Special Education: More Flexible Spending Requirement Could Mitigate Unintended Consequences While Protecting Services
Released: 2015-10-19T00:00:00

Letter

Background

Special Education under IDEA

First enacted in 1975, IDEA entitles children with disabilities to a free appropriate public education designed to meet the unique needs of each child. To be eligible for IDEA funding, states are required to provide special education in the least restrictive environment; meaning that, to the maximum extent appropriate, these children are to be educated with other children who do not have disabilities. However, to meet the diverse needs of children with disabilities, states must ensure that school districts provide a continuum of alternative placements, including regular classrooms, special classrooms, and special schools. The removal of children with disabilities from the regular classroom can occur only when the nature or severity of the child’s disability is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily.

IDEA requires that the services provided to each individual student be determined through an individualized education program (IEP) that describes the child’s present levels of academic achievement, goals for progress, and the special education and related services needed to attain those goals. The IEP is developed by a team of teachers, parents, school district representatives, and other educational professionals. This team must meet to develop the initial IEP within 30 days of determining that a child needs special education and related services, and it must continue to meet at least once a year to review the IEP to determine if goals are being met and to make any necessary changes.

IDEA also provides for procedural safeguards, including that the parents of a child with a disability have the right to inspect and review educational records with respect to the identification, evaluation and educational placement of the child, and to obtain an independent educational evaluation at public expense if the parent disagrees with an evaluation obtained by the school district. IDEA and related regulations provide methods for resolving complaints between parents and school districts, including mediation, due process hearings, and state complaint procedures.

Special Education Administration and Funding

IDEA is administered at the federal level by Education’s Office of Special Education Programs in the Office of Special Education and Rehabilitative Services. Part B of IDEA authorizes funding for federal grants to states to enable school districts to provide services for students with disabilities aged 3 through 21. IDEA Part B grants to states are distributed among states using a “base grant”—the amount received by the state for fiscal year 1999—and any remaining funds are distributed based on states’ child population and poverty rates. States distribute the funds to school districts similarly, starting with a base grant and then using a formula based on school enrollment and poverty. According to Education data, in fiscal year 2015, Congress appropriated approximately $11.5 billion under IDEA Part B grants to states, serving nearly 6.6 million children with disabilities (see table 1). In fiscal year 2009, the Recovery Act appropriated federal funding for IDEA, Part B that was more than double the 2008 amount. Since then, federal IDEA, Part B appropriations have been relatively constant.

Education data indicate that the federal share of special education spending has generally declined since 2005, holding steady at about 16 percent since 2010, based on the national average per pupil expenditure. This indicates that the state and local share of special education spending has done the opposite: generally increasing since 2005 and holding steady at about 84 percent since 2010. State and local governments are responsible for funding most of the costs of special education and other K-12 programs, relying primarily on state income and sales tax, as well as local residential and commercial property taxes. As a result of the 2008 national recession, however, state and local revenues fell, resulting in cuts to education and other areas of spending. Research has shown that state funding for elementary and secondary education has been slow to recover from the 2008 recession and that long-term budget challenges are likely to persist.

As shown in table 1, Education data also indicate that there has been a decline in the number of students with disabilities being served since 2005. Some researchers have suggested this decline may be attributed, in part, to greater emphasis on intervention services that reduce the need for special education among children who struggle but may not need special education with the proper supports.

Maintenance of Effort Requirements

IDEA funds help cover the costs of educating children with disabilities but cannot be used to take the place of state and local funding allocated to special education programs. IDEA’s local MOE requirement generally prohibits districts from reducing their expenditures on special education and related services below the level of the previous year. Education provides districts with various methods for calculating their MOE amount: They can use only local funding or both state and local funding and can base their calculation on either the total or per-pupil amount. Also, a district may be able to reduce its expenditures and still meet the MOE requirement if it qualifies for certain allowable exceptions or the funding adjustment specified in IDEA law and regulations (see fig. 1).

IDEA also contains a state MOE requirement for state funding of special education. The standard for state compliance with MOE requires that states maintain the same level of financial support provided (made available) for special education and related services from year to year, regardless of the amount actually expended. Education may waive the states’ MOE requirement for exceptional or uncontrollable circumstances, but there is no comparable provision allowing Education or a state to waive the districts’ local MOE requirement.

