Maintenance of Effort Requirements in IDEA 2004 Frequently Asked Questions
What is Maintenance of Effort (MOE)?
Any state or school district/local education agency (LEA) that receives any federal IDEA funds must agree each year to pay the same share of the state and local cost of special education that they paid the previous year. For example, if the LEA spent $100,000 of state and local funds for special education services in FY2008, it must spend at least $100,000 in FY2009 to be eligible to receive IDEA funding in FY2009. The level of state and local expenditures that must be maintained by the LEA to continue to receive federal funding is called maintenance of effort (MOE). Failure to meet MOE requirements may result in a reduction of federal funding.
Funds provided to an LEA under Part B of this Act must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding year. [34 CFR §300.203]
What are the Exceptions to MOE?
An LEA may reduce the level of state and local expenditures below the level of state and local expenditures for the preceding year if the reduction is attributable to any of the following [34CFR §300.204]:
- The voluntary departure, by retirement or otherwise, of special education or related services personnel. For example, when a retired teacher's position is filled by a zero-experience teacher, the salary will be less in the new fiscal year and the MOE amount may be reduced by the difference in the two salaries.
- A decrease in the enrollment of children with disabilities.
- Termination of the obligation to provide a high-cost program or services to a student with disabilities because the student:
Termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.
Assumption of the cost by the high cost fund operated by the state education agency.
- Moved out of the LEA
- Aged-out of special education eligibility
- No longer needs the special education program or services.
What is the MOE Adjustment?
IDEA 2004 allows-for the first time-the LEA to reduce the level of MOE under certain circumstances when its flow-through allocation of federal IDEA B funds is increased from one year to the next. IDEA's regulations call this "Adjustment to Local Fiscal Efforts in Certain Fiscal Years" [34 CFR §300.205]. If the LEA receives an increase in its IDEA allocation the LEA may reduce its MOE obligations by half (50%) of the increased amount. The "freed up" funds must be used to carry out activities that could be supported with funds under the Elementary and Secondary Education Act. Therefore, this money does not disappear from public education; it simply supports another part of public education.
FY2008 flow-through IDEA B allocation: $150,000
FY2008 state/local MOE amount: $800,000
FY2009 flow-through IDEA B allocation: $250,000
50% of IDEA B increase: $50,000
FY2009 new state/local MOE amount: $750,000
What are the Limitations to Using the MOE Adjustment?
- The LEA must meet requirements of IDEA Part B, including meeting all targets in the state's performance plan, in order to apply the MOE Adjustment.
- The LEA must establish and maintain free appropriate public education programs (FAPE), without state assistance, oversight, or sanction.
- The LEA that is required to use 15% of its IDEA Part B allocation on coordinated early intervening services because the state identified the LEA as having significant disproportionality based on race and ethnicity will not be able to apply the MOE Adjustment.
What is the Relationship between MOE and Coordinated Early Intervening Services?
Coordinated Early Intervening Services (CEIS) is a new provision in IDEA 2004 that allows for the use of up to 15% of Part B funds for early intervening services to provide programs and services to non-identified students who are struggling academically and/or behaviorally. CEIS allows IDEA funding to be expended for services to students not yet identified for special education to prevent placement in special education.
The allowable 15% for CEIS is calculated from the total current year allocation as opposed to any increase in allocation.
FY2008 flow-through IDEA B allocation: $100,000
FY2008 15% CEIS amount: $ 15, 000
If an LEA would like to reserve the 15% allowable for CEIS, and would also like to adjust its MOE, it must consider both of these amounts because they are interconnected. A calculation must be performed wherein the LEA subtracts the bigger of MOE or CEIS from the smaller of the two. Based on this, the LEA will know how much of either MOE or CEIS or both are available.
FY2008 flow-through IDEA B allocation: $900,000
FY2009 flow-through IDEA B allocation: $1,000,000
Maximum available for MOE reduction: $50,000
Maximum available for CEIS (15%): $150,000
If the LEA decides to set aside $150,000 for CEIS, it may not reduce its MOE.
If the LEA decides to set aside $100,000 for CEIS, it may not reduce its MOE.
If the LEA decides to set aside $50,000 for CEIS, it may not reduce its MOE.
If the LEA decides to set aside $30,000 for CEIS, it may reduce its MOE by $20,000.
If the LEA decides to set aside $0 for CEIS, it may reduce its MOE by $50,000.
What is the Intersection between the MOE Adjustment and ARRA Funds?
The American Reinvestment and Recovery Act of 2009 allows for increased federal funding for education through a variety of funding streams. The IDEA stimulus funds available through ARRA are available in addition to the FY2010 flow-through IDEA B allocation to LEAs. As increased funding, 50% of the ARRA amount can be applied as the MOE Adjustment to reduce the state and local MOE funding level required in current and future years. In order to take advantage of the MOE Adjustment with ARRA funds the LEA must meet requirements of IDEA Part B including meeting all targets in the state's performance plan and not identified as having significant disproportionality in special education based on race and ethnicity.
This page was developed by ASHA's School Finance Committee. For additional information, please contact Janet Deppe at email@example.com or visit School Funding Advocacy.