1. Compliance and Special Education Funding What’s MOE got to do with it?

2. Acronyms and Abbreviations
American Recovery and Reinvestment Act of 2009
ARRA
Coordinated Early Intervening Services
CEIS
Financial Accountability System Resource Guide (FAR Guide)
FASRG
Individuals with Disabilities Education Improvement Act of 2004
IDEA
Individualized Education Program
IEP
Foundation School Program
FSP
Local Education Agency (District or Charter)
LEA
Notice of Grant Award
NOGA
The terms found on the slide 2 and 3 are common acronyms that appear in special education/IDEA funding forms and guidance. Participants should familiarize themselves with these acronyms.

3. Acronyms and Abbreviations
Maintenance of Effort
MOE
Public Education Information Management System
PEIMS
Student Attendance Accounting Handbook
SAAH
Summary of Finances
SOF
Shared Services Arrangement
SSA
Texas Education Agency
TEA
Texas Education Agency Secure Environment
TEASE
United States Department of Education
USDE

4. Key Terms Maintenance of Effort ( MOE) Excess Costs
Coordinated Early Intervening Services (CEIS)
Desk Audit
Supplement
Supplant
Voluntary Departure
High Cost
Termination of Obligation
EDGAR
The key terms listed are used throughout this presentation. Participants will be able to discuss and define each key term at the end of this presentation in relation to impact on special education funding at the local level.
Icon made by Yannick from is licensed under Creative Commons BY 3.0.

5. Objectives of this Module
State Special Education Funding Compliance 52% Rule Federal Special Education Funding Compliance Determination of Excess Cost to Establish Need of Federal Funding Maintenance of Effort (MOE) IDEA Funding Audits/Reviews
Icon made by Freepik from is licensed under Creative Commons BY 3.0.

6. State Special Education Funding Compliance
At least 52% of state funds generated for special education must be spent in support of direct special education services.
(19 TAC § (d) Distribution of State Funds and
19TAC § Allowable Expenditures of State Special Education Funds
At least 52% of state funds generated for special education must be spent in support of direct special education services.
In this presentation we will sometimes use the terms direct services and indirect services. In the context of this workshop, direct services generally means those expenditures allowable under TAC , and are allowable in the 52% required to be spent each year from state funds.
However, LEAs should keep in mind that while expenditures of up to 48% of state sped funds for administrative/indirect costs may be allowable:
May have a possible adverse impact on MOE (Functions 81, 91, 92, 95, 97, and 99 not included in MOE calculation)
LEA remains responsible for proper implementation of IEPs, i.e., providing FAPE in the LRE.
(From Ramon Medina Power Point, May 27, 2010)
Now let’s talk about spending the state special education block grant funds.

7. What Constitutes 52% of the State Special Education Basic Allotment?
Specific Enhanced Program Intent Codes (PIC)
Specific Enhanced Program Intent Codes (PIC)
In other words, these funds may only be used for personnel, special materials, supplies, equipment and services which are directly related to the development and implementation of the IEPs not ordinarily purchased for the regular classroom.
But what about the other 48%? Can we spend it any way we wish?

8. What About the 48%?
No more than 48% of each school district's Foundation School Program (FSP) special allotments … may be expended for indirect costs related to the following programs: … special education...
Administrative/indirect costs may be attributed to the following expenditure function codes
34--Student Transportation
41--General Administration
81--Facilities Acquisition and Construction
Function 90 series of the general fund, as defined in the TEA publication, Financial Accountability System Resource Guide
Maximum Allowable Indirect Cost
No more that 48% of each school district’s Foundation School Program( FSP) special allotments under the Texas Education Code, Chapter 42, SubchapterC, may be expended for indirect costs related to the following programs; compensatory education, bilingual education and special language programs, and special education… Indirect costs may be attributed to the following expenditure function codes: 34 Student transportation; 41 General Administration; 81 Facilities Acquisition and Construction; and Function 90 series of the general fund, as defined in the Financial Accountability System Resource Guide.
(b) For the school year and each year thereafter, a school district may choose to use a greater indirect cost allotment under the TEC, under subsection , 42153, and , to the extent the school district receives less funding per weighted student in state and local maintenance and operations revenue than in the school year. The commissioner of education shall develop a methodology for a school district to make a determination under this section and may require any information necessary to implement this subsection. The commissioner’s methodology must limit the percentage increase in allowable indirect cost to no more that the percentage decrease in state and local maintenance and operations revenue for the school year.
Source : The provision of the adopted to be effective September 1, 1996, 21 Texas Register 5710; amended to be effective December 5, 2004, Texas Register 11347; amended to be effective December 31, 2009, 34 Texas Register 9439; amended to be effective December 26, 2011, 36 Texas Register 8825.

