Presentation on theme: "Iowa Department of Education Webinar: Permissive and Nonpermissive Uses of Special and General Education Funds January 28 & 30, 2014."— Presentation transcript:
Iowa Department of Education Webinar: Permissive and Nonpermissive Uses of Special and General Education Funds January 28 & 30, 2014
Purpose of the Webinar To facilitate understanding and compliance with the law. To provide additional detail and context to the clarifying guidance issued on December 19, 2013. To provide an additional venue for conversations about adjustments and implementation of existing statute and rule. To set the stage for additional conversations within the local context.
How Did We Get Here? Several state-level conversations converged ◦ 1) Concerns over growing SPED fund deficits SBRC directed DE to review reasons for significant jumps in SPED deficits in the last three years. Reasons for increases were a) 0% school aid growth during downturn, b) loss of federal ARRA IDEA funds, and c) changes to classification criteria for student placement (more likely Level II vs. Level I than before change). SBRC concern consistent with growing concern generally on property taxes. SBRC wanted to ensure that the growth was legitimate.
How Did We Get Here? (cont.) o 2 ) DE restructuring and refocus As a part of DE restructuring, the School Finance Team (now Bureau of FFOTS) assumed responsibility for Special Education Finance. Data collection mechanisms continued to improve, providing more detail on expenditures. Clarification of Chapter 98 regarding use of categorical funding (which includes SPED) began due to general concern about understanding of permissive uses of categorical funds. This led to additional monitoring and analysis of expenditures in multiple funding streams.
How Did We Get Here? (cont.) o 3) USDE oversight and expectations An audit done on the USDE found they weren’t monitoring well, so in all categories, they “doubled down.” This has resulted in a more literal application of federal statute to all states and grantees. Multiple implications from time recording to task assignment to uses of state and local funds.
How Did We Get Here? (cont.) o 4) Economic downturn During the downturn around FY10, state funding for both education and mental health supports did not grow enough to keep up with costs. This led to multiple state-level efforts to ensure permissive costs only and to promote efficiency along with adequacy as a funding concept.
Identified Issues Related to funding and expenditures, the DE saw several “pockets” of concern related to general spending : ◦ Coding of expenditures (i.e., special and general education). ◦ Uses of categorical funding for non-instructional costs (admin and operations). ◦ Third party educational costs. ◦ Billing issues. ◦ Use of general program percentage (IDEA specific). ◦ MOE.
Identified Issues (cont.) Expenditures creep from facilities to education funding for costs of the facility’s infrastructure, programs, and overhead. Legal authority creep from districts to facilities for instructional program. Care/treatment plan costs might be included in district billings, when they should not be. Should be DHS/courts. Expenditures eligible for Medicaid reimbursement might be included in district billings, but should not be. Should have been filed with Medicaid by facility. Belief expressed that basic funding is inadequate— incentive to pass along inappropriate costs.
Identified Issues (cont.) Insufficient oversight of both instructional program and billing process. Insufficient mechanism for cost containment. Treatment is 24-7 responsibility; education is on top of the treatment, not in place of. Conflicts of interest—high risk that when the same entity is providing the treatment and the education, that one will be provided at the expense of the other.
Identified Issues (cont.) Perception that the district is the fiscal billing agent for the facilities—NOT fiscal agent. Facilities can only have agreement with district of location—cannot enter into agreements with any other districts. Out-of-state placement requires contact with AEA and requires DE approval. Summer school/Extended year program must be on IEP.
Identified Issues (cont.) As the DE attempted to correct some of the identified issues, efforts were made to effect legislative changes to legalize what the DE determined was not permissive.
Recent History Two legislative sessions ago, an attempt was made to alter IC 256B to allow any entity receiving SPED funds to use those funds for admin and operations. DE resisted and the items were ultimately line-item vetoed by the Governor. DE analysis at the time showed that this would have increased the existing special education deficit by around $30 million. Also contrary to existing statute on use of categorical funds.
Recent History (cont.) After the line-item veto two sessions ago, the Governor asked the State Auditor to review certain facility special education expenditures. Finding was that noninstructional costs were being billed to educational funding.
Recent History (cont.) Last legislative session, private facilities impacted by IC 135H and 237 introduced language to legalize certain expenditures that the DE determined were not permissive. DE resisted. This would have again set a bad precedent for use of categorical funds and would have expanded funding when compared to what the law allowed. This action validated to the DE that the private facilities understood what was and was not permissive.
Recent History (cont.) After the 2 nd veto, the Governor directed the DE to develop clarifying guidance on the permissive and nonpermissive uses of special and general education funds and to work to ensure all entities impacted by the law understood the requirements of the law. DE also collaborated with DHS to ensure the line between education and mental health services was clear. Guidance was issued on December 19, 2013 Intent was to convene the affected stakeholders to talk about “what next” once the guidance was out.
Recent History (cont.) In conversations with private facilities and the school districts that contain them, it is clear that local context is important. DE decided to adjust the “large meeting concept” to one of providing more opportunities for understanding (these webinars). DE is then available to work with school districts and facilities within the local context as needed.
Recent History (cont.) The December 19 documents indicated that the law, as defined in the documents, would be applied to all situations consistently beginning July 1, 2014. This gives school districts and the facilities they house time to restructure the arrangements. If the law was being followed, this does not give additional permission to not follow the law this year. Simply means “status quo” – continue what you were doing through this school year.
Current State DE is attempting to be clear and to ensure that these arrangements meet students’ needs AND comply with existing law. DE believes that program delivery can be adjusted within the law to meet students’ needs. Many districts and facilities are doing this currently.
