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Denise Dusek

Denise Dusek. MAINTENANCE OF EFFORT - IDEA-B Updated July 2013. Presentation developed for Independent School Districts and Open-Enrollment Charter Schools Where applicable, the differences between ISDs and Charters will be notated in the slide.

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Denise Dusek

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  1. Denise Dusek MAINTENANCE OF EFFORT - IDEA-B Updated July 2013 Education Service Center, Region 20

  2. Presentation developed for Independent School Districts and Open-Enrollment Charter SchoolsWhere applicable, the differences between ISDs and Charters will be notated in the slide Education Service Center, Region 20

  3. The information provided in this presentation is subject to change based on revised guidance from TEA and/or USDE Education Service Center, Region 20

  4. Beginning with the comparison of 2008-2009 to 2009-2010, the IDEA MOE analysis performed by TEA is ON HOLD, pending clarification from USDE Education Service Center, Region 20

  5. Overview • Definition of Maintenance of Effort (MOE) • Comparison of MOE to State’s 52% Rule and Federal Excess Cost Requirement • MOE Data • Exceptions to MOE • MOE Voluntary Reduction • LEA Response to Finding of Noncompliance • OSEP Letters • Best Practices Education Service Center, Region 20

  6. Maintenance of Effort (MOE) – Definition Education Service Center, Region 20

  7. Federal Requirement – IDEA MOE • 34 CFR §300.203 (a) http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol2/pdf/CFR-2011-title34-vol2.pdf • IDEA-B funds provided to an LEA must not 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 Education Service Center, Region 20 7

  8. Example – IDEA MOE • Example: If the LEA expended $50,000 from State and/or local funds in 2011-2012 for the education of children with disabilities, the LEA must expend atleast $50,000 from State and/or local funds in 2012-2013 for the education of children with disabilities • If at least the same amount is not expended from one year to the next, the LEA will not be in compliance with MOE, unless an exception or adjustment applies Education Service Center, Region 20 8

  9. IDEA MOE Compared to ESEA MOE Education Service Center, Region 20 9

  10. Definition – IDEA MOE • 34 CFR §300.203 (b)(1) • The LEA must budget, for the education of children with disabilities, at least the sametotalorpercapita 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 Education Service Center, Region 20 10

  11. Four IDEA MOE Calculations • Total special education expenditures (aggregate) with a combination of State and local funds • Total special education expenditures percapita (per child with a disability) with a combination of State and local funds • Total special education expenditures (aggregate) with local funds only • Total special education expenditures percapita (per child with a disability) with local funds only Education Service Center, Region 20 11

  12. Most Favorable Calculation • When calculating MOE based on the four calculations, the most favorable result for the LEA will be used to determine the LEA’s status: • If the LEA meets MOE based on one of the four calculations, the LEA will be considered compliant • If the LEA does not meet MOE on all four calculations, the calculation showing the lowest amount of decline will be considered the amount of noncompliance Education Service Center, Region 20

  13. Most Favorable Calculation Compliant Example: Non-Compliant Example: Education Service Center, Region 20

  14. TEA’s Methodology for Determination of Local Funds Only **Methodology may change** Education Service Center, Region 20

  15. IDEA MOE Compared To:State 52% RuleandFederal Excess Cost Requirement Education Service Center, Region 20 15

  16. IDEA MOE Compared To:State 52% Rule Education Service Center, Region 20 16

  17. IDEA MOE vs State 52% Rule • The State’s 52% Rule is not MOE • 19 TAC §105.11: 52% Rule http://ritter.tea.state.tx.us/rules/tac/chapter105/ch105b.html#105.11 • MOE is a Federal spending requirement related to maintaining the same level of fiscal effort with local or State and local funds • 52% Rule is a State spending requirement related to direct costs and indirect costs with the State FSP* Special Education allotment *FSP (Foundation School Program) Education Service Center, Region 20 17