9. What if we don’t spend it all?
If state special education funds are carried over from one year to the next, entire amount must be budgeted and expended on direct costs . Administrative costs may not be taken from carryover funds
Also, if you find you didn’t spend 52 % of your State Special Education Block Grant funds and carry some over to the next year, you may not take any administrative costs from the carryover funds.
Please Note: If using state funds to pay for something out of the 52% direct costs, the district may not also pay for it out of the 48% indirect costs. A cost may only be charged once to a local, state and federal source of funds as either a direct or indirect cost.

10. Are we compliant? Maybe!
State special education entitlement could go down one year
(Example: poor attendance of students identified for special education services or significant changes to instructional arrangement FTEs)
Could satisfy the 52% requirement, but have a problem with maintaining effort for federal MOE purposes
Therefore, compliance with 52% Rule is not the same as compliance with federal MOE
State special education dollars used to calculate the 52% requirement are part of the MOE formula, but only part
The state special education dollars used to calculate the 52% requirement are part of the MOE formula, but only part. Your state special education entitlement could go down one year (example: poor attendance of special education students) and you could satisfy the 52% requirement, but have a problem with maintaining effort for MOE purposes.
Therefore, compliance with 52% Rule is not the same as compliance with MOE.

11. But our auditor says….
Remember that this criteria of 52 % is the current standard by which the auditor will determine compliance for the state special education allotment expenditures.
Compliance with the 52% rule is not a comparison of local/state support for the program from one year to the next.
An internal annual audit can identify if the LEA met the state requirements for the 52% Rule.
Remember that this criteria of 52 % is the current standard by which the auditor will determine compliance for the state special education allotment expenditures.
The State Board of Education has the authority, given to that body by the Texas Legislature, to change the percentage of indirect and direct costs for compliance and has a history of changing it up or down on an annual basis.
Compliance with the 52% rule is not a comparison of support from one year to the next. It is based solely on the expenditures for any given fiscal year.

12. Federal Compliance

13. Eligibility to Apply for Federal Funds
The LEA is eligible to apply for a special education grant if:
The LEA does not receive sufficient funds, including state and federal funds, for the child with disabilities to pay for the special education services provided to the child; or
The LEA does not receive sufficient funds, including state funds and federal funds, for all children with disabilities in the LEA to pay for the special education services to the child…
TEC (b-e)
The receipt of special education funds must be contingent upon the operation of an approved comprehensive special education program in accordance with state and federal laws and regulations.
TAC (d)
In order for a local education agency (LEA) to apply for a federal IDEA grant, it must demonstrate that it has a need that is in excess of what can be provided through the funding of state and local funds. Excess costs are those federal funds necessary to provide the program above and beyond those per-student state and local funds expended the previous year.

14. Federal MOE and other IDEA-B Fiscal Compliance Requirements
MOE and CEIS
Excess Costs
Focuses on special education state and local expenditures in the current year as compared to the previous year
CEIS: an LEA may use up to 15% of the IDEA-B funds for any fiscal year to develop and implement K-12 services for general education students who need additional academic and/or behavioral support
Excess costs are those federal funds necessary to provide the program above and beyond those per-student state and local funds expended the previous year

15. Part B Excess Cost
Education Department Federal Administrative Regulations(EDGAR) and IDEA
Subpart F: What are the administrative responsibilities of the sub-grantee? 34 CFR : Compliance with statutes , regulations and applications 34 CFR : Records related to compliance
The regs in EDGAR also apply to sub-grantees (LEAs). EDGAR requires that those entities receiving federal funds comply with all statutes, regs, and applications that implement program requirements and that records are maintained related to that compliance. One of the requirements under IDEA is excess costs. So let’s discuss the details…

16. How Do I Establish a Need for Federal Funds?
Excess Costs
The excess cost requirement mandates how much the LEA must expend in state and local funds before it may begin expending IDEA- B grant funds.
Focuses on per-student spending in special education as compared to per-student spending across all students.
IDEA-B grant funds “must be used only to pay the excess costs of providing special education and related services to students with disabilities. ( 34 CFR (a)(2).
An LEA must spend at least the average annual per-student expenditure in an LEA during the preceding school year for an elementary or secondary school student with a disability before IDEA-B funds are used to pay the excess costs of providing special education and related services. (34 CFR Appendix A to Part 300)