Other federal funding streams also have MOE requirements, including several Elementary and Secondary Education Act programs. However, in contrast to the IDEA local MOE requirement, which is set at 100 percent of prior year’s spending, other education programs—including the Title I, Part A, Education for the Disadvantaged program (the largest federal funding stream for K-12 education)—have a local MOE requirement set at 90 percent of prior year’s spending for the amounts that school districts must provide in a given fiscal year from state and local sources (see table 2).

Based on our previous work on federal grant design, as well as more recent work on MOE provisions under the Recovery Act, we have found MOE requirements to be important mechanisms for helping to ensure that federal spending achieves its intended effect. However, we have also found that without sufficient flexibility, these requirements can reportedly have adverse effects on state and local governments by distorting state and local priorities, penalizing spending reductions arising from fiscal crisis or increased efficiencies, and discouraging program innovation and expansion. In light of these concerns, in a previous report we concluded that federal MOE requirements should be sufficiently flexible to help mitigate some of the potentially adverse effects of the requirement on state and local governments and asked the Congress to consider enacting a standard maintenance of effort requirement across federal programs to help ease confusion among and potential adverse effects on recipients of federal funds.

States Reported That Nearly All Districts Met MOE, but Some Faced Challenges

States reported that their school districts generally met the MOE requirement without using the allowable exceptions or funding adjustment but that some faced a variety of challenges in doing so. The key challenges in meeting MOE that districts cited involved state and local budget or cost reductions, which are not among the allowable exceptions for districts to reduce spending.

States Reported That Most Districts Met MOE without Using Exceptions or the Funding Adjustment

No national level data exist on the extent to which districts are meeting MOE, but according to the responses to our state survey, nearly all school districts met MOE in the 2012-13 school year (the most recent data available in all states at the time of our survey). States reported less than 1 percent of districts nationwide failed to meet MOE in 2012-13, and all these districts were located in 14 states (see fig. 2). In addition, states indicated that the shortfalls for all districts identified as failing to meet MOE in 2012-13 amounted to a total of about $877,000 nationwide as of May 2015. However, this number is understated because 2 of the 14 states with districts failing to meet MOE were unable to report the amount of their districts’ shortfalls at the time.

State responses to our survey also indicate that most districts met MOE in 2012-13 without using allowable exceptions or the funding adjustment. Forty states responded to our survey that half or more of their districts met MOE without using either of these provisions (see fig. 3).

District responses to our 2015 follow-up survey of those districts that had anticipated trouble meeting MOE in 2011-12 largely mirrored the states’ survey responses on meeting MOE. Of the 87 districts that responded to this survey, only 7 reported that they had failed to meet MOE in school years 2011-12, 2012-13, or 2013-14. Of the 68 districts that reported meeting MOE all 3 years, 16 did so using exceptions or the funding adjustment in at least one of those years. “Our district has staff retire nearly every year, which makes the exception for voluntary staff departure the easiest exception for us to claim.” “Even when we were eligible to use the funding adjustment, the allowable spending decrease would have been negligible. We decided it was not worth the expenses and amount of time it would have taken us to claim it.”

The large number of districts meeting MOE without the use of exceptions or the funding adjustment may be partially explained by rising special education costs. According to some state and district officials we interviewed, rising costs have made it easier for districts to meet MOE in the last few years. In addition, some district officials said that documenting their eligibility to the state for use of exceptions is burdensome, which may lead some districts to avoid using them. Those that did use them, however, relied on some exceptions more than others (see fig. 4). Regarding the funding adjustment, many districts have not used it in the last few years because they were not eligible to do so.

Almost All States Reported at Least Some of Their Districts Faced Challenges Meeting MOE

Although states reported on our survey that most of their districts met MOE in 2012-13, almost all states indicated that some districts faced challenges, and the number of states reporting that half or more of their districts have faced or may face challenges is increasing (see fig. 5).

