local or localonly (if local only, calculation methodology will beestablished on a case by case basis).• Run the calculation using General Revenueaccounts with a function code of 5200.12

Consequences• There are no waivers available for LEAs failing tomeet the MOE requirement (the Department isworking with other states to ask Congress toapprove waiver authority at the local level).• The State must repay (with non-Federal funds) theFederal government the amount of money bywhich the LEA failed to maintain effort.• The State has the discretion to require the LEA topay back to the State the amount of money bywhich it failed to maintain effort.13

Best Practices• Know your district’s MOE threshold from theprevious year.• Establish a budget which meets your MOErequirement.• Track expenditures throughout the year and makeadjustments as necessary to maintain effort.• Other?14

Contact Information:Thank You!Martha K. Asbury850/245-0420martha.asbury@fldoe.orgMark Eggers850/245-0405mark.eggers@fldoe.orgAlricky Smith850/245-9875alricky.smith@fldoe.org15