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The Center for IDEA Fiscal Reporting. TA On Demand. Part B Maintenance of State Financial Support (or MFS): The Basics.
The maintenance of state financial support requirement in the Individuals with Disabilities Education Act, or IDEA, is found in 34 CFR Section 300.163. 34 CFR Section 300.163(a) states that a State must not reduce the amount of State financial support for special education and related services for children with disabilities or otherwise made available because of the excess costs of educating those children below the amount of that support for the preceding fiscal year. Simply put, MFS is the state’s responsibility to make sure that state funding for special education and related services for children with disabilities stays the same or increases each year. It ensures that financial support for special education does not decline over time. For example, if the state made available $100 million to support special education for children with disabilities in the prior state fiscal year, it must provide at least the same amount in the current state fiscal year. If it makes available $100,500,000, the state meets MFS.
Now that you understand what the requirement is, let’s talk about why it’s important. First, MFS ensures that federal funds are used to supplement and not supplant, or replace, state and local funding for children with disabilities. Also, when a state keeps its financial support steady, local educational agencies, or LEAs, can plan their budgets more predictably, knowing that the state’s financial contribution won’t decrease. This enables better long-term planning and resource allocation. In short, MFS helps to protect the rights of children with disabilities to a free appropriate public education by ensuring that the state provides a stable level of financial support.
How do you report MFS? Each year, states must show that they are meeting their responsibility to maintain financial support. To do this, they report total state funding made available for special education for two consecutive state fiscal years in their annual grant application for IDEA part B funds. To meet MFS, the state compares the total amount of state funds made available in one state fiscal year to the total amount in the prior state fiscal year. The state may also report and compare the amounts per child with a disability. If either of these calculations in the grant application is greater or equal to the comparison amount, the state has met MFS.
To calculate MFS, each state must track the total amount of state funds made available for special education and related services. The state may not include federal, local, or private funds in its calculation. Note that MFS is based on funds made available, not what was actually spent, and each state defines what made available means. Depending on your state definition, you may need to look at legislative appropriations and state agency budgets. A key factor in calculating MFS is year-to-year consistency to ensure accurate and replicable data. Although most support will come from the state educational agency, or SEA, other agencies might also provide funds for special education and related services. State agencies must coordinate to make sure all state funds for special education and related services are included.
Let’s look at funds that are used to calculate MFS. These include funds that have been made available directly to LEAs for special education and related services; for alternate assessments; for preschool services for children with disabilities; for transportation for children with disabilities, pursuant to their Individualized Education Plans or IEPs; to state schools for the deaf and blind; for SEA staff who support special education and related services; and for retirement contributions made by the state for special education teachers and other personnel. Other state agencies may also make funds available to provide special education and related services. These may include Corrections, Juvenile Justice, or Youth Detention; the Department of Health, Mental Health, or Behavioral Health Services; Human Services, Social Services, or the Division of Children and Families; the Developmental Disabilities Agency; and the Early Childhood Administration.
Now that we’ve covered the state’s responsibility for maintaining fiscal support, let’s look at the consequences of failing to do so, which are described in 34 CFR Section 300.163, paragraphs B through D. The most immediate consequence is that the US Department of Education may reduce the state’s IDEA part B Section 611 funds by the same amount that the state failed to maintain financial support. The total amount of the reduction can be spread over a period of no more than five consecutive years. Not meeting MFS can have long-term consequences. A decline in state funding combined with a decrease in federal IDEA funding in the following years could affect LEAs’ ability to provide special education and related services to children with disabilities. If, however, the state is unable to maintain financial support because of an exceptional or uncontrollable circumstance, such as a natural disaster, the state can apply for a waiver. If approved, the waiver applies for only one year.
If a state fails to maintain support with or without a waiver, the amount of support the state must make available the next year is the amount it made available in the year before it failed MFS. For example, in this scenario, a state failed MFS because it made $10 million available in one fiscal year, but only $9.5 million in the following fiscal year. As a result, the state must make at least $10 million available in the next fiscal year in order to meet MFS.
Because MFS is a state requirement with serious consequences if not met, it’s crucial for everyone, from legislators to state staff involved in state financial decisions, to understand its importance, especially when considering changes to state special education funding. It’s also essential to share information and work together with all state agencies responsible for providing special education and related services. This collaboration helps ensure that data about all available funding is accurate and reliable.
Understanding the MFS requirement and its potential impacts can be complex, but CIFR TA liaisons are here to support you. We can answer your questions and provide training to your team on the MFS requirement; help you document and improve your state’s MFS procedures; assist with organizing meetings with other state agencies, interested parties, and policymakers to increase awareness and understanding of this requirement and their roles; and discuss how changes in state funding may affect your MFS requirements. To find your assigned TA liaisons, go to our contact page, select your state or territory from the drop-down menu, and click on any part B TA liaison to send a message. To find more resources on IDEA part B MFS, visit our resource library and select the Part B and Maintenance of
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This video was developed under grant #H373F200001 from the U.S. Department of Education. It is not intended to be a replacement for the IDEA statute, regulations, and other guidance issued by OSEP and the U.S. Department of Education. The IDEA and the regulations are found at: https://sites.ed.gov/idea. The video does not necessarily represent the policy of the U.S. Department of Education, and you should not assume endorsement by the Federal Government.
