Montana Office of Public Instruction Denise Juneau, Superintendent opi.mt.gov Special Education...

Montana Office of Public Instruction Denise Juneau, Superintendent opi.mt.gov

Special Education Funding

August 7, 2012


Agenda

• Part 1: Funding Sources and Budgeting Requirements

• Part 2: Reversion and Maintenance of Effort


Part 1: Funding Sources

• Block Grants, the Local Match, and the Minimum Amount to Avoid Reversion

• Reimbursement for Disproportionate Costs

• Special Education Tuition

• IDEA Part B and Preschool

• Medicaid

• Impact Aid


Special Education Funding SourcesState

Eligibility (ARM 10.16.3810)• A district has a special education program if it:

– has at least one resident student in its current fiscal year special ed child count ; -- or --

– Participates in a cooperative; -- or --– Has a written agreement with another school

district or cooperative to provide a special ed program if a student in need enrolls



Eligibility (ARM 10.16.3810) - continued• The following are not eligible if providing

education services under contract with OPI:– Residential treatment facilities– Children’s psychiatric hospital



Special Education Cooperative• full service education cooperative or joint

board (20-7-451, MCA) to provide special education services

• eligible for member districts’ RSBG and admin & travel costs if requirements in 20-7-457, MCA are met

• Allowable costs same as districts plus additional costs of operating the cooperative



General Principles (ARM 10.16.3804)• Funding based on legislative appropriation and current

year ANB• Local contributions (match) is required• Expenditure of funds limited to certain allowable costs to

provide services to children with disabilities, ages 3–21• Block grant system allows flexibility in methods within

allowable cost guidelines• OPI uses annual TFS to make determinations



Distribution of legislative appropriation (20-9-321, MCA and ARM 10.16.3811)– 52.5% to Instructional Block Grants

• Paid to school districts only

– 17.5% to Related Services Block Grants• Paid to school districts or cooperatives

– 25% to Disproportionate Cost Reimbursements• Paid to school districts only

– 5% to Admin & Travel• Paid to cooperatives only


Instructional Block Grant (IBG)

• 52.5% of legislature’s special ed allocation

• Funded on per-ANB basis (current ANB)

• Paid directly to district

• Part of BASE Budget

• Match required


Related Services Block Grant (RSBG)

• 17.5% of legislature’s special ed allocation

• Funded on per-ANB basis (current ANB)

• Paid to district, or if member, to the Coop

• Part of BASE Budget

• Match required


Reimbursement for Disproportionate Costs

• 25% of legislature’s special ed allocation

• Intended to reimburse those districts with unusually high special education costs

• Paid only to districts, not to Coops

• Part of Special Ed Allowable Cost Payment

• No requirement to spend on Special Ed costs


Disproportionate Cost “Threshold”

• The district is eligible for Disproportionate Cost Reimbursement in this FY based on the amount of SPED Allowable costs from 2 FYs ago

• Reimbursement is made for amounts above the threshold

• Reimbursement received TWO fiscal years after expenditures are made (i.e. if high costs in FY08, reimbursement in FY10)

• State pays .40 for every $1 spent above threshold


Does my District Qualify?

Disproportionate Costs Reimbursement is paid to districts with Special Ed costs exceeding the “Threshold.”

• “Threshold” for eligibility based on these factors:

– Legislative Appropriation X 25%– Special Ed Allowable Costs (expenditures) reported

two years ago (FY10 based on FY08 TFS)– Special Ed amount to avoid reversion two years ago– Calculation considers only districts that had Special

Ed expenditures greater than amount to avoid reversion


Transfers and Payments to Other Districts and Cooperatives

• ARM 10.16.3815 (4)• The following expenditures are not considered

in determining reimbursement for disproportionate costs:

– Special education money received as payment for services provided to other districts or cooperatives

– Special education money transferred from another district or cooperative



Administrative & Travel Cost Payment• Paid to special education cooperative• Distribution:

– 60% based on ANB counts of member districts– 40% based on:

• # of member districts• FTE for itinerant personnel• Current Year ANB of member districts• # of road miles within co-op boundaries


Coop Admin & Travel

• 5% of legislature’s special ed allocation

• 60% based on ANB counts of member districts

• 40% based on # of member districts, FTE for itinerant personnel, CY ANB of member districts and # of road miles within co-op boundaries



