IDEA Maintenance of Effort (MOE) Requirements
Failure to maintain fiscal effort:
If an LEA fails to maintain fiscal effort, the LEA must refund to TEA an amount equal to the amount by which the LEA failed to maintain effort. If the amount exceeds the LEA’s IDEA-B Formula maximum entitlement for the non-compliant year, the LEA will only be required to refund an amount that equals the entitlement. This repayment must be made from non-Federal funds or from Federal funds for which accountability to the Federal government is not required.
Refer to the last paragraph of the USDE Memorandum OSEP 10-5 for documentation of the Federal requirement for repayment.
Maintenance of Effort Reduction
MOE Reduction - Voluntary Reduction Based on Flexibility Option 34 CFR §300.205
In accordance with 34 Code of Federal Regulations (CFR) §300.205, under certain circumstances, in any fiscal year that a Local Education Agency’s (LEA’s) subgrant allocation exceeds the amount that the LEA received in the previous fiscal year, that LEA may reduce the level of local, or state and local, expenditures otherwise required by the LEA maintenance of effort (MOE) requirements (34 CFR §300.203) by up to 50 percent of the increase in the LEA’s subgrant allocation.
Eligible LEAs should compare their previous year’s IDEA-B Formula entitlement to their current year IDEA-B Formula entitlement. If the LEA received an increase in entitlement, the LEA may be able to reduce their MOE level for the current year by up to 50% of the increase. If an LEA uses IDEA-B funds to provide coordinated early intervening services (CEIS) during the year of the reduction, the LEA must subtract the CEIS amount from the calculated reduction amount, thereby decreasing the amount the LEA may reduce MOE.
For determining eligibility to reduce the MOE level for the 2009-2010 school year, eligible LEAs compared their 2008-2009 IDEA-B Formula entitlement to their 2009-2010 IDEA-B Formula entitlement. The 2009-2010 entitlement was the total of both the LEA’s regular IDEA-B Formula entitlement and the LEA’s IDEA-B ARRA Formula entitlement. For determining eligibility to reduce the MOE level for the 2010-2011 school year, the LEA should compare their regular 2009-2010 IDEA-B Formula plus their IDEA-B ARRA Formula entitlement to their 2010-2011 IDEA-B Formula entitlement.
Once the LEA’s MOE is reduced, it becomes the new MOE level until such time when the LEA increases its state/local effort to support the special education program. For more information, refer to the USDE (United States Department of Education) guidance on MOE and ARRA funds, Section D6 - D12.
To be eligible to reduce MOE, all three of the following criteria must be met:
- The LEA must have an increase in IDEA-B Formula entitlement from the previous year
- The LEA must have a determination level of "Meets Requirements"
- The LEA cannot be identified as having significant disproportionality under 34 CFR §300.646
- If the eligible LEA chooses to take advantage of the flexibility option to reduce MOE, the LEA must spend the full amount of the ‘freed-up’ local, or state and local, funds on activities that are authorized under the Elementary and Secondary Education Act (ESEA) of 1965 and must spend the freed up funds on ESEA activities during the year the LEA reduces their MOE. Example: if the LEA expended $2,000,000 of local and state funds on special education and related services in 2010-2011 and lowered that amount by $500,000 in 2011-2012, the LEA must ensure that $500,000 is expended in 2011-2012 on activities allowable under the ESEA. In 2012-2013 and subsequent years, the LEA does not have to continue to separately “track” the $500,000 expended for ESEA activities.
- Eligible LEAs that choose to reduce their MOE based on the flexibility option must report the actual dollar amount of the reduction on the following year’s Special Education Consolidated Grant application (SPEDAA), BS6006 Budget Summary, Part 2 MOE Reduction section. The MOE reduction amount will be reported to the Federal government annually.
The LEA should only report the amount of the reduction based on the flexibility option of 34 CFR §300.205. The LEA should not report reductions to MOE based on exceptions indicated in 34 CFR §300.204 or due to failure to maintain effort.
The LEA will be instructed to select one of three choices in the BS6006 Part 2:
- The LEA did not meet the eligibility criteria to voluntarily reduce MOE for the previous year.
- The LEA was eligible to voluntarily reduce MOE for the previous year but did not exercise this option.
- The LEA was eligible to voluntarily reduce MOE for the previous year and exercised this option. If this selection is chosen, the LEA must also report the actual dollar amount of the reduction to MOE.
If the actual dollar amount is not known when the LEA submits the original Special Education Consolidated application, the LEA should report an estimate of the MOE reduction amount. It is imperative that the LEA submit an amendment later to report the actual dollar amount of the MOE reduction. The deadline to report the actual dollar amount is February 28.
LEAs that seek to reduce MOE based on the flexibility option of 34 CFR §300.205 and use some of their IDEA-B funds for coordinated early intervening services (CEIS) under §300.226 must do so with caution because the MOE reduction provision and the authority to use IDEA-B funds for CEIS are interconnected. The decisions that an LEA makes about the amount of funds that it uses for one purpose affect the amount that it may use for the other purpose. For examples that illustrate how §§300.205 and 300.226 affect one another, refer to Appendix D to Part 300 – Maintenance of Effort and Early Intervening Services.
MOE Reduction Based on Exceptions to MOE 34 CFR §300.204
Aside from the 50 percent reduction potentially allowed to LEAs under 34 CFR §300.205, LEAs may reduce their level of local, or state and local, expenditures below amounts expended in the prior year under 34 CFR §300.204 if such a reduction is attributable to any of the following:
- The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. Reductions in force do not qualify as an exception;
- A decrease in the enrollment of children with disabilities;
- The termination of the obligation of the LEA, consistent with IDEA-B, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the TEA, because the child:
a. Has left the jurisdiction of the agency;
b. Has reached the age at which the obligation of the agency to provide FAPE has terminated; or
c. No longer needs the program of special education;
- The termination of costly expenditures for long-term purchases, such as the acquisition of equipment; and/or
- The assumption of cost by the high cost fund under 34 CFR §300.704(c).
If an LEA reduces MOE based on these exceptions, that amount should not to be reported in the MOE Reduction section of the Special Education Consolidated Application (SPEDAA) BS6006 Part 2. The amount to be reported on the BS6006 only applies to reductions to MOE based on the flexibility option of 34 CFR §300.205.
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