Maintenance of Effort under IDEA

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Maintenance of Effort under IDEA

• Oregon Department of Education
• September 2006

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What is IDEA?

• The Individuals with Disabilities Education Act
  (IDEA) is a federal formula grant that provides
  states, and through them LEAs, financial
  assistance in providing special education and
  related services to children with disabilities
  under IDEA.
• Financial assistance intended to fund the
  excess costs of providing special education
• U.S. Department of Education Regional Inspector
  General for Audit. Letter to Kansas State
  Department of Education. February 6, 2006.

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Why IDEA?

• IDEA was enacted to ensure that all children
  with disabilities have available to them a free
  and appropriate public education, and to ensure
  that the rights of children with disabilities and
  their parents are protected.
• U.S. Department of Education Regional Inspector
  General for Audit. Letter to Kansas State
  Department of Education. February 6, 2006.

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Legislative History of IDEA

• 1975 - Education of the Handicapped Act
• Also known as P.L. 94-142
• 6 reauthorizations later EHA became
• 1997 - Individuals with Disabilities Education
  Act (IDEA 1997)
• 2004 Individuals with Disabilities Education
  Improvement Act (IDEIA or IDEA 2004)

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Nonsupplanting Requirements

• IDEA contains nonsupplanting requirements at both
  the state and local level.
• IDEA funds may only supplement, and not replace
  or supplant, state and local funds for educating
  students with disabilities.
• .

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Maintenance of Effort (MOE)

• Basic requirement to expend the same amount of
  state and local funds for special education in
  any fiscal year as in the previous year.

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MOE in EHA (1975)

• No Maintenance of Effort (MOE) requirement
• (1975 EHA included nonsupplanting requirement.)

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MOE in IDEA 1997

• IDEA 1997 revised the MOE requirements
• Changed the range of expenditures considered
• Added a state-level maintenance of effort
  requirement based on state expenditures only.

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MOE in IDEA 2004

• Added NEW elements that may affect a districts
  determination of its Maintenance of Effort
  compliance
• Effective July 1, 2005

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Applying for IDEA Funds

• States (SEAs) submit annual applications for IDEA
  funds to the U.S. Department of Education, Office
  of Special Education Programs (OSEP).
• ODEs current applications for funds under IDEA
  Parts B and C are found at
• http//www.ode.state.or.us/search/results/?id26
  0

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SEA Compliance IDEA

• To receive IDEA funds, SEAs must
• Assure that the State complies with all
  requirements of IDEA
• Be able to provide evidence of compliance with
  IDEA requirements fiscal and program.

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SEA General Supervision LEA Compliance IDEA

• To receive IDEA funds, SEAs must also
• Assure that all LEAs and agencies responsible for
  providing a free appropriate public education
  (FAPE) comply with IDEA.

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LEA Compliance IDEA

• To receive IDEA funds, LEAs must
• Assure ODE that the District/program complies
  with all requirements of IDEA
• Be able to provide evidence of compliance with
  IDEA requirements fiscal and program.

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General supervision IDEA

• As part of its general supervision
  responsibilites, ODE must ensure LEAs comply
  with the MOE provisions of IDEA.

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MOE Audit Process Why?

• MOE audit process verifies LEA compliance with
  IDEA requirements in
• Nonsupplanting not using IDEA funds to supplant
  general funds committed to the same services.
• MOE maintaining specified levels of financial
  support for special education unless exceptional
  circumstances exist.

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Audit Process Who conducts the audit?

• ODEOSLP selects and awards a contract to an
  auditing firm through a competitive bidding
  process.
• ODE currently contracts with the firm of Jones
  Roth, P.C. of Eugene.

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Audit Process - How is the audit conducted?

• The annual MOE audit conducted on an LEA is based
  entirely on the information provided by that LEA
  to the State.

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Beginning the audit process

• LEAs required to submit their annual financial
  reports, using the State approved chart of
  accounts, to the ODE Office of Finance and
  Administration (OFA).
• Due Dates
• Electronic data collection - December 10 of each
  year
• Final FY 2005-2006 audit - December 31, 2006

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Audit Process - What documents are reviewed?

• OFA spreadsheet listing the
• LEAs reported Fund 100 Area of Responsibility
  320 expenditures, and
• ESD 320 expenditures reported as spent on behalf
  of students from the LEA.
• Figures are totaled and compared with the audited
  figures from the previous year.
• .

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Audit Process - What documents are reviewed?

• OSLP spreadsheet of the Special Education Child
  Count (SECC) from the year under audit.

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MOE Revising Documentation

• MISTAKES Prior to the beginning of the audit,
  an LEA or LEA consortium may submit written
  notice to the auditing firm to
• Identify coding mistakes and
• Requesting that these changes be reflected in
  the OFA spreadsheet.
• The burden of providing documentation of these
  errors to OFA falls upon the LEA.

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MOE Requesting exceptions

• IDEA 1997 IDEA 2004 identify four exceptional
  circumstances an LEA or consortium may invoke to
  justify reduction in MOE.
• Agencies must provide a letter to ODE and the
  auditing firm clearly identifying the exceptions
  and detailing their fiscal impact.
• More than one may be applicable in a given year.

