RTI and ARRA
The American Recovery and Reinvestment Act of 2009 (ARRA) has been a primary topic of conversation for nearly every industry and organization since it was signed on February 17, 2009. The overall goals of the ARRA are to stimulate the economy in the short term and invest in a variety of areas, including education, to ensure the long-term economic health of the nation. ARRA specifically addresses and provides increased funding for several entitlement grants, including the Individuals with Disabilities Education and Improvement Act of 2004 (IDEA 2004), Parts B and C and Title I.
The question of whether Response to Intervention (RTI) startup, continuation, or expansion is an allowable ARRA expenditure is answered by stating that ARRA funding doesn't change or suspend any of the regulations that guide spending in any of the funded programs. The same rules for allowable costs, "supplement, not supplant," and maintenance of effort apply to stimulus dollars funneled through these formula grants. If a particular program, activity, or initiative is an allowable cost for regular IDEA 2004 or Title I allocations, ARRA dollars could be used for the project as well.
There is an opportunity, however, to redirect unrestricted general operating dollars that had been previously committed to special education expenditures and included in the maintenance of effort calculation. This is often referred to as "the 50% rule." In times of declining revenues, this opportunity does not present itself often. However, the unprecedented infusion of federal IDEA 2004 revenue through the ARRA has opened this particular maintenance of effort exception to almost every school district/local education agency (LEA).
Maintenance of Effort (MOE)
Any LEA that receives any federal IDEA 2004 funds must agree each year to pay the same share of the state and local cost of special education that they paid the previous year. For example, if the LEA spent $100,000 of state and local funds for special education services in FY2009, it must spend at least $100,000 in FY2010 to be eligible to receive IDEA 2004 funding in FY2010.1 The level of state and local expenditures that must be maintained by the LEA to continue to receive federal funding is called maintenance of effort (MOE). Failure to meet MOE requirements can result in a reduction of federal funding.
There are exceptions to this rule that allow an LEA to reduce the level of state and local expenditures below the level of state and local expenditures for the preceding year. These exceptions include the voluntary departure of special education or related services personnel and a decrease in the enrollment of children with disabilities, along with other specific provisions.
IDEA 2004 also allows the LEA to reduce the level of MOE when its flow-through allocation of federal IDEA 2004 Part B funds is increased from one year to the next. When this occurs, the LEA may reduce its MOE obligations by half of the increased amount, or 50%. The LEA is not required to utilize this option and may also reduce MOE by an amount lower than the full 50% of the increase. Any and all funds "freed-up" by the 50% rule must be used to carry out activities that could be supported with funds under the Elementary and Secondary Education Act (ESEA). This includes any activity allowed under Title I, Impact Aid, or other ESEA programs. An LEA could use these funds to pay for activities that are currently being funded with other state and local funds or for new activities. This is a very broad scope and, essentially, includes nearly every activity performed by a school district that would contribute to student achievement.
Demonstration of the 50% Rule
The demonstration above shows that an LEA received an IDEA 2004 allocation in FY2009 of $150,000, and expended $800,000 in state and/or local funds on special education. The $800,000 includes all non-grant funded special education costs. The following year, FY2010, because of the increase in the special education allocation from ARRA funds, the LEA receives an increase in the IDEA 2004 allocation of $100,000. The LEA's total IDEA 2004 allocation is now $250,000. Because of the 50% rule, the LEA would be allowed to reduce their local effort of $800,000 by $50,000, half of the amount of the increase received.
The amount of the allowable reduction that the LEA actually realizes must be expended on activities that support ESEA. By taking advantage of the flexibility of the IDEA 2004 50% rule, the LEA would be able to reduce its MOE from $800,000 to $750,000 with no penalty. This makes available $50,000 for uses other than special education, including RTI expenditures that do not qualify for IDEA 2004, Title I, or any other federal entitlement program.
Using Freed-up Funds for RTI
IDEA 2004 dollars, by nature, are to be spent only on supplemental services and supports for students who have been identified as having a disability. Likewise, Title I services must be concentrated to serve the students not meeting, or most at risk of not meeting, state standards. Services provided through both programs must meet "supplement, not supplant" provisions of the law. These requirements, and others, impose significant limitations on the available funding for RTI through these federal sources.
Screenings and primary interventions that are conducted for all students typically may not be charged to any federally funded grant program. However, it would certainly be allowable to use funds realized through the 50% rule to support these activities. The funds, once freed, are unrestricted state and local dollars and the only requirement is that they be spent on ESEA activities. The LEA will be required to track the use of these funds to ensure that this requirement has been met.
An LEA should take the following steps to implement this plan:
Identify the amount of special education ARRA funds to be received by the LEA.
Calculate the maximum MOE reduction.
Decide which costs, previously supported by unrestricted state and local dollars, are to be supported by new special education dollars.
Budget newly available state and local dollars for unfunded RTI expenditures.
There are provisions in IDEA 2004 that limit whether an LEA may reduce local effort using the 50% rule. It is important to know if any of the following situations apply.
The LEA must meet requirements of IDEA 2004 Part B, including meeting all targets in the state's performance plan, in order to apply the MOE adjustment.
The LEA must establish and maintain free appropriate public education programs, without state assistance, oversight, or sanction.
The LEA must not have been identified by the state as having significant disproportionality, thereby triggering the requirement that the LEA use 15% of its IDEA 2004 Part B allocation on coordinated early intervening services.
Although ARRA, or stimulus, dollars are not specifically identified for RTI start up, implementation, or expansion, they do offer opportunities for offsetting other expenses to alleviate strains on district budgets and improve student achievement. The possibility of gains in student achievement without increased expenses is a worthy goal and one that could be possible using the 50% rule in IDEA.
American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, (2009).
Elementary and Secondary Education Act of 1965, PL 89-10, 20 U.S.C. §§ 241 et seq.
Individuals with Disabilities Education Improvement Act of 2004, 20 U.S.C. § 1400 et seq. (2004).
U.S. Department of Education (n.d.). Section 300.205 Adjustment to Local Fiscal Efforts in Certain Fiscal Years. Retrieved September 1, 2009.
1 The U.S. Department of Education (DOE) identified all stimulus appropriations as supplemental FY2009 allocations. However, the DOE fiscal year is different than most district fiscal years. Any new money appropriated to districts for the 2009–2010 school year is typically an FY2010 allocation. Few states distributed the ARRA dollars within districts' FY2009. For the majority, the dollars were not allocated to districts until the current fiscal year, identifying the funds as FY2010 allocations to districts.
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