17. Worksheet for Excess Costs
Excess Cost Worksheet - Elementary
Grades:
(select)
Previous year's expenditures from all sources, for all elementary school students, minus capital outlay and debt service
State and local funds
Federal funds
Total
Capital outlay
Debt service
Total adjusted previous year's expenditures
Previous year's elementary school expenditures from:
IDEA, Part B
ESEA, Title I, Part A
ESEA, Title III, Parts A and B
State and local special education funds
State and local funds for programs under ESEA Title I,
Part A, and ESEA Title III, Parts A and B
Previous elementary school enrollments:
Average number of elementary students enrolled, including
students with disabilities
Average number of elementary students with disabilities
enrolled in the current year
Calculation results:
Average annual expenditure per elementary student
Minimum amount the LEA must spend for the education of elementary students with disabilities before using IDEA Part B funds
HELP
HELP
HELP
Presenter will click on Excess Costs hyperlink to show actual worksheet.
Procedure: The procedure described will be for the calculation of excess cost for the LEA’s elementary program, on the left hand side of the sheet. The procedure for the secondary program is identical.
The user enters data into the blue colored boxes. Values outside the blue colored boxes are calculated automatically.
At the top right, just over the first box, click the “Grades:” drop-down menu and select the grade range included in the LEA’s elementary program.
First box: In the first two blue cells, enter the amount expended during the previous school year from all fund sources (local, state and federal, including IDEA-B) for the education of the district's elementary school students, including students with disabilities. Include all expenditures associated with campus level operations. Exclude non-campus-based expenditures such as central office, district administrators, central transportation facility, etc. A recommended method for identifying appropriate expenditures is to include any expenditure with a “campus.org” code.
In the second two blue cells, enter the amounts from the above expenditures that were for Capital Outlay and Debt Service (i.e. Class/Object Codes 6500 and 6600).
Second box: Enter the amounts included in the above expenditures that were from the sources listed.
Third box: In the first blue cell, enter the student count as indicated. In the second blue cell, enter the number of children with disabilities as indicated.
Fourth box: These two figures are automatically generated, and show the previous year’s average expenditure per student, and the minimum amount the LEA must spend in the current year for the education of elementary students with disabilities before using IDEA Part B funds.
 Provide Excess Cost template and procedures as handouts– found at

18. Excess Costs Activity Step 1:
Determine the total amount of expenditures for elementary school students from all sources – local, State and Federal (including IDEA-B) – in the preceding school year. Exclude capital outlay and debt services.
State and local tax funds    
$6,500,000
Federal funds    
   $600,000
Total Expenditures
$7,100,000
Less capital outlay and debt service relating to the education of elementary school students
    - 60,000
Total Adjusted Expenditures
$7,040,000
Excess Costs Calculation Tool Activity:
Have participants actually fill in the numbers provided in this example on their excess cost calculation tool for each step of the process for slides

19. Step 2: Subtract from the Total Adjusted Expenditures amounts spent for:
From the amount determined in Step 1, subtract the previous year expenditures identified below (see Appendix 1 for a list of codes assigned to these expenditures). These are funds actually spent; not funds received and carried over to the current year.
(a) IDEA–B 
(b) ESEA, Title I, Part A 
(c) ESEA, Title III, Parts A and B State and local funds for children with disabilities, and 
(d) State or local funds for programs under ESEA, Title I, Part A, and Title III, Parts A and B. 
These are funds that the LEA actually spent, not funds received last year but carried over for the current school year.
(a) IDEA-B
   $200,000
(b) ESEA, Title I, Part A
     250,000
(c) ESEA, Title III, Parts A & B
       50,000
(d) State and local funds for children with disabilities
     500,000
(e) State and local funds for programs under ESEA,        Title I, Part A, and Title III, Parts A & B
     150,000
Total Deductions 
$1,150,000
Total Adjusted Expenditures
$7,040,000
Less Total Deductions
-1,150,000
Total
$5,890,000

20. Step 3:
Determine the average annual per student expenditure for elementary school students by dividing the average number of students enrolled in the elementary schools of the LEA during the preceding year (including children with disabilities) into the total amount computed in Step 2.
The amount obtained through this computation is the minimum amount the LEA must spend (on the average) for the education of each of its elementary school children with disabilities with fund sources other than IDEA-B.
Total Amount from Step 2
 $5,890,000
Average number of students enrolled in preceding year (October PEIMS snapshot)
          ÷800
Average annual per student expenditure
       $7,362

21.  Step 4:
Determine the total minimum amount of funds the LEA must spend for e education of its elementary school children with disabilities in the LEA (not including capital outlay and debt service) with fund sources other than IDEA-B by multiplying the number of elementary school children with disabilities in the LEA times the average annual per student expenditure obtained in Step 3.
Funds under IDEA-B can only be used for excess costs over and above this minimum.
Number of students with disabilities in the LEA's elementary schools in the current year (October PEIMS snapshot)
          100
Average annual per student expenditure (obtained from Step 3)
x   $7,362
Total minimum amount of funds the LEA must spend for the education of children with disabilities enrolled in the LEA's elementary schools with fund sources other than IDEA-B
 $736,200
Once participants have filled in the dummy data, discuss how this information can be accessed at their local education agency. Who has access to this data? Who has authority to provide this information to special education director? Where should this evidence been filed?

