Tiffany R. Winters, Esq. [e-mail] Bonnie Little Graham, Esq. [e-mail] Brustein

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Tiffany R. Winters, Esq.twinters_at_bruman.comBonni
e Little Graham, Esq.bgraham_at_bruman.comBrustein
Manasevit, PLLCFall Forum 2012

• Fiscal Allowability and Flexibility Updates Under
  IDEA

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Agenda

• ESEA Flexibility
• Allowability
• Time and Effort Reporting
• Maintenance of Effort Updates
• Supplanting, CEIS and RTI

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ESEA Waiver affect on iDEA
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ESEA Flexibility

• Does this flexibility affect the rights of a
  student with a disability to a free appropriate
  public education (FAPE) in accordance with the
  students individualized education program (IEP)
  as required by Part B of the Individuals with
  Disabilities Education Act (IDEA) or FAPE as
  required by Section 504 of the Rehabilitation Act
  of 1973 (Section 504)?

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ESEA Flexibility (cont.)

• No!!
• Nothing in the ESEA flexibility affects an SEAs
  or LEAs responsibility to provide FAPE to a
  student with a disability in accordance with the
  students IEP or as required by Section 504. 
• If required under an IEP or Section 504 Plan,
  services or activities that an LEA/school is
  providing pursuant to its identification for
  improvement under ESEA section 1116, must
  continue even when the LEA and its schools are no
  longer in improvement status. 
• Although a students IEP or 504 plan may be
  modified those revisions must ensure that the
  student will continue to receive FAPE.
• (Modified August 3, 2012)

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IDEA ALLOWABILITY RULES
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Allowable Uses of Funds under IDEA

• Child Find Obligation
• Staff Trainings
• Evaluations
• IEP Services
• Special Education Coordinator
• Service Providers
• Special Education Teachers
• Equipment and Supplies
• Coordinated Early Intervening Services

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Coordinated Early Intervening Services (CEIS)

• Set-aside up to 15 of Part B allocation to
  develop implement coordinated CEIS
• 15 Required if Significantly Disproportionate!!
  (Defined by the SEA)
• Eligibility
• Students who are NOT currently identified, and
• Who need additional academic and behavioral
  support to succeed in a general education
  environment
• For students in kindergarten through Grade 12
  (focus on K-3rd Grade)
• May be used in RTI system (depending on level)
• 34 CFR 300.226

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SPP University and Fiscal 101 Beta Test Feedback
Submission

• Fiscal 101 For Part B Understanding IDEA Funding
  Requirements
• 4 Courses
•  Introduction and Overview of Part B
•  Federal Fiscal Requirements
•  Timely Obligation, Liquidation, and Distribution
  of Federal Funds
•  Ensuring the Allowable Use of Federal Funds at
  the State Level and Summary
• http//www.sppuniversity.org/

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Allowability According to SPPU

• Advisory Councils? YES
• Audit Costs and Related Services? YES
• Attorneys Fees to the Attorneys of a Prevailing
  Parent in Due Process? YES
• Entertainment Costs? NO
• Lobbying? NO
• Professional Services Costs? YES
• Rearrangement and Alteration of Facilities Costs?
  YES
• Taxes? YES
• Training Costs? YES
• Travel Costs for Personal Business? NO

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Attorneys Fees NOT ALLOWABLE!!!

• 34 C.F.R. 300.517
• Funds Under Part B of the Act may not be used to
  pay attorneys fees or costs of a party related
  to any action or proceeding under section 615 of
  the Act and subpart E of this Part.
• Section 615 Procedural Safeguards Section
  (includes due process hearings)
• Subpart E Procedural Safeguards (includes due
  process hearings)

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EDGAR Procurement Rules Section 80.36

• All procurement transactions must be
• conducted with full and open competition
• Follow Your Procurement Rules!!
• IDEA (B) requires preapproval for Equipment
  Purchases! (34 CFR 300.718)
• IDEA definition includes instructional equipment,
  books, periodicals, documents, and other related
  materials
• ARRA IDEA Guidance uses EDGAR definition for
  pre-approval

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Procurement According to SPPU

• In many cases, files lack documentation
• Didnt check whether vendor was suspended or
  debarred
• Sole source purchase without justification
• Purchase over 5,000 was made without grantor
  approval, etc.
• Prove
• Purchase was allowable
• Result would have been the same had the proper
  procedures been followed
• No harm to the federal interest and
• Evidence that the same process errors are not
  recurring.

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Time and Effort Documentation
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OMB Circular A-87 Federal Cost Principles

• 43 Specific Items of Costs detailed (alphabetical
  order)
• Example Salaries and Wages
• Allowable if proper time distribution records
• Single Cost Objective Semi-annual certification
• Multiple Cost Objectives PAR Report

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WHO MUST PARTICIPATE?

