IDEA - Maintenance of Effort (MOE) Requirement

The term “Maintenance of Effort,” often shortened to “MOE,” refers to the requirement placed upon many federally funded grant programs that the State Education Agency (SEA) and Local Education Agencies (LEA) demonstrate that the level of state and local funding remains relatively constant from year to year. Failure to meet MOE requirements may result in the LEA losing eligibility to receive IDEA entitlement funding and requiring an LEA to repay funds, using a non-federal source, to the SEA, who is required to send funds to the US Department of Education.

At the local level, IDEA requires that LEAs expend the same amount of local / state funding for special education and related services as it expended in the previous fiscal year (34 CFR §300.203). There are provisions in IDEA to allow for decreases in an LEA’s MOE from one fiscal year to the next.
 
Maintenance of Effort (MOE) Technical Assistance

 

IDEA MOE Guide Technical Assistance Document

 

This guide provides an overview of the IDEA MOE regulations, covers how DPI tests an LEA's compliance with the MOE regulations, and walks the reader through the web-based Eligibility and Compliance reports. This guide was revised in March 2014 to reflect the retooling of the MOE web-based compliance software and to reflect the clarification provided by OSEP in September 2013. 
 
Chapters include:
Overview of IDEA Maintenance of Effort
Testing IDEA Maintenance of Effort
Eligibility Report
Compliance Report
Maintenance of Effort Regulations
Frequently Asked Questions
 
    • Online Modules: Introduction to IDEA's Maintenance of Effort Requirement
This module looks at the LEA's obligations under IDEA's MOE requirement. It reviews how MOE compliance is tested in Wisconsin as well as the exceptions under the regulations that allows a district to lower their local special education costs from one year to the next.
 
Other Guidance
 
Financial and Student Data Technical Assistance Document
Pulled from the MOE guide, this five-page document covers the expenditure and revenue accounts used in the MOE calculation. It also includes a description of the difference between the October 1 Child Count and the student count used for the MOE calculation. 
 

Exception Checklist Technical Assistance Document

This includes a list of possible exceptions a district should review if MOE compliance has not been met. This list will be udpated as additional situations are determined. 

 

Options for Maintaining IDEA Maintenance of Effort Technical Assistance Document

The Special Education Team has determined several options an LEA may wish to consider when planning for maintenance of effort compliance in future fiscal years. These options are described at length in this document.


Information from the Office of Special Education Programs (OSEP)
  • In an April 4, 2012 response to Kathleen Boundy from the Center for Law and Education(CLE), OSEP rescinded a policy interpretation originally issued on June 16, 2011 to Bill East, Executive Director of the National Association of State Directors of Special Education (NASDSE), regarding an LEA's level of effort in the case where MOE compliance has not been met. OSEP is withdrawing their interpretation as expressed in the letter to Dr. East and now believes that the level of effort that an LEA must meet in the year after it fails to maintain effort is the level of effort that it should have met in the prior year, and not the LEA’s actual expenditures.

    All letters may be viewed below:
 
In a March 13, 2014, letter to the Chief State School Officers, OSEP provided information that the Consolidated Appropriations Act, 2014, signed by President Obama, made the OSEP response to Kathleen Boundy law. Under this provision, if an LEA failed to maintain effort in one fiscal year, the level of effort that the LEA must maintain in the following year is the level of effort that would have been required the last year the LEA met MOE. In essence, in a situation in which an LEA fails MOE compliance, the LEA's maintenance of effort levels are not "re-set." The letter can be viewed here:  Pub. L. No. 113-76, 1238 Stat. 5, 394 (2014)
 
Important FY 2014 MOE Information
 
To review your Maintenance of Effort eligibility status with Rachel Zellmer, please contact Marge Schenk at marjorie.schenk@dpi.wi.gov.  She will schedule a conference call time.  
 
Medicaid MAC and Cost Settlement funds coded to Fund 10
 
Since DPI’s standardization of monitoring IDEA’s maintenance of effort compliance requirement, past Medicaid cost settlements have resulted in a number of complicated issues for districts. The IDEA regulations state that revenue received through Medicaid should offset a district’s special education expenditures to reflect true local costs (34 CFR §300.154(g)(2); however, in the case of MAC and cost settlements, the revenue received is often years after the expenditures were made. 
 