22. But…
The excess cost requirement does not prevent 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 in any of the ages 3, 4, 5, 18, 19, 20, or 21, if no local or State funds are available for nondisabled children of these ages. The LEA must comply with the non-supplanting and other requirements of this part in providing the education and services for these children.

23. Supplement not Supplant
Funds provided to the LEA under IDEA-B 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.
Icon made by Freepik from is licensed under Creative Commons BY 3.0.

24. Requirements for Compliance: MOE
The LEA budgets for the education of children with disabilities from local or combination of local and state funds;
Spends funds for the same purpose as the most recent prior year for which information is available; and
Ensures that the amount of local funds budgeted is at least the same, either in total or per capita, as the amount the LEA spent for that purpose in the most recent fiscal year for which information is available.
Reference Legal Frameworks and 34 CFR

25. MOE for Fiscal Year 2014 and Beyond
TEA has published IDEA-B LEA Maintenance of Effort Guidance Handbook which provides a detailed description of the steps that TEA will use to calculate an LEA’s compliance with the MOE requirement.
Please note that beginning with fiscal year 2014, the PIC 99 allocation is not used in the MOE calculation.
For MOE calculation for fiscal year 2013, allocated funds will be used to determine MOE compliance with previous year.
The Texas Education Agency has published a guidance handbook that provides the federal requirements for MOE and how TEA will collect that information beginning in New methodology is described and guidance is provided to help districts and charters complete the MOE template and develop a process to ensure compliance with this regulation.

26. 34 CFR provides the following four methods for determining whether an LEA has met the IDEA-B MOE requirement:
The total amount the LEA expended in state and local funds must equal or exceed the amount it expended from those sources for special education during the previous fiscal year.
The per-pupil amount the LEA expended in state and local funds must equal or exceed the amount it expended per capita from those sources for special education during the previous fiscal year.
The total amount the LEA expended in local funds must equal or exceed the amount it expended from that source for special education during the previous fiscal year.
The per-pupil amount the LEA expended in local funds must equal or exceed the amount it expended per capita from that source for special education during the previous fiscal year.
An LEA only needs to pass one of the four tests to be compliant.

27. If the LEA was noncompliant in maintaining effort in the preceding year, then the current year must be compared to the second preceding year rather than the preceding year when the LEA was noncompliant. For example, if the LEA was noncompliant in the fiscal year 2013 final determination, then the fiscal year 2014 determination must compare fiscal year 2014 to fiscal year 2012.
(See the USDE guidance from April 4, 2012, posted on the Division of Federal Fiscal Compliance and Reporting IDEA-B MOE page of the TEA website.)

28. Consequences for Noncompliance
If an LEA fails all four tests, it will be notified of its preliminary determination of noncompliance and given the opportunity to respond by claiming allowable federal exceptions, voluntary MOE reduction, and/or requesting state reconsiderations.
If an LEA does not have sufficient allowable federal exceptions, a voluntary MOE reduction, and/or state reconsiderations to offset the “decline in fiscal effort, the LEA must refund to TEA the amount by which the LEA failed to maintain effort (i.e., the difference between its prior and current year expenditures on students with disabilities after all applicable federal exceptions, voluntary MOE reduction, and state reconsiderations have been applied).
If the refund amount exceeds the LEA's IDEA-B maximum entitlement for the fiscal year under determination, the LEA will only be required to refund the amount up to the LEA’s maximum entitlement. The repayment must be made from nonfederal funds or from funds for which accountability to the federal government is not required, that is, from state and/or local funds.

29. Federal Exemptions 34 CFR 300.204
The LEA may reduce the level of its state and/or local expenditures below the level of those expenditures for the preceding fiscal year only if the reduction is attributable to any of the following:
(a) The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel.
(b) A decrease in the enrollment of children with disabilities.
(c) The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the State Education Agency (SEA), because the child—
(1) Has left the jurisdiction of the agency;
(2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or
(3) No longer needs the program of special education.
(d) The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.
(e) The assumption of cost by the high cost fund operated by the SEA under34 CFR (c).
34 CFR
Presenter will go over each of the exemptions and then state “we will now discuss the exemptions in detail and what evidence must be in place for each exemption.”

30. Documentation for Exceptions
LEAs will complete TEA’s standardized assertion forms to document any reductions attributable to the allowable causes described above.
The assertion forms will be uploaded into the Grants and Federal Fiscal Compliance (GFFC) Reports and Data Collections application available in TEASE/TEAL.
TEA will provide specific templates to document exception assertions. Additionally the supporting evidence will also be submitted through this GFFC Data Collection application.

31. Departure of Personnel
In order for the level of state and/or local expenditures to be reduced on the basis of departure of personnel, the LEA must provide the following source documentation:
Source payroll record (e.g., personnel action form, resignation letter signed and dated by the employee) indicating the reasons why the employee departed the LEA
Year-to-date payroll distribution journal
Employee’s State Board of Educator Certification (SBEC) record (i.e., certification) Employee’s signed and dated job description
Please make note of all of the supporting source documentation. Discuss when each of these pieces should be collected so that response to TEA’s letter of noncompliance with MOE is not delayed.

