United States General Accounting Office

GAO Report to Congressional Committees

May 1996 DOD DEPENDENTS

SCHOOLS

Cost Issues Associated

With the Special

Education Program

G O A

years

1921 - 1996

GAO/HEHS-96-77

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-262031 

May 13, 1996

The Honorable Strom Thurmond

Chairman, Committee on Armed Services

United States Senate

The Honorable Sam Nunn

Ranking Minority Member, Committee on

 Armed Services

United States Senate

The Honorable Floyd D. Spence

Chairman, Committee on National Security

House of Representatives

The Honorable Ronald V. Dellums

Ranking Minority Member, Committee on

 National Security

House of Representatives

To provide a free public education through secondary school for

dependents in overseas areas,1

 the Congress created the Department of

Defense Dependents Schools (DODDS) system in 1978. DODDS, a Department

of Defense (DOD) support organization, is responsible for educating every

child of a sponsor2

 serving an accompanied tour,3 regardless of the child’s

educational needs or the resources available at the sponsor’s overseas

location.

In addition, DODDS must provide special education assistance to all eligible

students as required by the Individuals With Disabilities Education Act

(IDEA). To comply with IDEA, DODDS’ special education program must

provide a free and appropriate education for students with disabilities

aged 3 through 21. In most cases, special education students attend DODDS

schools with the resources to meet their educational needs. Sometimes,

however, the sponsor of a special education student is assigned to a

location lacking a DODDS school or where the DODDS school lacks the

1

Public Law 95-561, the Defense Dependents’ Education Act of 1978, (20 U.S.C. 921) created DODDS.

2

A sponsor is an active-duty military service member stationed overseas or a full-time DOD employee

whose salary is paid from appropriated funds and who is stationed overseas and either a U.S. citizen or

an immigrant who is a permanent legal U.S. resident.

3

An accompanied tour is an overseas tour, usually 24 to 36 months, during which the federal

government pays the transportation and housing costs for dependents who accompany a military

service or DOD employee.

Page 1 GAO/HEHS-96-77 DODDS Special Education
B-262031 

resources to meet the student’s needs. In these cases, DODDS pays the cost

of obtaining such resources for students on accompanied tours, even if it

means placing students in a non-DODDS school.4

Because of concerns that DODDS is incurring excessive costs to educate

special education students when their sponsors are assigned to locations

lacking a DODDS school that can meet the students’ needs, the House

Committee on National Security asked us to review DODDS’ special

education program. This review was part of the work we were directed to

do by the Conference Report accompanying the 1994 Defense

Authorization Act.5

 The Committee was particularly interested in knowing

the (1) amount of money DODDS spends on its special education program,

(2) number of special education students whose sponsors are assigned to

locations lacking a DODDS school with the resources to meet the students’

needs and the cost associated with meeting their needs another way, and

(3) number of special education students who are sent to non-DODDS

schools because no DODDS school is located near them to meet their needs

and the associated cost.

To obtain this information, we reviewed special education laws and

relevant DOD regulations. We also analyzed data on special education

enrollments and costs in DODDS schools but did not independently verify

the accuracy of the reported data. We supplemented our analysis with

discussions with officials at the Office of the Secretary of Defense and

DODDS headquarters and used structured interviews to gather information

from two of three DODDS regional offices,6

 9 of 11 district offices, and 21 of

191 schools. We did our work on the special education program between

June 1994 and December 1995 as part of the work mandated by the

Conference Report accompanying the 1994 Defense Authorization Act.

Our work was done in accordance with generally accepted government

auditing standards.

4

Generally, the student is placed in a school that civilian agency dependents attend while abroad.

Various nongovernment, coeducational independent schools are available overseas, but most

American students attend schools established cooperatively by Americans living overseas. Many of

these schools receive assistance and support from the U.S. government.

