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ODE MOE Guidance Document: IDEA Part B 4-8-09

ODE ARRA Guidance Document: IDEA Part B

How can an LEA determine that it is eligible to reduce its state and local effort by up to 50 percent of the increase in its subgrant allocation?

The first step for an LEA that is considering taking advantage of this flexibility is to compare the total Federal subgrant allocation the LEA received under the Part B Grants to States program in FY 2008 with the total subgrant Grants to States allocation they expect to receive in FY 2009 (including both the regular Part B LEA Grants to States subgrant allocation and any Part B IDEA Grants to States ARRA funds that the LEA receives).  If the total Federal subgrant allocation under the Part B Grants to States program received by an LEA in FY 2009 exceeds the amount received by that LEA in FY 2008 under that program, the LEA may be eligible to reduce the level of local, or state and local, special education expenditures otherwise required by, up to 50 percent of this increase.

There are other provisions of the IDEA that limit whether an LEA may reduce local effort under IDEA section 613(a)(2)(C) (34 CFR §300.205).  Under IDEA section 616(f), if an SEA determines that an LEA is not meeting the requirements of Part B, including meeting targets in the state’s performance plan, the SEA must prohibit that LEA from reducing its MOE under IDEA section 613(a)(2)(C) for any fiscal year.  Therefore, an LEA must receive a determination under section 616 of “Meets Requirements” from the state in order to take advantage of this flexibility.  Also, IDEA section 613(a)(2)(C)(iii) requires an SEA to prohibit an LEA from reducing its MOE if the SEA has taken responsibility for providing a FAPE in the LEA because the LEA is unable to establish and maintain programs of FAPE, or the SEA has taken action against the LEA under IDEA section 616.  Finally, an LEA that is required to use 15 percent of its IDEA Part B allocation on CEIS because the SEA identified the LEA as having significant disproportionality under 34 CFR §300.646, will not be able to reduce local MOE under IDEA section 613(a)(2)(C).
 
Hypothetical examples of small, medium, and large Oregon districts lowering their LEA Maintenance of Effort Bar by 50% (Amounts used are examples and not actual figures)

District

Base

IDEA Allocation 08-09

Base allocation plus  stimulus 09-10

Net

increase in funds

Could

lower MOE bar by:

Estimated MOE base

for 08-09

Base less lowered amount: Amount needed to meet MOE for 09-10

Amount district would need to spend on ESEA activities

Burnt River

$17,250

$26,000

$8,750

$4,375

$11,775

$7,400

$4,375

Vernonia

$140,000

$250,000

$110,00

$55,000

$725,000

$670,00

$55,000

No. Marion

$325,000

$550,000

$225,000

$112,500

$1,810,000

$1,697,500

$112,500

Corvallis

$1,320,000

$2,000,000

$680,000

$340,000

$4,687,035

$4,347,035

$340,000

Lake Oswego

$1,150,000

$1,850,000

$700,000

$350,000

$7,534,750

$7,184,750

$350,000

Salem-Keizer

$6,630,000

$9,900,000

$3,270,000

$1,635,000

$39,850,000

$38,215,000

$1,635,000

 

 How does taking advantage of the 50 percent MOE reduction under the IDEA, and using a comparable amount of state and local funds for ESEA activities affect an LEA’s ESEA MOE level?

Many (but not all) ESEA programs include a MOE requirement, which is described under 34 CFR §299.5.  Under this MOE requirement, each LEA must demonstrate that, during the prior fiscal year, it expended at least 90 percent of the amount expended in the second preceding fiscal year.  This MOE amount is calculated based on the LEA’s expenditures from state and local funds for free public education, including expenditures for administration, instruction, attendance and health services, operation and maintenance of plant, fixed charges, and net expenditures to cover deficits for food services and student body activities.  

The LEA may NOT include the following in its calculation:  any expenditures for community services, capital outlay, debt service or supplemental expenses made as a result of a Presidentially declared disaster or any expenditures made from funds provided by the Federal Government.  

We would expect that local and state funds used to provide special education and related services would be included in the calculation of state and local funds expended for a free public education.  Therefore, shifting local and funds from special education activities to ESEA activities should have no appreciable effect on the LEA’s overall expenditures for a free public education under 34 CFR §299.5.  

If an LEA opts to utilize the flexibility available under IDEA section 613(a)(2)(C) (34 CFR §300.205) to reduce its MOE in the current fiscal year, what effect would this reduction have on the LEA’s expected level of MOE in future years?  

If an LEA chooses to utilize the flexibility available under IDEA section 613(a)(2)(C) to reduce the level of local, or state and local, expenditures otherwise required in the current fiscal year, in subsequent fiscal years the LEA would be required to maintain effort at the reduced level -- except to the extent that an LEA increases the level of expenditures for the education of children with disabilities made by that LEA above the level of expenditures in FY 2009, using local, or state or local funds.  In other words, an LEA choosing to take advantage of this flexibility may reduce the required MOE level in subsequent years, until that LEA increases the level of special education expenditures, using state or local funds, on its own.

Questions?

Eric Richards
503-947-5786
eric.richards@state.or.us