OSEP LETTER: Oct. 31, 2008 to Fiscal and Policy Advisor for Rural and Sparsely Populated Consortium of California James Kennedy

10/31/08James "Sarge" KennedyFiscal and Policy AdvisorRural and Sparsely Populated Consortium of California Post Office Box 689Red Bluff, CA 96080Dear Mr. Kennedy:This is in response to your May 5, 2008 letter to Ms. Patty Guard, Deputy Director of the Office of Special Education Programs (OSEP). I apologize for your not receiving a response as promised by the electronic mail (email) system. Your questions and OSEP's responses are provided below.1-2. You refer to Appendix A to Part 300 (the regulations implementing Part B of the Individuals with Disabilities Education Act (IDEA)) and the instructions pertaining to calculation of the excess cost, specifically, paragraph b. The instructions in paragraph b require an LEA to subtract from the total amount of its expenditures for elementary school students amounts spent for, among other things, State and local funds for children with disabilities. You ask if this includes only State and local funds whose use is restricted to children with disabilities or any State arid local funds, including unrestricted funds, that are used to provide services to children with disabilities. You also ask for clarification of the Appendix A, paragraph b, statement that "These arc funds that the LEA [local educational agency] actually spent, not funds received last year but carried over for the current school year."OSEP's Response: Once the LEA has calculated the total amount of its expenditures for elementary school students from all sources - local, State and Federal (including Part B) in the preceding school year (excluding only capital outlay and debt services), the LEA must subtract from these total expenditures a variety of amounts spent for various purposes (listed in Appendix A, paragraph b), including State and local funds spent for children with disabilities, consistent with 34 CFR 300.16. In response to your first question, any State and local funds that arc used for services for children with disabilities, including unrestricted funds that the LEA is not required to use for children with disabilities, must be included in the calculation. Your letter states that in California, the only local funds that must be used to provide services to children with disabilities are the local property taxes assessed for that purpose and any other local funds used to provide services to children with disabilities come from general purelementary school students. The LEA must compute the minimum average amount separately for children with disabilities in its secondary schools.In response to your second question regarding the statement that these are funds that the LEA actually spent, not funds received last year but carried over for the current school year, your assumption is correct. Because funds that the LEA actually spent must he included in the calculation, it would, as you believe, include funds carried over from the second prior year that were subsequently spent in the year for which you are calculating the cost. Funds that were received last year hut not spent and carried over to the current year are not included in the calculation.3-4. You ask about the relationship between the supplement, not supplant and excess cost requirements and also how the maintenance of effort requirement can he met if the average expenditure per k-8 student or 9-12 student goes down.OSEP's Response: The excess cost and supplement, not supplant requirements are different and an LEA must meet both requirements. Under 34 CFR 300.202(a), amounts provided to the local educational agency (LEA) under Part B of the IDEA: (1) must be expended in accordance with the applicable provisions of 34 CFR Part 300; and (2) must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with 34 CFR 300.202(b); and (3) must be used to supplement State, local, and other Federal funds and not to supplant those funds. The excess cost requirement prevents an LEA from using funds provided under Part 13 of IDEA to pay for all of the costs directly attributable to the education of a child with a disability, subject to 34 CFR 300.202(b)(1)(ii). See 34 CFR 300.202(b)(1)(i). An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before funds under Part B of IDEA are used. See 34 CFR 300.202(b)(2)(i).With regard to education for children with disabilities, the nonsupplanting requirement is met by meeting the maintenance of effort requirements in 34 CFR 300.203(a). Under that provision, funds provided to an LEA under Part B of the IDEA must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds belowcc: Mary HudlerOSEP's Response: Under 34 CFR 300.149(a)(1), the State educational agency (SEA) is responsible for ensuring that the requirements of Part B of IDEA are carried out. This includes10/31/08James "Sarge" KennedyFiscal and Policy AdvisorRural and Sparsely Populated Consortium of California Post Office Box 689Red Bluff, CA 96080Dear Mr. Kennedy:This is in response to your May 5, 2008 letter to Ms. Patty Guard, Deputy Director of the Office of Special Education Programs (OSEP). I apologize for your not receiving a response as promised by the electronic mail (email) system. Your questions and OSEP's responses are provided below.1-2. You refer to Appendix A to Part 300 (the regulations implementing Part B of the Individuals with Disabilities Education Act (IDEA)) and the instructions pertaining to calculation of the excess cost, specifically, paragraph b. The instructions in paragraph b require an LEA to subtract from the total amount of its expenditures for elementary school students amounts spent for, among other things, State and local funds for children with disabilities. You ask if this includes only State and local funds whose use is restricted to children with disabilities or any State arid local funds, including unrestricted funds, that are used to provide services to children with disabilities. You also ask for clarification of the Appendix A, paragraph b, statement that "These arc funds that the LEA [local educational agency] actually spent, not funds received last year but carried over for the current school year."OSEP's Response: Once the LEA has calculated the total amount of its expenditures for elementary school students from all sources - local, State and Federal (including Part B) in the preceding school year (excluding only capital outlay and debt services), the LEA must subtract from these total expenditures a variety of amounts spent for various purposes (listed in Appendix A, paragraph b), including State and local funds spent for children with disabilities, consistent with 34 CFR 300.16. In response to your first question, any State and local funds that arc used for services for children with disabilities, including unrestricted funds that the LEA is not required to use for children with disabilities, must be included in the calculation. Your letter states that in California, the only local funds that must be used to provide services to children with disabilities are the local property taxes assessed for that purpose and any other