Maintenance of Effort compliance is based on a July 1 to June 30 fiscal year comparison. Once the fiscal year is closed (we use the date September 30), any opportunities to “amend” the prior year expenditures by moving costs between funding sources is no longer permitted. Using the same concept with Medicaid MAC and cost settlements, we believe that revenue received after the close of a fiscal year (September 30) should be excluded from the MOE calculation. For example, a cost settlement for the 2011-12 fiscal year received in June of 2014 
would be excluded from the MOE calculation. 
 
To facilitate this, the Department of Health Services (Forward Health) will now print a banner message attached to each payment to identify if the check represents a MAC or cost settlement payment. These payments should be coded to fund 10. All other payments from Forward Health that do not have a banner message attached to the check are the result of interim SBS billing and these funds should continue to be coded to fund 27. 
 
For additional coding information, please see:  http://sped.dpi.wi.gov/files/sped/pdf/1-31-14_idea-listserv.pdf
 
Important FY 2013 MOE Compliance Information
 
To review your Maintenance of Effort compliance status with Rachel Zellmer, please contact Marge Schenk at marjorie.schenk@dpi.wi.gov.  She will schedule a conference call time.  
 
Open Enrollment Coded to Fund 10
 
Prior to fiscal year 2012, LEAs coded the flat-rate open enrollment (OE) amount tied to students with disabilities in fund 27. Because this amount is not considered an excess cost of providing special education, LEAs were asked to code the flat-rate OE costs for all students in fund 10 in FY 2013 (some optionally began doing for FY 2012). 
 
For most, this will not cause an LEA to fail all four tests when analyzing compliance with IDEA’s maintenance of effort (MOE) requirement. MOE Test #1 is based on total expenditures and revenue whereas Test #2 is based on local costs only (the fund 10 transfer). When source 347 OE revenue is removed from Test #1, the amount transferred from fund 10 will increase. This, in turn, causes the LEA to pass Test #2.
 
The MOE & Open Enrollment technical assistance document describes the process DPI will use to determine if the new OE coding instructions have caused an LEA to fail MOE. These steps should be completed by the LEA prior to requesting an administrative MOE exception based on open enrollment coding.
 
Open Enrollment Flat-Rate Tuition Amounts
2012-13: $6,335
2011-12: $6,867
 
Late Medicaid Payments
 
If an LEA received Medicaid payments from expenditures that were incurred PRIOR to FY 2011-12, and the LEA believes this is why the LEA failed MOE compliance, then an administrative exception for MOE may be possible.
 
Unless the LEA has failed all four MOE tests, a late Medicaid revenue exception will not be necessary. If the LEA has failed all four MOE tests and there are not enough normal exceptions to cover the failed by amount, the LEA will need to e-mail Rachel Zellmer with the Medicaid revenue information, including the amounts tied to the year the expenditures were incurred. For example, District A would e-mail the following information: $8,647 2009-10 SBS; $11,000 2010-11 SBS Cost Settlement. DPI will create an MOE scenario calculator to determine if MOE would have been met the year the revenue should have been received. If MOE would have been met in prior years with the additional revenue, the revenue received in FY 13 will be removed from the FY 2012-13 calculation. An administrative exception will be entered for the amount the LEA fails to maintain effort.

LEAs can do a quick check to see if a Medicaid administrative exception would be possible:  Review the MOE reports during the years the Medicaid revenue should have been received. If the LEA passed MOE by a sizeable increase in expenditures, then it is probable that adding the revenue to those years would not impact the LEA's MOE compliance in those same years. 
 
Notice of Proposed Rule Making to IDEA's MOE Regulations
 
Recorded Webinar on DPI's Comments to OSER's Proposed MOE Rulemaking

​Document links to Proposed Rules

Archived Webinars
 
MOE Compliance Report and Exception Software:

The MOE Compliance Report and Exception software was designed so LEAs would be able to easily submit MOE exception supporting documentation to gain MOE compliance. This webinar is broken into two parts - an overview of MOE compliance and a demonstration on using the software. These webinars are slightly out of date, but the premise of the guidance remains the same. 

Further questions regarding IDEA Flow-through and Preschool Entitlement budgets should be directed to the DPI special education consultant assigned to the district. A listing of consultant assignments can be located at http://sped.dpi.wi.gov/sped contact.