32. Departure of Personnel
In addition, the following conditions must be satisfied:
Departed personnel may no longer be employed by the LEA. If a special education teacher has been reassigned to other duties within the LEA, the reassignment does not qualify the LEA to claim the “departure of personnel” exception.
The departure must be voluntary (that is, the employee resigned or retired) or for just cause (the employee was terminated as the result of misconduct or negligence). If the LEA reduces the number of special education personnel as the result of a reduction in force, the LEA may not claim the “departure of personnel” exception.
The LEA may not claim the “departure of personnel” exception when releasing or failing to renew the contract of a probationary employee, as neither of those cases meets the “just cause” requirement.

33. Decrease in Enrollment of Children with Disabilities
TEA automatically accounts for a decrease in the enrollment of children with disabilities when calculating the LEA’s IDEA-B MOE in the following two ways:
1. If the number of students with disabilities decreases, and per-pupil special education expenditures remain the same or increase, the LEA will pass the second and fourth tests described in the Methods of Determining Compliance section.
2. In addition, TEA implements allowable flexibility to reduce the refund due by the percentage decrease in enrollment of children with disabilities from the preceding comparison year to the most recent year.
For example, if the special education enrollment in the LEA decreased by 5% and the LEA was determined to be noncompliant, then the refund due would be decreased by 5%. This reduction is reflected on the LEA’s MOE report.

34. Termination of Obligation
In order for the level of state and/or local expenditures to be reduced because the LEA no longer has an obligation to serve a child with an exceptionally costly program, the LEA must provide the following supporting documentation:
A schedule summarizing the total costs for each special education student that participated in an exceptionally costly program. The schedule must reconcile to the LEA’s detailed general ledger and source records which must include the fund/net asset code and object code for each cost description.
A detailed general ledger and source records supporting costs identified on the summary schedule provided.
TEA may also request a student’s individualized education program (IEP).
(If the IEP is requested, the LEA must provide it to TEA through a secure transmission method (provided by TEA) within 24 hours of the request.)

35. Termination of Obligation
An exceptionally costly program for serving a student with a disability is defined as an amount greater than the average per pupil expenditure (as defined in section 9101 of the ESEA) in Texas. Examples of reductions in an exceptionally costly program include, but are not limited to, the following:
A student in a residential placement graduates or moves out of the LEA.
A residential facility closes.
A charter school or another school district begins providing educational services for a student.
A student with a high number/level of personnel assigned to implement the student’s individualized education program (IEP) leaves the LEA. Such students would include but are not limited to students who are identified as deaf, blind, deaf-blind, autistic, medically fragile, emotionally disturbed, or having a severe disability across eligibility categories.
A settlement agreement/corrective action ends.
New definition for exceptionally costly program—The examples provided are the most frequently used under this exception; open the floor for discussion of any other possible situations where this exception could be applied.

36. Termination of Costly Expenditures
In order for the level of state and/or local expenditures to be reduced because of a termination of costly expenditures for long-term purchases, the LEA must provide the following supporting documentation:
A schedule listing all of the items purchased, description of the items purchased, and the general ledger classification of the purchases, i.e., fund/net asset code, function code and object code. The schedule must agree to the LEA’s detailed general ledger and source records, which must include the fund/net asset code and object code.
A detailed general ledger and source records supporting the costs identified on the summary schedule provided.

37. Assumption of Cost by High Cost Fund
In order for the level of state and/or local expenditures to be reduced because of assumption of cost by the high cost fund operated by TEA, meaning the expenditure in the current year was charged to the IDEA-B High Cost grant received from TEA, the LEA must provide the following supporting documentation:
A detailed general ledger for the previous school year indicating the cost was previously recorded under fund code 199 or 420.
A detailed general ledger for the current school year indicating the cost was subsequently recorded under fund code 226 (High Cost Grant).
The source records supporting costs identified on the detailed general ledgers.
Depending on TEA’s guidance at the time of presentation, please double check the High Cost threshold to provide the baseline of whether this exception can be applied.

38. Voluntary Reduction of MOE
PL , Section 613(a)(2)(C)(i)for any fiscal year for which the allocation received by an LEA under section 611(f) exceeds the amount received for the previous fiscal year, the LEA may reduce the level of expenditures otherwise required by subparagraph (A)(iii) by not more than 50% of the amount of such excess.
However…
Documentation of the decision to apply voluntary reduction to MOE is documented in the e-grant application for funds. Make sure thAt everyone understands the criteria on the next slide to determine eligibility.

