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Special Education Listserv

Subject: Receipt of Federal Funds/Overpayments

Source: Special Education Finance, Division of Financial and Administrative Services

Intended Audience: Special Education Directors, District Administrators

Date: November 14, 2011

Districts/LEAs that receive an overpayment of federal IDEA Part B funds must submit a refund to the Division for the overpayment amount plus any interest that could have accrued on the overpayment to comply with the Cash Management and Improvement Act (CMIA).  Funds used to pay the interest must come from the district's/LEAs state/local funding sources.  Interest is calculated by taking the amount of the overpayment multiplied by the annualized federal interest rate for the fiscal year, and then multiplied again by the number of business days the overpayment was held.  Business days are counted from the day of the payment to the day the check is cut.  Federal interest rates are located at: http://www.fms.treas.gov/cmia/index.html.  Please note that interest is owed even if it was not actually accrued because the standard is "could have accrued."

Therefore, it is important that districts/LEAs carefully review payment requests to ensure the correct amounts are entered before the request is submitted.  In addition, districts/LEAs should compare all payment transmittals to their payment requests to ensure that the system has not overpaid the district in error.  If districts/LEAs notice that a Part B overpayment has occurred, they should contact the Special Education Finance section as soon as possible at (573) 751-0622 or by email at spedfunding@dese.mo.gov so interest charges are not owed.