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Understanding Local Education Agency Maintenance of Effort: Basics

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11/9/2022

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Hello and good morning, everyone. How’s everyone doing this morning?

My name is Clarissa Perea and I am a financial coordinator with the special education division for the Public Education Department. Today we will be reviewing Local Education Agency Maintenance of Effort. We will be covering basics today in regards to the compliance standard. Leah Johnson will be monitoring the chat section for general questions, which we will more than likely answer at the end of the presentation, before the short tutorial of the MOE online calculator.

If you have a question specific to your district or more in-depth question, please feel free to email those questions directly to me and I will either email you back or call you to discuss.

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LEA MOE: Why Is It Required and What Does It Mean?

LEA MOE means that, in each year for the education of children with disabilities, an LEA:

Budgets at least as much as it expended in the most recent year it met LEA MOE, referred to as “eligibility standard”.
Expends at least as much as it expended in the most recent year it met LEA MOE, referred to as “compliance standard”.

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LEA MOE is required to ensure that LEAs do not replace state/local funding with federal funds.

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4 Methods to Calculate MOE

Total amount of local funds.
Total amount of state and local funds.
Per capita amount of local funds.
Per capita amount of state and local funds.

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What data is pulled from OBMS for MOE?

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Fund	Fund Description	Object	Object Description	Job Class	Job Class Description
11000	Operational	51100	Salaries	0000	None
13000	Pupil Transportation	51200	Overtime	1214	Guidance Counselors/ Social Workers
		51300	Additional Compensation	1311	Diagnosticians
		53211	Diagnosticians, Contracted	1312	Speech Therapists
		53212	Speech Therapists, Contracted	1313	Occupational Therapists
		53213	Occupational Therapists, Contracted	1314	Physical/Recreational Therapists
		53214	Physical/Recreational Therapists, Contracted	1315	Psychologists/Counselors
		53215	Psychologists/Counselors, Contracted	1316	Audiologists
		53216	Audiologists, Contracted	1317	Interpreters
		53217	Interpreters, Contracted	1318	Specialists
		53218	Specialists, Contracted	1319	Special Ed Assistants (Non-Instructional)
		53219	Special Ed Assistance (Non-Instructional), Contracted	1412	Teachers, Special Education
				1712	Instructional Assistance (Special Education)

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What data do LEAs need to enter?

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MOE Exceptions

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Exceptions – General Information

It is permissible to take multiple exceptions in one year, as long as each exception applies in that year.
If an LEA does not meet MOE after all expenditures have been entered, an LEA may apply these exceptions to reduce its required MOE level and meet the compliance standard using any of the four methods.
Exceptions are factored into the calculation and may help the LEA meet MOE.

All exceptions must be supported by an auditable paper trail. If the LEA has met MOE, exceptions cannot be applied.

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Exception (a)

(a) The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel.
Note: If staff worked .5 FTE on special education duties then .5 FTE can be the exception; not the entire salary and benefit of that FTE

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Exception (a) Example

A veteran special education teacher retired and is replaced by a less-experienced special education teacher.
The LEA expended $100,000 in salary and benefits on the veteran teacher last school year, and will expend $55,000 on the new hire in the current school year.
The LEA can reduce its required level of effort by $45,000 ($100,000-$55,000) in the current school year.

Exception (a) is when special education or related services staff leave. It is important to note that it must be voluntary — someone retires or resigns — or for just cause, such as when an employee is terminated for misconduct. It does not refer to a reduction in force or downsizing. OSEP determined that the voluntary termination of a services contract also falls under this provision.

Now let’s look at an example.

In this L-E-A, a veteran teacher retired at the end of the last school year, and the L-E-A hires a less-experienced teacher for the current school year.

The veteran cost 100,000 dollars. The new hire only costs 55,000 dollars.

[CLICK ONCE]

You can only reduce your required level of effort by the difference, which is 45,000 dollars.

The cost for each teacher includes salary and benefits combined. If the L-E-A had not replaced the veteran teacher, it could have reduced its M-O-E by the full 100,000 dollars. It is important to note that the L-E-A was still obligated to ensure, in the event the teacher was not replaced, that it continued to provide FAPE to the children in its jurisdiction.

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Exception (a)

The following do not qualify under the Voluntary Departure exception (a):

The LEA reassigns the special education teacher or ancillary staff to other duties in the district;
The LEA reduces the number of special education staff due to a reduction in force;
The LEA changes local special education policy or procedure, reducing the number of staff and/or hours;
The LEA releases or does not renew the contract of a probationary employee; and
The LEA is not able to recruit or hire a special education teacher and relies on long term substitute teachers during the school year.

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Exception (b)

(b) A decrease in the enrollment of children with disabilities.
If there is a decrease in enrollment of students with disabilities in an LEA, the calculator automatically accounts for the difference between the two years.
That difference is converted to a percentage, which is multiplied by the prior year expenditures.

