QUICK REFERENCE

Special Education Funding

©2012 Education Service Center Region XIII 1

QUICK REFERENCE

Special Education Funding

For staff members responsible for the budgeting and expenditure of special education funds. The Individuals with Disabilities Education Act (IDEA) outlines specific purposes for federal special education dollars and requires the expenditure of local and/or state funds prior to use of federal funds.

Included in this guide:

• Requirements for Local, State, and Federal Special Education Funds

• Funding Cycles and Indirect Costs

• Maintenance of Effort (MOE) Requirements, Calculations, and Noncompliance

• Excess Cost Requirements and Calculations

• Guide to Terms and Resources

2 ©2012 Education Service Center Region XIII

Special Education Revenue and Expenditures

Revenue Fund Source Purpose of Funds Revenue Based On

LOCAL Allowable expenditures Local tax collection

STATE Foundation School Program (FSP)

Tier I Allotments

Regular Program Allotment

Services, materials, supplies and equipment for ALL students

Attendance of ALL students minus Special Ed and CTE FTEs

Special Education Allotment

SUPPLEMENTAL special services, materials, supplies and equipment for students receiving special education as outlined in the student’s Individualized Education Program (IEP). Not for services, materials, supplies and equipment ordinarily purchased for the regular classroom

Weighted instructional setting codes, attendance of students receiving special education and the average hours per day for the instructional setting

FEDERAL

IDEA, Parts B and C

Formula

Preschool

Discretionary

Supplemental services for the excess cost of special education and related services for students with disabilities.

Extra, over and above state and/or local funds

Supplement, not supplant other federal, state and/or local funds

IDEA-B Formula and Preschool Revenue:

Base entitlement

Population of total LEA

Poverty of total LEA (Free and Reduced Lunch)

State Foundation School Program (FSP) Special Education Revenue

Average Hours/Day by Instructional Arrangement

× Days Per Week ÷ Hours Per Week = % of one FTE

% of one FTE ×Weighted Instructional Arrangement

= % of one Weighted FTE

% of one Weighted FTE × Adjusted Basic

Allotment = $ per Student

Chapter 41 school districts do not receive state special education funds. These districts must spend the equivalent in local funds as

though they were state special education funds.

©2012 Education Service Center Region XIII 3

State Funds Unique to Special EducationSpecial Transportation Fund 199

Specialized transportation services per the student’s Individualized Education Program (IEP) to access:• Academic Programs• Related Services• Extended School Year• Community-based life skills training

• Developmental, corrective and other supplementary supportive services including health exams, diagnostic testing, counseling, and therapy

Non-Educational Community-Based Support Fund 392State funds to support students at risk for, or returning from, residential placement for educational reasons. Services include:

• Respite Care*• Attendant Care*• Psychiatric/Psychological Consultation• Management of Leisure Time• Socialization Training• Individual support

• Family Support• Family Dynamics Training• Peer Support Group• Parent Support Group• Transportation to approved services

* Student with autism limited to respite and attendant care only

Extended School Year (ESY) Fund 199; SSA member districts file own dataState funds for services to eligible students based on regression and recoupment data. Fund are based on ESY contact hours submitted in the PEIMS Extended Collection 4.

Auditory and Visual Impairments AI: Fund 386 or 435 for SSA. VI: Fund 385 or 434 for SSA• State funds specific to auditory impairments

flow to Regional Day School Programs for the Deaf. Carryover of funds not allowed.

• State Supplemental Visually Impaired (SSVI) funds flow to the Texas School for the Blind/Visually Impaired and Education Service Centers (ESC) as outlined in ESC’s Regional Plan. Carryover of funds not allowed.

State Special Education ExpendituresDirect Costs

• LEA must spend at least 52% for the costs of direct special education services.

• Direct costs include: personnel, special materials, supplies, and equipment in IEPs and other Special Ed costs.

• Not for routine services or materials provided to all students.

• LEA may spend no more than 48% of state Special Ed allotment for indirect cost (IC).

• IC includes administrative costs: student transportation, general administration, facilities acquisition and construction, and other general fund activities.

• Carryover of funds is not allowed.

*Annually, LEA may choose to use greater indirect cost allotment if less funding per weighted student received in state and local maintenance and operations revenue than in 2011-2012.

*Increase in IC percentage may be no more than the percentage decrease in state and local maintenance and operating revenue from 2011-2012.

Indirect Cost2012–2013 and thereafter:52/48 or greater*

2011-12: 52/48

2010-11: 55/45

2009-10: 55/45

2008-09: 85/15

4 ©2012 Education Service Center Region XIII

IDEA-B Discretionary High-Cost Funds (HCF)

TEA awards funds for costs of services for a student with disabilities exceeding an amount set annually ($35,000). TEA may deny request if: 1. IDEA-B carryover 50% or more of entitlements; 2. Lapsed funds; or 3. Least Restrictive Environment (LRE) violations.

Federal Special Education Revenue

Individuals with Disabilities Education Act, Part B (IDEA-B)Purpose of Funds

Supplement (increase the level of services), not supplant (replace) other funds. State or local funds may not be decreased or diverted for other uses merely because of the availability of IDEA funds. Covers excess, not routine, costs of educating students with disabilities. Does not cover all costs directly attributable to the education of students with disabilities.