Quality Educator Payment (20-9-327, MCA)– Based on # of full-time equivalent educators

• Licensed educators• Licensed professionals

– Distributed to:• School Districts• Special Education Cooperatives• MT School for the Deaf & Blind• State youth correctional facilities• Montana Youth Challenge Program


Special Ed Tuition

• For Out-of-District Attendance Situations

• Regular Tuition Form (FP-14) and Special Tuition Form (FP-14A) required

• Regular Ed Tuition rates are limited by Montana Code Annotated (MCA)

• Special Ed Tuition rates have three options when calculated (Option A, Option B, and Option C)


Unique Costs

• If requesting an add-on payment under Option B

- Provide backup documentation to the entity you are charging

- Pro Rata Special Ed costs (i.e. salaries, benefits for entire special ed staff) are NOT unique to an individual student

- You are responsible to auditors in showing the add-on rates are legitimate



State Paid Tuition 20-5-321(d) and (e), MCA– OPI pays tuition and transportation costs for

non-resident students if:• the child is under the protective care of a state

agency or has been adjudicated to be a youth in need of intervention or a delinquent youth, as defined in 41-5-103, or

• the child is required to attend school outside of the district of residence as the result of a placement in foster care or a group home licensed by the state.


State Paid Tuition

• Deposit tuition receipts in General Fund (01)• Deposit transportation receipts in Transportation

Fund (10)• If tuition receipts for current FY exceed previous

FY, the excess can be deposited in the Misc. Programs Fund (15) using a unique project reporter code


• Unspent tuition receipts in Fund 15 as of June 30 must be transferred to the General Fund

• $$ transferred will increase end of year fund balance and will be subject to 10% operating reserve limit

• If reserves are full at year end, the excess will be re-appropriated to fund the BASE budget in the ensuing year

State Paid Tuition


Special Education Funding SourcesIDEA Part B

• Federal program

• “IDEA” = Individuals with Disabilities Education Act

• Coops receive allocations on behalf of member districts


Special Education Funding Sources Medicaid Reimbursements

• Administered by Dept. of Public Health & Human Services (DPHHS)

• DPHHS Contact: Rena Steyaert• Available programs

– Direct Services or Direct Care– Medicaid Administrative Claiming (MAC)– Comprehensive School & Community

Treatment (CSCT)



Direct Services or Direct Care• Requirements:

– Client/child qualifies for IDEA– Services are written into the IEP– Client/child must be Medicaid eligible

on the date of service– Client/child must be between ages of

3 and 20



Direct Services or Direct Care – cont’d• Examples of services:

– Private duty nursing– Personal care assistance– Psychotherapy and psych testing– Speech therapy– Comprehensive hearing test– Physical therapy– Occupational therapy– . . . and more



Medicaid Administrative Claiming (MAC)• Reimbursement for costs of administering

school-based health services and outreach activities that are not claimable under the Medicaid Direct Services program.

• Services include activities to locate, identify and refer individuals needing medical, dental or mental health related services after the initial IEP is developed.



Medicaid Administrative Claiming (MAC)• Random Moment Study (RMS)

– Measures work effort of staff involved in school’s medical and health related services

– Provides a statistically valid means of determining the portion of staff workloads applicable to reimbursable activities



Medicaid Administrative Claiming (MAC)• Participant List

– Direct, contract or part-time employees or others receiving pay from the school

– Must perform reimbursable activities– Does not include staff compensated 100%

from Federal funds or parent and volunteers that receive no compensation from the school



Medicaid Administrative Claiming (MAC)• Quarterly Financial Data Report

– For 1st, 2nd and 4th quarters– Generates reimbursement “invoice”

• Lists each participant and their salary and benefits for the quarter

• Lists other district-wide expenditures• Includes RMS form



Comprehensive School and Community Treatment (CSCT)

• Mental health services for children diagnosed with a Severe Emotional Disturbance (SED)– Service must be medically necessary– Service must be available to all qualifying children,

not just children eligible for Medicaid



Comprehensive School and Community Treatment (CSCT)

• School enters into a contract with a Mental Health Agency for mental health services– Program requires 2 mental health workers – a licensed

professional and a behavioral specialist– Types of services

• Individual, family and group therapy• Behavior intervention• Crisis intervention• Continued treatment during non-school days

