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High Cost Fund (HCF) for 2014-2015


State Plan

During the 83rd Texas Legislative Session (2013), the Legislature appropriated funds for the Local Educational Agency Risk Pool, Rider 36. These high cost funds (HCF) are to assist local education agencies (LEAs), including school districts and charter schools, in addressing the needs of "high need children with disabilities" and the financial impact on the budget of the child’s LEA. The Legislature further clarified that the use of these funds by school districts and charter schools must not violate the least restrictive environment (LRE) requirements of Individuals with Disabilities Education Act (IDEA) 2004, as addressed in 34 CFR §300.114. 

The State will reserve ten percent of the amount of funds reserved for other State-level activities under 34 CFR §300.704 (b)(1). These funds will not be used for costs associated with establishing, supporting, and otherwise administering the program. These funds remain under the control of the State until disbursed to an LEA to support a specific child.

Definition of a High Need Child with a Disability:

A high need child with a disability has a significant financial impact on the budget of the LEA due to the high costs associated with providing direct special education and related services.  The costs of each high need child must be greater than three times the average per pupil expenditure (APPE), as defined in section 9101 of the elementary and secondary education act (ESEA), to meet eligibility requirements for a HCF award. The current APPE for Texas is $8,685. A high need child with a disability would therefore cost the district more than $26,055. Only costs associated with providing direct special education and related services to the child that are identified in that child’s IEP are to be considered in determining whether a child is a high need child. To determine whether a child is a high need child, LEAs may track expenses from the beginning of the school year or the date the services begin in the case of a student who enrolled after the first day of school.

LEA Eligibility Criteria:

An LEA may request an HCF award provided that the LEA:

  • Has not violated the least restrictive environment requirements of IDEA of 2004;
  • Has not lapsed IDEA-B Formula or Formula Deaf funds from the previous school year; and
  • Does not carry over/roll forward 60% or more of its IDEA-B formula funds from the previous year.

HCF Eligibility Application: 

The HCF Eligibility Application must be submitted by the Special Education Director or a designee. If the district is a member of a shared services arrangement (SSA), the application must be submitted by the SSA Fiscal Agent. The application will be available to LEAs on Monday, November 10, 2014 and will remain open until Friday, December 19, 2014.

A Texas Education Agency Secure Environment (TEASE) account is required in order to access and submit the application. For information on how to apply for a TEASE account or for assistance regarding TEASE issues, access TEASE HELP or email Only one submitter per LEA or SSA is allowed.

Use of Funds: 

  • The costs associated with educating a high need child with a disability are only those costs associated with providing direct special education and related services to the child that are identified in that child’s IEP, including the cost of room and board for a residential placement determined necessary, consistent with the least restrictive environment requirements of IDEA 2004 (34 CFR 300.114), to implement a child’s IEP. The HCF team may request a copy of a child’s IEP if there are questions about cost items submitted in the application.
  • Eligible LEAs receive discretionary residential funds to assist with the costs for students with disabilities who are served in residential care and treatment facilities. Therefore, disbursements from the High Cost Fund for the cost of residential care and treatment will be limited to a portion of the LEAs’ 25% residential set aside amount being used for the specific high need student.
  • These costs must be incurred during the 2014-2015 school year.
  • The High Cost Fund must not be used to limit or condition the right of a child with a disability who is assisted under Part B of the Act to receive a free appropriate public education (FAPE) in the least restrictive environment (LRE) pursuant to section 612(a)(5) of the Act.
  • The High Cost Fund must not be used to support legal fees, court costs, or other costs associated with a cause of action brought on behalf of a child with a disability to ensure FAPE for such child.
  • The High Cost Fund must not be used to pay costs that otherwise would be reimbursed as medical assistance for a child with a disability under the State Medicaid program under Title XIX of the Social Security Act.
  • High cost funds are student specific and must be used only to provide the services listed in the application for that student. No other activities are may be supported by the use of high cost funds.
  • Allowable costs:
    • High Cost funds are child-specific, not program-specific. The pre-populated cost items in the Non-Residential section of the HCF Eligibility Application are allowable if identified in the child’s IEP.
    • Salary of special education teachers and related services personnel who provide services identified in the IEP must be pro-rated. Use the pro-rating tool located in the "Additional Resources" section of the Help file.
    • If a bus aide is required specifically for the high need student and is identified in the child’s IEP, the aide’s salary is allowable with High Cost funds and may be pro-rated if the aide is required for more than one high need student on the bus.
    • Write-ins (other costs) will be evaluated by TEA staff for allowability.
    • All cost items must be clearly identified in the child’s IEP
  • Unallowable costs:
    • Indirect costs.
    • The pro-rated salary of a bus aide, who is assigned to a bus regardless of whether a high need student is a passenger.
    • Diagnostic evaluations.
    • Group therapy.
    • Services provided by an LSSP or social worker unless specifically identified in the child’s IEP.


34 CFR §76.731, Education Department General Administrative Regulations (EDGAR), requires States and LEAs to maintain records to show compliance with program requirements. LEAs must create and maintain adequate and sufficient documentation for all HCF expenditures. If the LEA chooses to use the funds for salaries, the appropriate time and effort and/or certification reports will be required. By submitting the application the LEA agrees to submit the HCF student’s IEP and any supporting documents when requested by TEA. IEPs and supporting documents will be submitted through a secure email system that requires a login name and password.

Calculation of the Award Amount

Approved costs in excess of $26,055 will be considered for funding as follows:

  • Adjusted Allotment and SHARS reimbursements, if applicable, will be subtracted from the submitted costs for non-residential students.
  • State funds received through the SPE-106 submission process and SHARS reimbursements, if applicable, will be subtracted for non-public day school students.
  • An amount over the 25% residential set-aside amount will be subtracted for residential students.

The final award will be dependent on the amount of funds requested statewide and the amount of funds available.

Notification of Status

After the HCF Eligibility Application has been submitted to the TEA, the TEA Division of Federal State and Education Policy will begin its review process. Once all applications have been reviewed for eligibility, the award amount will be determined.
An award letter or denial letter will be generated and mailed to the Superintendent of the Single Member District or to the Superintendent of the Fiscal Agent of a SSA. A copy of the letter will be mailed to the Special Education Director of the LEA and to the Special Education Contact of the Education Service Center (ESC).

The deadline to submit the eGrants application is July 15, 2015. Once this eGrants application has been reviewed and approved by TEA, the HCF Notice of Grant Award (NOGA) will be generated.


The HCF Eligibility Application (to request an award) must be submitted electronically by 11:59 pm December 19, 2014. All HCF Eligibility applications received by this deadline will be considered for a High Cost Fund award, subject to eligibility criteria. HCF Eligibility applications received after the deadline will not be considered for a HCF award.

The deadline to submit the eGrants IDEA-B Discretionary High Cost Fund (SPED AH15) application (to budget the funds) is July 15, 2015.

Technical Assistance Contact Information:

(512) 463-9414 | High Cost Funding Team or email
TEA SE Support or e-mail
ESC Special Education Contact at your regional education service center
(512) 463-7025 | eGrants Help Desk or e-mail


Page last modified on 9/16/2014 01:02:44 PM.