Current State (cont.) In Iowa, statute says the school district is responsible for the education program delivered in any private facility contained in its boundaries. In terms of education programs, it does not matter whether the program is day treatment or residential. Students generally placed at these facilities for non-educational reasons.
Current State (cont.) Legally, these facilities are programs under the law, not schools. Education programs delivered in these facilities are public education programs simply delivered at a privately-owned site. Licensed educators should be making educational program decisions for students in these facilities. Any student within the school district’s boundary is the school district’s student.
Current State (cont.) For students with IEPs, costs for education must be actual, instructional costs. For students without IEPs, the maximum is the district cost per pupil. UAP defines any expenditure over class 2299 as non-instructional. This includes: ◦ Administration ◦ Operations ◦ Transportation ◦ Facilities ◦ Debt Service ◦ And Others
Current State (cont.) If the facility is contracted to provide the educational program, it can only bill the school district it resides in. School district then bills resident districts for educational services, again using the above limitations. All of this should be itemized so the entity responsible for public funds can ensure legal spending occurs.
Special Education Funding Appropriate uses ◦ Costs delineated on the pupils’ IEPs that are direct costs of providing instruction and services. ◦ Includes specialized physical education, travel training, or accommodations for extracurricular activities. ◦ Modifications, adaptations or special accommodations in order to benefit from instruction. ◦ Salary and benefits for SE licensed teachers for portion devoted to program; also paraeducators in IEPs. ◦ Staff development/travel for SE teachers or targeted PD. ◦ Specialized supplies, equipment.
Special Education Funding (cont.) Appropriate uses (cont.) ◦ Health services delineated on IEP. ◦ Specialized transportation equipment (lifts/ramps). ◦ Vehicles only if specialized and exclusive and required by IEP. ◦ Tuition to another district for providing education on behalf of resident district. ◦ Administrative costs (principal or special education director and his/her clerical support) ONLY IF approved by the SBRC.
Special Education Funding (cont.) Inappropriate uses ◦ Costs related to private facilities administration. ◦ Indirect costs or use charges on state funding. ◦ Operational or maintenance costs. ◦ Capital expenditures other than specialized equipment on students’ IEPs. Facility rental, acquisition or modifications (even if ADA required) are disallowed. ◦ Administrative costs other than approved by SBRC. ◦ General education program costs or general education teachers/staff. ◦ Instruction of general education students by SE licensed teachers.
Special Education Funding (cont.) Inappropriate uses (cont.) ◦ Early intervening services or child find under IDEA, Part B or Part C, or other general education initiatives. ◦ Student transportation that is not specialized or not on IEP. ◦ Vehicles that are not specialized, exclusive, or on IEP. ◦ Any other expenditure not directly related to providing the SE program beyond the scope of regular ed program. ◦ Any expenditures not appropriate to the general fund. ◦ Any expenditures charged to, or more appropriate to, other federal or state categorical funding.
Three Models To ensure flexibility, the DE described three models that would comply with law: Model 1- District Delivered ◦ District delivers the program directly at the private facility. ◦ District employs the teachers. ◦ District coordinates with the facility for delivery structures. ◦ District owns the program and bills appropriately.
Three Models (cont.) Model 2 – District Contracted ◦ District responsible for the programming. ◦ District contracts with the facility for educational delivery. ◦ Facility employs the teachers. ◦ District and facility coordinate on deliverables. ◦ Facility bills the district of location for instructional services, district of location bills the resident districts appropriately.
Three Models (cont.) Model 3 - Consortium ◦ Multiple districts agree to “co-own” the program. ◦ Districts agree to share costs for program delivery. ◦ Facility cannot be in the consortium, but can be a contracted service. ◦ No tuition billing – it is each districts’ program, so they all cover actual costs. ◦ Fiscal agent distributes program costs across partners. ◦ Districts can share non-instructional costs.
Details DE authority for all of this exists in IC 256, 256B, 274, and 282 and IAC 281-41 & 98. Actual costs = costs to deliver on the IEP. If the items are in the IEP, they are covered using special education funding. School district is payer of last resort (DHS example). Transportation is typically not a special education cost – IEP must be specific. School districts must ensure costs are permissive.
Details (cont.) Likely not desirable to remove kids from facilities. DE believes this is generally unnecessary – that district and facility should work out an arrangement that works for the kids and provides them a proper education and FAPE within the law. If district responsible for ed. program, little need for non-instructional expenditures at the facility. Facilities get a per diem rate from DHS for general administration and operations.
Details (cont.) Clarifying guidance is consistent with federal law. Only other costs allowed under federal law are restricted indirect costs. Admin and operations as a function are not allowed under federal law. Rent only allowed if district is electing to provide programming at the facility. Not facility-driven.
Details (cont.) There is no per-day billing rate. It is all either actual costs (IEP) or 1/180 th of DCPP. Any bill that indicates a per diem rate should be itemized to ensure that only permissive costs are covered. School districts do have the ability to request additional MAG from the SBRC for SPED administrative costs in certain situations.
Details (cont.) The facility establishing an accredited nonpublic school on the facility site does not change the responsibility of the district of location to provide the educational program for all placed students. If you are interested in a consortium, it is critical to get it set up correctly up front. Please let us help.
Details DE will post this webinar and FAQs on the web site and will distribute the link. Questions or concerns can be addressed to Jeff Berger at email@example.com or (515) firstname.lastname@example.org