39. Voluntary Reduction To be eligible :
The LEA must meet each of the state targets for the five SPP compliance indicators (9, 10, 11, 12, and 13) and
Have a LEA Determination Level of “Meets Requirements” , and
Is not identified as having significant disproportionality.
2. The LEA will need to provide :
Form B: Assertion of Eligibility for Adjustment to Local Fiscal Effort and supporting documentation (now in e-grant application))
3. Will need to demonstrate and have evidence of eligibility:
Actual amount of adjustment
The amount of the adjustment expended on NCLB activities
Stress that an LEA must meet all of the criteria to be eligible.

40. PL , Section 613(a)(2)(C)(ii) If an LEA exercises the authority under clause (i), the LEA shall use an amount of local funds equal to the reduction in expenditures under clause (i) to carry out activities authorized under the Elementary and Secondary Education Act.
If voluntary reduction is done, then the LEA must use those monies to carry out activities authorized by the ESEA which are detailed on the next slide.

41. Parental Involvement Activities
Activities authorized under the Elementary and Secondary Education Act (ESEA)
Parental Involvement Activities
Drop out Prevention Programs for At-Risk Children and Youth
Family Literacy Services
Activities to Promote Family Support for Higher Education
Mentor Programs
The activities will need to be documented and such evidence might include agenda, sign in sheets, evaluations of training or activity, program data including students and staff involved and evidence of implementation.

42. Reporting
The reporting of any MOE Reduction on the Special Education Consolidated Grant application is only applicable to the Voluntary MOE reduction for the grant application year. Remember: If the LEA failed to maintain effort (received a letter of finding for MOE noncompliance), the LEA must not report the noncompliance amount on the Special Education Consolidated Grant application. MOE non-compliance is not Voluntary MOE Reduction.
Provide participants with a visual (hard copy) of the following:
Special Education Consolidated Grant Application Program Budget
BS Fiscal Compliance Requirements
Discuss the questions and the required entries.
Icon made by Freepik from is licensed under Creative Commons BY 3.0.

43. Relationship between Voluntary Reduction of MOE and CEIS
There are two relationships between the Voluntary Reduction option and CEIS:
Choosing to voluntarily reserve IDEA-B funds for CEIS can limit the amount the LEA voluntarily reduces MOE
Choosing to voluntarily reduce MOE can limit the amount the LEA voluntarily reserves for CEIS
Please refer to the following chart to discuss how CEIS and MOE interact with each other.

45. CEIS
Remember:
If the LEA intends to use CEIS funds and is eligible for voluntary reduction of MOE, both must be planned for at the same time to ensure compliance. If doing both the LEA must determine which amount is the lesser; combined, the CEIS set-aside amount and MOE reduction may not exceed that lesser amount.
If the LEA is only doing one or the other, it is unnecessary to consider the interconnection between CEIS and MOE.

46. Federal Funds That May be Considered as State or Local Funds
In years when the federal government provides special and/or additional federal funds that TEA designates as state or local funds (such as ARRA SFSF, fund code 266), those specific funds will be automatically included in the total aggregated expenditures by function code for each respective compliance year in the MOE calculation.
This occurred when LEAs were provided with stimulus funds and/or the jobs funds from the federal government. Discuss the impact on MOE that these funds could possibly have?
Icon made by Freepik from is licensed under Creative Commons BY 3.0.

47. Significant PEIMS Errors
USDE approved TEA’s request to reconsider significant PEIMS errors.
Significant is defined as corrections that change the LEA’s compliance status
To meet this definition the LEA must enter its self-reported corrected data in to TEA’s IDEA-B LEA MOE calculation tool and the results must reflect a change in the compliance status.
If a change results, TEA will recalculate a revised compliance determination using the corrected data.
Any decision to use revised data will not change the official PEIMS data. The official PEIMS data is final and remain unchanged on all TEA products and reports that rely on this information
The LEA may request a state reconsideration for significant errors by providing to the TEA:
1. The results returned by the MOE calculation tool singed by the LEA’s external auditor, showing the corrections and how it has changed the compliance status.
A detailed schedule prepared and signed by the external auditor containing the erroneous and the correct PEIMS data, along with the supporting documentation for the claim(s).
3. A detailed schedule with the corrected data in the appropriate PEIMS format provided by TEA to be used in lieu of the original PEIMS data.
A description of how the error occurred and the administrative procedures taken to ensure a systemic corrective action.

