400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-2600

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The Department of Education’s mission is to promote student achievement and preparation for global competiveness 

by fostering educational excellence and ensuring equal access.

UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

June 1, 2022 

Honorable Brian Schroeder

Superintendent of Public Instruction

Wyoming Department of Education

2300 Capitol Avenue, Hathaway Building, 2nd Floor 

Cheyenne, Wyoming 82002 

superintendent@wyo.gov 

Dear Superintendent Schroeder:

This is in response to the September 30, 2021 letter from Dicky Shanor, Wyoming Department of 

Education’s former Chief of Staff, in which Wyoming requests waivers of the requirement to 

maintain State financial support (MFS) for special education and related services under the 

Individuals with Disabilities Education Act (IDEA), 20 U.S.C. § 1412(a)(18) and 34 C.F.R. 

§ 300.163, in the amount of $2,567,730 (based on a per capita MFS calculation) for State fiscal year 

(SFY) 2019 and $6,504,391 (based on a total MFS calculation) for SFY 2020.1 For the reasons 

explained below, the U. S. Department of Education (Department) does not grant these waiver 

requests, and therefore finds that Wyoming failed to meet MFS in both SFYs 2019 and 2020.

Background 

Several years ago, the Office of Special Education Programs (OSEP) identified a potential MFS 

issue after staff of the Wyoming Department of Education (WDE) informed OSEP that the State 

legislature was considering changes in the school financing system that would have a significant 

impact on the funding for special education, and — through subsequent discussions, as well as a 

white paper submitted to OSEP on June 15, 2018 — provided OSEP with additional information 

about its school financing system. This information raised questions about the methodology by 

which WDE calculated Wyoming’s State financial support under the MFS requirement. The 

MFS requirement mandates that the amount of State — rather than local — funds be maintained 

from one year to the next in order to ensure that State-provided funds are available for local 

educational agencies (LEAs) to meet their ongoing obligation to make a free appropriate public 

education (FAPE) available to each child with a disability. See 20 U.S.C. § 1412(a)(1) and

§ 1413(a)(1). OSEP sought additional information from Wyoming to determine which funds in 

its school financing system were being made available by the State. 

OSEP learned that Wyoming uses a foundation or “base budget” school funding formula. In 

other words, Wyoming’s primary school funding formula is designed to capture the total amount 

of funding the State calculates is necessary to educate a particular student and then divides that 

total between the State and its LEAs. For LEAs that generate more local revenue than that “base 

1

 States may meet the MFS requirement on either a total dollar or per capita basis, and where there is a shortfall 

under both bases, may use the basis that results in the smallest shortfall amount.
Page 2 –Superintendent Schroeder

budget” amount, the excess amount is required to be remitted to the State through a process 

known as “recapture.” The State uses some of these recaptured funds to help offset the cost of 

providing additional funding to low-revenue LEAs, while also using a portion of these

recaptured funds for other educational programs and purposes.

Under State statutory and regulatory requirements, LEAs’ costs of special education and related 

services (not covered by Federal IDEA Part B funds) were reimbursed at 100% from three 

sources of funds: (1) State funds from State generated revenue; (2) local funds (not 

“recaptured”); and (3) local funds (“recaptured”). WDE informed OSEP that WDE included all 

of these funds as amounts made available by the State in calculating State financial support 

towards the MFS requirement.

On December 13, 2019, OSEP had a subsequent conversation with WDE to further discuss and 

understand the State’s school funding structure, and to determine which funds should be counted 

as State funds for MFS purposes. On January 13, 2020, WDE submitted responses to questions

that OSEP raised during that conversation.

WDE explained that although Wyoming Statute § 21-13-306 states that local funds “recaptured” 

by the State “shall be drawn out and distributed to the [local school] districts,” the State 

interpreted that directive as allowing those funds to be used for all education programs, and not 

just reimbursement to LEAs. Thus, at the State’s discretion, the State’s view was that it may use 

those funds for other education programs or purposes or carry them over to the following year. In 

a September 11, 2020, letter, OSEP determined that it is reasonable for the “recaptured” local 

funds to be deemed State funds for the purposes of calculating MFS. However, OSEP 

determined that the local funds which are not “recaptured,” and which remain local funds 

without being remitted to or controlled by the State, cannot be considered State funds for MFS 

purposes. As a result, those local funds cannot be included in the calculation of State financial 

support for special education and related services. WDE’s then MFS methodology incorrectly 

included the amount of local funds that are not “recaptured” by the State. Because WDE was 

counting funds that are not State funds as State financial support for MFS purposes, the 

September 11, 2020, letter informed WDE that WDE’s methodology was inconsistent with the 

requirement in 20 U.S.C. §1412(a)(18)(A). OSEP required WDE to submit revised data, 

covering the previous five fiscal years, using a corrected MFS methodology to include only State 

funds, and to not include local funds which are not “recaptured” by the State and thus were 

incorrectly included in previous calculations.