IDEA-B Formula and Preschool Entitlement Components

Base: Amount based on 1998 October PEIMS Special Ed Child Count (1996 for Preschool)

Population: 85% of federal dollars, remaining after base amount, calculated on the total number of ALL enrolled LEA students. (Enrollment on prior year’s October PEIMS Child Count)

Poverty: 15% of the federal dollars, remaining after base amount, calculated on the number of ALL LEA students living in poverty (Free and Reduced Lunch on prior year’s October PEIMS Child Count)

IDEA-B EntitlementsFund Source Ages LEA/SSA Fund Codes Applicant BASE POP POV

IDEA-B Formula

Formula Deaf

3–21

3–21

224/313

227/316

LEA

SSA FA

TSBVI

TSD

RDSPD

Y

Y

Y

N

Y

N

IDEA-B Preschool

Preschool Deaf

3–5

3–5

225/314

228/317

Y

Y

Y

N

Y

N

IDEA-B Discretionary

Residential3–21 226/315

LEA

SSA FAY N N

IDEA-B Discretionary

High Cost Funds3–21 226/315

IDEA-B Discretionary

1-Time Extraordinary Situations

3–21 226/315LEA

SSA FAY N N

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Fund Source Ages LEA/SSA Fund Codes Applicant BASE POP POV

IDEA-B Discretionary

Deaf3–21 226/315

RDSPD

TSDY N N

IDEA-B Discretionary

SSA Charter Start Up3–21 226/315 Charter

Y N N

IDEA-B Discretionary Other 3-21 226/315 TSBVI

IDEA-C Early Childhood Intervention Deaf

0–3 253/340RDSPD

TSD

IDEA-D Deaf/Blind 3–21 229/318 TSBVI

Medicaid ReimbursementLEA has the opportunity to maximize federal revenue through two optional programs.

SHARS

The School Health and Related Services (SHARS) program offers Medicaid reimbursement for direct medical services and certain costs associated with direct medical services (e.g., evaluation, therapy, counseling and personal care services) provided to students with special needs under IDEA. Student’s IEP documents services required. LEA uses the existing state/local Special Ed allotment as the state match. SHARS providers are reimbursed the federal share of the established reimbursement rate for IEP services. Student must be Medicaid eligible. Reimbursed funds may be placed in the general fund.

MACThe Medicaid Administrative Claiming (MAC) program offers reimbursement for certain costs related to administrative activities that support the Medicaid program. Medicaid eligibility not required. Fund 272

Budget Planning TipsProjecting Federal IDEA-B RevenuePrior to the release of IDEA-B entitlements, use the current year Maximum Entitlement amount to project revenue for upcoming year if total student population is stable.

If LEA losing students or growing slightly, use current year Tentative Entitlement to project revenue.

IDEA-B AmendmentsAn amendment is required to:

• add a class/object code not previously budgeted on the Program Budget Summary.

• increase or decrease the amount budgeted in any class/object code on the Program Budget Summary by more than 25% of the current amount approved in the class/object code (for discretionary grants) or of the total approved budget (for formula grants).

• add a new element requiring specific TEA approval.

IDEA-B Entitlements continued

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Federal Special Education Expenditure

IDEA-B Formula/Preschool Application Process

Late SpringTEA notifies LEA of Tentative IDEA-B Formula and Preschool Entitlements

July 1–September 12 LEA submits Initial Grant Application via eGrants

Upon TEA Approval TEA issues a Notice of Grant Award (NOGA) to LEA via eGrants

After Final Expenditure Report for Prior Year

TEA notifies LEA of Carryover (unused prior-year funds that carry over for use during current fiscal year)

LEA Reviews NeedsLEA amends Application to include Carryover and submits via eGrants

Upon TEA Approval TEA issues a revised Notice of Grant Award (NOGA) to LEA

January/February TEA notifies LEA of Maximum Entitlement

LEA Reviews NeedsLEA amends Application to include additional funds and submits via eGrants

Upon TEA Approval TEA issues a revised Notice of Grant Award (NOGA) to LEA

Mid June Last Date to submit Amendment

IDEA-B Formula/Preschool Budgeting Requirements

Residential

Set-Aside

LEAs are responsible for setting aside 25% of tentative IDEA-B Formula Base Entitlement for related services and residential costs. If LEA fails to set aside federal funds, LEA must guarantee an equivalent amount of state and/or local funds to meet residential costs.

For SSAs, the 25% is calculated for each member district. LEAs submit applications to ESC for review. ESC forwards to TEA for approval and access to federal discretionary funds to assist in funding. LEA also contributes state Special Ed funds toward the education costs.

Proportionate Share

Private/ Home School

LEAs must spend a portion of the Tentative, then Maximum, IDEA-B Formula and Preschool Entitlements to provide services to parentally-placed identified private/home school students. Unexpended funds must be maintained during the fiscal year and subsequent carryover year. Unspent funds near the end of the carryover year may be used for other Special Ed needs.

If LEA does not have proportionate share funds because no parentally placed private/home school students with disabilities were counted the last Friday of October of the previous year, the LEA is not obligated to provide Special Ed and/or related services to a new student during the year in which there are no proportionate share funds.

Coordinated Early Intervening Services (CEIS)

LEAs may use up to 15% of the IDEA-B Formula and Preschool Maximum Entitlements to develop and implement services for non-identified K-12 students who are struggling in general education. LEAs with a determination of Significant Disproportionality MUST use 15% of the IDEA-B funds. Emphasis is on services to students in grades K-3. LEAs use a local option, not Program Intent Code 23, to identify CEIS expenditures.