NARRATOR
The Center for IDEA Fiscal Reporting, TA On Demand. Part B, Local Educational Agency Maintenance of Effort, or LEA MOE, The Basics.
The LEA MOE requirement in Part B of the Individuals with Disabilities Education Act, or IDEA, is found in 34 CFR Sections 300.203, 204, and 205. It addresses the level of effort or funding that LEAs dedicate to educating children with disabilities. Simply put, maintenance of effort requires LEAs to budget and spend the same amount or more in local or state and local funds on the education of children with disabilities from year to year.
All LEAs that receive IDEA Part B funds are required to meet MOE each year. These may include school districts, charter school LEAs, regional service centers, and other state agencies responsible for special education services in each state.
LEA MOE is important for several reasons. First, meeting MOE demonstrates compliance with the Supplement Not Supplant requirement of IDEA Part B, which requires that LEAs use federal IDEA funds to add to (or supplement) and not replace (or supplant), state and local funding for special education and related services.
Second, MOE provides a stable source of support that enables LEAs to more predictably manage budgets for special education and make better long-term decisions about funding over time. Ultimately, LEA MOE lays a fiscal foundation for the provision of a free appropriate public education for children with disabilities.
How does an LEA meet MOE? There are two different standards required to meet LEA MOE, the Eligibility Standard and the Compliance Standard. LEAs are responsible for meeting both standards each year.
To meet the Eligibility Standard, the LEA budgets, for the education of children with disabilities, at least the same amount in state and local funds as the LEA spent for that purpose for the most recent year for which information is available. The Eligibility Standard compares budgeted amounts for the upcoming fiscal year to actual expenditures from the comparison year, which is the most recent year that MOE was met.This comparison is typically made near the end of the school year when budgeting for the upcoming year occurs. The standard must be met before the SEA can give final approval of the LEA’s subgrant reward for that year.
To meet the Compliance Standard, an LEA must show that it actually spent, for the education of children with disabilities, at least as much state and local funds as it did in the comparison year. The MOE Compliance Standard compares actual expenditures of the most recent fiscal year to actual expenditures of the comparison year, and occurs after the close of the most recent fiscal year when financial records become available.
There are four ways to meet each standard: the total of local funds only, the total of state and local funds, local funds per child with a disability, or state and local funds per child with a disability. An LEA can use any of these four methods to meet MOE, but the comparison must use the same method in the comparison year and the calculated year. For example, comparing total local funds in the calculated year to the total local funds in the comparison year.
The consequences of an LEA failing to meet MOE are significant. If an LEA fails to meet the MOE Eligibility Standard, the LEA will be ineligible to receive its IDEA Part B subgrant award for that fiscal year. If an LEA fails to meet the MOE Compliance Standard, the SEA must pay a penalty to the US Department of Education in the amount of the LEA’s shortfall or the LEA’s IDEA subgrant in the year of failure, whichever is smaller. The penalty must be paid with non-Federal funds or funds for which accountability to the Federal Government is not required. Additionally, the SEA may require the LEA to repay the SEA for this penalty amount.
SEAs are required to monitor LEAs to verify that they are meeting both standards. Here’s some questions to consider about how your SEA oversees these requirements.
How does your SEA collect information to make sure LEAs budget enough state and local funds for the education of children with disabilities to meet the Eligibility Standard? How does your SEA gather records of expenditures to verify that LEAs spend enough state and local funds to meet the Compliance Standard?
Whatever the processes used, SEAs must check two things every year, what the LEA plans to spend and what it actually spends to ensure it meets the MOE requirements.
Understanding the IDEA Part B LEA MOE requirement and its potential impacts can be complex, but CIFR technical assistance liaisons can help you.
We can answer your questions and train your team on the LEA MOE requirements, help you document and improve how your SEA monitors LEA MOE, help your SEA respond to or share information about MOE requirements with LEAs, help your SEA build awareness and understanding of this requirement among state agencies, policymakers, and other interested parties, and discuss how changes in state or federal funding might affect LEA MOE.
To contact your TA team, go to our Contacts page, choose your state or territory from the dropdown menu, and click on any Part B TA liaison to send a message. To find more resources about IDEA Part B LEA MOE, visit our resource library and select the filters for Part B and local educational agency maintenance of effort.
Thank you for watching the CIFR TA On Demand video. If you have any questions about the video, please contact us at [email protected].