  18. State 52% Rule State’s 52% Rule (effective 12/26/11): • No more than 48% of the LEA’s FSP State Special Education allotment can be expended for indirect costs related to special education • Therefore, at least 52% of the LEA’s FSP State Special Education allotment must be spent on direct costs related to special education Education Service Center, Region 20 18

  19. State 52% Rule • Establishes the maximum amount that may be spent on indirect costs • The LEA has the option to spend 100% of their State Special Education allotment on direct costs related to special education • The rule only prohibits the LEA from spending more than 48% on indirect costs • Does not imply that the LEA may only spend 52% on direct costs Education Service Center, Region 20 19

  20. State 52% Rule • Statement on SOF can be misleading • Percent is actually minimum amount to be spent on direct costs • More accurate statement would be: “23-Special Education Adjusted Allotment (Spend at least 52% on direct costs) Education Service Center, Region 20 20

  21. Indirect Costs in Relation to IDEA MOE • Although the State Special Education allotment may be spent on both indirect and direct costs, for MOE purposes, the indirect costs coded to the special education program intent code are limited to: • Function 34 Student Transportation • Function 41 General Administration • Therefore, spend cautiously on indirect costs to avoid an adverse impact on MOE Education Service Center, Region 20 21

  22. IDEA MOE and 52% Rule Scenarios Education Service Center, Region 20 22

  23. MOE vs 52% Rule: Scenario #1 • 2010-2011: • LEA receives State Special Education funds $100,000 • LEA spends $52,000 in Fund 199/420, PIC 23, direct costs • LEA spends $48,000in Fund 199/420, PIC 23, indirect costs • Total spent = $100,000 • LEA meets 52% Rule • 2011-2012: • LEA receives State Special Education funds $100,000 • LEA spends $52,000 in Fund 199/420, PIC 23, direct costs • LEA spends $40,000 in Fund 199/420, PIC 23, indirect costs • Total spent = $92,000 • LEA meets 52% Rule, but not MOE Education Service Center, Region 20 23

  24. MOE vs 52% Rule: Scenario #2 • 2010-2011: • LEA receives State Special Education funds $100,000 • LEA spends $52,000 in Fund 199/420, PIC 23, direct costs • LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs • Total spent = $100,000 • LEA meets 52% Rule • 2011-2012: • LEA receives State Special Education funds $100,000 • LEA spends $48,000 in Fund 199/420 PIC 23, direct costs • LEA spends $52,000 in Fund 199/420, PIC 23, indirect costs • Total spent = $100,000 • LEA meets MOE, but not 52% Rule Education Service Center, Region 20 24

  25. MOE vs 52% Rule: Scenario #3 • 2010-2011: • LEA receives State Special Education funds $100,000 • LEA spends $52,000 in Fund 199/420, PIC 23, direct costs • LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs • Total spent = $100,000 • LEA meets 52% Rule • 2011-2012: • LEA receives State Special Education funds $100,000 • LEA spends $52,000 in Fund 199/420, PIC 23, direct costs • LEA spends $48,000 in Fund 199/420, PIC 23, indirect costs • Total spent = $100,000 • LEA meets both MOE and 52% Rule Education Service Center, Region 20 25

  26. IDEA MOE Compared To:Federal Excess Costs Requirement Education Service Center, Region 20

  27. Excess Costs - 34 CFR §300.202 • IDEA-B funds provided to the LEA must be used only to pay the excess costs of providing special education and related services to children with disabilities • The excess cost requirement prevents an LEA from using IDEA-B funds to pay for all of the costs directly attributable to the education of a child with a disability Education Service Center, Region 20

  28. Education Service Center, Region 20

  29. Excess Costs – 34 CFR 300.16 • Excess costs means: • Those costs that are in excess of the average annual per-student expenditure in an LEA during the preceding school year • Computed separately for elementary and secondary school students • Computed after deducting certain amounts • Refer to TEA’s Excess Cost calculator tool http://www.tea.state.tx.us/index2.aspx?id=2147499857 Education Service Center, Region 20

