MOE Rule Finalized, Finally

Today, some 18 months after proposed, the U.S. Dept. of Education issued the final federal regulations amending Part B of the Individuals with Disabilities Education Act (IDEA) governing the requirement that local educational agencies maintain fiscal effort, or maintenance of effort (MOE). The new regulations are effective July 1, 2015.

The final MOE regulations provide clarification on the following:

  • the Subsequent Years rule,
  • the eligibility and compliance standards,
  • the four methods available to LEAs to meet the eligibility and compliance standards, and
  • the existing exceptions and adjustment in §§ 300.204 and 300.205.

Subsequent Years rule

This amendment expands the LEA (aka school district) eligibility standard by clearly establishing that if an LEA fails to meet its MOE requirement for any fiscal year, the level of funding required for any subsequent year (beginning or or after July 1, 2015) is the amount that would have been required in the absence of that failure – not the LEA’s reduced level of expenditures.

Now known as the “Subsequent Years Rule” (§300.203 (c)), this clarification codifies the OSEP April 2012 Letter to Boundy which challenged an earlier OSEP interpretation in its Letter to East. IDEA Money Watch supporters worked hard to bring about this reversal, including language in the federal Appropriations Acts of 2014 and 2015 pending new regulations. Now, with the release of these final regulations, this matter is put to rest.

The regulations include a number of tables to assist States and LEAs in establishing a thorough understanding of how an LEA may comply with the Subsequent Years rule.

Four methods available to LEAs to meet the eligibility and compliance standards 

The regulations now makes clear that the an LEA may meet the compliance standard using one of four methods and that SEAs must permit LEAs to do so. The four methods are:

(1) Local funds only, (2) the combination of State and local funds, (3) local funds only on a per capita basis, or (4) the combination of State and local funds on a per capita basis.

It is also established that an LEA may change methods to establish compliance from one year to the next. LEAs may meet the compliance standard using alternate methods from year to year. The regulations include a number of tables that provide examples of how an LEA may meet the compliance standard using alternate methods.

Existing exceptions and adjustment in §§ 300.204 and 300.205 

The regulations establish that LEAs may include any allowable MOE reductions (as laid out in §§ 300.204 and 300.205) that it is eligible to take preparing a budget for the upcoming year. It had previously been unclear if this was allowable.

 

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