Revised Data and Waiver Requests:

On March 5, 2021, and May 19, 2021, WDE submitted revised MFS data to OSEP based on 

required revisions to the State’s MFS methodology that excluded local funds not “recaptured” by 

the State. The corrected level of State financial support indicated MFS shortfalls in SFYs 2019 

and 2020 using either of the two methods for calculating State financial support recognized by 

OSEP — per capita (per child) or sum total — when compared to SFY 2018 baseline amounts.
Page 3 –Superintendent Schroeder

Table 1: Total and Per Capita MFS Calculations 

SFY

Total 

amount of 

State 

financial 

support

Child 

Count

Per Child 

Amount of 

State 

financial 

support

Shortfall based 

on Sum Total 

Amount of 

State financial 

support 

Shortfall

based on Per 

Child Amount 

of State 

financial 

support

2018 $163,969,617 15,638 $10,485 N/A N/A

2019 $160,603,024 15,562 $10,320 $3,366,593 $2,567,730

2020 $157,465,226 15,897 $9,905 $6,504,391 $9,220,260

Under 20 U.S.C. § 1412(a)(18)(A) and 34 C.F.R. § 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. The Department is permitted to 

waive this requirement for a State, for one fiscal year at a time, only if the Department

determines that granting a waiver would be equitable due to exceptional or uncontrollable 

circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial 

resources of the State. 20 U.S.C. § 1412(a)(18)(C)(i) and 34 C.F.R. § 300.163(c)(1). Regardless 

of whether a State receives a waiver under this authority, the State has a continuing obligation to 

ensure that a FAPE is made available to all eligible children with disabilities, as required in 

20 U.S.C. § 1412(a)(1) and 34 C.F.R. § 300.101. 

As noted above, on September 30, 2021, WDE submitted waiver requests for both SFYs 2019 

and 2020. In support of its waiver requests, WDE argued it would be equitable to grant this 

waiver because of “exceptional or uncontrollable circumstances” due to fluctuations in “local 

revenue” that resulted in districts requiring less funding directly from the State to provide

educational services. In its request, WDE conceded the State did not experience precipitous and 

unforeseen declines in State financial resources for the fiscal years at issue. WDE, however, 

argued that it did not decrease overall special education funding or availability and that the 

increased portion of local revenue is a result of its reimbursement system. Specifically, 

Wyoming argued that its “exceptional or uncontrollable circumstances” exist because its ratio of 

“State” and “local” funding is unstable year over year because of uncontrollable commodities 

market fluctuations. Therefore, while the total revenue that a district receives may be relatively 

unchanged year-over-year, the ratio of “local revenue” to “State support” may shift. WDE argued 

that this shift caused a decrease in State-level funding without a corresponding decrease in 

overall special education spending. 

As explained on OSEP’s June 23, 2021 call with WDE, in assessing waiver requests, the 

Department considers, among other factors, whether the State experienced exceptional or 

uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in 

the financial resources of the State as well as the State’s revenues for the year for which it sought 

a waiver, and to what extent the decrease was based on “exceptional or uncontrollable 

circumstances.” In this case, WDE has not demonstrated that the State experienced an 

exceptional or uncontrollable circumstance that caused the State unusual difficulty in meeting the 

MFS requirement in SFYs 2019 or 2020. Similarly, the State has not identified a decrease in 
Page 4 –Superintendent Schroeder

State revenues which would have been a contributing factor to the MFS shortfall. Instead, in its 

waiver request, WDE relied on the implementation of its own MFS methodology, and particular 

aspects of the State’s funding system which are within the State’s control, as constituting 

“exceptional or uncontrollable circumstances” in SFYs 2019 and 2020.

As the State explained, fluctuating funding sources are inherent in its system. The State was 

aware that the ratio of “local revenue” to “State support” may shift each year due to some school 

districts collecting more local revenue than in previous years and consequently requiring less 

funding being distributed to districts. Because these variations are inherently part of the State’s 

own funding system, the Department cannot consider local revenue fluctuation to be 

“exceptional or uncontrollable circumstances.”