5

Under this congressional mandate, we have issued two other products: Military Dependents’

Education: Current Program Information and Potential Savings in DODDS (GAO/T-HEHS-94-155,

Apr. 26, 1994) and DOD Dependents Schools: Enrollment Categories, Numbers, and Locations

(GAO/HEHS-95-149, Sept. 18, 1995). This report is our final product under this mandate.

6

We excluded the Panama Region from our analysis of special education enrollments because, under

the terms of the Panama Canal Treaty, the schools in Panama will be turned over to Panama’s

government for operation in 1999 and the only other school in the region was scheduled to close in

1995.

Page 2 GAO/HEHS-96-77 DODDS Special Education
B-262031 

Results in Brief Although DODDS provides special education assistance to about 8,000

students, it does not separately track and report information needed to

determine the total amount of money DODDS spends on its special

education program. Specifically, DODDS’ accounting system only segregates

special education labor costs, such as special education teachers’ salaries.

Other special education costs, for equipment, supplies, and the like used

for special education students, are combined with costs incurred for the

regular education program.

Similarly, DODDS does not track and report information on the additional

costs it incurs to (1) acquire services for special education students whose

needs cannot be met by DODDS schools in locations where their sponsors

have been placed or (2) send special education students to non-DODDS

schools to meet their needs. According to district office special education

staff, however, only a small number of special education students fall in

these categories. These staff estimated that DODDS had incurred additional

annual per student costs that ranged from several hundred dollars for

evaluation and monitoring to $60,000 when teachers had to be flown in to

one DODDS school throughout the school year to provide services. DODDS

regional office staff identified 15 students in non-DODDS schools who were

receiving special education services at the time of our visits. A DODDS

official told us that one of these students was in a non-DODDS school

because the DODDS school where the student’s sponsor had been assigned

lacked special education services. According to the official, the other 14

students were in non-DODDS schools because no DODDS schools were

located where the students’ sponsors had been assigned.

Two factors have influenced DODDS’ special education program costs:

(1) DOD’s lack of adherence to its policies and procedures for screening

and placing dependents with special education needs, which has

sometimes resulted in the assignment of their sponsors to overseas

locations lacking DODDS schools with the services they need and (2) DODDS’

management of its special education program, which has historically

focused on legal compliance and paid scant attention to instructional and

administrative issues. One way to possibly reduce program costs is to

improve the effectiveness of these factors.

Background DODDS’ total 1994-95 school year enrollment was approximately 89,000

students. The enrollment in the special education program was

approximately 7,700 students—a 9-percent increase from the 1992-93

Page 3 GAO/HEHS-96-77 DODDS Special Education
B-262031 

school year enrollment.7 Some DODDS officials believe DODDS’ special

education population will continue to increase as DODDS implements new

initiatives mandated by IDEA, such as the establishment of preschools for

children aged 3 to 5 with identified disabilities.

DODDS staff in three regions—European, Pacific, and Panama—and 11

districts administer the special education program at 191 schools in 14

countries. Although DODDS does not offer full services for all disabilities at

every school, it offers the full continuum of special education services,

except for full-time residential care, in each region.8

 Most DODDS schools

can meet the needs of most special education students. Some schools

located near medical facilities in both the European and Pacific regions

can serve the needs of students with severe disabilities, such as some

neurological disorders, who also require specialized medical services.

In 1983, DODDS established its special education office to ensure

compliance with IDEA. Although the Department of Education provides

some funding for implementing IDEA in the United States, DODDS is not

eligible for such funding. DODDS does not report to the Department of

Education on its implementation of the act because it is exempt from

IDEA’s reporting provisions.

DODDS Does Not

Separately Account for the

Full Cost of Its Special

Education Program or

Collect Data on Special

Education Students Whose

Sponsors Are Assigned to

Locations With Schools

Lacking Services

DODDS does not record separately all costs related to its special education

program. Generally, DODDS’ knowledge about its special education program

costs is limited to teacher salaries. DODDS usually aggregates special

education program costs such as those for equipment, evaluation

instruments, transportation, and books with data on the costs of

implementing its general education curriculum. Accounting codes for

various special education costs were either never established or not used

consistently throughout DODDS. Fiscal managers in DODDS told us they did

not maintain discrete data on special education costs other than teacher

salaries because they have no need to do so.