Similarly, of the districts that anticipated trouble meeting MOE in 2011-12, about half of those responding to our follow-up survey (44 of 87) said that they ultimately did face challenges meeting MOE in 2011-12, 2012-13, or 2013-14.

In our characteristics analysis comparing districts that had and had not anticipated having trouble meeting MOE in 2011-12, we identified small, but statistically significant differences with respect to declining enrollment and the extent to which districts were rural. This analysis was based on the nationally representative sample of districts for our 2011 survey and is therefore generalizable to districts nationwide in that year. (For a more detailed discussion of this analysis and the results, see app. IV.)

Exceptions Do Not Address Key Challenges Some Districts Faced in Meeting MOE

Among districts that reported facing challenges in meeting MOE, officials described a number of reasons for those challenges that were not covered by allowable exceptions. As reflected in responses to our district survey, illustrated in figure 6 below, and our discussions with selected districts, often the key reasons that districts faced challenges or failed to meet MOE involved circumstances that decreased special education spending from one year to the next but were not covered by the allowable exceptions and, in some cases, were outside the districts’ control. Specifically, in response to our survey and in interviews at selected sites, district officials identified budget or revenue reductions and various circumstances related to cost reductions—such as local actions to implement efficiencies—as key challenges in meeting MOE.

Districts surveyed most frequently cited reductions in state funding of K- 12 education and reductions in the state contribution to funding for special education as a factor in not meeting MOE (see fig. 6). The MOE requirement does not include an exception for such challenges and is, in fact, designed to protect special education funding in such circumstances. Officials in one Texas district we interviewed told us their state funding had been cut for the 2011-12 school year, in spite of an increase in the district’s student population. In response to reduced funding, the district made cuts to special education as well as general education spending, and as a result it had come close to not meeting MOE for the 2011-12 school year. A Virginia district we interviewed met MOE in 2011-12 and 2012-13, but officials said it has been difficult to maintain special education expenditures because the county cut its funding in response to declines in local revenue.

Cost Reductions

District officials reported three different types of circumstances that can result in reduced costs that are not allowable exceptions to MOE: (1) local actions to increase efficiencies, (2) state policy changes to staff salary or benefits, and (3) a gradual decline in enrollment over multiple years.

Increased efficiencies. District officials we surveyed and interviewed described various challenges stemming from efforts to implement efficiencies, even when these changes had no effect on service delivery. In response to our survey, 17 districts reported challenges due to local actions to increase efficiencies in the provision of direct services, and 14 districts reported challenges due to efficiencies in administrative functions (see fig. 6). For example, a New Jersey district official commented on our survey that his district failed to meet MOE after reorganizing to share the cost of a special education director with another district. Similarly, officials we interviewed in one Michigan district told us that they negotiated a staff pay cut of 10 percent due to a budget deficit. As a result, they were paying 10 percent less for the same services. The district met MOE only because Michigan elects to test its MOE compliance in aggregate with other districts, according to local officials who oversee that district and others. Another Michigan district we interviewed said that when they had difficulty hiring a staff psychologist they had to contract for psychologist services, which turned out to be less costly than what the district spent on those services previously, causing challenges in meeting MOE. A Texas district official told us that when their state funding was cut, they reduced costs by increasing the number of classes taught by middle and high school teachers, allowing them to cut 237 staff positions without eliminating any courses, programs, or special education services. Despite continuing to deliver the same services, because it was less costly, they came close to not meeting MOE.

State salary or benefit changes. Survey respondents from 15 districts cited state policy changes to teacher or staff salary or benefits as a challenge (see fig. 6). All districts we interviewed in Michigan told us they faced challenges meeting MOE when the state legislature passed a law capping the amount that public employers, such as school districts, could contribute toward employee health benefits. This effectively reduced the amount districts spent on special education teachers and other staff, the majority of any district’s special education spending. One Michigan district we visited was very small and had only one special education teacher. As a result of the new state cap, officials said that their teacher decided to opt out of the district’s health insurance plan for the 2013-14 school year, which decreased their special education spending by about $10,000. The district did not meet MOE on its own for 2013-14, but it did meet it in aggregate with other districts (the level the state tests for compliance), according to local officials.

