POLICY LETTER: June 28, 2010 to individual (personally identifiable information redacted)

June 28, 2010XXXXX XXXXXXXXXXXXXXXXXXXXXXDear XXXXXXXXXX:This is in response to your electronic mail (email) communication to Dr. Deborah Morrow on April 2, 2010, requesting information on local educational agency (LEA) maintenance of fiscal effort (MOE) under Part B of the Individual with Disabilities Education Act (IDEA or Part B) as addressed under 34 CFR 300.203. Your questions and responses from the Office of Special Education Programs (OSEP) are below. 1Question #1: If the fiscal year (FY) 2010 budgeted per capita student special needs expense meets or exceeds the prior year actual per capita expense, does the budget of the LEA have to be adjusted or amended if the actual December 1 student count is greater than the budgeted student count before the State educational agency (SEA) will release Federal funding?Question #2: If the budget for the fiscal year ending June 30, 2010 is due to the SEA prior to the end of June 2009, and the audit for the fiscal year ending June 30, 2009 is not final and due to the SEA until November 1, 2009, then isn't the most recent fiscal year for which comparable per capita information actually the FY 2008 audit which is due to the SEA November 1, 2008?OSEP's Response: Under 34 CFR 300.203(a), except as provided in 34 CFR 300.204 and 300.205, funds provided to an LEA under Part B must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. There are two standards that apply to the LEA regarding MOE. The first relates to the LEA's eligibility for an award. In order to determine that the LEA is eligible for an award, the State must determine that the LEA complies with 34 CFR 300.203(a). In order to make this determination, the SEA must determine that the LEA budgets at least the same total or per capita amount from either local, or a combination of State or local funds, as the LEA spent for that purpose from the same source for the most recent prior year for which information is available. 34 CFR 300.203(b). The second standard, addressed below, establishes whether in fact the LEA has complied with 34 CFR 300.203(a) --- which requires determining whether the LEA expended, from year to year, either per capita or in total, from local, or State and local, funds at least as much as it expended in the immediate prior year.Page 2 XXXXXX XXXXXXWith respect to LEA eligibility for a subgrant, if the LEA budgeted for the education of children with disabilities for FY 2010 during the spring of FY 2009, prior to "closing the books" on FY 2009 at the end of June 2009, its budget for FY 2010 is compared against FY 2008 -- "the most recent prior year for which information is available." Accordingly, the LEA would be eligible to receive its FY 2010 Federal allocation if the budgeted amount for FY 2010, in total or per capita, is equal to, or greater than, the actual expenditures from FY 2008. There is no requirement in IDEA that the LEA adjust this budget based on updated child count data in order to establish or maintain eligibility for FY 2010 Federal funds. Since the December 1 child count for FY 2010 occurs on December 1, 2009, the Federal funds for FY 2010 would have been released, based on eligibility established Alexa Posny, Ph.D. Acting DirectorOffice of Special Education Programs1 For the purposes of your questions, we are assuming that by fiscal year 2010 you are referring to State fiscal year 2010, which in many, but not all states, is from July 1, 2009 through June 30, 2010.