In addition, DODDS maintains neither records on special education students

who are placed in schools without needed services nor data on any

additional expenditures it incurs to provide the services. Our discussions

with officials in DODDS’ district offices and schools indicate that, on the

7

Data on DODDS’ special education population were not maintained before school year 1992-93.

8

Services are available to support children with mild to severe communication, emotional, hearing,

visual, learning, and/or orthopedic impairments as well as developmental delays. Students requiring

full-time residential care are generally placed in stateside residential programs.

Page 4 GAO/HEHS-96-77 DODDS Special Education
B-262031 

basis of their experience, the number of such placements worldwide

appears to be relatively small. For example, although officials in one

district cited 10 students in a 2-year period who were considered to be

inappropriately placed, officials in other districts cited only 1 or 2 students

so placed per year. They told us, however, that disruptions can arise for

staff, the student being placed, and the other students while DODDS works

to meet the needs of the child. For example, students with severe

disabilities may have to remain in classrooms with teachers unprepared to

deal with their needs while DODDS works to remedy the situation. In

addition, the school may incur extra costs when a student arrives at a

school lacking the resources to serve the student. DODDS does not,

however, routinely track and report cost data. Data we obtained from

some locations showed approximate costs ranging from a few hundred

dollars to $60,000 for one student when teachers had been flown in

throughout the school year to provide services.

DOD regulations authorize DODDS to obtain reimbursement from the military

services for extra costs incurred to provide special education services for

children on accompanied tours. DODDS asked all its regions to report these

costs for the first time in August 1994. Nevertheless, it did not obtain

reliable or consistent cost data from the responses received because

districts included different cost elements in their reports. DODDS officials

said they plan to continue to work on getting better cost information.

At our request, DODDS regional offices identified 15 students in non-DODDS

schools who were receiving special education services, but they kept no

record of all costs incurred to deliver special services. A DODDS official said

only one of the special education students in a non-DODDS school was

placed there because special education services were not available at a

DODDS school. Estimated annual, individual costs for special education

students placed in non-DODDS schools ranged from several hundred dollars

to evaluate and monitor a child to $55,000 for non-DODDS school tuition

costs.

Screening and Placement

Policies and Procedures

and Program Management

Can Influence the Cost of

DODDS’ Special Education

Program

DODDS and DOD officials stated that DODDS costs can increase when policies

and procedures for screening and placing special education students are

not followed. In addition, lack of management attention to special

education program issues, such as teacher workload and training and

providing the least restrictive environment for special education students

as required by IDEA, may also influence costs.

Page 5 GAO/HEHS-96-77 DODDS Special Education
B-262031 

Before authorizing an accompanied overseas tour, DOD is required to

screen school-age dependents for disabilities. According to DODDS officials,

failure to screen students or consistently follow established screening and

placement procedures is a major reason special education students are

placed in schools without needed services. For example, at one DODDS

school only 1 of 10 special education students had been screened before

entering the school.

Screening and placement procedures were ignored for a variety of

reasons. In some cases, military personnel concealed their children’s

disabilities during the screening process because they perceived a

particular overseas transfer as necessary for career advancement. In other

cases, after the screening identified disabilities, the relevant military

service did not contact DODDS to coordinate the placement or disregarded

the placement recommendations. Although the military occasionally

returns personnel to the states for not adhering to these procedures, this is

not uniformly done among the services. Moreover, lacking adequate

expenditure data, DODDS cannot request reimbursement from the military

for the cost of providing special education to students in schools without

needed services.