Gradual enrollment decline. Officials we interviewed in several selected districts said meeting MOE could be a challenge if a district experienced a gradual decline in enrollment over multiple years that eventually resulted in needing fewer special education teachers on staff. In the three states we visited, officials interpreted the decreasing enrollment exception as applying only to year-to-year decreases. One local official in Michigan who oversees several school districts said that they have experienced gradual reductions in special education caseloads as a result of population decline that do not always necessitate immediate staff reductions. He explained that if districts let one staff member go at the end of each year, it would be easier to meet MOE using either the per capita calculation or the exception for a decrease in enrollment (see fig. 1 for a description of MOE calculations and exceptions). However, districts often wait 3 or 4 years until they reach a crisis point and have to lay off two or more special education staff, which makes meeting MOE more difficult. Officials in one of the districts he oversees explained that they would not eliminate staff positions due to the loss of only two or three students, but over the course of 5 years, a gradual decline could justify a decrease in staff.

States and Districts Report That MOE Protects Funding, but Can Create Unintended Consequences Affecting Services for Students

State and district officials had mixed views on MOE’s effects on services for students with and without disabilities. MOE is one of multiple safeguards established under IDEA to protect special education funding, and while some officials reported positive effects, others said the requirement can sometimes have the unintended consequence of deterring districts from innovating and implementing efficiencies in special education services. Additionally, some states and districts pointed out that prioritizing special education spending to meet MOE during a period of budget constraints resulted in cuts to general education spending that affected services for all students, including the many students with disabilities that spend much of their days in general education classrooms.

MOE Helps Safeguard Funding but May Deter Innovation and Efficiencies in Special Education Services

“The IDEA MOE requirement has helped to protect our schools from state general fund budget reductions.” “If the MOE requirement didn’t exist … based on my own opinion I believe services for children with disabilities would be reduced. While accountants and even other personnel may not like that it exists, it does protect children with disabilities.” such as dispute resolution. District officials often told us that they viewed MOE as a secondary consideration and not a factor in determining the level of services planned for special education students. Instead, they said they fund special education services based on the IEP process and are required by law to provide the services outlined in those plans regardless of MOE. However, a disability advocate we interviewed noted that the amount of services districts prescribe in the IEP is often determined by the funding available, and MOE helps to prevent districts from decreasing those funds. “MOE hinders our ability to offer innovative methods for delivery of services, if the cost of the new, innovative method is less than in the previous year.” “The MOE requirement also fosters a lack of innovation in the program [special education] for fear of adding to the spending base.”

At the same time, some state and district officials we interviewed said MOE can discourage efforts to implement innovations or expand services. For example, some district officials we spoke with said that because of MOE, they do not want to commit to a higher level of spending to implement innovative services, despite other provisions in IDEA that are intended to encourage innovation. An official in one Texas district said that although their special education director recommended expanding their integrated athletics program for children with disabilities, they chose not to because they did not want to commit to the increased costs in an environment of ongoing budget uncertainty. Similarly, a Michigan district official said that program innovations, such as introducing new technology or new co-teaching methods, can be costly to implement and cannot be piloted and discontinued if unsuccessful without decreasing spending and jeopardizing the district’s ability to meet MOE. This concern is consistent with our past work that concluded that federal MOE requirements without sufficient flexibility can discourage program expansion and innovation.

Moreover, as noted earlier, implementing efficiencies can create challenges in meeting MOE. As a result, some district officials said that MOE can discourage efforts to implement efficiencies that could help reduce costs and can lead to unnecessary spending to comply with the requirement. For example, one Wisconsin district official commenting on Education’s 2013 NPRM said that because of state legislative changes that required reductions in their contributions to teacher benefits, they had to find other ways to spend money on special education to meet MOE regardless of whether the expenditures were needed. Further, a Virginia state education official we interviewed said that Virginia districts feel penalized for complying with IDEA’s directive to serve more students with disabilities in general education classrooms since this more inclusive model can be less costly than placing all these students in special education classrooms; yet the MOE requirement is not flexible enough to allow for this without putting districts at risk of failing to meet MOE. At the same time, a disability advocate we interviewed noted that if districts do have cost savings in special education, districts should reinvest those savings back into special education.