• Any employee who is working on a federal program
• Not contractors
• All employees paid with federal funds
• Some employees paid with non-federal funds

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Time and Effort according to SPPU

• Time and Effort is what is commonly referred to
  as a cross-cutting finding, but it can also
  occur in situations that involve employees who
  are paid solely out of IDEA funds..
• If the employee works on more than one grant
  award, then there must be personnel activity
  reports.
• Getting Closer!

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Personnel Costs

• Type of documentation depends on how many cost
  objectives the employee worked on
• These cost objectives must be connected to the
  employees salary source
• What is a cost objective?
• A specific grant award, or other category of
  costs, that requires the grantee to track
  specific cost information

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IDEA, Part B Cost Objectives

• SEA-Level
• IDEA Part B State-level Administration for Part B
• IDEA Part B State Administration for Part C
• Other State-level activities

• LEA-Level
• Administration (as applicable)
• IDEA Part B program
• Coordinated Early Intervening Services (CEIS)
• Equitable Services Proportionate Share

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New Time and Effort Guidance by OCFO!!
http//www2.ed.gov/policy/fund/guid/gposbul/time-a
nd-effort-reporting.html
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OCFO Guidance

• It is possible for multiple programs to have the
  same cost objective, which creates confusion over
  whether the presence of a single cost objective
  or being funded by multiple programs should
  determine what time-and-effort documentation and
  employee must complete.

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OCFO Guidance (cont.)

• It is possible to work on a single cost objective
  even if an employee works on more than one
  Federal award or on a Federal award and a
  non-Federal award.
• The key to determining whether it is a single
  cost objective is whether the employees salary
  and wages can be supported in full from each of
  the Federal awards on which the employee is
  working or from the Federal award along if the
  employees salary is also paid with non-Federal
  funds.

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IDEA OCFO Guidance Examples of Single Cost
Objectives

• Funds under Sections 611 and 619 of the
  Individuals with Disabilities Education Act
  (IDEA)
• A preschool special education teacher is funded
  with 50 percent IDEA section 611 funds and 50
  percent with IDEA section 619 funds.
• Teaching preschool special education is an
  allowable activity under both IDEA sections 611
  and 619.
• Accordingly, the teacher is performing a single
  cost objective even though she is supported with
  funds from two separate Federal awards
  therefore, she need only file a semiannual
  certification.

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IDEA OCFO Guidance Examples of Single Cost
Objectives

• Title I, Part A funds and CEIS (comprehensive
  early intervening services) funds under IDEA
• A teacher works with low-achieving students and
  is supported with 60 percent Title I, A funds and
  40 percent CEIS funds.
• Teaching low-achieving students is a single cost
  objective because it can be fully supported under
  both Title I, A and CEIS.
• Only a semiannual certification, therefore, is
  required even though the employees salary is
  supported by two Federal awards.

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Time and Effort Questions

• A special education teacher spends 100 of her
  time working with students with disabilities, but
  is paid 50 with IDEA, Part B funds and 50 with
  State funds.
• Semi-annual or PAR??

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Time and Effort Questions

• A general education teacher provides coordinated
  early intervening services (CEIS) in 3 out of her
  7 classes this year.
• Semi-annual or PAR??

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Time and Effort Questions

• A general education teacher provides coordinated
  early intervening services (CEIS) one day when
  the CEIS teacher is absent.
• Semi-annual or PAR??

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Time and Effort Questions

• A school counselor spends 25 of her time
  providing general counseling services and 75 of
  her time providing counseling services under
  IEPs.
• Semi-annual or PAR??

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IDEA, Part B State and Local Maintenance of Effort
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State Maintenance of Effort (MOE)

• A State must not reduce the amount of State
  financial support for special education and
  related services for children with disabilities
  below the amount of that support for the
  preceding fiscal year.
• Must use ALL State funds!!
• May not use Medicaid reimbursements towards SEA
  MOE requirements.

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Grant Application FY 2013 MOE Section

• Compute how much is spent each year on special
  education and related services
• Monitor spending for children with IEPs by other
  state agencies
• Include a grand total for the application
• Previously, States only affirmed that they were
  in compliance with MOE requirements

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State MOE Waiver

• IDEA Waiver ONLY applies to State MOE! (not LEA
  MOE)
• ED may waive SEA MOE (for one FY at a time) if ED
  determines that a waiver would be equitable due
  to
• Exceptional or uncontrollable circumstances such
  as a natural disaster or a precipitous
  unforeseen decline in State financial resources
  or
• The SEA meets Supplement Not Supplant Waiver
  Requirements. IDEA Regs 300.163(c) and 300.164
• Does not reduce State MOE for subsequent years

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State MOE Waiver (cont.)

