New Mexico could lose more than $60M in special ed funding

There’s a big mess brewing in the Land of Enchantment. And it could cost the state dearly in Federal funding for the Individuals with Disabilities Education Act.

State auditor Hector Balderas, following a detailed audit of the NM Education Dept. (available here), directed the education dept. to provide details on why it failed to provide adequate state funding for special education in two consecutive years, in violation of the IDEA’s “maintenance of effort” or MOE requirements.

Under 34 CFR §300.163(a), “a State must not reduce the amount of State financial support for
special education and related services for children with disabilities, or otherwise made available
because of the excess costs of educating those children, below the amount of that support for the
preceding fiscal year.” If a State fails to maintain the required level of financial support for special education and related services, under 34 CFR §300.163(b); the Secretary of Education reduces the
allocation of funds under section 611 of the IDEA for any fiscal year following the fiscal year in
which the State fails to comply with the requirement of34 CFR §300.163(a) by the same amount
by which the State fails to meet the requirement. (Letter to states clarifying MOE)

IDEA authorizes very limited waivers to the State MOE requirement. The Secretary of Education may find that a waiver is equitable due to exceptional or uncontrollable circumstances such as a natural disaster (e.g., Hurricane Katrina) or precipitous and unforeseen decline in the financial resources of the state, or the State meets the exceptionally high standards for a waiver of the supplement not supplant requirement – i.e., an SEA can establish that a free appropriate public education is provided to all eligible children with disabilities in the State.  (This type of waiver has never been granted.) USED issued guidance on the process and criteria used to evaluate a request by states to waive maintenance of effort (MOE) requirements in 2009.


Balderas said his office wants to find out why the department didn’t comply and why it took so long to disclose what was happening.

The New Mexico Education Dept. requested a waiver (as allowed under IDEA) for two years – 2009-2010 and 2010-2011. In June 2013 the US Dept. of Ed informed New Mexico that it was granting the waiver for 2009-2010 but not for 2010-2011 hence the potential loss of funds.

According to a story in the Santa Fe New Mexico paper, New Mexico has appealed the denial of the waiver for 2010-2011. Lawyers from both sides will meet in Washington, D.C., on April 8 to lay out the legal groundwork.

Documents regarding New Mexico’s MOE waiver requests:

  • NM Waiver Request for 2010-2011
  • NM Waiver Request for 2009-2010
  • USED Response
  • State Audit Report


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