Similarly, district officials reported mixed views about whether MOE had positive or negative effects on students in our 2015 follow-up survey of districts that had indicated in 2011 that they anticipated trouble meeting MOE in 2011-12. More districts said MOE had a positive effect on services for students with disabilities than for students without disabilities. But, even for students with disabilities, the majority of districts said it had a negative effect or no effect on services for these students (see fig. 7). Several district officials noted that protecting special education funding does not necessarily equate to protecting or improving special education services. For example, a Minnesota district official said the 100 percent MOE requirement may discourage districts from striving to make students with disabilities as independent as possible if such actions would reduce special education spending. He was concerned that not enough attention was being given in the IEP process to encouraging greater independence and inclusion and that the process was being driven by maintaining expenses rather than responding to the evolving needs of students. Also, a Texas district official commented that a district could still meet MOE if it were to give a 3-percent raise to special education educators while reducing costs related to services and programs by an equal amount.

Some Districts Reported That MOE Contributes to Budget Pressures That Can Lead to Cuts in General Education Services

When districts experience reductions in state and local funding and are forced to make cuts, they generally must prioritize special education to meet the MOE requirement, which can result in cuts to general education services. The 100 percent requirement is significantly stricter than the 90 percent MOE requirement established by law for other K-12 education programs and provides districts less latitude to adjust spending to minimize negative effects on services. Moreover, while state education funding may be beginning to recover from the recession, many districts have experienced severe budget challenges in the last 4 years. For example, according to Education data for fiscal year 2011, 33 states had decreases in their state and local K-12 per-pupil revenue, and for 20 of these states, the decreases ranged between 2 and 13 percent. In our 2015 district follow-up survey, about half of those responding (44 of 87) reported reducing general education spending at least once during school years 2011-12 through 2013-14. Of those reporting reductions, about half (21) said MOE was one of several reasons for the cut, and one district reported that MOE was the primary reason in at least one of these school years (see fig. 8). In addition, one Virginia district official we interviewed noted that if a district is penalized for not meeting MOE, the penalties hurt students by further reducing already constrained district resources.

As figure 9 shows, cuts to general education spending can affect services in a variety of ways. Responses from the 22 districts that attributed general education service cuts, at least in part, to MOE, indicated that these cuts often led to reductions in teachers and support staff, classroom materials, and technology. Some district officials we interviewed noted that such cuts can result in increased classroom sizes, decreased class offerings, and reduced extracurricular activities.

General education service reductions negatively affect all students—both those with and without disabilities. But this may be especially true for the growing number of special education students being served in general education classrooms—another unintended consequence of MOE. Education recently reported that the percentage of special education students spending at least 80 percent of their school day in general education classrooms increased from 33 percent in 1990–91 to 61 percent in 2012–13. One Virginia district official we interviewed said students with disabilities served in general education classrooms were particularly affected by increased classroom sizes resulting from reductions in general education spending.

Education’s Delayed Feedback and Evolving Policies Have Frustrated State Efforts to Facilitate Districts’ MOE Compliance

Education’s delayed monitoring feedback and evolving policies over the past decade (see fig. 10) have hindered states’ efforts to facilitate compliance with the MOE requirement, according to state officials. States and school districts cited the need for additional technical assistance, information sharing, and training to help them meet—not just understand—this complex requirement.

Education’s Delayed Feedback Has Hindered State Monitoring Efforts

Although Education carried out its fiscal monitoring reviews of states’ compliance from 2010 through 2012, it has yet to issue feedback letters to nearly half the states—keeping these states waiting at least 3 years for their monitoring results. Education began its latest round of IDEA programmatic and fiscal monitoring in 2010, initiating the new monitoring cycle with verification visits to 16 states. Then in 2011, Education removed the fiscal component from its visits and merged the findings from that component with the fiscal monitoring it was conducting for the Recovery Act. From that point on, the merged fiscal monitoring effort was conducted through desk audits rather than site visits, and as a result, Education officials told us that they were able to complete the bulk of these reviews of all 50 states by the end of 2012.