local funds used to provide services to children with disabilities come from general purelementary school students. The LEA must compute the minimum average amount separately for children with disabilities in its secondary schools.In response to your second question regarding the statement that these are funds that the LEA actually spent, not funds received last year but carried over for the current school year, your assumption is correct. Because funds that the LEA actually spent must he included in the calculation, it would, as you believe, include funds carried over from the second prior year that were subsequently spent in the year for which you are calculating the cost. Funds that were received last year hut not spent and carried over to the current year are not included in the calculation.3-4. You ask about the relationship between the supplement, not supplant and excess cost requirements and also how the maintenance of effort requirement can he met if the average expenditure per k-8 student or 9-12 student goes down.OSEP's Response: The excess cost and supplement, not supplant requirements are different and an LEA must meet both requirements. Under 34 CFR 300.202(a), amounts provided to the local educational agency (LEA) under Part B of the IDEA: (1) must be expended in accordance with the applicable provisions of 34 CFR Part 300; and (2) must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with 34 CFR 300.202(b); and (3) must be used to supplement State, local, and other Federal funds and not to supplant those funds. The excess cost requirement prevents an LEA from using funds provided under Part 13 of IDEA to pay for all of the costs directly attributable to the education of a child with a disability, subject to 34 CFR 300.202(b)(1)(ii). See 34 CFR 300.202(b)(1)(i). An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before funds under Part B of IDEA are used. See 34 CFR 300.202(b)(2)(i).With regard to education for children with disabilities, the nonsupplanting requirement is met by meeting the maintenance of effort requirements in 34 CFR 300.203(a). Under that provision, funds provided to an LEA under Part B of the IDEA must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds belowcc: Mary HudlerOSEP's Response: Under 34 CFR 300.149(a)(1), the State educational agency (SEA) is responsible for ensuring that the requirements of Part B of IDEA are carried out. This includes10/31/08James "Sarge" KennedyFiscal and Policy AdvisorRural and Sparsely Populated Consortium of California Post Office Box 689Red Bluff, CA 96080Dear Mr. Kennedy:This is in response to your May 5, 2008 letter to Ms. Patty Guard, Deputy Director of the Office of Special Education Programs (OSEP). I apologize for your not receiving a response as promised by the electronic mail (email) system. Your questions and OSEP's responses are provided below.1-2. You refer to Appendix A to Part 300 (the regulations implementing Part B of the Individuals with Disabilities Education Act (IDEA)) and the instructions pertaining to calculation of the excess cost, specifically, paragraph b. The instructions in paragraph b require an LEA to subtract from the total amount of its expenditures for elementary school students amounts spent for, among other things, State and local funds for children with disabilities. You ask if this includes only State and local funds whose use is restricted to children with disabilities or any State arid local funds, including unrestricted funds, that are used to provide services to children with disabilities. You also ask for clarification of the Appendix A, paragraph b, statement that "These arc funds that the LEA [local educational agency] actually spent, not funds received last year but carried over for the current school year."OSEP's Response: Once the LEA has calculated the total amount of its expenditures for elementary school students from all sources - local, State and Federal (including Part B) in the preceding school year (excluding only capital outlay and debt services), the LEA must subtract from these total expenditures a variety of amounts spent for various purposes (listed in Appendix A, paragraph b), including State and local funds spent for children with disabilities, consistent with 34 CFR 300.16. In response to your first question, any State and local funds that arc used for services for children with disabilities, including unrestricted funds that the LEA is not required to use for children with disabilities, must be included in the calculation. Your letter states that in California, the only local funds that must be used to provide services to children with disabilities are the local property taxes assessed for that purpose and any other local funds used to provide services to children with disabilities come from general purelementary school students. The LEA must compute the minimum average amount separately for children with disabilities in its secondary schools.In response to your second question regarding the statement that these are funds that the LEA actually spent, not funds received last year but carried over for the current school year, your assumption is correct. Because funds that the LEA actually spent must he included in the calculation, it would, as you believe, include funds carried over from the second prior year that were subsequently spent in the year for which you are calculating the cost. Funds that were received last year hut not spent and carried over to the current year are not included in the calculation.3-4. You ask about the relationship between the supplement, not supplant and excess cost requirements and also how the maintenance of effort requirement can he met if the average expenditure per k-8 student or 9-12 student goes down.OSEP's Response: The excess cost and supplement, not supplant requirements are different and an LEA must meet both requirements. Under 34 CFR 300.202(a), amounts provided to the local educational agency (LEA) under Part B of the IDEA: (1) must be expended in accordance with the applicable provisions of 34 CFR Part 300; and (2) must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with 34 CFR 300.202(b); and (3) must be used to supplement State, local, and other Federal funds and not to supplant those funds. The excess cost requirement prevents an LEA from using funds provided under Part 13 of IDEA to pay for all of the costs directly attributable to the education of a child with a disability, subject to 34 CFR 300.202(b)(1)(ii). See 34 CFR 300.202(b)(1)(i). An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before funds under Part B of IDEA are used. See 34 CFR 300.202(b)(2)(i).With regard to education for children with disabilities, the nonsupplanting requirement is met by meeting the maintenance of effort requirements in 34 CFR 300.203(a). Under that provision, funds provided to an LEA under Part B of the IDEA must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds belowcc: Mary HudlerOSEP's Response: Under 34 CFR 300.149(a)(1), the State educational agency (SEA) is responsible for ensuring that the requirements of Part B of IDEA are carried out. This includes