SHARS Reimbursements and Special Education Maintenance of Effort
Understand how SHARS reimbursements to Texas school districts can affect its special education Maintenance of Effort calculation.
School Health and Related Services (SHARS) allows Texas school districts to receive Medicaid reimbursement for certain eligible services provided to students with disabilities. How a school system subsequently spends those reimbursements can affect its special education Maintenance of Effort (MOE) calculation.
Understanding this connection is important when planning budgets, reviewing expenditures, and completing the Texas Education Agency’s annual SHARS reimbursement form.
What is Maintenance of Effort?
Districts receiving funds under the Individuals with Disabilities Education Act, Part B (IDEA-B), generally must maintain their spending for students with disabilities using local funds, or a combination of state and local funds year to year.
MOE has two parts. The eligibility standard addresses what the district budgets. The compliance standard addresses what the district spends.
TEA reviews compliance using four methods:
- Total local expenditures
- Total state and local expenditures
- Local expenditures per student with a disability
- State and local expenditures per student with a disability
A district must meet at least one of the four methods. Each method has its own comparison amount, generally based on the last year the district met MOE under that method. Districts should refer to their final TEA compliance report and current calculation resources when determining the amount they must maintain.
TEA has required this reporting for several years
TEA has collected SHARS reimbursement information for MOE reviews for several years. Its September 2022 reporting letter required IDEA-B recipients to submit a SHARS reimbursement survey even if they received no reimbursement. The letter also explained that reimbursements subsequently spent on special education must be excluded from the state and local expenditures counted toward MOE. The current form continues that requirement.
How SHARS reimbursements affect MOE
SHARS reimburses the federal Medicaid portion of eligible service costs. If a district subsequently spends SHARS reimbursement funds on special education services, that expenditure cannot be included as a state or local expenditure in the district’s MOE calculation. Federal regulations prohibit districts from counting special education expenditures funded with SHARS reimbursements as state or local expenditures for MOE purposes. The district must document and report the expenditure so TEA can exclude it from the MOE calculation.
Districts need to distinguish three transactions: paying for the original service, receiving the reimbursement, and subsequently spending the reimbursement. TEA’s SHARS Reimbursement Form asks how the district subsequently spent the reimbursement. Revenue code R5931 identifies the SHARS reimbursement received; it does not show how the district later used it.
How different uses affect MOE
The district’s response depends on whether it received SHARS reimbursements and whether it subsequently spent any of those funds on special education. The following examples illustrate how different uses may affect MOE. They do not authorize a particular purchase or accounting change.
| How the district uses the reimbursement | What it means for MOE |
| Pays for additional special education services or equipment. | The reimbursement-funded expenditure is excluded from MOE. TEA gives an assistive technology device specified in a student’s IEP as an example. Option 3 below applies. |
| Pays special education costs that otherwise would have been paid with state or local funds. | That amount cannot count toward MOE. The district needs to determine whether its remaining state or local expenditures meet the requirement. Option 3 below applies. |
| Uses the reimbursement for a lawful purpose outside special education. | If none of the reimbursement was subsequently spent on special education during the reporting period, Option 2 below applies. Spending outside special education does not count toward special education MOE. |
| Spends part of the reimbursement on special education. | The district reports the applicable subsequent special education expenditure, rather than automatically reporting all reimbursements received. Option 3 below applies. |
| Deposits the reimbursement into the general fund while paying special education costs from that fund. | The deposit and the use of general funds do not, by themselves, determine the MOE treatment. The district must identify whether SHARS reimbursement funds were directly used for special education. Neither transaction alone determines MOE treatment. Option 2 or 3 below applies. |
These distinctions follow TEA’s SHARS guidance and form instructions.
Using SHARS reimbursements for special education does not automatically cause an MOE failure. A district can use the reimbursements to provide additional services while continuing to meet its required state or local spending level. However, if SHARS replaces spending that previously counted toward MOE, the district could fall short. A district whose state or local special education spending exceeds its required MOE level may be able to use SHARS reimbursements for some special education expenditures while continuing to meet MOE. The district should complete the applicable calculation before changing its spending practices.
The MOE requirement does not establish a separate obligation to spend the same amount of SHARS reimbursement every year. Districts must continue meeting their applicable MOE level and their obligations to students with disabilities. Recurring expenses therefore deserve careful review, particularly when future reimbursement amounts may differ.
Annual reporting
For the yearly reporting cycle, school districts and fiscal agents that received or administered IDEA-B funds must submit the SHARS Reimbursement Form by October 30th in most years. All districts must submit the form, including those that received no SHARS reimbursement and those that do not participate in the SHARS program. The deadline is established for each reporting cycle, so districts should review TEA’s current letter and instructions each year for the applicable reporting period and deadline.
The form offers three choices:
- Option 1: The district did not participate in SHARS and received no reimbursements.
- Option 2: The district received reimbursements but did not subsequently spend them on special education.
- Option 3: The district received reimbursements and subsequently spent them on special education. It must report the applicable expenditure amount. TEA will exclude the reported amount from the district’s state and local special education expenditures when calculating MOE.
For a district participating in a shared services arrangement, the reported amount must include applicable expenditures made by the fiscal agent on its behalf. Districts must retain the records that support their responses and provide them if TEA requests validation.
Business office, special education, and SHARS staff should review the information together before submitting the form. If the records do not clearly establish how reimbursements were spent, or questions remain about coding or timing, contact TEA’s Federal Fiscal Compliance and Reporting Division at compliance@tea.texas.gov.
TEA resources
- SHARS and IDEA-B LEA MOE Guidance
- IDEA-B LEA MOE Compliance Standard and Calculation Resources
- September 17, 2026, SHARS Reporting Letter
- 2025–2026 SHARS Reimbursement Form Instructions
TASB Student Solutions assists districts with SHARS program review, documentation, operational alignment, and related special education fiscal matters. For additional information or assistance, contact TASB Student Solutions at studentsolutions@tasb.org or shars@tasb.org.
Part of the TASB Student Solutions SHARS Explainer Series. For a series overview, begin with SHARS Governance and Accountability.
This information is provided for educational purposes only to facilitate a general understanding of applicable laws, regulations, and practices. It is not intended as legal advice and should not be relied upon as a substitute for consultation with legal counsel or other qualified professionals. This resource was developed with the assistance of artificial intelligence tools. AI was used to support drafting, analysis, and idea generation.