48. Possible Consequences of a State Reconsideration Request Due to Significant PEIMS Errors
TEA’s  Federal Fiscal Compliance and Reporting (FFCR) division will make the following notification of erroneous data submission:
Division of Financial Compliance– possible increased risk of audit, investigation an/or review
Division of State Funding-possible effect on state funding
Division of Federal Fiscal Monitoring- possible identification as high-risk resulting in a review of all reimbursements across grants
Office of Statewide Education Data Systems- possible identification as high-risk
Department of Accreditation and School Improvement- risk for investigation/review
Division of Enforcement Coordination and Governance-possible recommendation for district-level interventions/sanctions based on findings

49. Let’s Talk METHODOLOGY
The methodology for calculating IDEA-B MOE compliance is based on both federal and state requirements. 34 CFR provides the following four methods for determining compliance:  The total amount the LEA expended in state and local funds must equal or exceed the amount it expended from those sources for special education during the previous fiscal year.  The per-pupil amount the LEA expended in state and local funds must equal or exceed the amount it expended per capita from those sources for special education during the previous fiscal year.  The total amount the LEA expended in local funds must equal or exceed the amount it expended from that source for special education during the previous fiscal year.  The per-pupil amount the LEA expended in local funds must equal or exceed the amount it expended per capita from that source for special education during the previous fiscal year.
Please have the participants have an e-copy of the template on their devices so that they can follow along in the directions. If possible have each have their own PEIMS edit + reports for unallocated expenditures for PIC 23 and PIC 33. Also have PEIMS Edit+ report PRF5D010, Special Education Child Counts by Funding Type.

50. Calculating State and Local Funds
To calculate the total amount expended in state and local funds, TEA uses expenditures reported on PEIMS Record 032, Fund Code 199 for school districts, or 420 for charter schools, coded to program intent code (PIC) 23 and PIC 33.
TEA also includes PEIMS Record 033, Fund Code 437 Shared Services Arrangement – Special Education for Shared Service Arrangements (Type 11) expenditures.
As described in the Federal Funds That May be Considered as State or Local Funds section, in years when the federal government provides special and/or additional federal funds that TEA designates as state or local funds (such as ARRA SFSF, fund code 266), those specific funds will be automatically included in the total aggregated expenditures by function code for each respective compliance year in the MOE calculation.

51. Function Codes Used in MOE Determination
The function codes listed below meet the requirements of the IDEA regulations and are used to aggregate state and/or local expenditures within PIC 23 and PIC 33.
Function Code Description
11 Instruction
12 Instructional Resources and Media Services
13 Curriculum and Instructional Staff Development
21 Instructional Leadership
23 School Leadership
31 Guidance and Counseling Service
32 Social Work Services
33 Health Services
34 Student (Pupil) Transportation
36 Co-curricular/Extracurricular Activities
41 General Administration
51 Plant Maintenance and Operations
53 Data Processing Services
On the PEIMS Edit+ report have the participants highlight these function codes for both PIC 23 and PIC 33

52. Function Codes Not Used in MOE Determination
The function codes listed in the following table do not meet the requirements of the IDEA regulations and are not used to aggregate state and/or local expenditures within PIC 23 and PIC 33.
Function Code Description
35 Food Service
52 Security/Monitoring Service
61 Community Service
71 Debt Service
81 Facilities Acquisition and Construction
91 Contract Services
92 Cst/Sl WADA
93 PMT – SSA
95 PMT – JJAEP
97 PMT – TIF
99 Other Intragov Chgs

53. Special Education Student Count
PEIMS Record Child-Count-Funding-Type-Code 3 is used to identify the Special Education Student Population.
This special education student count is also found on the line titled IDEA-B of the PEIMS Edit+ report PRF5D010, Special Education Child Counts by Funding Type.

54. Local Funds
Imputing the total local portion of LEA special education expenditures requires the following: The LEA’s total state and local special education expenditures. The LEA’s Tier 1 Special Education Adjusted Allotment, total cost of Tier 1, and local fund assignment from the Legislative Planning Estimate (LPE) column in the Summary of Finance (SOF) dated September 10 or first date thereafter in the year under determination.
Discuss where to find the Summary of Finance and stress that the agency is currently using the “near” final dated 9/10 or first date after in the year under determination and also stress that the agency will be using the LPE not the DPE amount.

55. How do I do that? It is a 3 Step Process
Determine the LEA’s local special education expenditures that are in excess of its Tier I Special Education Adjusted Allotment.
This determination is done by subtracting the Tier I Special Education Adjusted Allotment from the LEA’s total state and local special education expenditures.
If the LEA’s total state and local special education expenditures is greater than the LEA’s Tier I Special Education Adjusted Allotment, then the difference (the expenditures made in excess of the Tier I Special Education Adjusted Allotment) is considered to be expended from local funds.

56. 3 Step Process
2. Impute the LEA’s local special education expenditures using the ratio of local funding within its total Tier I Allotment. a. First, determine the percentage of local funding within the Tier I Allotment by dividing the LEA’s Local Fund Assignment by the Total Tier I Allotment. If the Local Fund Assignment is greater than the Total Tier I Allotment, then the percentage of local funding within Tier I is automatically adjusted to 100%. b. Next, multiply that percentage by the total state and local expenditures up to the Special Education Adjusted Allotment. The result is the LEA’s imputed local special education expenditures.

