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Special Education Listserv

Subject: State and Local Special Education Expenditures UPDATE

Source: Shelley Witherbee, Director, Funds Management

Intended Audience: Education Directors, Superintendents, and Financial Administrators

Date: July 11, 2008

One of the requirements for Federal Part B Entitlement funding is Maintenance of Effort (MOE) which means in general, a district must expend in the current year an amount equal to or greater than the special education expenditures in the prior year.  Maintenance of Effort may be calculated using local expenditures only or a combination of state and local expenditures.  MOE may be met by selecting one of four different methods, whichever is most advantageous to the district.

These methods include:

1. Combined State and Local Expenditures 2. Per Capita (per child - December 1 child count) using Combined State and Local Expenditures 3. Total Local Expenditures 4. Per Capita (per child - December 1 child count) using Local Expenditures Only

A district must provide two MOE calculations annually to DESE.  The first calculation uses actual expenditures for the school year just completed in order to determine whether the district is entitled to keep all of the Part B allocation for that year.  The second calculation is a budget MOE calculation for the new (current) school year which indicates a budgeted amount equal to or greater than the prior year expenditures for the district to be eligible to receive Part B funds in the current year.

The Division of Special Education had previously announced through SELS that it would require all districts to separate state and local expenditures for special education for the 2008-09 school year regardless of which method of MOE they chose.  After further evaluation, the Division has determined that districts need to separate state and local expenditures ONLY if the district elects to meet maintenance of effort using total local expenditures or the per capita using local expenditures.  Therefore, on the DESE Maintenance of Effort worksheet for the FY 2008 actual/2009 budget calculation, if the district elects to calculate MOE using combined local and state expenditures, it should report actual combined local and state expenditures in Column C, even though the column heading indicates State Expenditures only.  

In addition, State Special Education Funding (previously referred to as Exceptional Pupil Aid/EPA) was made a component of the Basic State Aid Payment effective in FY 2007.  While these funds are no longer paid as categorical funds for special education, a portion of the base Basic State Aid is attributable to special education and continues to flow to each school district in an amount roughly equal to the amount of EPA received by the district in FY 2006.  Each district is expected to maintain special education maintenance of effort using these state special education funds as well as other state and local funds as necessary.  The district FY 2006 EPA payment amount is posted at:  

The 2006 EPA amount indicated is the state amount of funding a district should consider as the beginning point for its special education budget each year.  However, as long as MOE requirements are met, it is ultimately up to the district to determine the total amount of state and local funds budgeted for its special education program.