Special Education Finance

1. Special Education Finance Designs for Learning September 2005 Diane D. Elkerton, MSE, Ed. Spec.NCSP Licensed Director of Special Education Licensed School Psychologist ddelkert@comcast.net *All information is taken directly from the MDE Special Education Funding and Data Manual and the Special Education Uniform Tuition Billing Manual 2005

2. Special Education Funding and Data Manual MDE April 2005 • Copies and updates of this manual can be downloaded from MDE website in PDF format: http://education.state.mn.us/html/intro_speced_res.htm.

3. State Funding for Special Ed. • Appropriations for State funding for special education is based on the perception of the “excess costs” of special education.

4. Excess Cost Aid • The use of the term “excess cost” stems from the legislative assumption that the general education revenue (GER) provided for all students is being used to cover basic costs for each child and the legislative desire to share the burden of these extra costs with local districts.

5. State Funding for Special Ed. • It is important to note that primary responsibility for the education of each student rests with the student’s district of residence and that it is appropriate for local funds to be used to the extent necessary to meet this responsibility.

6. State Funding for Special Ed. • Base Year Formula/Base Revenue: The special education revenue paid to school districts each year is based on expenditures from two years before.

7. State Funding for Special Ed. • State base revenue funds: • Salary: 68% of the salary of each essential staff providing direct instructional services to students receiving spec. ed. services; • Supplies & Equipment: 47% of the cost of supplies and equipments not to exceed an average of $47 per student. • Contracted Services: 52% of the amount of a contract for instruction and services that are supplemental to a district’s education program for students with disabilities.

8. State Funding for Special Ed. • State base revenue funds: • Contracted Services: 52% of the difference between the amount of the contract and the GER of the district for that pupil for the fraction of the school day the student received services that are provided in place of services of the district’s program; and • Transportation: 100% of the cost of special transportation services.

9. Federal Funding for Special Ed. • Federal special education funds are intended to supplement not to replace (supplant) such local funds (34 C.F.R. ss 300.230. • MN legislation provides a base revenue and an excess cost funding formula to aid districts in paying for costs incurred in providing spec. ed., & assumes that the balance of those costs will be met by local funds.

10. Fed. Funds Payment Schedule • Only current EDRS data is used to calculate federal entitlements. • Sept. 27% Oct. 36% Nov. 44% • Dec. 52% Jan. 60% Feb. 68% • March 76% April 83% May 90% Final (Dec.) 100%

11. Federal Excess Cost Aid Requirement C.F.R. ss 300.184 • Federal regulations require that the school must spend a certain amount for the education of its children with disabilities before Part B Funds are used.

12. Supplement Not Supplant • Federal funds cannot be used to displace or supplant state and local funds. Districts cannot move staff to federal funding in order to save state or local funds. Federal funds have traditionally been used in MN to supplement programs that have been paid for with state and local funds.

13. Third Party Funding • Minn. Stat. ss 125A.212 subd. 2 requires school districts to seek reimbursement from insurers and similar third parties for the cost of services provided by a district whenever these services are otherwise covered by the child’s health coverage. 5:1 Spec. Ed. Funding & Data Manual

14. Maintenance of Effort (MOE) • If a LEA does not maintain the same level of state and local spec. ed. expenditures from one year to the next, it may put itself in violation of the non-supplanting requirements. • The federal MOE clause in IDEA requires LEAs to spend in the current year, from state and local spec. ed. funds, the same or greater amount spent in the previous year. • An LEA cannot arbitrarily reduce its special education program costs without putting its federal spec. ed. funds in jeopardy.

15. Electronic Data Reporting System (EDRS) • EDRS is the online application system for special education funding. Current year expenditures are reported on this system for state and federal programs. The program edits the line items entered on this system and automatically errors out lines that are reported incorrectly.

16. Electronic Data Reporting System (EDRS) • Funding Source Codes (most require separate application) • Service Codes • Personnel Type Codes • Deduct Status/Parental Status • Disability Codes • Instructional Setting Codes • Facility Codes • Activity Codes

17. Electronic Data Reporting System (EDRS) Schedule of Reporting Activities July 1st – Extended year/summer school data is copied and rolled into next fiscal year. Aug. 16th Extended year/summer school data that has not been retained will be deleted from EDRS database. Sept. First fed. entitlement is calculated and sent to LEA. Dec. 30th All regular year EDRS data not retained or revised is deleted. Fin. Fed. Entitlement is made. Spec. Ed. EDRS data from the previous year is final.

18. Electronic Data Reporting System (EDRS) Schedule of Reporting Activities March 1st – Charter schools on current year funding must have expenditures reported on EDRS to receive state aid in the current year. April 30th – Have data entered on EDRS as complete as possible for the rollover into the new fiscal year. May 2nd – Current regular year EDRS data is copied and rolled into the new fiscal year. May 3rd – New year annual application materials are made available to districts via the MDE website. Districts should begin reviewing and retaining lines on EDRS. June 1st – Annual application forms and materials must be completed and returned to MDE. All EDRS lines must be retained to receive state or federal payment.

19. Special Education Finance Make sure that expenditures and codes are accurate for both state and federal special education expenditures. Match both EDRS and UFARS.

20. Tuition Billing • It is important to note that primary responsibility for the education of each student rests with the student’s district of residence and that it is appropriate for local funds to be used to the extent necessary to meet this responsibility.

21. Tuition Billing Determining Resident School District • The non-resident serving LEA is responsible for verifying the learner’s district of residence. • Serving LEA must requests students’ educational records, including transcript, current IEP, most recent ASR from the last school attended. • Note: Parent consent is not required for this sharing of educational records. According to MN Data Practices, educational records must be shared between state agencies (LEAs and correctional facilities) on demand and on a need-to-know basis. FERPA

22. Tuition Billing Tuition Agreements • The serving LEA must send a tuition agreement to the resident school district within 60 calendar days of the date the student is determined to be a nonresident, but no later than August 1, following the end of the school year in which the student was enrolled. • Tuition agreements must be sent out annually. • Tuition agreements must include a current copy of the student’s IEP.

23. Tuition Billing • In all placements, except parent choice placements, the serving district must invite resident district participation in the IEP process. The resident district can send a representative to the IEP meeting, participate by phone or defer program decisions to the serving LEA.

24. Tuition Billing • The serving LEA is responsible for entering the student information on MARSS and for notifying the resident district of all known nonresident students by Dec. 1 of the year in which the student is being educated. This will assure the resident district the student has been properly identified for federal child count and GER purposes.

25. Tuition Billing • All tuition bills should be mailed to the resident LEA on or before Sept. 15th, following the school term the services have been provided. • A copy of the student’s IEP and the MARSS nonresident report should be sent along with the bills.

26. Special Education Finance Questions/Answers Designs for Learning September 2005 Diane D. Elkerton MSE, Ed. Spec.NCSP Licensed Director of Special Education Licensed School Psychologist ddelkert@comcast.net