57. 3 Step Process
3. Determine the LEA total local special education expenditures for IDEA-B LEA MOE by summing (a) the LEA’s local special education expenditures that are in excess of its Special Education Adjusted Allotment (determined in Step 1 above); and (b) the LEA’s imputed local special education expenditures (determined in Step 2 above).
Icon made by Freepik from is licensed under Creative Commons BY 3.0.

58. IDEA-B MOE Calculation Tool
To assist LEAs in complying with the MOE requirements for FY2014 and beyond, TEA has developed a calculation tool
that LEAs may use to estimate their MOE compliance. To use the tool, LEAs must be prepared to enter the following data:
Prior year and current year state and/or local expenditures in relevant function codes as described in Appendix 3.
Special Education Student counts for the prior year and current year (PEIMS Record 163, Child-Count-Funding-Type-Code=3).
Tier I Special Education Adjusted Allotment, Total Cost of Tier I, and Local Fund Assignment data from the LPE Column of the LEA’s Summary of Finance (SOF) dated September 10 or the first date thereafter in the year under determination.
Do activity– each LEA uses the calculation tool on their technology to determine MOE compliance.
Each must have the previous and current year’s data as required complete the template:
Prior and current years state and local expenditures in identified fund codes
PEIMS Record 163 Child-count funding type Code 3 for both years
SOF dated Sept 10 for both years.

59. Things to think about: Reducing MOE Legally
Review current year expenditures before you “close the ledgers” in light of the exceptions.
Using the information from previous year’s closed budget and upcoming year’s program plan, are there high dollar expenditures that may need to be assigned to state and local special education funds in your new budget?
Communicate with staff to determine future/ potential resignations and retirements
Anticipate capital outlay needs such as technology or data management systems
Anticipate high cost student or program needs
Use the knowledge of exceptions to plan for future budgets and the potential for reducing the MOE when determining the federal or state/local funding code.
Plan for your exceptions; don’t let them slip away!

60. Reminders Maintenance of Effort – IDEA Part B
Best Practices
Calculate estimated MOE during budget development process
Track and document special education staff changes – HR paper trail and PEIMS data accuracy
Distribute and collect signed job descriptions for staff for current position – keep current with changes in funding and/or assignments (HR)
Track and document expenditures related to exceptions – use sub-object codes as appropriate
Calculate actual MOE during the fiscal year

61. What happens if we have overall budget reductions?
How do you maintain local effort when reducing the LEA budget? 1. Calculate LEA’s MOE during the Budget Process. 2. With Declining Financial Resources—Easier to meet Per Pupil Expenditures rather than the Aggregate Expenditures, but must monitor both. 3. With Declining Per Pupil Expenditures, must monitor costs. 4. With Declining Per Pupil Enrollment, monitor Per Pupil Expenditures in order to meet MOE.
Tips from an auditor! Discuss each in groups

62. Federal Desk Audits/Review
The objective of a review is to determine if the sub-recipient complied with Title 34 CFR and other applicable federal statues, regulations and grant requirements.
Review focuses on fiscal practices developed and implemented by the sub-recipient to demonstrate compliance with the requirements.
The review focuses on current grant and TEA auditors will require LEA to submit prescribed documentation.
BE prepared for a desk review at all times. Questions to ask ourselves:
Do we all know the fiscal practices that our business office requires?
Do we all know the evidence required for expenditure out of a federal budget?
Do we have evidence that we have carried out our business procedures?

63. Administrative Procedures Manual (APM)
The agency is expecting the LEA to have an approved APM in effect and it must address the following fiscal and fiscal-related activities:
Accounting for property and supplies purchased with federal funds
Budgeting and accounting for federal grants
Financial reporting and cash management for federal grants
Authorized uses for federal funds
Maintenance and retention of records pertaining to federal grants
Monitoring and reporting program performance for federal grants
Time and effort reporting requirements
Procurement of goods and services using federal grants
Program income generated from activities supported by federal grants
Support of salaries, wages, and related costs charged to federal grants
Travel reimbursement requirements applicable to federal grants
Use of credit and debit cards
Property management policy and property disposal policy
Administrative policies and procedures to help prevent and report fraud, waste, and abuse of public funds.
Does your business office have an APM? If not, where are the procedures documented for each of these topics?

64. Review
TEA will request the sub-recipient to submit the required documents listed in the attachments to the letter no later than 10 business days from the date of the letter. All documents are to be submitted in electronic format, such as a CD or flash drive. Documents may include: General ledger pages (specific) Purchase orders ( specific) Working papers for drawdown WebER request for specific dates CEIS documentation Comprehensive Needs Assessment and Program Plan If requested documentation cannot be provided, a detailed explanation is required.