  30. Excess Costs – When to Expend • An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before IDEA-B funds are used • For practical purposes, the LEA may expend IDEA-B funds simultaneously with other fund sources provided that the minimum average amount per student is expended by the end of the school year with non-IDEA funds Education Service Center, Region 20

  31. Excess Costs Calculation • The calculation must be completed annually by the LEA based on previous year expenditures as soon as possible during the new school year • The calculation and supporting documentation must be maintained by the LEA and made available to auditors Education Service Center, Region 20

  32. IDEA MOE vs. Excess Costs • The excess cost requirement is not MOE • Excess cost establishes the minimum average amount an LEA must spend on the education of children with disabilities from non-IDEA fund sources • MOE is the level of the expenditure of local funds or combination of State and local funds for special education purposes that must be maintained from one year to the next, subject to certain exceptions and adjustments Education Service Center, Region 20

  33. Excess Costs – Additional Information • View USDE’s presentation from August 2012 concerning Excess Cost at: http://idea.ed.gov/explore/view/p/,root,dynamic,Presentation,31, Education Service Center, Region 20

  34. IDEA MOE DataInformation is subject to change, pursuant to revised guidance from TEA Education Service Center, Region 20 34

  35. SAMPLE BASED ON IDEA MOE TEMPLATE FROM JULY 2012; FORM IS CURRENTLY UNDER REVISION Education Service Center, Region 20

  36. PEIMS Data for MOE Analysis • TEA uses RAWPEIMS Data for MOE analysis • PEIMS EDIT+ Reports most closely matched to the RAW PEIMS data will be identified as data sources for explanatory purposes • Rounding differences could cause variances in the final calculated numbers when comparing data from PEIMS EDIT+ reports to data on the Summary of Compliance report Education Service Center, Region 20

  37. Expenditures: PIC 99/ORG 999 • Program Intent Code (PIC) • Codes used to account for the cost of instruction and other services that are directed to a particular need of a specific set of students • Example: PIC 23 = Special Education • Program Intent Code (PIC) 99 Undistributed • Costs that are not clearly attributable to a specific Program Intent Code • PEIMS Allocation Process distributes portions of PIC 99/ORG 999 amounts to specific PICs Education Service Center, Region 20

  38. Expenditures: PIC 99/ORG 999 • Use PIC 99/ORG 999 sparingly • Refer to TEA’s Financial Accountability System Resource Guide (FASRG) • Financial Accounting and Reporting (FAR) Module • Located at: http://www.tea.state.tx.us/index4.aspx?id=1222 • Improper use of PIC 99/ORG 999 could have an adverse effect on MOE analysis Education Service Center, Region 20

  39. Estimating Allocation of PIC 99/ORG 999 • The allocation process is complicated • Refer to TEA’s document “The Allocation Process for EDIT+ Reports” located at: http://www.tea.state.tx.us/index4.aspx?id=6564 Education Service Center, Region 20

  40. Estimating Allocation of PIC 99/ORG 999 A simple method for estimating the current year allocation from PIC99/ORG 999: • Current year PEIMS EDIT+ PRF1D002 (Fall): • Page titled “% to Spread ORG 999/PIC 99 Across ORG & PIC” • Obtain Total percent listed under PIC 23 • Multiply that percent by the total amount of current year special education expenditures obtained from your financial accounting records Education Service Center, Region 20

  41. Expenditures: Function Codes • Expenditure amounts for MOE analysis include: • Amounts coded directly by the LEA to the special education program intent code, in: • Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 • Amounts allocated from PIC 99/ORG 999 to the special education program intent code, in: • Functions 11, 12, 13, 21, 23, 31, 32, 33 only Education Service Center, Region 20 41