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Exception (c)

(c) Termination of obligation to provide special education to a student in an exceptionally costly program.
Cost to provide FAPE is greater than two times the annual per pupil cost.
An LEA may reduce the amount of expenditures if the LEA no longer has an obligation to serve a child with an exceptionally costly program because the child:

Has left the jurisdiction of the agency; or
Has reached the age at which the obligation of the agency to provide FAPE has terminated; or
No longer needs the program of special education.

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An L-E-A’s required level of effort may be reduced when the L-E-A stops providing an exceptionally costly program of special education to an individual child with a disability. The L-E-A can reduce its level of effort the following fiscal year. This exception can only be taken if the child has left the L-E-A’s jurisdiction, if the child has aged out of the L-E-A’s responsibility to provide FAPE, or if the child no longer needs that program of special education.

In particular, the last bullet point requires some discussion. It doesn’t necessarily mean the child no longer needs any special education. The child may continue to need special education services, but may no longer need the program of services that meets the state’s definition of an exceptionally costly program.

Our state defines an exceptionally costly program to align with the Puente para los Ninos definition of a high needs student, which for fiscal year 21, was 23,439 dollars.

Let’s take a look at some examples of exception (c).

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Exception (d)

(d) Termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.
Is equal to or greater than $20,000 and paid out over a period of more than one year.
Examples include acquisition of special education equipment, construction and/or renovation of designated special education spaces.

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Exception (e)

(e) The assumption of cost by the high cost fund operated by the PED.
If your LEA has applied for and received this grant, the expenditures that were initially funded through a state or local source from fund 24120 can be entered as exception (e).

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MOE Adjustment

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What is an Adjustment?

Similar to an exception; the adjustment provision may allow an LEA to lower its MOE obligation if the LEA will not or does not meet MOE.
If an LEA received an increase in their IDEA B 611 award, the adjustment can be up to 50% of that increase.
Adjustment is from operation funds not IDEA B grant funds
“Adjusted” funds must be used toward an Elementary and Secondary Education Act (ESEA) program.

LEA can reduce spending obligation for MOE by using operational funds to carry activities.

The LEA may only apply the adjustment up to the amount by which the LEA is deficient in meeting MOE

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READ 1^st Bullet

[After 1^st bullet say]

Because of the strict requirements, the adjustment may be easier to access up-front during budget planning, also know as the eligibility standard.

In describing this provision, the regulations refer to the funds the L-E-A receives under 34 C-F-R Section 300 point 7-0-5, which are section 6-11 funds provided for children with disabilities ages 3 through 21. So, in calculating the increase in funds from one year to the next, funds received under section 6-19 for children with disabilities ages 3 through 5 are not included. When an L-E-A receives an increase in its 6-11 allocation, then it can calculate 50 percent of that increase. Based on that amount, an L-E-A can reduce its expenditures, by up to that amount for L-E-A M-O-E. As always, there are rules and parameters for taking advantage of this provision in the regulations, and we will talk about those next.

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Add a Slide Title - 4

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Conditions for Using Adjustment

The LEA must:

Use the freed-up local (or state and local) funds to carry out �ESSA activities during the FY in which the adjustment takes place.
Receive an annual determination of “meets requirements” from the SEA for the FY of the adjustment.
Not have had action taken against it by the SEA under IDEA Section 616.
Not have had the responsibility for providing FAPE taken away by the SEA.
Not be determined to have significant disproportionality for the FY of the adjustment.

There are several conditions that L-E-As must meet if they choose to use the adjustment.

[Bullet 1:] [CLICK ONCE]

If it takes the adjustment, an L-E-A must use an amount of local, or state and local, funds equal to that adjustment, in the same fiscal year it takes the adjustment, on other activities that are allowable under the Elementary and Secondary Education Act, or E-S-E-A. This is required even if the L-E-A is not using funds under E-S-E-A for those activities at the time. We talk about these funds as – freed-up – funds. Simply put, funds freed up from an L-E-A’s level of effort must be used for other activities in the L-E-A which are allowable under E-S-E-A. They can be used to expand or supplement existing activities or to begin new activities that are approvable under E-S-E-A.

[Bullet 2:] [CLICK ONCE]

An L-E-A must receive a determination of – meets requirements – from PED in the state fiscal year in which the adjustment is taken.

[Bullet 3:] [CLICK ONCE]

An L-E-A cannot take the adjustment if PED has taken action against the L-E-A under section 616 of the Act, specific to monitoring, technical assistance, and enforcement.

[Bullet 4:] [CLICK ONCE]

An L-E-A cannot take the adjustment if P-E-D has determined that the L-E-A is unable to establish and maintain programs of FAPE.

[Bullet 5:] [CLICK ONCE]

Finally, an L-E-A must not have been identified with significant disproportionality for the state fiscal year in which the adjustment is taken.

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Contact Information

SharePoint MOE access: Crystal Vigil, Crystal.Vigil3@ped.nm.gov and Clarissa Perea, Clarissa.Perea@ped.nm.gov

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MOE Questions: Clarissa Perea, Clarissa.Perea@ped.nm.gov or (505) 467-9002