WDE also argued that overall special education funding did not decrease in SFYs 2019 and 

2020, when considering the total of both State and local funding. Under the MFS requirement in 

20 U.S.C. § 1412(a)(18)(A) and 34 C.F.R. § 300.163(a), however, it is the amount of State

financial support that determines whether a State has met the MFS requirement, not the total 

amount of special education funding available to LEAs from all sources. Regardless of any 

fluctuation in local revenues, the MFS provision requires the State to ensure that State financial 

support does not decrease from year to year. The State has not cited any “exceptional or 

uncontrollable circumstances” that would have prevented it from doing so (e.g., a precipitous and 

unforeseen decline in State revenue, which WDE conceded did not occur). Because WDE did not 

experience an “exceptional or uncontrollable” circumstance in SFYs 2019 or 2020, the 

Department has determined that it is not equitable to grant a waiver under 

20 U.S.C. § 1412(a)(18)(C)(i) and 34 C.F.R. § 300.163(c)(1) for either SFY 2019 or SFY 2020.

Proposed Determinations

When a State fails to maintain State financial support for special education and related services 

at the level required by law, the Department “shall” reduce the allocation of funds to the State 

under 20 U.S.C. § 1411 (“section 611 grant”) “for any fiscal year following the fiscal year in 

which the State fails” to maintain State financial support by the same amount by which the State 

fails to meet the requirement. 20 U.S.C. § 1412(a)(18)(B); 34 C.F.R. § 300.163(b).

Accordingly, the Department proposes to make the following final determinations: that 

Wyoming is not eligible for a portion of its section 611 grant under IDEA in the amount of 

$2,567,730 because of its failure to maintain State financial support for special education and 

related services by that amount in SFY 2019. This amount is based on the per child amount of 

State financial support which is the lesser of the two SFY 2019 shortfall amounts in Table 1.

Wyoming also is not eligible for a portion of its section 611 grant under IDEA in the amount of

$6,504,391 because of its failure to maintain State financial support for special education and 

related services by that amount in SFY 2020. This amount is based on the sum total amount of 

State financial support which is the lesser of the two SFY 2020 shortfall amounts in Table 1.2

20 U.S.C. § 1412(d)(2). In summary, Wyoming failed to meet the MFS requirement in SFY 2019 

2 In the event of an MFS failure, the Department uses the lesser shortfall amount between the sum total amount of 

State financial support and the per child amount of State financial support for each year. In this case this means 

the penalty will be $2,567,730 based on a per child amount in SFY 2019, and $6,504,391 based on the sum total

amount in SFY 2020. 
Page 5 –Superintendent Schroeder

and SFY 2020 by $9,072,121. This represents the SFY 2019 Shortfall based on Per Child 

Amount of State financial support of $2,567,730 and the SFY 2020 Shortfall based on Sum Total 

Amount of State financial support of $6,504,391. 

Notice and Opportunity for a Hearing

WDE may request a hearing pursuant to the procedures in 34 C.F.R. §§ 300.179 through 300.183 

in connection with the Department’s proposed determinations to that Wyoming is not eligible for 

a total of $9,072,121 of its IDEA section 611 grant because of its failure to maintain State 

financial support for special education and related services in SFYs 2019 and 2020. To request a 

hearing, WDE must submit a letter to Katherine Neas, Deputy Assistant Secretary, delegated the 

authority to perform the functions and duties of the Assistant Secretary of the Office of Special 

Education and Rehabilitative Services, 400 Maryland Avenue S.W., Room 5106, Potomac 

Center Plaza, Washington, D.C. 20202-2600 (facsimile number 202-245-7638) not later than 30 

calendar days after it receives this notice. The filing date for any written submission by a party 

under 34 C.F.R. §§ 300.179 through 300.184 is the date the document is hand-delivered, mailed, 

or sent by facsimile transmission. 34 C.F.R. § 300.183(a)-(b).

The Department may undertake additional monitoring of Wyoming’s implementation of Part B 

of IDEA should we believe that to be necessary to assess whether FAPE is still being made 

available to all eligible children with disabilities. In addition, in light of the Wyoming IDEA 

State Advisory Panel’s duties in 20 U.S.C. § 1412(a)(21)(D), particularly its duty under 

20 U.S.C. § 1412(a)(21)(D)(i) to “advise the State educational agency of unmet needs within the 

State in the education of children with disabilities,” we are providing it with a copy of this letter.

We look forward to resolving this matter and appreciate your continued cooperation. 

Sincerely, 

/s/

Katherine Neas

Deputy Assistant Secretary 

Delegated the authority to perform the functions and duties of the 

Assistant Secretary of the Office of Special Education and 

Rehabilitative Services

cc: Margee Robertson 

State Director of Special Education 

 

Wyoming Advisory Panel for Students with Disabilities