Department of Education Makes Change to Rule Under the Individuals with Disabilities Education Act

The Department of Education made a technical change to the state maintenance of effort (MOE) rule under the Individuals with Disabilities Education Act (IDEA). The change was included in the continuing resolution (CR), the spending bill for the rest of the 2013 fiscal year that Congress passed last month.

Under an MOE, states cannot cut their own education spending below whatever amount they spent the previous year and still receive their full allotment of federal dollars under IDEA, unless they get special permission from the Department. A provision in the recent spending legislation clarified that while states that are out of compliance with the law will have their IDEA funding reduced, the cut will not be permanent. Instead, the reduction would just be for the year (or years) that the state was out of compliance and did not obtain a waiver. Once the problem had been fixed, the state could go back to its regular spending levels. Any surplus funds resulting from reductions in funding due to MOE violations would be divided among states that follow the rule as a one-time bonus.

Local Districts Required to Fulfill Maintenance of Effort

The Department of Education retracted informal guidance it had given to local school districts concerning the maintenance of effort (MOE) requirement in the Individuals with Disabilities Education Act (IDEA). The MOE requirement was built into IDEA to protect students with disabilities from economic and political funding decisions. In June 2011, the Department had advised the National Association of State Directors of Special Education that if districts lowered special education funding (there are a few very specific exceptions to the MOE requirement), districts could base future funding on the lowered amount. The Arc joined several advocacy organizations in asking the Department to re-think its interpretation of the MOE requirement in IDEA and to retract the guidance.

In a letter sent to the Center for Law and Education on April 4, the Department said that upon further review, they had determined that the amount of money a district must spend on special education in a year after it had not able to maintain effort is the amount that it should have spent in the prior year, and not the district’s actual expenditures. The Department concluded its letter by indicating it planned to seek public comment on the issue.

Individuals with Disabilities Education Act and Maintenance of Effort

The Office of Special Education Programs (OSEP) in the Department of Education issued informal guidance to local schools explaining that they can reduce their local spending on special education services. OSEP’s guidance was triggered by a request from the National Association of State Directors of Special Education and concerned a local school district that had not been able to provide the same level of funding for special education in 2011 as it had in 2010. The district was fined for its failure but, according to OSEP, could reduce its 2012 level of special education funding to the 2011 reduced level (when it failed to meet the 2010 level of spending) rather than the 2010 level. Legal advocacy organizations have said they believe OSEP is mistaken and have asked for reconsideration of OSEP’s position. Under the IDEA, States and local school districts are required to keep their spending levels the same from year to year, a provision known as maintenance of effort (MOE). Several states have asked for a waiver from the MOE requirement due to budgetary constraints (Alabama, Iowa, Kansas, New Jersey, Oregon, South Carolina, and West Virginia).