Local Educational Agency (LEA) Maintenance of Effort (MOE) Organizer
Meeting the Compliance (Expenditure) Standard
Federal Requirements
The regulations for the MOE compliance standard are at 34 CFR §§300.203(b)-(d), 300.204, and 300.205. Other IDEA requirements that may apply include §§300.12, 300.28, 300.209, 300.227, 300.228, 300.608, Appendices D and E, and 2 CFR §200.441.
34 CFR 300.203(b)(2) provides an overview of the compliance standard:
“An LEA meets this [compliance] standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in §§ 300.204 and 300.205: (i) Local funds only; (ii) The combination of State and local funds; (iii) Local funds only on a per capita basis; or (iv) The combination of State and local funds on a per capita basis.”
Regulations
34 CFR §300.12 Educational service agency (ESA). Defines an ESA. May help an SEA determine if some of its state structures must meet the LEA MOE compliance standard under 34 CFR §300.203 (e.g., cooperatives, regional TA centers, etc.).
34 CFR §300.28 Local educational agency. Defines an LEA, including ESA and other public institutions and agencies, and Bureau of Indian Affairs funded schools. Will help an SEA determine which education providers must meet the LEA MOE compliance standard under 34 CFR §300.203.
34 CFR §300.203 (b) Maintenance of effort. Compliance standard. Describes the MOE requirements for the compliance standard so that the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203 and how to monitor for compliance.
34 CFR §300.203 (c) Maintenance of effort. Subsequent years. Describes the Subsequent Years rule as it relates to LEA MOE so that the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203 and how to monitor for compliance.
34 CFR §300.203 (d) Maintenance of effort. Consequence of failure to maintain effort. Describes the consequences for an LEA of failing to meet the compliance standard so that the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203, how to monitor for compliance, and how to enforce noncompliance.
34 CFR §300.204 Exception to maintenance of effort. Describes the five allowable exceptions to the MOE requirements so that the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203 and how to monitor for compliance.
34 CFR §300.205 Adjustment to local fiscal efforts in certain fiscal years. Describes the circumstances under which LEA may adjust MOE amount downward in fiscal years when federal allocations increase so that the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203 and how to monitor for compliance.
34 CFR §300.209 Treatment of charter schools and their students. Clarifies that children with disabilities retain all rights under IDEA and outlines regulations for charter schools that are public schools of the LEA. This regulation also clarifies the position of public charter schools that are LEAs and public charter schools that are neither an LEA nor part of an LEA relevant to these regulations. Will help an SEA determine what education providers must meet the LEA MOE compliance standard under 34 CFR §300.203 so the SEA can determine how to provide TA to LEAs that must maintain effort under 34 CFR §300.203 and how to monitor for compliance.
34 CFR §300.227 Direct services by the SEA. Describes circumstances, including ineligibility for IDEA Part B funds, under which an SEA must use the payment that would otherwise have been available to an LEA or to a state agency to provide special education and related services directly to children with disabilities residing in the area served by that LEA, or for whom that state agency is responsible.
34 CFR §300.228 State agency eligibility. Describes condition of eligibility for any state agency that desires to receive a subgrant under § 300.705. Eligibility for a subgrant includes, among the other requirements that apply to an LEA, the MOE provisions at 34 CFR §§300.203-300.205. It is important that both the SEA and any state agency that receives an IDEA subgrant be aware of all the provisions, including the LEA MOE requirements.
34 CFR §300.608 State enforcement. States that if the LEA is not meeting the requirements for Part B of the IDEA, including the targets in the State’s Performance Plan, the SEA must prohibit the LEA from reducing the LEA’s MOE for any fiscal year. This provision clearly delineates the relationship between the SEA’s State Performance Plan (and its Annual Performance Report), along with any outstanding monitoring findings from the SEA, due process or state complaint findings, or any other actions that demonstrate noncompliance with Part B of the IDEA and the LEA’s potential to reduce LEA MOE pursuant to 34 CFR §300.205.
Appendix D to Part 300—Maintenance of Effort and Early Intervening Services. Explains that LEAs that seek to adjust their local maintenance of effort in accordance with 34 CFR §300.205(d) and use some of their Part B funds for Coordinated Early Intervening Services (CEIS) under 34 CFR §300.226 must do so with caution because the LEA MOE adjustment provision and the authority to use Part B funds for early intervening services are interconnected. Provides examples of the interaction.
Appendix E To Part 300—Local Educational Agency Maintenance of Effort Calculation Examples. Provides examples of calculating LEA MOE, including information on the Subsequent Years Rule, exceptions, and the LEA MOE adjustment.
2 CFR §200.441 Fines, penalties, damages and other settlements. Explains that these costs cannot be paid out of Federal funds. If an LEA fails to maintain effort and the SEA (as the federal grantee) must repay the amount by which the LEA failed to maintain effort, this provision explains that such repayment must be out of non-federal funds or federal funds for which accountability to the federal government is not required.
OSEP Resources
OSEP Guidance – Sections B & C. This question and answer document explains: (1) the eligibility standard; (2) the compliance standard; (3) the subsequent years rule; and (4) the consequences for an LEA’s failure to maintain effort. The document also describes the actions that SEAs and LEAs must take to meet the MOE eligibility and compliance standards, answers frequently asked questions about LEA MOE, and shares examples to facilitate and enhance SEA and LEA understanding of LEA MOE.
Letter to a Chief State School Officer (2014). This 2014 letter clarifies that the level of effort an LEA must meet under IDEA regulations—in the year after it fails to maintain effort—is the level that would have been required in the absence of that failure and not the LEA’s reduced level of expenditures. It also provides examples of LEAs that meet and those that do not meet the MOE compliance and eligibility requirements. See §613(a)(2)(A)(iii).
Letter to Kennedy (2009). This OSEP letter to the fiscal/policy advisor to the Greater California Special Education Fiscal Support Alliance discusses the relationship between MOE and Excess Cost. The letter also addresses the intentional use of the term “education” as opposed to “special education and related services” in the regulations and the inclusion of both special education and regular education expenditures in MOE calculations.
Dear Colleague (2009). This letter addresses the possibility of taking an LEA MOE adjustment due to increased IDEA Part B funds resulting from the American Recovery and Reinvestment Act of 2009 (ARRA). The letter notes that IDEA requires states to make annual determinations about the performance of LEAs and if the SEA determines that an LEA does not meet the requirements of Part B, the SEA must prohibit that LEA from taking the LEA MOE adjustment.
Letter to Plagata-Neubauer (2008). This letter provides clarification to several questions regarding the calculation of excess cost. The minimum average amount must be computed separately for children with disabilities in elementary school and secondary schools.
Letter to Copenhaver (2008). This letter responds to questions about federal Impact Aid and Medicaid funds and how they relate to LEA MOE.
Letter to Baglin (2006). This OSEP letter provides clarification on several questions about MOE, in particular SEA obligations around LEA MOE and reimbursement of funds to the federal government.
TA Center Resources
CIFR. Understanding LEA MOE PowerPoint Training Deck. Developed by CIFR, this PowerPoint training deck is designed for SEA staff to train LEA staff to increase their familiarity and comfort level with applying the LEA MOE regulatory requirements under IDEA Part B. The customizable training deck includes a basic review of the regulatory requirements, examples of the requirements at work, and a list of additional resources. The deck is accompanied by a Microsoft Word Script and a Guide to Slides with presenter tips and directions for customization.
CIFR. LEA MOE Quick Reference Guide. Provides an overview of the LEA MOE requirements stipulated by IDEA.
