Section 1413 (a) (2)

(2) Use of amounts

    (A) In general

  • Amounts provided to the local educational agency under this subchapter shall be expended in accordance with the applicable provisions of this subchapter and—
    • (i) shall be used only to pay the excess costs of providing special education and related services to children with disabilities;
    • (ii) shall be used to supplement State, local, and other Federal funds and not to supplant such funds; and
    • (iii) shall not be used, except as provided in subparagraphs (B) and (C), to reduce the level of expenditures for the education of children with disabilities made by the local educational agency from local funds below the level of those expenditures for the preceding fiscal year.

    (B) Exception

  • Notwithstanding the restriction in subparagraph (A)(iii), a local educational agency may reduce the level of expenditures where such reduction is attributable to—
    • (i) the voluntary departure, by retirement or otherwise, or departure for just cause, of special education personnel;
    • (ii) a decrease in the enrollment of children with disabilities;
    • (iii) the termination of the obligation of the agency, consistent with this subchapter, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the State educational agency, because the child—
      • (I) has left the jurisdiction of the agency;
      • (II) has reached the age at which the obligation of the agency to provide a free appropriate public education to the child has terminated; or
      • (III) no longer needs such program of special education; or


    • (iv) the termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.

    (C) Adjustment to local fiscal effort in certain fiscal years

      (i) Amounts in excess

    • Notwithstanding clauses (ii) and (iii) of subparagraph (A), for any fiscal year for which the allocation received by a local educational agency under section 1411(f) of this title exceeds the amount the local educational agency received for the previous fiscal year, the local educational agency may reduce the level of expenditures otherwise required by subparagraph (A)(iii) by not more than 50 percent of the amount of such excess.

      • (ii) Use of amounts to carry out activities under ESEA

    • If a local educational agency exercises the authority under clause (i), the agency shall use an amount of local funds equal to the reduction in expenditures under clause (i) to carry out activities authorized under the Elementary and Secondary Education Act of 1965 [20 U.S.C. 6301 et seq.].

      • (iii) State prohibition

    • Notwithstanding clause (i), if a State educational agency determines that a local educational agency is unable to establish and maintain programs of free appropriate public education that meet the requirements of subsection (a) or the State educational agency has taken action against the local educational agency under section 1416 of this title, the State educational agency shall prohibit the local educational agency from reducing the level of expenditures under clause (i) for that fiscal year.

      • (iv) Special rule

    • The amount of funds expended by a local educational agency under subsection (f) shall count toward the maximum amount of expenditures such local educational agency may reduce under clause (i).

    (D) Schoolwide programs under title I of the ESEA

  • Notwithstanding subparagraph (A) or any other provision of this subchapter, a local educational agency may use funds received under this subchapter for any fiscal year to carry out a schoolwide program under section 1114 of the Elementary and Secondary Education Act of 1965 [20 U.S.C. 6314], except that the amount so used in any such program shall not exceed—
    • (i) the number of children with disabilities participating in the schoolwide program; multiplied by
    • (ii)
  • (I) the amount received by the local educational agency under this subchapter for that fiscal year; divided by
    • (II) the number of children with disabilities in the jurisdiction of that agency.

      • Severe Discrepancy
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      Last modified on November 7, 2019