In 2010, when Education began its latest round of monitoring, it had a performance standard to provide feedback to states within 88 days of a verification visit. However, Education did not set a performance standard for the merged fiscal monitoring reviews. We found that although the bulk of these reviews were completed by the end of 2012, as of August 2015, 22 states were still waiting for Education to provide results letters telling them whether their fiscal monitoring systems comply with federal requirements. The delay of 3 years or more in providing written feedback to states significantly exceeds the timeframes Education had considered reasonable for its previous verification visits and is inconsistent with federal government standards that call for the findings of audits and other reviews to be promptly resolved.

States reported that Education’s delayed feedback has kept them from taking corrective actions in a timely way. For example, an Oregon state official we interviewed as part of our survey follow-up told us Education conducted its fiscal monitoring of the state in 2010 but did not provide feedback requiring corrective action until the fall of 2014. The state official told us the state is in the process of taking corrective actions in response to Education’s findings but said it could have taken such steps earlier to better facilitate district compliance had Education provided more timely feedback. Similarly, state officials in Delaware told us they experienced delays of more than a year while in discussions with Education on the state’s proposed changes to bring the state’s MOE calculation methodology into compliance. The state put its monitoring of MOE on hold until Education approves its proposed changes because those changes will require updates to the state’s information technology system which will take time and resources. In the meantime, state officials said they are unable to determine whether districts are meeting the MOE requirement.

Education officials told us competing priorities and staffing issues contributed to the delays in providing states feedback. For example, they said they were implementing a new accountability system and finalizing revised regulations for MOE that Education issued in April 2015. They also said they were working to eliminate a backlog of independent audit reviews that contained findings pertaining to IDEA programs. Education officials also said that, while dealing with these competing priorities, multiple staff involved in the monitoring process left Education and that it took time to replace them.

At the time of our review, Education officials said they would like to release the findings for the remaining states by fall of 2015. However, some fiscal monitoring letters were undergoing departmental review—one of the final steps before release—while others were still in the drafting stage. Also, because so much time had elapsed since its monitoring reviews, Education was contacting some states again to ensure it had up- to-date information about those states’ monitoring systems and to confirm that the findings from its reviews were still relevant. As of August 2015— the most recent data Education provided—22 states were still waiting for feedback.

Education officials told us they are planning to begin piloting their next cycle of IDEA monitoring during fiscal year 2016. They said that the new monitoring system will be a risk-based system, and, while they expect to review all states to determine which states require monitoring, they have not established a schedule for completing reviews of all states within a specified period of time, nor for providing feedback to states. Education officials told us they did not yet have a written plan, including timelines and performance measures, for implementing the new monitoring process.

States Report Frustration Due to Education’s Unclear and Changing Guidance

Prior to Education’s April 2015 final rule revising its MOE regulations, states said they experienced confusion and uncertainty about Education’s policies, making it difficult for them to help districts comply with the MOE requirement. They identified two areas, in particular, as having caused the most confusion and frustration: (1) the existence of two MOE standards and (2) the level of spending required after failing to meet MOE.

Standards for eligibility and compliance. In two states, the state officials we interviewed indicated uncertainty about the need to meet MOE based on two different standards: eligibility (based on a district’s budgeted amounts) and compliance (based on a district’s actual expenditures). Apparently other states had also been confused about this. Despite Education’s policy letters that attempted to clarify the existence of two standards, in the preamble to its 2013 NPRM, Education acknowledged that some states had still not understood that two different standards were in place based on the wording of the 2006 regulations. To address this issue, in its April 2015 final rule, Education made revisions to clearly label and explain the differences between the two standards. Officials in one state also told us that implementing the eligibility standard would require them to modify their data systems. “Subsequent years” rule. Some states and special education stakeholders had generally understood MOE to require a district to maintain the level of spending from the previous year, even if they had failed to meet MOE in that year (referred to as the “subsequent years” rule). The 2006 regulations did not specifically address this issue, but in a 2011 policy letter, Education confirmed this general understanding. In April 2012, however, Education reversed this policy and instead said that a district’s required level of spending after failing to meet MOE is equal to the amount it should have expended in the prior year had it met MOE. Congress included similar language in two separate appropriations acts, and Education’s April 2015 final rule included a provision codifying this interpretation and examples of how states should apply this rule. Officials in two states told us this change in the guidance frustrated their efforts to monitor districts’ compliance with MOE, and in one state, required them to change their tracking systems.