• ED wants to make sure any reduction in State SPED
  funds is not greater than the reduction in
  revenues experienced by the State (SPED treated
  equitably).
• Factors considered
• States revenues and extent of decrease based on
  exceptional or uncontrollable circumstances
• States total appropriations for current versus
  prior year
• States appropriations for other agencies
• States compliance with Implementing IDEA, Part B
  and performance record
• Other available funds to mitigate effects of
  waiver

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Failure to Meet State MOE

• Consequences for failure to maintain support
• ED reduces allocation for any FY following the FY
  in which the State fails to comply.
• Reduction is the same amount by which the State
  fails to meet the requirement.
• Following year reverts back to previous level of
  effort.
• Ability of SEA to reduce its MOE is VERY
• RARE!

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Local-level Maintenance of Effort (MOE)

• An LEA may not use its Part B funds 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.
• (IDEA Regs Section 300.203(a))

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Local-level MOE (cont.)

• Four ways to calculate Local MOE
• Comparison of total expenditures using local
  funds only,
• Comparison of total expenditures using state and
  local funds,
• Comparison of the per pupil amount using local
  funds only, or
• Comparison of the per pupil amount using state
  and local funds.
• (IDEA Regs Section 300.203(b))

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Local-level MOE Reductions

• Allowable reductions
• Voluntary departure of special education or
  related services personnel
• A decrease in the enrollment of children with
  disabilities
• The assumption of cost by the SEAs high cost
  fund
• An exceptionally costly child has left the
  agencys jurisdiction, aged out of the
  eligibility age-range, or no longer needs the
  program of special education, or
• The termination of costly expenditures for
  long-term purchases, such as the acquisition of
  equipment.
• (IDEA Regs Section 300.204)

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Local-level MOE - Optional Flexibility

• If there is an increase in the LEAs allocation,
  compared to the previous FY allocation,
• Then the LEA may reduce the level of expenditures
  otherwise required by not more than 50 of the
  amount of excess in allocation,
• But the LEA must use an amount of local funds
  equal to the MOE reduction to carry out
  activities that could be supported with ESEA
  funds, regardless of whether the LEA is using
  ESEA funds for those activities. (IDEA Regs
  Section 300.205)
• This will reduce next years MOE as well!

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Local-level MOE - Optional Flexibility (cont.)

• Flexibility may be unavailable if
• SEA determines that LEA is unable to establish
  and maintain programs of FAPE that comply with
  Part B and 613(a) or
• The SEA took action against an LEA under 613(a)
  of IDEA
• SEA has taken action against an LEA under 616
  and
• subpart F of regulations or
• LEA is identified as significantly
  disproportionate.

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Local-level MOE - Optional Flexibility CEIS

• The amount of LEA MOE reduction that an LEA can
  take is affected by an LEAs use of Part B funds
  for coordinated early intervening services
  (CEIS).
• Therefore, must subtract any CEIS set-aside from
  any potential LEA MOE reduction!

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Local-level MOE (cont.)

• Consequences for violation SEA can not reduce an
  LEAs current or future allocation.
• ED would handle an LEA MOE violation by seeking a
  recovery of funds from the SEA.
• The level of recovery would depend on the degree
  to which the LEA failed to maintain effort, but
  would not exceed the amount of the LEAs subgrant
  for the year in question. (See OSEP policy
  letter, July 26, 2006, to Carol Ann Baglin on
  www.bruman.com )
• Up to SEA to recover funds from LEA.

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Local-level MOE (cont.)

• Consequences for violation
• The LEAs MOE requirement reverts to the level
  set the last time the LEA met MOE!
• Letter to the Center for Law and Education,
  Kathleen Boundy, dated April 4, 2012 on
  www.bruman.com
• Rescinds previous Letter to NASDSE Executive
  Director Bill East, dated June 16, 2011.
• What about LEAs that relied on June 2011 letter
  to reduce effort levels???

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Supplement not supplant
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IDEA, Part C MOE/SNS

• Under Part C, the lead agency meets the
  Supplement Not Supplant requirement if it meets
  MOE
• The total amount of State and local funds
  budgeted for expenditure in the current fiscal
  year for early intervention services must be at
  least equal to the total amount of state and
  local funds actually expended for early
  intervention services in the most recent
  preceding fiscal year for which information is
  available.
• .
• No Waiver Authority.
• Notice of Proposed Rulemaking to address Part C
  MOE/SNS flexibility??