(coordinated through contract)



Comprehensive School and Community Treatment (CSCT)• Reimbursement calculated using a Federal Medical

Assistance Percentage (FMAP)– Effective Oct. 1, 2008, FMAP increased from 68.04% to 76.29%– Retroactive adjustments – watch your Explanation of Benefits (EOB)

• $$ received must be passed through to the Mental Health Agency

• At the end of each calendar year:– Provide DPHHS with verification that reimbursement was passed

through to the Mental Health Agency– Provide DPHHS with match statement

• DPHHS notifies district of % required match in January• District can generate match statement in MAEFAIRS system


Special Education Funding SourcesImpact Aid

• Flat allocation based on CWD count, LOT percentage

• Must spend for special ed purposes• Funds may be accumulated from year to year• Counts toward reversion spending • Does not count toward IDEA Part B MOE• May access Retirement Fund (14) for

employer share of retirement costs for employees paid with Impact Aid funds


Part 2: Allowable Costs, Reversion and MOE

• Allowable Costs– State Funds– Federal Funds

• Reversion

• Maintenance of Effort


State Special Education Allowable Costs

Allowable costs (costs for special education programs)

•See 20-7-431, MCAInstructional servicesRelated services

•ARM 10.16.3806 instructional services•ARM 10.16.3807 related services •ARM 10.16.3808 cooperatives



Allowable costs do not include the entire cost of operating a special education programARM 10.16.3805 excludes:

- Employer contributions to TRS, PERS, FICA, and unemployment insurance- Admin, teachers or aides necessary to meet accreditation- Transportation (see also ARM 10.16.3820)- Most administrative support personnel- Overhead costs



Allowable expenditures to avoid reversion picked up from the following funds ARM 10.16.3813(2)(a):– General (01)– Metal Mines (24)– State Mining Impact (25)– Impact Aid (26)



Expenditure codes counted toward reversion: (Program) (Function) --(Objects)--

– 280 1XXX 1XX - 7XX– 280 21XX 1XX – 7XX– 280 221X 1XX - 7XX– 280 222X 1XX - 7XX– 280 24XX** 1XX - 2XX– 280 62XX 920

* * Only allowed if a certified special education director is employed.


IDEA Part B Funds

• Awarded annually• Grant period is July 1-June 30• Intended to supplement the cost for special

education services• Allocation based on base payment and

poverty/enrollment• Additional funding , supplemental flow-thru, is

allocated based on poverty/enrollment to assist districts with program improvement activities for students with disabilities.


IDEA Part B Funds Allowable: Cost of Delivering IEP Services

• Salaries of special education personnel• Equipment• Supplies/Materials• Personnel Training• Administrative costs of cooperative• Assistive technology/adaptive equipment• Transportation related to provision of special

education services• Construction or Alteration of facilities (additional

requirements)


IDEA Part B FundsAllowable Costs

Other considerations• IDEA grant must pay employer share of

retirement costs for employees paid with IDEA funds– TRS– PERS– FICA

– Unemployment • Carryover: 100% of current year award


Medicaid Reimbursements

• Deposit Medicaid receipts in Misc. Programs Fund (15)

• May be used for any school purpose (20-9-507, MCA)

• Expenditures coded to program 280 do not count toward IDEA Part-B MOE

• No deadline in which to spend money


State Special Ed Funding - Reversion

Coop member districts:

Instructional Block Grant

+ 1/3 Instructional Block Grant

+ 1/3 Related Services Block Grant

= Minimum Sp Ed Expenditures to Avoid Reversion

Non-member districts:


+ Related Services Block Grant
















Coop Member?Yes: RSBG Paid to Coop

No: RSBG paid to and budgeted for at the district level

Difference between Coop and Non-Coop













ALL Districts must match IBG and RSBG





Where is the RSBG?



