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A Microsoft Word version of this letter is available for download
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IMPORTANT UPDATES April 12, 2011 TO THE ADMINISTRATOR ADDRESSED: SUBJECT: Clarification on Use of Individuals with Disabilities Education Act (IDEA), IDEA-B American Recovery and Reinvestment Act (ARRA) The United States Department of Education (USDE) Office of Special Education Programs (OSEP) has encouraged states to ensure local educational agencies (LEAs) expend the ARRA funding by the September 30, 2011 deadline. As a result, the Texas Education Agency (TEA) has encouraged districts to expend their 2009-2011 IDEA-B ARRA entitlement prior to expending their 2010-2011 IDEA-B (Regular) Formula and Preschool entitlements. LEAs may carry over (i.e., roll forward) 100% of their 2010-2011 IDEA-B entitlement without incurring any penalty, but there is no provision for carrying forward the 2009-2011 IDEA-B ARRA funds. Education Service Centers (ESCs) were asked to notify LEAs in December 2010 of the option to request pre-award costs by submitting an amendment to their 2009-2011 Special Education ARRA/Stimulus grant application for allowable expenses obligated no earlier than February 17, 2009. IDEA-B ARRA funds must be fully expended by the end of the grant period (September 30, 2011). All goods must be received and all services must be rendered by September 30, 2011. Pre-award costs for infrastructure projects (permanent patient lifts, building construction, and building alterations) are not allowable with IDEA-B ARRA funds. The deadline to submit a 2009-2011 ARRA/Stimulus amendment is May 2, 2011. Calculating the Excess Cost Requirement TEA has developed an excess cost calculator tool for use by LEAs in determining compliance with the excess cost requirement (34 CFR §300.16; 34 CFR §300.202; Appendix A to Part 300- Excess Cost Calculation). As TEA has received clarification from OSEP regarding excess cost, the calculator tool has been updated. Please access the most current version dated March 2011 which is located on TEA’s special education website Special Education Funding. When calculating the excess cost for the 2010-2011 school year, use the previous year’s expenditures and child counts. Do not include any ARRA expenditures in the calculation. 2010-2011 Reallocation of IDEA-B (Regular) Funds A “To the Administrator Addressed” (TAA) letter was distributed on January 14, 2011, advising LEAs that the maximum entitlement and the reallocation entitlement would be awarded at two different times for the 2010-2011 (regular) IDEA-B formula funds. As a follow up to that TAA letter, LEAs are now being advised that there will be no reallocation of IDEA entitlements. According to 34 CFR 300.705(c), the State Education Agency (SEA) cannot reallocate IDEA funding unless the state has a process in place to determine if an LEA is adequately providing free appropriate public education (FAPE) with its state and local funds. If the SEA determines through its process that an LEA is not adequately providing FAPE, the SEA can reallocate the IDEA funds not needed by those LEAs identified as adequately providing FAPE only to those LEAs identified as not adequately providing FAPE. Based on continued review of this regulation, TEA has determined it is no longer appropriate to reallocate entitlements to the LEAs. LEA Reduction in Maintenance of Effort (MOE) Previous guidance on the TEA website stated the aggregated amounts of IDEA-B (Regular) Formula and IDEA-B (Regular) Preschool funds determined the amount of the increase from one year to the next. However, the increase in allocation should only be calculated on IDEA-B Formula funds. The MOE Reduction is not applicable to IDEA-B Preschool funds. TEA is required to report to OSEP by district the actual reduction in MOE. LEAs will be required to annually report this information in the following year’s Special Education Consolidated Application once the LEA has amended for their maximum entitlement. This requirement reports only on the voluntary reduction of effort and not a reduction based on a failure to meet effort or a reduction in MOE based on the exceptions as stated in 34 CFR §300.204. Detailed information is located on the special education website Special Education Funding. If an LEA chooses to utilize the voluntary reduction of MOE, the LEA is required to maintain effort at the reduced level in subsequent years until that LEA increases the level of special education expenditures, using state and local funds, on its own. The reduced level of effort also applies if an LEA failed to maintain effort and refunded the costs identified by TEA’s Division of Financial Audits due to noncompliance with MOE. An LEA that utilizes the voluntary reduction of MOE is required to use the “freed up” state and local funds to support activities that are authorized under the Elementary and Secondary Education Act (ESEA) of 1965 during the year the LEA reduced its MOE. When calculating 50% of the increase in federal funding for the voluntary reduction, ARRA entitlements were used to calculate the increase between 2008-2009 and 2009-2010. However, ARRA entitlements may not be used when comparing 2009-2010 to 2010-2011. TEA has received clarification from OSEP regarding the exception to MOE which is attributable to “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 free appropriate public education (FAPE) to the child has terminated; or (3) no longer needs the program of special education” (34 CFR §300.20 (c)). If an LEA chooses to implement a cost cutting measure by redesigning or consolidating programs without harm to the student’s Individualized Education Program (IEP) service delivery, it might be considered an exception due to the termination of an exceptionally costly program according to CFR 300.204(c). TEA will be providing guidance on the definition of an “exceptionally costly program” so LEAs will be able to determine if they meet this exception. LEAs should be cautious about using this exception until TEA provides guidance on the definition of an exceptionally costly program. This information is not considered guidance by TEA and is for information only. Waiver for State-Level MOE The IDEA regulations outlined in 34 CFR §300.163(a) the requirements for a State to maintain the financial support for special education and related services for children with disabilities at the same amount of that support for the preceding fiscal year. 34 CFR §300.163(c) discusses a waiver for exceptional or uncontrollable circumstances and states that the Secretary of Education may waive the requirement of paragraph (a) for a State, for one fiscal year at a time, under certain circumstances which are outlined in 34 CFR §300.163(c)(1)-(2). However, the State waiver does not change the standard of maintenance of effort for an LEA. An OSEP memo (OSEP 10-5) dated December 2, 2009, clearly outlines that the standard of State Financial support is different from the LEA MOE standard delineated in 34 CFR §300.203(b). For LEA MOE compliance, the comparison is expenditures from year to year. For SEAs, the comparison is the amount of State financial support provided (made available) for special education and related services from year to year, regardless of the amount actually expended. A copy of the OSEP memo is attached. For questions please contact the Division of IDEA Coordination at (512) 463-9414. Sincerely, Ann Smisko Attachment - OSEP memo |