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Treatment of Funds - IDEA Part C

• Federal Funds Reimbursements from federal
  finds (e.g., Medicaid) is not state and local
  funds for purposes of MOE. Section 303.520(d)(2)
• Private Insurance Private insurance is not
  considered State or local funds for MOE purposes.
  Section 303.520(d)(3)
• However, if a State has enacted a statute
  regarding the use of private health insurance
  coverage to pay for early intervention services
  under Part C, the State may reestablish a new
  baseline of State and local expenditures in the
  next Federal fiscal year following the effective
  date of the statute. Section 303.520(b).
• Family Fees Funds from a parent or family
  member under the States system of payments
  established under 303.521 are considered program
  income under 34 CFR 80.25. These funds are
  considered neither State nor local funds for MOE
  purposes under 303.225(b). Sections 303.520(e)
  and 303.521(d)(2) .

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Sea Supplement Not Supplant

• Part B funds must be used to supplement and
  increase the level of Federal, state and local
  funds expended for special education and related
  services provided to children with disabilities,
  and in no case supplant those Federal, State and
  local funds.
• A state may use funds it retains for state admin
  and other state-level activities without regard
  to the prohibition on supplanting other funds
• 34 CFR 300.164

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Lea Supplement Not Supplant

• Part B funds must be used to supplement state,
  local and other Federal funds (used for providing
  services to children with disabilities).
• If LEA meets MOE, then LEA meets supplement /not
  supplant requirements
• No particular cost test
• ARRA Guidance, April 2009
• 34 CFR 300.202

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LEA Supplement Not Supplant (cont.)

• Notwithstanding 300.202 (SNS), 300.203 (MOE), and
  300.162 (Commingling), fund provided to an LEA
  may be used for
• Services and aids that also benefit nondisabled
  children
• Early intervening services
• High cost special education and related services
• 34 CFR 300.208

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CEIS and Supplement Not Supplant

• CEIS must supplement any ESEA activities or
  services. 34 CFR 300.226(e)
• Model example
• CEIS and local funds serve total population
  CEIS for eligible CEIS students
• Title I provides Response to Intervention to
  Title I students and CEIS supplements

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Supplement Not Supplant (cont.)

• IDEA, Part B funds must be used to supplement and
  not supplant State, local, and other Federal
  funds.

Exceptions to SNS Exceptions to SNS
State Administrative Set-Aside IDEA Regs 300.704(d)
Other State-Level Activities Set-Aside IDEA Regs 300.704(d)
Equitable Services (reverse supplement not supplant) IDEA Regs 300.133(d)
Services and aids that also benefit nondisabled children IDEA Regs 300.208(a)(1)
Early Intervening Services IDEA Regs 300.208(a)(2)
High Cost Fund IDEA Regs 300.208(a)(3)
Administrative Case Management IDEA Regs 300.208(b)
Schoolwide Funds (only amount consolidated) IDEA Regs 300.206(a)
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Charter Schools and idea
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Charter Schools within the district

• Charter schools that are public schools within
  the LEA. The LEA must
• Serve students and provide supplementary and
  related services onsite to the same extent as the
  policy or practice of providing services to other
  public schools and
• Provide funds to charter schools
• On the same basis as other public schools, and
• At the same time
• 34 CFR 300.209(b)

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Charter Schools - LEA

• Public charter schools that are LEAs The
  charter school is responsible for ensuring that
  the requirements of IDEA are met, unless state
  law assigns the responsibility to some other
  entity. 34 CFR 300.209(c).
• Local educational agency or LEA means a public
  board of education or other public authority
  legally constituted within a State for either
  administrative control or direction of, or to
  perform a service function for, public elementary
  or secondary schools in a city, county, township,
  school district, or other political subdivision
  of a State, or for a combination of school
  districts or counties as are recognized in a
  State as an administrative agency for its public
  elementary schools or secondary schools. 34 CFR
  300.28.

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Charter schools - other

• Public charter schools that are not an LEA or a
  school that is part of an LEA.
• If the public charter school is not an LEA
  receiving funding under Sec. 300.705, or a school
  that is part of an LEA receiving funding under
  Sec. 300.705, the SEA is responsible for ensuring
  that the requirements of this part are met.
• 34 CFR 300.209(d)

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Charter School Funding

• LEA Charter schools
• State must allocate IDEA funds to all eligible
  LEAs, including public charter school LEAs,
  according to 300.705 base payment plus remaining
  (85 based on CWDs and 15 based on poverty)
• The SEA must ensure that any opening or
  significantly expanding charter school district,
  (including any statewide charter school district)
  receives its allocation within five months of the
  date the charter school district opens or
  significantly expands its enrollment. 34 CFR
  76.793.
• Charter schools within LEA
• LEA must allocate funds consistent with local
  policies and practices, similar to any other
  public school.
• Other charter schools SEA responsibility???

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Questions?
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Disclaimer This presentation is intended solely
to provide general information and does not
constitute legal advice.  Attendance at the
presentation or later review of these printed
materials does not create an attorney-client
relationship with Brustein Manasevit, PLLC. 
You should not take any action based upon any
information in this presentation without first
consulting legal counsel familiar with your
particular circumstances.