Budget reductions and your moe watch out
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Budget Reductions and Your MOE – Watch Out!. TASBO BUDGET ACADEMY JANUARY 13, 2011. Maintenance of Effort. Legal Requirement to maintain local effort No Child Left Behind (NCLB) Individuals with Disabilities Education Act (IDEA) Part B Supplemental Expenditures from Grants

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Budget Reductions and Your MOE – Watch Out!

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Budget reductions and your moe watch out

Budget Reductions and Your MOE – Watch Out!

TASBO BUDGET ACADEMY

JANUARY 13, 2011


Maintenance of effort

Maintenance of Effort

  • Legal Requirement to maintain local effort

    • No Child Left Behind (NCLB)

    • Individuals with Disabilities Education Act (IDEA) Part B

  • Supplemental Expenditures from Grants

    • Cannot “Supplant” the local effort


Maintenance of effort1

Maintenance of Effort

Where Do You Get the Data?

  • Mid Year PEIMS submissions – Expenditures

    • Record 032 (allocated)

    • Record 033 (allocated)

    • Review the PEIMS Edit+ Tips: Allocation Process & Calculating Staff FTEs

  • Student Information for:

    • Average Daily Attendance (ADA)

    • Membership

    • Enrollment


Maintenance of effort nclb

Maintenance of Effort - NCLB

Compliant with Maintenance of Effort (MOE) if:

  • 90% of Preceding Fiscal Year’s Combined Fiscal Effort per Student Expended in Current Year, Using:

    • Fund 199

    • Object Codes 6100 to 6500, Inclusive;

      And


Maintenance of effort nclb1

Maintenance of Effort - NCLB

Compliant with Maintenance of Effort (MOE) if:

  • 90% of Prior Year Expenditures as Compared to the Current Year Expenditures Using the Per Pupil Expenditures of:

    • Average Daily Attendance

    • Membership

    • Enrollment

  • Adjustment is based upon 90% less the largest percentage of the four comparisons as most beneficial to the district


Maintenance of effort nclb2

Maintenance of Effort - NCLB

If Noncompliant, the District will receive a Letter of Findings

Action to be taken:

Determine Why There is a Decline of Effort:

Extenuating Circumstances; or

PEIMS Data contained material errors


Maintenance of effort nclb3

Maintenance of Effort - NCLB

  • If PEIMS errors are discovered:

    • Statement signed by Superintendent and CFO acknowledging errors

    • Schedule indicating the fields of the account code, original erroneous amount, and the proposed correct amount

    • Statement signed by the external auditor

      TEA can process errors in data collection


Maintenance of effort nclb4

Maintenance of Effort - NCLB

  • If Extenuating Circumstances:

    • Natural disaster, i.e. hurricanes, tornados, etc.

    • Financial Exigency

  • Waiver must be requested from the U.S. Department of Education (USDE)

  • TEA does NOT have the authority to issue waivers on the Maintenance of Effort requirements


Maintenance of effort idea part b

Maintenance of Effort – IDEA Part B

  • Compliant with MOE for Grant if:

    • Current Year Expenditures Meet or Exceed the Level of Expenditures Compared to Prior Year

    • OR

  • Per Pupil Expenditures Increased or Stayed the Same


Maintenance of effort idea part b1

Maintenance of Effort – IDEA Part B

  • Determining Compliance

    • Total expenditures of two previous fiscal years


Maintenance of effort idea part b2

Maintenance of Effort – IDEA Part B

  • Determining Compliance

    • Expenditures per Student


Maintenance of effort idea part b3

Maintenance of Effort – IDEA Part B

  • Noncompliance occurs when total expenditures AND per pupil expenditures both decline


Maintenance of effort idea part b4

Maintenance of Effort – IDEA Part B

If Noncompliant, the District will receive a Letter of Findings

Action(s) to be taken:

  • Complete Form A: Response to Findings

  • Submit applicable forms:

    • Form B: Adjustment to Fiscal Effort

    • Exceptions:

      • Form C: Departure of Sp. Ed. Personnel

      • Form D: Decrease in Sp. Ed. Student enrollment

      • Form E: Termination of Exceptionally Costly Program

      • Form F: Termination of Costly Expenditures for Long-Term Purchases

      • Form G: Assumption of Cost by High Cost Fund

      • Form H: PEIMS Data errors


Maintenance of effort idea part b5

Maintenance of Effort – IDEA Part B

  • Exceptions Allowed:

    • Departure of Sp. Ed. Personnel

      • RIF does not qualify

      • Document departing personnel and reason for separation

      • Document personnel that replaced departed personnel (payroll & account distribution journals – data must match PEIMS 050, 060 and 090 records)

      • Document hiring action (personnel action memo, etc)

      • Submit SBEC certification of personnel

      • Submit “signed” job description

      • Document difference in salary between staff


Maintenance of effort idea part b6

Maintenance of Effort – IDEA Part B

  • Exceptions Allowed:

    • Decrease in Sp. Ed. Student enrollment

    • Use PEIMS Edit+ Child Count numbers

    • Document Special Education FTEs and Special Education allotment

    • Document allocated and unallocated costs


Maintenance of effort idea part b7

Maintenance of Effort – IDEA Part B

  • Exceptions Allowed:

    • Termination of Exceptionally Costly Program

      • Special Education Child left the District and/or Program

      • Child has reached the age at which the District is no longer required to support the child’s education

      • Document the following:

        • Description of costly program

        • Reason for program termination

        • IEP supporting services/program

        • Total costs – detailed general ledger


Maintenance of effort idea part b8

Maintenance of Effort – IDEA Part B

  • Exceptions Allowed:

    • Termination of Costly Expenditures for Long-Term Purchases

    • Defined by LEA’s capitalization policy

      • Equipment such as a Braille Machine, other apparatus, etc.

      • Construction of School Facilities

      • Document with detailed general ledger


Maintenance of effort idea part b9

Maintenance of Effort – IDEA Part B

  • Exceptions Allowed:

    • Assumption of Cost by High Cost Fund

      • Must have received a High Cost Grant

      • Costs may only include those approved by TEA

      • Document with detailed general ledger


Maintenance of effort idea part b10

Maintenance of Effort – IDEA Part B

  • Sample ISD

    • Letter of Finding - $89,630


Maintenance of effort idea part b11

Maintenance of Effort – IDEA Part B

  • Best Practices

    • Calculate estimated MOE during budget development process

    • Track and document special education staff changes – HR paper trail and PEIMS data accuracy

    • Distribute and collect signed job descriptions for staff for current position – keep current with changes in funding and/or assignments (HR)

    • Track and document expenditures related to exceptions – use sub-objects as appropriate

    • Calculate actual MOE during the fiscal year


Budget reductions

Budget Reductions

Factors Causing Budget Reductions:

  • Declining Financial Resources

  • Declining Per Pupil Expenditures

  • Declining Pupil Enrollment

  • Leading up to the………………

    Perfect Storm!!!


Budget reductions1

Budget Reductions

  • How do you maintain local effort when reducing the budget?

    • 1. Calculate District’s MOE during the Budget Process

    • 2. With Declining Financial Resources—Easier to meet Per Pupil Expenditures rather than the Aggregate Expenditures , but must monitor

    • 3. With Declining Per Pupil Expenditures, must monitor costs

    • With Declining Per Pupil Enrollment, Monitor Per Pupil Expenditures in order to meet MOE


Budget reductions2

Budget Reductions

  • Number of Special Education Students

    • Inclusion Model—factor in declining numbers

    • Response to Intervention (RTI)—causing a delay in identification of Special Education Students

  • Number of Staff FTE’s may not decline, but may be recoded with different Program Intent Codes

    • Appearance of Decline in Maintenance of Effort

    • Students may need additional assistance in classrooms—causing additional staffing needs without corresponding state program aid


Budget reductions3

Budget Reductions

  • Sample School District

    • Decrease of $4,031,313 in local effort (Line 15)

    • Decline in local effort adjustment:

      • Adjusted by 50% of Increase of Entitlement from 2009-10 compared to 2008-09 (Line 16 = 50% of Line 27)

      • Decline in local effort adjusted:

        • Line 16$10,235,048

        • Less Line 15 4,031,313

        • Line 17$ 6,203,735


Budget reductions and your moe watch out1

Budget Reductions and Your MOE – Watch Out!

Reducing Staff to Reduce Your Payroll Costs and the Expenditure Budget……………

May Cause an Offsetting Reduction in Revenues!!!!

Watch out!!!


Plan for your maintenance of effort

Plan for Your Maintenance of Effort

  • Repercussions of Reduction in Staff?

    • COMMUNICATE!

    • Make sure the Superintendent and School Board are aware of possible recapture of funding!


Maintenance of effort2

Maintenance of Effort

  • Questions???

  • Resources:

  • TEA website:

    • MOE Templates:

    • TEA Staff Presentations

    • http://www.tea.state.tx.us/index4.aspx?id=4073


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