LEA + MOE = ? Calculate That!

14 Jun 2017

Beginning with the fiscal 2018 school year, school districts must use the LEA Maintenance of Effort (MOE) Calculator.

Huh? Let’s try this again. In the past, New York State Education Department (NYSED) has never required LEAs to submit information that verifies whether they have met the Compliance Standard for MOE (which means NYS wasn’t monitoring the Compliance Standard). As a result, NYSED has been out of compliance with the Individuals with Disabilities Education Act (IDEA), a federal law enacted in 2004. To satisfy the Compliance Standard, districts will now have to complete the LEA MOE Calculator (hereinafter “Calculator”) for the fiscal 2014, 2015, and 2016 school years, and must do so by June 16, 2017.

So, what do the Compliance Standard and MOE mean for you? Well, the good news is that only districts receiving Section 611/619 IDEA grants are required to complete the Calculator. There are two parts of the MOE:

  1. Eligibility Standard which is related to the budget requirement, and
  2. Compliance Standard which is related to the actual spending requirement

The Compliance Standard means that a district must not reduce the level of expenditures for special education made by the LEA from local funds below the level of expenditures from the previous fiscal year; LEAs are to budget and expend, for special education, at the least the amount equal to 100% of the state and/or local funds it expended on special education during the previous year. Expenditures of federal aid are not considered. The budget is calculated using 1 of the 4 methods of demonstrating compliance (or “maintaining effort”) provided by Federal law:

  1. Local funds only,
  2. States and local funds,
  3. Local funds per capita, or
  4. State and local funds per capita

The best method to use is… whichever one requires the least expenditures to be in compliance with MOE.

What does this Calculator look like? It has grown to be a 24-tabbed Excel spreadsheet with a lengthy instruction manual (Click here for more information).Bad news is this lengthy Excel project is required to be completed annually, but the good news, tabs 3, 4, and 5 will be the only three tabs needed to be completed for most districts. Tab 6 will be generated using the information completed in the previous 3 tabs. Please keep in mind that fiscal 2014 will be considered the base year from which compliance will be determined for LEAs.

As previously mentioned, the base year is going back all the way to fiscal 2014. So you will need a few things to make the initial determination. For fiscal 2014, 2015, and 2016, your district will need to gather the following information:

  1. the child count of Students with Disabilities (SWD),
  2. the amount awarded in each of the 3 years for Section 611/619 grants,
  3. the amount spent on special education, and
  4. the amount of State Aid recognized for special education services.

Remember, fiscal 2014 is the base year. Therefore, be consistent in future years when categorizing expenses. So far, NYSED has provided the following and/or made available to districts:

  1. Memo to Superintendents and Special Education Directors
  2. SWD Child Count by District for the 2014, 2015, and 2016 school years
  3. MOE Recommendation Worksheet
  4. Guidance to Complete the LEA MOE Calculator
  5. LEA MOE Calculator Version 1.2
  6. Guidance of How to Use the LEA MOE Calculator
  7. LEA MOE Calculator FAQ

The final steps consist of the determination of your compliance once the Calculator has been completed. If tab 5 indicates you are in compliance, the Excel spreadsheet should be saved and e-mailed to idea@nysed.gov and the e-mail’s subject line should include “Your LEA Name” and “2013-16 Compliance Standard Calculator.” Just remember, the due date to complete this task is June 16, 2017 and the spreadsheet submitted is subject to audit. Your district will not be eligible for a fiscal 2018 IDEA award until the calculator has been submitted and approved by the NYSED. If the MOE has not been met, the next step is to determine if there are ways to reduce the expenditure limit for MOE. Here are five instances that may allow districts to reduce the expenditures required for the education of children with disabilities:

  1. Voluntary departure, retirement, or departure for just cause, of special education or related services personnel
  2. Decrease in the enrollment of children with disabilities
  3. Termination of the obligation of the district to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by NYSED, because the child:
    • Has left the jurisdiction of the agency;
    • Has reached an age where the obligation of the District has terminated; or
    • No longer needs the special education program.
  4. Termination of costly expenditures for long-term purchases (i.e. acquisition of equipment or the construction of school facilities)
  5. Assumption of cost by the high cost fund operated by the SEA

Districts can use more than one of these reductions in the same year to reduce the expenditure for meeting MOE compliance which in turn may result in the LEA becoming compliant or reduce the amount of any refund due for noncompliance.

Now, it’s time to get calculating!

Nicholle Mezier, CPA, MBA
Senior Accountant
James Laino
Staff I Accountant