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MOE Exceptional circumstances

• An LEA may reduce level of expenditures required
  for MOE due to
• The voluntary departure by retirement or
  otherwise, or for just cause, of special
  education or relaed services personnel who are
  replaced by qualified, lower-salaried staff
• A decrease in the enrollment of children with
  disabilities

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MOE Exceptional circumstances

• Termination of an obligation to provide an
  exceptionally costly program, as determined by
  the SEA, because the child-
• Has left the agencys jurisdictions
• Has reached the age at which the obligation to
  provide FAPE has ended or
• No longer needs the special education program.

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MOE Exceptional circumstances

• Termination of costly expenditures for long-term
  purchases, such as the acquisition of equipment
  or the construction of school facilities.

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MOE Completing the Audit

• Audit firm forwards summary to ODE OSLP upon
  completion of audit.
• ODEOSLP issues a status letter of pass or
  fail to the LEA or consortium, documenting the
  ESD and LEA expenditures and the total
  expenditures.

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MOE Pass Status

• Beginning with FY 2003-2004 audit period,
  ODEOSLP reviews both total expenditures and
  per capita expenditures. IDEA permits an LEA
  to pass on either basis.
• Agency might fail on the basis of total
  expenditures, but pass on the basis of per
  student expenditures Example LEA whose
  enrollment declined by 10 students, but whose
  expenditures declined by only 5,000 from the
  previous year.

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MOE Pass Status

• PASS
• Total expenditures equal the base amount to which
  the LEA will be compared in the following audit
  year.

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MOE Fail Status

• FAIL and Follow-up Audit(s)
• If in fail status, the LEA or consortium is
  given a time period within which it may submit
  information that could place it in a pass
  position.
• LEA/consortium responsibility to provide updated
  documentation to ODE OSLP and the auditing
  firm.

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MOE Pass Status

• IDEA permits an LEA to pass on either basis.
  
• Agency might fail on the basis of total
  expenditures, but pass on the basis of per
  student expenditures Example LEA whose
  enrollment declined by 10 students, but whose
  expenditures declined by only 5,000 from the
  previous year.

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Which applies? IDEA 1997 or IDEA 2004

• IDEA 1997 Expenditures prior to or related to
  fiscal year (FY) 2004-2005 fall under IDEA 1997.
• Last audit under IDEA 1997 was initiated in June
  2006.
• IDEA 2004 Beginning with FY 2005-2006, audits
  fall under IDEA 2004.

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Whats new in IDEA 2004?

• Authority for additional permissive use of funds,
  including
• Early Intervening Services and
• Administrative Case Management.

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Whats new in IDEA 2004?

• IDEA 2004 allows an LEA to use up to 50 of the
  increase in Part B funds from the previous year
  to reduce its local MOE amount. 20 USC
  1413(a)(2)(c)
• Forms to determine the maximum amount of money a
  district may use to reduce its MOE are available
  online at
• http//www.ode.state.or.us/data/schoolanddistrict/
  funding/
• sped/annapp/eseaactivities.pdf.
• Forms are for district use only and do not need
  to be submitted to ODE.

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Whats new in IDEA 2004?

• Limitation on the exception to local MOE
  requirements.
• If the SEA determines than an LEA is not meeting
  IDEA requirements, including the targets in the
  State Performance Plan (SPP), the SEA shall
  prohibit the LEA from reducing its MOE under
  Section 613(a)(2)(C) for any fiscal year.

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Whats new in IDEA 2004?

• Early Intervening Services (EIS)
• LEAs may use up to 15 of Part B funds, in
  combination with other amounts, to develop and
  implement coordinated, early intervening services
  (EIS) for children who have not been identified
  as needing special education or related services
  but who need additional academic and behavior
  support to succeed in a general education
  environment.
• Note IDEA requires SEA to impose EIS on LEAs
  demonstrating significant disproportionality
  based on student race or ethnicity in the
  identification, placement, or disciplinary
  actions. 618(d)(2)(B)

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Whats new in IDEA 2004?

• Early Intervening Services (EIS) Cautions
• Local MOE reduction option and use of Part B
  funds for EiS are interconnected.
• LEA decisions about amounts to be used for one
  purpose would affect the amount it may use for
  the other.
• (Reference See Page 2 of the ODE reduction in
• MOE form on website AND OSEPs EIS Topic Brief
  for examples.)
• Note IDEA requires SEA to impose EIS on LEAs
  demonstrating significant disproportionality
  based on student race or ethnicity in the
  identification, placement, or disciplinary
  actions. 618(d)(2)(B)

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Whats new in IDEA 2004?

• States must collect/examine data to determine if
  significant disproportionality based on race or
  ethnicity is occurring.
• If disproportionality is verified, LEA required
  to reserve maximum amount of funds under section
  20 USC 1413(f) to provide comprehensive
  coordinated early intervening services to serve
  children in the LEA, particularly children in
  those groups that were significantly over
  identified 20 USC 1418(2)(B).

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Whats New in IDEA? Effect of Significant
Disproportionality

• If a district is found significantly
  disproportionate, the district must use 15 of
  its IDEA funds towards early intervening services
  (EIS).
• LEA must public report on the revision of
  policies, practices, and procedures used to
  address the disproportionality issues.
  20 USC 1418(d)(2)(C)

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Why so much work?

• ? Penalty Penalty Penalty

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Why so much work?

• Failure to maintain effort in a given fiscal year
  may result in forfeiture of the IDEA grant
  received by the LEA or consortium member
  districts during that same year.
• SEAs may be subject to penalties if state MOE or
  general supervision of LEAs is inadequate.

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THE END