Overview
When awarding grant funds for education purposes, the federal government does not intend for school districts to use federal funds as the primary means of providing services to students with disabilities. The district agrees when it accepts the IDEA Part B funds that it will expend nonfederal (e.g. state and local) funds in accordance with two federal fiscal accountability stipulations: supplement, not supplant, and MOE. The supplement, not supplant provision of 34 CFR 300.202(a) (3) mandates that state and local funds may not be diverted to other purposes simply because federal funds are available. The MOE requirement ensures that the school district continues to expend its state and local funds at the same level from year to year instead of limiting services to what can be provided using federal dollars. For additional information please refer to the Federal Office of Special Education Programs (OSEP) Letter to Kennedy.
School district receipt of IDEA dollars is contingent upon maintaining fiscal effort for special education services from year to year. Districts must expend a greater or equal amount of local funds or a combination of local and state funds for special education services from one year to the next to meet the IDEA Part B maintenance of effort (MOE) requirement. Federal regulation [34 CFR 300.203(b)(2)] clarifies the school district MOE compliance standard for IDEA Part B in the following way “An LEA meets the compliance standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year: (i) Local funds only; (ii) the combination of State and local funds; (iii) local funds only on a per capita basis; or (iv) the combination of State and local funds on a per capita basis.”
The Nebraska Department of Education (NDE) is required by 34 CFR 300.203 to ensure that districts expend for its intended purpose at least the same total local or a combination of state and local funds, per capita amount of local funds only or the combination of state and local funds on a per capita basis. As a result, the NDE must assure annually that each Nebraska school district demonstrates they expend annually state and/or local funds on special education at 100% of the level at which it expended state and/or local funds on special education in the comparison year employing the subsequent year rule [(34 CFR 300.203(c)] for each of the four available methods.
To summarize, to meet the IDEA part B MOE compliance requirement, at least one of the following conditions must be met:
· District state and local fund expenditures must equal or exceed the amount of expenditures from those sources for special education when compared to a previous fiscal year.
· District per-pupil expenditures of state and local funds must equal or exceed the amount of expenditures per capita from those sources for special education when compared to a previous fiscal year.
· District local fund expenditures must equal or exceed the amount of expenditures from those sources for special education when compared to a previous fiscal year.
· District per-pupil expenditures of local funds must equal or exceed the amount of expenditures per capita from those sources for special education when compared to a previous fiscal year.
For additional information please refer the MOE guidance, examples, questions and answers document and LEA MOE: Mechanics of the Revised Regulations.
In certain situations, two federal regulations allow IDEA Part B funds to be used to reduce the level of state and local special education expenditures below a proceeding year expenditure level. First, through the use of the 50% flexibility option- federal adjustments in certain fiscal years (34 CFR 300.205) that, in most cases, permit school districts, in situations in which a district’s current IDEA allocation exceeds the previous year IDEA allocation, to apply up to 50% of the increase to reduce the previous year expenditure level. If the district elects to adjust MOE using this 50% flexibility option, the district must use the local “freed-up” funds for activities that can be supported under the Elementary and Secondary Education Act (ESEA) as reauthorized under the (Every Student Succeeds Act) ESSA and report to NDE information on the use of the “freed-up” funds. Second, through exception to maintenance of effort (34CFR 300.204) whereby districts may reduce the level of expenditure below the level of expenditures for the preceding fiscal year if the reduction is attributable to certain defined circumstances.
The following application provides districts with the NDE established applicable AFR special education expenditures and receipts for the 2022-2023 fiscal year and establishes the MOE for each of the available four Federal options. The current year level of effort is then matched to the MOE Target (highest year effort level from a prior year) to establish the district MOE excess or shortage for these available options. Districts are then provided, if available, the adjustment (50% flexibility option) amount that may be used to adjust the MOE target level for current year for comparison purposes. Second, districts are to report all exceptions and supporting documentation for each exemption. All credits and exceptions are to be reported regardless of MOE status. Finally, a summary page is presented reflecting MOE as determined from the AFR and the Grants Management System (GMS), any credits/exceptions as reported by the district within the application, a revised MOE including the reported credits/exceptions identified by the district, and the required level of effort the district must maintain in the following year to meet MOE for each federal option available.
Please be reminded, if the school district fails to meet the Maintenance of Effort (MOE) compliance standard it is liable in a recovery action to return to the NDE, using non-Federal funds, an amount equal to the amount by which the school district failed to maintain its level of expenditures in that fiscal year, or the amount of the school district’s IDEA Part B subgrant in that fiscal year whichever is lower [34 CFR 300.203(d)].
To avoid financial penalties, it is critical that all information requested be submitted as accurately as possible and no later than May 10, 2024.
If you have questions regarding this application process please contact:
Megan Kassing 531-289-8565 Or E-Mail at: megan.kassing@nebraska.gov
Access the Maintenance of Effort (MOE) Compliance Application