maintenance of effort (moe) compliance · set a new level of effort. – this level will become the...

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Maintenance Of Effort (MOE) Compliance

©2012 Region One Education Service Center

MOE — What Is It?“Except as provided in §§300.204 and 300.205, funds provided to an LEA under Part B of the Act 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.”

[ 34 CFR §300.203 (a) ]


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MOE — What Is It?• LEAs must spend . . . at least the same total or per

capita 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

[ §300.203 (b) (1) ]

• Note: In Texas, local and state funds are all in Fund 199.


Example

• For example, if the LEA expended $200,000 from State and local funds for the education of children with disabilities in 2009-2010, thechildren with disabilities in 2009 2010, the LEA must expend at least $200,000 from State and local funds for the education of children with disabilities in 2010-2011.

• If the same amount is not expended during theIf the same amount is not expended during the subsequent year, the LEA will not be in compliance with MOE.


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MOE Noncompliance• If the LEA is still found to be noncompliant after

responding to the preliminary letter, the LEA will receive a final letter of finding from TEA.

• The LEA will be required to refund to TEA an amount equal to the amount by which the LEA failed to maintain effort.

• Once the LEA has submitted their refund to TEA, the LEA will have corrected its MOE noncompliance and pset a new level of effort.

– This level will become the LEA’s new MOE level until such time when the LEA increases its local, or State and local, effort to support the special education program.


MOE Noncompliance• If the noncompliant amount exceeds the LEA’s IDEA-B

Formula maximum entitlement for the non-compliant year, the LEA will only be required to refund an amount that equals the entitlement for the year in question.

• The repayment must be made from non-Federal funds or from Federal funds for which accountability to the Federal government is not required.


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MOE Noncompliance• The LEA’s current year IDEA-B Formula entitlement

will be placed on hold until the refund is submitted to TEA.

• For details on data used to determine compliance with MOE, refer to the “IDEA Maintenance of Effort” power point located under “Presentations” at:

http://www.tea.state.tx.us/index4.aspx?id=4073


OSEP letters and TEA Decision• Letter to East (June 2011)

– “LEAs maintenance of effort obligation is based on the actual amount expended in the immediate prior fiscal year.”

– Based on this TEA reset the threshold if exceptions and/orBased on this TEA reset the threshold if exceptions and/or payment was made to the agency

• Letter to Boundy (April 2012)– “The level of effort that an LEA must meet in the year after it

fails to maintain effort is the level of effort that it should have met in the prior year and not the LEA’s actual expenditures. We are, therefore, withdrawing the letter to Dr. East.”

TEA i (TETN 8/2012)• TEA actions (TETN 8/2012)

• TEA is not applying the information from USDE but making LEAs aware. (June 6 letter)

• MOE threshold is being reset for now

• Waiting on USDE official guidance©2012 Region One Education Service Center

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Comparing 2008-2009 to 2009-2010


Notification• Revised 2009-2010 IDEA MOE letters were mailed

July 9, 2012.

• 6 different letters

– Compliant

– Revised Compliant

– Revised Decrease Non Compliant

– Revised Increase Non Compliant

– Revised No Change

– Preliminary Non Compliant


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Exceptions• The LEA will be required to submit documentation to

support these exceptions during their response to the preliminary letter of findings.

• Access “Forms B-G: Adjustments and Exceptions to IDEA MOE Requirement” located under “Forms Addressing Preliminary Letter of Findings” at:



Future MOE Notifications

• Fall 2012

– Fiscal Year 2011 MOE compliance

MOE i 2009 2010 t 2010 2011– MOE comparing 2009-2010 to 2010-2011

• Spring 2013

– Fiscal Year 2012 MOE compliance

– MOE comparing 2010-2011 to 2011-2012


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Times To Check MOE

When you:

• Propose a new budgetPropose a new budget

• Prepare to close a fiscal year

• Review the real figures for the prior fiscal year after the mid-year PEIMS collection


Next Steps

• When fiscal agent closes books for year, member districts should be provided with amount that will be reported on 033 record

