Excess Costs

IDEA-B Requirement

Texas Education Agency (TEA)

Code of Federal RegulationsDefinitionPurposeCalculation Tool and InstructionsSummaryReferencesResources

Excess Costs -- Topics

Part B Excess Costs – IDEA Requirement

34 CFR §300.202 (a)(2)

IDEA-B funds must be used only to pay excess costs of providing special education and related services for children with disabilities

Part B Excess Costs – Definition

34 CFR §300.16

LEA costs to educate a student with disabilities in excess of the average annual per-pupil expenditure (APPE) during the preceding school year

LEAs must:

Calculate, expend, and document expenditures of funds for the education of students with disabilities in elementary and secondary schools

Annually calculate separately for elementary and secondary students

What does this mean for LEAs?

Prevents an LEA from using IDEA-B funds to pay for all of the costs to educate a student with disabilities

Ensures students with disabilities receive general education support to which all students are entitled

Ensures federal IDEA-B funds are used to supplement general education support

Purpose: Why is the Excess Costs Calculation Important?

To be eligible for IDEA grants, LEAs certify compliance in the SPED Consolidated grant application’s CS7000 schedule

Audited in the A-133 single audit compliance supplement

Calculation and documentation must be maintained by the LEA and made available to auditors and/or federal fiscal review monitors

Purpose: Why is the Excess Costs Calculation Important? (continued)

Step 1: Calculate APPE for immediate prior year – gather:◦ Elementary

Expenditure data Enrollment data

◦ Secondary Expenditure data Enrollment data

Step 2: Calculate amount required to be spent in current year – gather:◦ Elementary

Prior Year APPE Current enrollment

◦ Secondary Prior Year APPE Current enrollment

Excess Costs Calculation – 2 Steps:

Calculation ExampleSeparate for Elementary and Secondary

Step 1 - Determine Immediate Prior Year APPE

Elementary

Secondary

State and Local – All sources $6,500,000 $7,400,000

Federal funds – All sources $600,000 $750,000

Total $7,100,000 $8,150,000

deduct Capital Outlay ($40,000) ($30,000)

deduct Debt Service ($20,000) ($15,000)

Total Adjusted $7,040,000 $8,105,000

deduct Expenditures for:

IDEA Part B ($200,000) ($130,000)

ESEA Title I, Part A ($250,000) ($220,000)

ESEA Title III, Parts A & B ($50,000) ($43,000)

State and local funds for students with disabilities

($500,000) ($350,000)

State and local funds for programs under ESEA Title I, Part A and ESEA Title III, Parts A & B

($150,000) ($80,000)

Final Adjusted Total $5,890,000 $7,282,000

Step 1 continued- Determine Immediate Prior Year APPE

Elementary

Secondary

Final Adjusted Total $5,890,000 $7,282,000

Average number of Enrolled Students – immediate prior year

/800 /600

Prior Year APPE $7,632 $12,136

Step 2 - Determine Excess Cost Requirement

Elementary

Secondary

Prior Year APPE $7,632 $12,136

Current-year enrollment of students with disabilities - October snapshot

X 100 X 75

Excess Cost RequirementMinimum amount to be spent on students with

disabilities with fund sources other than IDEA-B$736,200 $910,200

Calculation Tool and step-by-step instructions available on TEA’s Excess Cost Guidance webpage

http://www.tea.state.tx.us/index2.aspx?id=2147499857 Type “Excess Cost Guidance” and click

Search button

Excess Costs Calculation Tool

Excess CostQuestion and Answer (Q & A)

Is excess costs the same as MOE? No, excess costs and MOE are two distinctly

separate IDEA requirements:◦ Excess costs – LEA must spend at least as much on

the education of students with disabilities as it spends on students without disabilities (student: student comparison) before spending IDEA funds

◦ MOE – LEA must spend at least as much local or state/local funds on the education of students with disabilities as it spent in the prior year (year:year comparison)

Excess Cost Q & A

What about members of an SSA – where can they find their expenditure data? In addition to LEA expenditures, member

districts of a Special Education SSA include expenditures paid on behalf of the LEA.

Request the “Actual Amount Expended on Behalf of Member District” from the SSA fiscal agent (reported via PEIMS record 033).

Ensure “expenditures on behalf” are included when conducting the excess cost calculation.

Excess Cost Q & A

Does the LEA submit the excess costs calculation to TEA? No, currently there is not a reporting

requirement to TEA for excess costs, however the LEA should maintain local documentation of its excess costs calculation. 

Documentation of the excess cost calculation should be available to your independent auditor and/or other monitors if requested during on-site visits. 

Excess Cost Q & A

Does the LEA use amounts received in the excess cost calculation? No, only expenditures are used in the excess

cost calculation when determining the average annual per pupil expenditure. Funding amounts received or allocations awarded are not in the excess cost calculation.

Excess Cost Q & A

I cannot track all of my expenditures directly to Elementary and Secondary programs. How do I proceed with reporting those expenses? As a rule of thumb, where you can specifically

identify costs with either elementary or secondary, you must do so. If not, the LEA may prorate by the ratio of students in each.

Excess Cost Q & A

What is the consequence for not meeting excess cost? Public Law 108-446, Section 613(d)(1) indicates

that if TEA determines an LEA is not complying, after reasonable notice, it shall reduce or shall not provide any further payments to the local educational agency...until the TEA is satisfied that the LEA is complying with the requirement.

Excess Cost Q & A

Summary of Major Points

Summary of Major PointsIDEA-B Excess Cost Requirement

Multiply APPE from immediate prior year by current year child count

Include all Federal, State, and local funds in the total expenditures and back out (deduct) only the Federal, State, and local funds indicated in the formula

SSAs: Individual LEAs responsible for calculation and maintaining record of compliance (not Fiscal Agent)

LEAs must calculate separately for elementary and secondary students

Designation of grade levels as elementary or secondary should follow local policy

Summary of Major PointsIDEA- B Excess Cost Requirement

34 CFR 300.16 34 CFR 300.202 (a-b) 34 CFR Appendix A to Part 300 34 CFR 80.26 OMB Circular A-133 Letter to Kennedy, OSEP, 9/25/09 Letter to Plagata-Neubauer, OSEP, 4/8/08

References

Visit the Excess Cost Guidance website:In TEA’s search engine type Excess Cost

For questions, please send an email to: Compliance@tea.state.tx.us

Resources for More Information