Spring 2015

Maintenance of Effort

In 2013, the U.S. Secretary of Education proposed amending regulations under Part B of the Individuals with Disabilities Education Act (IDEA), which govern the Assistance to States for the Education of Children with Disabilities program.  Through a Notice of Proposed Rule Making (NPRM), the Secretary sought public comment on proposed amendments to the regulations related to local Maintenance of Effort found at 34 C.F.R. § 300.203.  The term “Maintenance of Effort,” or MOE, refers to the IDEA requirement that school districts, or local education agencies (LEAs), expend the same amount of local/ state funding for special education and related services as it expended in the previous fiscal year.  Failure to meet MOE requirements could result in the LEA losing eligibility to receive IDEA funding and requiring an LEA to repay related funds.

The new regulations were meant to clarify existing policy and make other related changes regarding: 1) the compliance standard; 2) the eligibility standard; 3) the level of effort required of an LEA in the year after it fails to maintain effort under the IDEA; and 4) the consequence for a failure to maintain local effort.  The Secretary also sought comment on whether states and LEAs or other interested parties thought the proposed amendments would be helpful in increasing understanding of, and ensuring compliance with, the current local MOE requirements. Specifically, the Secretary sought comment from states and LEAs to identify where they experience the most problems in implementing the MOE requirements.

LAF filed a letter in response to the NPRM and made the following five points:

  1. An LEA’s duty to provide FAPE should be an important consideration in determining MOE compliance requirements.
  2. The NPRM correctly recognized the need for calculation options for the LEA.
  3. The NPRM should allow the LEA to make full use of the four options to calculate MOE.
  4. The NPRM should honor the specific language of the Act with regard to calculation of the baseline for MOE compliance.
  5. The department must recognize the need for spending flexibility in promulgating revised rules.
Generally, the intent of the comments were to suggest changes in the rules that would give school districts the flexibility to provide required special education services without substantial financial penalties given the great fluctuations in funding recently from the state and federal governments.

In February 2015, the Department of Education (DOE) took final action adopting the new regulations, which became effective on July 1, 2015.  In general, the DOE was responsive to some of LAF’s comments.  Specifically, the regulations:
  • Added language to the eligibility standard in § 300.203(a)(1) to clarify the four methods that LEAs may use to meet this standard: (1) local funds only, (2) the combination of state and local funds, (3) local funds only on a per capita basis, or (4) the combination of state and local funds on a per capita basis.
  • Changed the language in the eligibility standard in § 300.203(a)(1) to provide that the comparison year is the most recent fiscal year for which information is available, regardless of which method an LEA uses to establish eligibility.
  • Changed the language in the compliance standard in § 300.203(b)(1) to state that the comparison year is the preceding fiscal year, regardless of which method an LEA uses to establish compliance.
  • Added language in § 300.203(d) to clarify that, if an LEA fails to maintain its level of expenditures for the education of children with disabilities, the SEA is liable in a recovery action for either the amount by which the LEA failed to maintain its level of expenditures in that fiscal year or the amount of the LEA's Part B subgrant in that fiscal year, whichever is lower.
A more extensive summary of the DOE’s final rules can be found at: www.federalregister.gov/articles/2015/04/28/2015-09755/assistance-to-states-for-the-education-of-children-with-disabilities#h-7.

USDOE NPRM: Assistance to States for the Education of Children with Disabilities, Docket ID ED-2012-OSERS-0020.  LAF’s Attorney:  Chris Borreca, Thompson & Horton, L.L.P., Houston