McKinney-Vento and Foster Care Students: Strategies for maximizing revenues and reducing expenditures

McKinney-Vento and Foster Care Students: Strategies for maximizing revenues and reducing expenditures

According to the New York State Education Department, there were approximately 143,500 homeless students attending public and charter schools in the state of New York during the 2019-2020 school year. This is an approximate 66% increase since the 2009-2010 school year. Per NYSED, the McKinney-Vento Act states that children and youth who lack “a fixed, regular, and adequate nighttime residence” will be considered homeless.

McKinney-Vento eligible students have the right to:

  • receive a free, appropriate public education;
  • enroll in school immediately, even if lacking documents normally required for enrollment, or having missed application or enrollment deadlines during any period of homelessness;
  • enroll in school and attend classes while the school gathers needed documents;
  • continue attending the school of origin, or enroll in the local attendance area school if attending the school of origin is not in the best interest of the student or is contrary to the request of the parent, guardian, or unaccompanied youth;
  • receive transportation to and from the school of origin, if requested by the parent or guardian, or by the local liaison on behalf of an unaccompanied youth; and
  • receive educational services comparable to those provided to other students, according to each student’s need.

Students typically attend public schools in the district in which they reside. However, school districts sometimes educate nonresident students, such as foster care children who are placed in a district by a social service agency and certain homeless children who choose to attend the district where they are temporarily housed rather than their last district of residence. The costs for services provided to nonresident foster and homeless children are initially borne by the district that provides the services (referred to as the “District of Attendance” or “DOA”) and can be quite expensive, especially transportation costs. To recover costs related to educating and in some instances transporting a student, the educating district (DOA) must seek reimbursement from the district in which the student resided when placed in foster care or became homeless as defined under the McKinney-Vento Act (“District of Origin” or “DOO”). In addition, the DOA can recover costs related to transporting a foster care or homeless student through grant funding, the Local Department of Social Services (LDSS), and/or the System to Track and Account for Children (STAC).

Accordingly, it is the responsibility of the DOA to identify all nonresident students in a temporary housing situation and all nonresident students in foster care who are receiving services from the DOA in order to:

  • identify the DOO,
  • determine whether the DOO and/or LDSS is responsible for reimbursing the DOA,
  • accurately calculate costs to be reimbursed to the district,
  • prepare and submit the necessary documentation to the DOO/LDSS/STAC Unit in a timely manner to receive reimbursement, and
  • input the student in the STAC, if applicable.

It is important that a school district has adequate internal controls and procedures to monitor revenue and expenses related to educating and transporting homeless and foster care students. Such controls include identifying students eligible for DOO or LDSS reimbursement, assessing the adequacy of required support documents, and evaluating invoices and support documents received from other districts for cost reimbursement. This requires a good system to record and track the documentation of services and costs being provided. School districts often use their student management database to maintain the status of a student’s foster care and homeless situations. But like any system, if the data is not being properly reviewed, updated, and communicated to all the necessary departments, school districts may be missing out on opportunities to increase revenues and decrease expenses.

Who should be involved? School district personnel responsible for overseeing the homeless and foster care registration, billing, and accounts payable. There are many regulations surrounding the education of homeless and foster care students. Depending on your student population, it can make more sense and be more cost effective for your district to have two different individuals responsible for monitoring homeless and foster care students.

*Homeless students:

Districts must designate a liaison for children and youth experiencing homelessness (Homeless Liaison). The McKinney-Vento Act (hereinafter “Act”) requires liaisons to ensure that “homeless children and youths are identified by school personnel through outreach and coordination with other entities and agencies.” This is meant to allow districts to provide support and offer appropriate services to the family, child, and/or youth.

*Foster Care students:

Similar to homeless students, school district must appoint a Foster Care Point of Contact (POC) who will work collaboratively with representatives from LDSS. In general, the designated POC should not be the same as the liaison designated under McKinney-Vento for homeless students, unless that person has sufficient time, capacity, and ability to carry out the duties of both positions.

What are some good practices?

First, ensure the district has implemented a policy that outlines the district’s responsibilities related to the admission, education, and transportation of homeless and foster care students. The policy can also include the processes for tuition reimbursement, coordination with Title I, Part A, state reporting requirements, as well as dispute resolution process for homeless children/unaccompanied youth.

Second, ensure that there is a mechanism in place to track the status of homeless and foster care students and maintain a current status, especially as the student’s housing arrangements are often transient. Districts can utilize their student management database to reflect changes in housing as well as status. For example, if a foster student has been adopted, it is important that the housing information within the student database system is properly updated, and that supporting documentation is maintained. Supporting documentation can also be filed and organized within your district’s student management database.