• When mid-year collection is submitted, fiscal agent should give copy of Edit+ PRFBD001 to each member district

• After mid-year submission, each LEA should run MOE figures as pre-look at MOE status before TEA letters are mailedletters are mailed


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Next Steps

• Fiscal agent should provide amount of the maximum IDEA-B Formula entitlement to SSA members

• Documentation system should be developed for any potential MOE issue

- Should be collected at that time since letters will be months later coming from TEA

- Should be collected in such a way to answer directly one or more of allowable reasons for reduction of MOE


Next Steps• Foster strong working relationship among special

education director, PEIMS coordinator, and business manager

• Establish who keeps what records and makes what decisions

• Make sure all know what affects MOE

• Make sure new business managers understand MOE implications before they change bookkeeping and/orimplications before they change bookkeeping and/or coding procedures


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MOE for Charter SchoolsMaintenance of Effort (MOE) for charters

• Calculated in same manner as ISDs with two exceptions:– Charter schools include net asset codes 199 and 420 (whereas

school districts include fund code 199 only)

– Charter schools do not report a 033 record


Exceptions to MOE

34 CFR §300.204


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Exceptions

• LEAs may reduce their level of local, or State and local, expenditures below amounts expended in the prior year if such a reductionexpended in the prior year if such a reduction is attributable to any of the following five exceptions.


Exception 1

The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related servicesspecial education or related services personnel.

• Reductions in force do not qualify as an exception.

• Transfers or reassignments of staff do not qualify as an exception.

2012 Region One Education Service Center

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Exception 2

A decrease in the enrollment of children with disabilities.

A reduction in the number of students with disabilities will not be accepted as an exception to MOE if the LEA actually earned more state special education block grant funds in the second year.

Year 1 $200,000 in state funds, 525 studentsYear 2 $240,000 in state funds, 498 students (increase in state funds, but decrease in students)

This possibility of earning more state dollars even with a decrease in students could occur due to better attendance the second year or a change in instructional arrangements that generate more funds for the fewer students.


Exception 3The termination of the obligation of the LEA, consistent with IDEA-B, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by TEA, because the child:

•Has left the jurisdiction of the agency;

•Has reached the age at which the obligation of the LEA to provide FAPE has terminated; or

•No longer needs the program of special education.


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Exception 3 cont.

An exceptionally costly program can extend beyond the cost of one child’s exceptionally costly program.program.

• The redesign, refocus, or consolidation of programs may lead to this exception.

•Additional guidance concerning this exception is forthcoming.


Exception 4 and 5

Exception 4:

The termination of costly expenditures for long-The termination of costly expenditures for longterm purchases, such as the acquisition of equipment.

Exception 5:

The assumption of cost by the high cost fund.


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MOE Reference Documents

• Individuals With Disabilities Education Act http://ritter.tea.state.tx.us/special.ed/rules/

• eGrants Program Guidelines

http://burleson.tea.state.tx.us/GrantOpportunities/forms/GrantProgramSearch.aspx

• IDEA-B Formula Maximum Entitlements

https://seguin.tea.state.tx.us/apps/logon.asp



• Financial Accounting and Reporting Module, TEA Financial Accountability System Resource Guide http://www.tea.state.tx.us/index4.aspx?id=1222

• Texas laws and regulations on spending state special education funds, such as TEC §21.003, TAC § 89.1125, 89.1131, 230.501, 230.551http://ritter.tea.state.tx.us/special.ed/rules/sbs.html


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• PEIMS Data Standards http://ritter.tea.state.tx.us/peims/standards/index.html

• Edit+ Reports

http://ritter.tea.state.tx.us/peims/editplus/index.html

• School Financial Audits Web Site on MOE



Contact Information

• Kelly Solis, Director for Special Education

Region One ESC

(956)984-6180 or [email protected]

• Frances Guzman, Director of Business, Operations and Finance Support

Region One Esc

(956) 984-6290 or [email protected]
