POLICY LETTER: December 2, 2009 to Chief State School Officers and State Directors of Special Education

UNITED STATES DEPARTMENT OF EDUCATIONOFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICESDEC - 2 2009Contact PersonsName: Ruth Ryder Telephone: 202-245-7513Name: Deborah MorrowTelephone: 202-245-7456OSEP 10-5MEMORANDUMTO: Chief State School Officers State Directors of Special Education FROM: Alexa Posny Acting Director Office of Special Education Programs SUBJECT: Maintenance of State Financial Support under the Individuals with Disabilities Education Act Since the Office of Special Education Programs (OSEP) began focusing on the fiscal requirements of the Individuals with Disabilities Education Act (IDEA) in 2007, the heightened scrutiny has given rise to requests for clarification of several of those provisions. In addition, the passage of the American Recovery and Reinvestment Act of 2009 on February 17, 2009, requires States and local educational agencies (LEAs) to examine the fiscal requirements in a new light and to be in a position to account for each of those requirements with increasing detail and specificity. One of the provisions which OSEP has been asked to clarify is found at 34 CFR 300.163, Maintenance of State financial support. Under 34 CFR 300.163(a), "a State must not reduce the amount of State financial support for special education and related services for children with disabilities, or otherwise made available because of the excess costs of educating those children, below the amount of that support for the preceding fiscal year." The question has been asked whether this provision specifically means the support for special education and related services provided by the State educational agency (SEA) or whether, in computing its maintenance of financial support for special education and related services, the SEA must include support provided by other State agencies, such as a State Department of Health or a State Vocational Rehabilitation Agency. Under section 602(31) of the IDEA and 34 CFR 300.40 of the Part B implementing regulations, "State" is defined as each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico and each of the outlying areas. Under section 602(32) of the IDEA and 34 CFR 300.41 of the regulations, "State educational agency" is defined as the State board of education or other agency or officer primarily responsible for the State supervision of public elementary schools and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the Governor or by State law. The reference to "State financial support" in 34 CFR 300.l63 is not limited to only the financial support provided to or through the SEA, but encompasses the financial support of all State agencies that provide or pay for special education and related services, as those terms are defined under the IDEA, to children with disabilities. Because 34 CFR 300.163(a) requires that a State not reduce its financial support from year to year for special education and related services, a State must include in its calculation of financial support under 34 CFR 300.163(a), any financial support for special education and related services provided by any State agency. The SEA is one of those agencies and likely provides or supervises the administration of the majority of the State's support for special education and related services but possibly not all the State's financial support for special education and related services. For example, payment by the State Vocational Rehabilitation Agency from State fThe consequences are also different for an LEA and a State if they fail to meet the required standard. If a State fails to maintain the required level of financial support for special education and related services, under 34 CFR 300.163(b), the Secretary of Education reduces the allocation of funds under section 611 of the IDEA for any fiscal year following the fiscal year in which the State fails to comply with the requirement of 34 CFR 300.163(a) by the same amount by which the State fails to meet the requirement. If an LEA fails to maintain fiscal effort, the SEA must return to the U.S. Department of Education, an amount equal to the amount by which the LEA failed to maintain effort. This repayment must be from non-Federal funds or from Federal funds for which accountability to the Federal government is not required. If you have questions regarding these provisions, please contact Ruth Ryder at 202-245-7513 or Deborah Morrow at 202-245-7456. Page PAGE * MERGEFORMAT 3 -Maintenance of State Financial Support