*Homeless students:

Once enrolled, students who are homeless should be identified/flagged as such within a district’s student management system. As the status of these students can change, school districts should check in with parents whose children are McKinney-Vento eligible (or youth themselves in the case of unaccompanied homeless youth) at the end of each school year to determine whether their housing situation has changed and make appropriate arrangements for the next school year if there has been a change.

Maintaining an updated list of homeless students and adequate documentation is important as districts are eligible for funding/reimbursement to cover the cost of educating and transporting these students under the Act. If education records cannot be obtained from the school of origin, districts should maintain documentation to support the placement of the student in their student management database. In addition, NY Education Law § 3209(2)(e) states a STAC-202 form shall be completed for each student identified as homeless who is seeking enrollment in your district. Copies of the form should be submitted to the following:

  • NYSED STAC Unit (if last permanent housing was in a different district),
  • the DOA,
  • the DOO,
  • the district where last enrolled,
  • the parent, guardian, unaccompanied youth, or director of a residential program for runaway and homeless youth, and
  • the LDSS (if the student was placed in temporary housing by LDSS).

However, when a district is the DOO, the DOA, and the School of Origin (SOO), it does not need to submit a STAC-202 form to the NYSED STAC Unit or LDSS. If your district is the DOA, you are responsible for maintaining documentation to prove residency in accordance with Section 100.2(y) of the Commissioner’s regulations should a student claim permanent residency. This is important because the DOA can bill the new DOO for the cost of educating a student who was homeless, found permanent residency outside the DOA, and chose to continue attending school at the DOA. The student is permitted to do this for the remainder of a year in which permanent housing was found. In addition, the student may remain at the DOA for an additional year if it is his/her terminal grade at the school building. Further, when being invoiced from another district, it is important that adequate documentation (i.e., documentation as referenced in Section 100.2(y) of the Commissioner’s regulations) is received to substantiate the student’s housing situation.

Funding is available for certain programs and activities that support the educational success of students experiencing homelessness. The McKinney-Vento Competitive Grant Program is available every three years. In addition, a district may use Title I, Part A funds to provide similar services for economically disadvantaged students, including transportation of homeless students, but only as a last resort when funds or services are not available from other public or private sources, such as public health clinics, or local discretionary funds (sometimes provided by the PTA). Districts can also claim state transportation aid for the cost of transporting homeless students for whom the district is the DOA.

*Foster Care students:

School districts are responsible for ensuring that Form LDSS-2999 and the best interest documentation are maintained in the student’s file. Chapter 56 of the Laws of 2018 mandates that the best interest determination rests ultimately with the LDSS, after consultation with the district. In addition, NYSED and the NYS Office of Children and Family Services requires that a foster care student’s Individual Transportation Plan (ITP) be completed and started within 2 to 3 business days (for in-district transportation), or 5 to 7 business days (for out-of-district transportation) of notification of best interest determination. Because of the importance of timely enrollment and transportation arrangements, a good practice is to date stamp the forms and other documentation to provide an audit-trail of events.

As the DOA is responsible for transporting foster care students, the student should be included in the claim for State Transportation Aid. The District may also use Title I, Part A funds for costs not reimbursed by transportation aid if: 1) the student is temporarily housed within the District and the student is attending the SOO, 2) the student is temporarily housed outside the District, or 3) the student is temporarily housed in a neighboring state. Prior to fiscal 2018-2019, transportation costs not reimbursed by State aid or Title I funds were split between the DOA and DOO. Subsequent to that, any transportation costs not reimbursed by State aid or Title I funds are split between the DOA and the LDSS.

Funding for the cost of educating foster care students is also available to districts. While the DOA is responsible for educating foster students, the DOO is responsible for the costs associated with educating those students. As such, the DOA may bill the DOO for any costs associated with educating foster care students in excess of aid received. Costs associated with the transportation of foster students in excess of any aid received is shared equally with the LDSS.

This article was also featured in our newsletter Lesson Plan Vol. 25

Nicholle Mezier, CPA, MBA

Nicholle Mezier, CPA, MBA


Nicholle is a Manager of Cerini & Associates’ audit staff where she brings experience in audit, review, and consulting services to our general business, nonprofit and special education clients. Nicholle has worked with a large number of nonprofit clients, predominantly focusing on social service providers, healthcare providers, foundations, educational institutions, and arts and culture organizations. Nicholle’s technical knowledge allows her to provide specific services, including financial statement audits, internal and claims audits, and nonprofit outsourced accounting services. Nicholle has also contributed to the firm’s various newsletters.


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