Federal law requires that each local education agency (LEA) receiving federal funds from the No Child Left Behind Act of 2001 (NCLB) or the Individuals with Disabilities Education Improvement Act of 2004 (IDEA) must spend a certain amount of its local and state funds. This is referred to as maintenance of effort (MOE). TEA reviews the LEA's actual expenditures reported in the PEIMS to determine if the federal MOE requirement is met.
NCLB MOE Requirement
The amount of state and local funds spent per pupil or of the total state and local funds spent must at least be equal to 90% the total amount spent the previous year. If the LEA fails to meet the required NCLB MOE for the federal programs listed below, then TEA is required to reduce the amount of the LEA's allocation of NCLB funds by the same proportion.
MOE Forms (for completion by LEAs with preliminary determination of noncompliance)
Response to Determination (MS Word 25 KB)
2012 Form 1: Assertion of the Expenditure of Education Jobs Fund (Ed Jobs) Funds to Meet ESEA MOE Requirements (MS Excel 24 KB)
(a) Title I, Part A;
(b) Title I, Part B, Subpart 3;
(c) Title I, Part C;
(d) Title I, Part D;
(e) Title I, Part F;
(f) Title II, Part A;
(g) Title II, Part D;
(h) Title III, Part A;
(i) Title IV, Part A;
(j) Title IV, Part B;
(k) Title V, Part A; and
(l) Title VI, Part B, Subpart 2.
The state has no authority to waive the MOE requirement. However, the U.S. Secretary of Education may waive the MOE requirement if the Secretary determines that such a waiver would be equitable due to:
(i) Exceptional or uncontrollable circumstances such as a natural disaster; or
(ii) A precipitous decline in the financial resources of the LEA.
IDEA MOE Requirement
IDEA MOE Frequently Asked Questions (PDF, 47KB)
The amount of state and local funds spent per pupil or of the total state and local funds spent must at least be equal to the total amount spent the previous year. If an LEA fails to maintain fiscal effort, the LEA must refund to the 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.
Exceptions to MOE Requirement
LEAs may claim an exception to the IDEA MOE requirement for one or more of the following reasons:
(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 part, 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 (SEA), 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; or
(v) The assumption of cost by the high cost fund operated by the SEA.
Methods of Determining Compliance
In order to meet the IDEA, Part B, MOE requirement in any fiscal year, an LEA is required to expend state and/or local funds at 100% of the level at which it expended funds on special education in the preceding fiscal year. Federal law provides the following four methods for testing whether an LEA has met the IDEA, Part B, MOE requirement:
• The total amount the LEA expended in local funds must equal or exceed the amount it expended from that source for special education during the previous fiscal year.
• The per-pupil amount the LEA expended in local funds must equal or exceed the amount it expended per capita from that source for special education during the previous fiscal year.
• The total amount the LEA expended in state and local funds must equal or exceed the amount it expended from those sources for special education during the previous fiscal year.
• The per-pupil amount the LEA expended in state and local funds must equal or exceed the amount it expended per capita from those sources for special education during the previous fiscal year.An LEA only needs to pass one of the four tests to ensure compliance.
Consequences of Noncompliance
If an LEA fails all four tests, it will be notified of a preliminary finding of noncompliance and given the opportunity to respond with allowable exceptions. (See the Exceptions section, above.) If there are no allowable exceptions to explain the reduction in expenditures, the LEA will have the opportunity to submit information from its auditor explaining possible errors in reporting.
If an LEA’s MOE review indicates a reduction in expenditures without any allowable exception or adjustment to fiscal effort being claimed, the LEA must refund to TEA the amount by which the LEA failed to maintain effort. If the amount exceeds the LEA's IDEA, Part B, maximum entitlement for the noncompliant year, the LEA will only be required to refund the amount of the entitlement. This repayment must be made from non-federal funds or from funds for which accountability to the federal government is not required.
TEA’s Adopted Methodology
In order to comply with federal law, TEAs methodology was revised for the 2009–2010 MOE process to include all four methods of determining compliance.
Because TEA has not provided LEAs a “local only” fund code/net asset code, TEA applied the SpecialEd Adjustment Allotment [Current] amount in the LEAs Summary of Finances to determine compliance using local funds methods above. If the LEA expended more in state and local expenditures than their current [Current] SOF SpecialEd Adjusted Allotment this is presumed to be the “Local” funds amount used to support the special education program. If the LEA expended less in state and local expenditures than their current [Current] SOF SpecialEd Adjusted Allotment it is presumed that the LEA did not use any local funds to support the special education program.
In addition, the methodology was revised to include financial data from American Recovery and Reinvestment Act (ARRA), Title XIV, State Fiscal Stabilization Fund (SFSF), Fund 266, for 2008–2009 and 2009–2010. Please note that the PEIMS Edit+ reports LEAs may have used as a resource to determine MOE compliance did not include ARRA financial data.
The revised methodology now includes a distribution by formula of expenditures coded in Program Intent Code 99 (undistributed) and/or Organization Code 999 (undistributed) for Fund 266, ARRA, Title XIV, SFSF, in addition to the Fund 199 General Fund (or net asset code 420 for charter schools) allocations. These allocated expenditures distributed by formula, combined with the actual expenditures coded by the LEA to the General Fund and/or SFSF, Program Intent Code 23 (special education), represent the total allocated expenditures for special education in each school year.
Guidance in the TEA Financial Accountability System Resource Guide, section 22.214.171.124 Compliance Monitoring- Program Intent Codes, describes the formula-based allocation used for state and federal compliance monitoring purposes.
USDE guidance of June 16, 2011, and April 4, 2012
TEA used the attached June 16, 2011, USDE letter to determine MOE compliance for 2009-2010 and 2010-2011.
On April 4, 2012, USDE issued the attached letter rescinding the calculation procedures referenced in the June 16, 2011, letter.
Forms Addressing Preliminary Letter of Findings for 2009-2010
The following forms should be used to respond to a preliminary letter of findings issued to the LEA with regards to its compliance with the IDEA MOE requirement. The information provided by the LEA on these forms will be used by agency compliance staff to determine if an adjustment or exception should be applied to a LEA's decline in fiscal effort and/or if the LEA submitted erroneous financial data. The LEA should complete these forms only if the LEA received a preliminary letter of findings from agency compliance staff.
Form A: Response to Preliminary Letter of Findings (Word, 54KB)
Forms B-G: Adjustment and Exceptions to IDEA MOE Requirement (Excel, 242KB)
Forms A-G (PDF, 389KB)
Templates will be forthcoming
Templates will be forthcoming
For more information on the federal maintenance of effort requirements, please contact Norma Yanez in the Division of Federal Program Compliance.
Division of Federal Fiscal Compliance and Reporting
1701 N. Congress Avenue
Austin, Texas 78701