Coop Member Prelim. Budget Data Sheet:

Coop member:RSBG Paid directly to Coop. District Still Matches RSBG

IBG always paid to district


Non-Coop MemberPrelim. Budget Data Sheet:

Non-Coop Member:RSBG Paid to District(RSBG Rate x ANB)


Prelim. Budget Data Sheet

Instructional Block Grant+ Related Services Block Grant (if NOT in coop)+ 1/3 Instructional Block Grant + 1/3 Related Services Block Grant

Minimum Expenditures to Avoid Reversion

Local Match


Reversion Expenditures

• Listed in 20-7-431, MCA

• Picked up from following funds:– General (01)– Metal Mines (24)– State Mining Impact (25)– Impact Aid (26)

• Expenditure codes counting toward reversion:– 280 1XXX 1XX - 7XX– 280 21XX 1XX – 7XX– 280 221X 1XX - 7XX– 280 222X 1XX - 7XX– 280 24XX* 1XX - 2XX– 280 62XX 920

* Salaries and benefits under function 24XX are only allowed if a certified special education director is employed.


Reversion Expenditures

• Listed in 20-7-431, MCA

• Picked up from following funds:– General (01)– Metal Mines (24)– State Mining Impact (25)– Impact Aid (26)

• Expenditure codes counting toward reversion:– 280 1XXX 1XX - 7XX– 280 21XX 1XX - 7XX– 280 221X 1XX - 7XX– 280 222X 1XX - 7XX– 280 24XX* 1XX - 2XX– 280 62XX 920

* Salaries and benefits under function 24XX are only allowed if a certified special education director is employed.

NOTE: Money and match sent to the coop is “Allowable Cost!”


Prelim. Budget Data Sheet

Reimbursement for Disproportionate Costs are NOT included in Minimum

Sped Expenditures to avoid Reversion


IDEA Part B FundsMaintenance of Fiscal Effort

Basic Requirement

*IDEA Part B Funds may not be used to

reduce the level of state/local or local fund

expenditures for special education below the

level of expenditures for the preceding fiscal year.


Maintenance of Effort Expenditures


How Does An Applicant Know If They Maintained Effort?

• OPI calculates MOE using the Trustees’ Financial Summary (TFS)

• OPI sends two reports to the Part B applicant

– Preliminary and Final

• Both Reports show

– expenditures for state/local funds

– allowed reduction and decrease in enrollment (calculates per capita)


Maintenance of Fiscal EffortAllowed Exceptions

1. Voluntary departure, by retirement or otherwise, or departure for just cause of special education personnel *

2. Decrease in enrollment of children with disabilities

3. Termination of the obligation of the district to provide a special education program to a particular child that is exceptionally costly (e.g., student left the district; no longer requires the special education program) *

4. Long-term purchases (i.e., equipment/ facilities)

* District must document to OPI


Maintenance of Effort Report

From TFS report

Allowable reduction = 50% of increase in allocation (excluding

supplemental flow-through)


IDEA Part B Maintenance of Effort

Allowable Reduction:

• If IDEA B allocation exceeds prior year allocation, applicant may treat as local funds up to 50% of the difference

• Must spend on qualifying Elementary and Secondary Education Act (ESEA) activities or Early Intervening Services (EIS)

• Not available to applicants that are not meeting FAPE (determined by OPI)


Allowable Reduction Example

FY10 IDEA, Part B Grant: $150,000

FY09 IDEA, Part B Grant: $100,000

Difference: $ 50,000

x 50%

Allowable reduction: $ 25,000

FY09 MOE expenditures: $ 80,000


FY10 MOE requirement: $ 55,000


Allowable Reduction…..Effect on Budget

FY10 IDEA-B Grant: $150,000



x 50%





FY10 Special Ed Budget:

IDEA Grant $150,000State/Local $ 55,000Total $205,000

FY09 Special Ed Budget:

IDEA Grant $100,000State/Local $ 80,000Total $180,000


Allowable Reduction….Spending Requirements




x 50%





Must spend on ESEA activities or

EIS


IDEA Part B Maintenance of Effort

Determining required spending level to maintain effort:

Prior year state and local expenditures

Less: Allowable Reductions

Less: Exceptions

= Required state & local spending levels


Similarities between Reversion and MOE

• Both look at state and local special education expenditures

• Expenditures are tracked for both via Trustees’ Financial Summary (TFS)

• Failure to meet requirements results in less special education funds for the district


REVERSION

*STATE Requirement

MOE

*FEDERAL Requirement

Affected fund(s) General (01) General (01)

Misc Programs (15)