  42. Expenditures: Function Codes • Functions: • 11 Instruction • 12 Instructional Resources & Media Services • 13 Curriculum Development & Instructional Staff Development • 21 Instructional Leadership • 23 School Leadership • 31 Guidance, Counseling, & Evaluation Services • 32 Social Work Services • 33 Health Services • 34 Student Transportation (Indirect Costs)* • 36 Extracurricular Activities* • 41 General Administration (Indirect Costs)* • 51 Facilities Maintenance & Operations* • 53 Data Processing Services* *Functions 34, 36, 41, 51, 53 not used in the allocation of PIC 99/ORG 999 Undistributed Education Service Center, Region 20 42

  43. Expenditures: Data Sources • TEA utilizes the following data sources for the expenditure amounts: • 2007-2008 and 2008-2009: • PEIMS Mid-Year EDIT+ PRF1D007 Actual Compliance Report – General Fund Allocated • Allocated data (combination of directly coded expenditures and allocation of PIC 99/ORG 999) • 2009-2010 and beyond: • Raw data comparable to amounts found in the PEIMS Mid-Year EDIT+ PRF1D008 Actual Compliance Report – General Fund Unallocated • Unallocated data • TEA performs allocation to obtain total expenditure amount Education Service Center, Region 20 43

  44. Education Service Center, Region 20

  45. Expenditures: SFSF Funds • For 2009-2010 and 2010-2011 ONLY: • SFSF* Fund Codes 266 (and 366 for SSAs) • The portion of SFSF expended for special education (PIC 23) is considered State and local funds for MOE purposes *State Fiscal Stabilization Funds Education Service Center, Region 20

  46. Expenditures: SFSF Funds - Allocated • In June 2012, TEA announced that SFSF funds coded to PIC 99/ORG 999 will be allocated by a formula, similar to the allocation of PIC 99/ORG 999 from the General Fund • Due to the allocation of SFSF PIC 99/ORG 999 amounts, it will be difficult for the LEA to verify the expenditures used in the MOE analysis Education Service Center, Region 20

  47. Expenditures: General Fund and SFSF Funds • 2009-2010 & 2010-2011 MOE Expenditures include: • General Fund PIC 23Unallocated Amounts • Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 • SFSF PIC 23 Unallocated Amounts • Functions 11, 12, 13, 21, 23, 31, 32, 33, 34, 36, 41, 51, 53 • Allocation of portion of PIC 99 in General Fund to PIC 23 • Functions 11, 12, 13, 21, 23, 31, 32, 33 only • Allocation of portion of PIC 99 in SFSF to PIC 23 • Functions 11, 12, 13, 21, 23, 31, 32, 33 only Education Service Center, Region 20 47

  48. Expenditures: Education Jobs Fund • For 2010-2011 and 2011-2012 ONLY: • May treat Ed Jobs funds (287/368), as State or local funds for MOE purposes if the LEA spent those Ed Jobs funds for the education of children with disabilities • Ed Jobs funds expenditures will NOT automatically be included in TEA’s MOE analysis • LEA must provide data and documentation of special education expenditures with Ed Jobs Funds to TEA during response to preliminary finding of potential noncompliance for MOE Education Service Center, Region 20

  49. Expenditures: PEIMS Mid-Year 033 Record • 033 Record: Applicable only to Shared Services Arrangements (SSAs) of ISDs* • PRFBD001 Actual SSA Financial Summary by Fund and SSA Type – Unallocated data • Fund Code 437 SSA Special Education only • Fiscal Agent reports expenditures made on behalf of their Member Districts *033 Record is not applicable to Charter School SSAs • Each Charter School reports its own share of SSA expenses on its own 032 record based on information provided to them by their Fiscal Agent Education Service Center, Region 20 49

  50. Expenditures: PIC 23 vs 32 vs 33 • Should special education prekindergarten (PPCD – Preschool Program for Children with Disabilities) expenditures from State and/or local funds be coded to PIC 23 or PIC 32 or the new PIC 33? Education Service Center, Region 20

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