Special Education Listserv
Subject: Maintenance of Effort (MOE) Adjustment
Source: Funds Management
Intended Audience: Superintendents, Special Education Directors, Finance Administrators
Date: May 13, 2010
As the end of the school year is fast approaching, we are finding there are still several questions in the field related to the Maintenance of Effort (MOE) Adjustment option. Remember, MOE is the amount of state and local funds expended towards special education. There is a requirement for the district to spend the same amount or more as the previous year unless an adjustment or exception applies. While this SELS provides a brief summary of the adjustment process, we ask that you please call the Funds Management Section if you still have additional questions. This is a complicated coding change that can have a huge impact on budgeting for the 2010-11 school year. The Division has posted the maximum amount each district can take for an adjustment at:
http://www.dese.mo.gov/divspeced/Finance/. Click on ARRA info link to the right, and then click on "Maximum MOE Adjustment Amount by District" link under the Maintenance of Effort section.
An adjustment is a reduction to MOE, so basically the district is reducing the amount of state/local dollars they put behind special education. For example, if a district's MOE is $500,000 and their adjustment amount is $200,000, then the new MOE threshold is $300,000. The district was able to adjust (reduce) their MOE by $200,000; thus "freeing-up" or "redirecting" $200,000 in state/local dollars that were previously budgeted for special education. The district can now take this $200,000 and spend on non-special education expenditures for this school year.
The district, if it has not done so already, will have to make some coding changes. Using the example above, the district is going to identify $200,000 of their special education expenditures paid with state/local funds and "re-code" those expenditures as federal IDEA or IDEA ARRA funds. This will "free-up" $200,000 of state/local dollars that will now need to be coded to non-special education activities. The district will have to track these non-special education expenditures and report on their Final Expenditure Report (FER).
Important Points to Remember:
* The adjustment only applies to 2009-10, meaning the district has until June 30, 2010, to spend the "freed-up" funds. Any unspent "freed-up"
funds do not carry-over.
* If the entire adjustment amount is not expended, the MOE can only be reduced by the amount expended.
* Districts do not have to spend any IDEA ARRA funds in order to take advantage of the adjustment if they can operate their program on the reduced MOE and regular IDEA grant.
* Any expenditures from Part B funds on Early Intervening Services (EIS) will reduce the amount of the adjustment.
* The district must track the "freed-up" funds that are spent on non-special education activities and record them on the Part B Final Expenditure Report (FER). Each expenditure will be classified into an ESEA activity or coded to Impact Aid. The Division will issue guidance on how to code these prior to the FER submission date.
* The new lower MOE threshold will set the threshold for the upcoming years until the district decides to increase it again.
* Districts will not receive a payment for the "freed-up" funds. These are dollars that are currently built into the General Ledger budget that were obligated for special education but are now being released to the general ledger through the adjustment.