Central management of the special education program over the years has

focused on legal compliance issues and paid scant attention to the

instructional or administrative support aspects of the special education

program, according to our discussions with DODDS officials. For example,

increasing noninstructional duties related to special education has

affected teacher workloads. In some schools, teachers are paid extra for

handling these duties as well as a full teaching schedule, and in other

schools one teacher handles all special education noninstructional duties

as a full-time job. No guidance from management has indicated which

arrangement is more cost-efficient or -effective for the schools. Also, one

school reported high special education teacher turnover rates in part due

to lack of guidance from management on implementing inclusion9

 in the

school to fulfill IDEA’s requirements to educate students in the least

restrictive environment. Again, lack of management attention to such

issues leaves DODDS unable to ascertain the most cost-efficient and

educationally effective way to address these issues. Furthermore, because

DODDS management has not implemented procedures to ensure that valid

and reliable cost data are routinely obtained and maintained, complete

9

Inclusion is a program in which a student—no matter what disability he or she may have—attends his

or her home school with age and grade peers and receives in-school education services, with

appropriate support in the general education classroom.

Page 6 GAO/HEHS-96-77 DODDS Special Education
B-262031 

cost information is not available to determine if the program is operating

efficiently or to accurately predict its future cost.

Concluding

Observations

In fulfilling its educational responsibilities overseas, DODDS must

sometimes incur extra costs because the sponsors of special education

students are assigned to locations lacking DODDS schools that can meet the

students’ needs. Only a small number of cases have occurred in which

DODDS has incurred extra costs because it could not meet the needs of

special education students at a DODDS school where they live, according to

available information. DODDS does not, however, record information in a

way that allows us to determine how much money it actually spends on its

special education program or how much extra cost DODDS has incurred

when DODDS schools could not accommodate special education students.

As a result, opportunities may exist for reducing the cost of DODDS’ special

education program. One possibility is better adherence to DOD’s screening

and placement procedures; another is improvements in DODDS’

management of its special education program.

Agency Comments In commenting on a draft of this report, DOD stated that cost data can be

retrieved from DOD’s accounting system or from source documentation.

DOD recognized, however, that items used in the special education program

that are not uniquely targeted or required by an individual special

education student are accounted for as general education costs. Although

we agree that DOD segregates some special education costs in its

accounting records, not segregating all such costs makes it impossible to

determine the total amount of money DODDS spends on its special

education program or the incremental cost DODDS incurs when its schools

cannot accommodate its special education students.

In addition, DOD informed us of some recent actions that address several

issues raised in our report. DODDS recently reorganized and gave its area

offices the responsibility to monitor and track all dependent children with

disabilities whose sponsors are assigned to locations that do not have the

resources to meet their special education needs or who require placement

in a non-DODDS school. DODDS gave area and district offices responsibility

for monitoring the compliance issues and providing technical assistance at

the local school level. According to DOD, DODDS headquarters will continue

to provide leadership for policy development and guidance for special

education programs overseas, including technical assistance and training

in the administrative and instructional aspects of the program. If properly

Page 7 GAO/HEHS-96-77 DODDS Special Education
B-262031 

implemented, these actions may improve DODDS’ management of its special

education program.

Finally, the Department reported that the screening and placement

process for special education children is being reviewed by a coordinating

committee that is standardizing the screening process and establishing

single points of contact for each of the military services and DODDS

schools. Like those noted already, if properly implemented, these actions

may address the concerns raised in our report.

We are sending copies of this report to agency officials and to other

interested parties. We will also make copies available to others on request.

Major contributors to this report are listed in the appendix. If you have any

questions about this report, please call me on (202) 512-7014.

Cornelia M. Blanchette

Associate Director, Education and

 Employment Issues

Page 8 GAO/HEHS-96-77 DODDS Special Education
Page 9 GAO/HEHS-96-77 DODDS Special Education
Appendix 

GAO Contacts and Staff Acknowledgments

The following team members contributed to this report: Mary E. Roy,

Evaluator-in-Charge; and Joan A. Denomme, Thomas J. Laetz, Mary W.

Freeman, Maria A. Cruz, Michael D. Rohrback, Paula J. Haurilesko, and

Daniel J. Tikvart, Evaluators.

(104826) Page 10 GAO/HEHS-96-77 DODDS Special Education
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