Tracked by District District and Coop

Purpose Ensure local funds match state dollars (state law)

Ensure federal funds are not used to supplant

state/local funds

Inadequate spending results

in

Reduced state special ed allowable cost payment in

ensuing year

Repayment to OPI with local funds and OPI

Repays Feds

Basis for determination

ANB, legislative appropriation

(Block Grants)

Prior year state and local expenditures


Timeline

• 2nd Mon in Sept: TFS due *Taxable Values*

• November 20: OPI calculates preliminary MOE and notifies schools

• December 20: Last date for TFS changes

• January – February: OPI reduces state payment by reversion amount

• March: OPI reports final MOE status


Basic Concepts for Special Education Budgeting

1. Ensure spending is great enough to:• Meet State and Federal Requirements

2. After meeting requirements, promote current and future budget flexibility

• Accommodate current spending needs• Minimize state and local expenditures to reduce

future years’ special education spending requirements


Planning Your Special Education Expenditures

What about maximizing disproportionate cost reimbursement? Might not be a good idea, because:

• Reimbursement comes two years after expenditures

• Only 40% of costs above threshold are reimbursed

• Could possibly increase MOE requirements in future years…


Disproportionate Costs…..Why Not?

General Fund SpecialEd Expenditures

Do

llars

FY 08 District SPED Expenditures *Shown by funding source in FY 08*

Local $$

State $$

All of these Local $$$ expenditures could have significantly

impacted your MOE requirement for FY09



1. Budget enough in General Fund (state and local funds) spending to:

• Avoid reversion (PBDS)

**Impact Aid Fund (CWD Allocation)

• Maintain effort (Your Records, Program 280)

2. If you still haven’t met MOE requirements:• Budget Special Ed tuition (13), transportation

(10), retirement (14) expenditures, or fund (82) – if program code 280, it counts toward MOE



3. Exhaust IDEA Grant• Purchase special ed supplies first, as allowed

• Pay salaries, retirement costs as necessary

• Federal Funds; Will not increase MOE requirement

4. Spend Medicaid reimbursement• Will not increase MOE requirement



5. Use General Fund/Impact Aid Fund as necessary for remaining costs:

• Impact Aid won’t affect MOE

• General Fund will affect MOE

• Paying salaries from either fund allows access to the retirement fund (14) for the employer paid benefits, which will increase MOE requirement



17-2-108, MCA. Expenditure of non-general fund money first:

“…an office or entity of the executive, legislative, or judicial branch of state government shall apply

expenditures against appropriated non-general fund money whenever possible before using general fund

appropriations.”

See Legislative Auditors Use of Special Education Funds Report (2005)

http://www.leg.mt.gov/content/Publications/Audit/Report/05P-01B.pdf


Reversion and MOE

• Guess what? These requirements aren’t going anywhere.

• They both still apply as they always have.

• MOE has some flexibility, but reversion does not.


Reversion……Quick Review












Coop Member?Yes: RSBG Paid to Coop

No: RSBG paid to and budgeted for at the district level


Reversion….Expenditures that Count

Expenditures in the following funds: - General Fund (01) - Metal Mines (24) - State Mining Impact (25) - Impact Aid (26)

With these expenditure codes:

Program Function Objects280 1XXX 1XX - 7XX280 21XX 1XX - 7XX280 221X 1XX - 7XX280 222X 1XX - 7XX280 24XX** 1XX - 2XX280 62XX 920

* * Only allowed if a certified special education director is employed.


MOE…….Quick Review

*IDEA Part B Funds may not be used to

reduce the level of state/local or local fund

expenditures for special education below the

level of expenditures for the preceding fiscal year.


Maintenance of Effort Chart


Maintenance of Effort

• Factors affecting calculation of maintenance of fiscal effort

– Allowable exceptions

• Child count

• Departure of staff

• Departure of a high-cost student

• Long-term purchases end

– Required amounts are calculated as a roll up.

• “Stand-alone districts”

• Cooperatives

• Consortiums


OPI Support for Budgeting

• E-Grants– Kate Vatter 444-0864 ([email protected]) available for

assistance using the E-Grants application• OPI staff

– Dick Trerise 444-4429 ([email protected]) available to answer questions regarding procedural requirements when calculating maintenance of fiscal effort or completing budget applications

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