In its 2013 NPRM, Education acknowledged that the MOE requirement is complex and that a significant lack of understanding of the requirement had persisted. To help states navigate this complexity and to promote a better understanding of MOE, the April 2015 final rule includes several tables detailing how to comply with the requirement. In addition, Education officials said they have provided a webinar, presentations at Education’s IDEA leadership conference, and a written question and answer document to help explain the revised regulations.

States and School Districts Want More Technical Assistance, Information Sharing, and Training

Education has provided various types of technical assistance regarding compliance with MOE, as required under IDEA, but more may be needed. While Education has provided states with assistance to help them understand the MOE requirement, responses to our surveys indicate that states and school districts could benefit from additional technical assistance, information sharing with their peers, and training to help districts meet—not just understand—the MOE requirement.

Prior to 2014, Education funded multiple regional resource centers that provided webinars and established communities of practice focused on issues including MOE. In our survey, many states commented that they had relied on these centers for support related to the MOE requirement. In 2014, Education moved away from a regional assistance model to a more centralized approach and established two new national technical assistance centers, the Center for IDEA Fiscal Reporting (CIFR) and the National Center for Systemic Improvement (NCSI). Education officials told us that NCSI will provide some general fiscal technical assistance to states, but that any detailed technical assistance on the MOE requirement will come from CIFR.

CIFR is charged with providing technical assistance to states on collecting and reporting special education fiscal data. It plans to work collaboratively with states and other federally funded technical assistance centers to (1) improve the capacity of states to collect and report accurate fiscal data and (2) increase states’ knowledge of the underlying fiscal requirements and the calculations necessary to submit valid and reliable data, according to its website. However, it is too early to assess how effective CIFR will be in achieving these goals. Since opening its doors in November 2014, CIFR has launched its website, conducted introductory webinars targeted to states, and established a listserv that 45 of 60 states and entities have joined. It is collecting data from the states to develop a database about each state’s fiscal reporting that will be used by CIFR to plan its technical assistance activities and is holding regional meetings and communities of practice for states to exchange information on various fiscal and programmatic issues, including those related to the MOE requirement. Education officials told us they anticipate that CIFR will be able to provide technical assistance and facilitate information sharing among states related to the MOE.

The results of our surveys and interviews indicate that states value Education’s technical assistance (see fig. 11), and several states added that they would like Education to provide additional technical assistance, training, tools, and opportunities to share information across states.

While Education is charged with providing technical assistance to the states, the states, in turn, are charged with providing assistance and support to their districts. In response to our state survey, states reported providing technical assistance, training, and tools to school districts to assist them in complying with the MOE requirement. Among the school districts we surveyed, well over the majority indicated these resources were useful.

However, in our interviews and in our 2015 follow-up survey, school districts reported that they would like additional training to help them comply with the MOE requirement. For example, some districts officials we interviewed specifically stressed the need to have training for special education directors, finance or business managers, and superintendents because each plays a role in decisions affecting MOE compliance. Some districts we surveyed commented that they would like assistance in managing and tracking their MOE status throughout the year. One district specifically noted that they wanted to be more pro-active in ensuring compliance, while others wanted more transparency in how their state calculates MOE. In Virginia, though districts submit data to the state annually, the state’s system allows districts to enter their expenditures throughout the year to track MOE. Officials in one district we interviewed said this was extremely helpful, allowing them to track their compliance with MOE on an ongoing basis. “We experienced cuts in state funding for special education that dropped us below the MOE required for state and local expenditures combined, but our local funding for special education increased during the same period. We think we could have met MOE if we had been able to use one of the local only calculations.” states said that they do not routinely use all four calculations to determine MOE, in some cases because the data on state and local funds that districts use for MOE calculations are pooled together. This means that districts in their states do not have ready access to the data needed for the two MOE calculations based on local expenditures separately. For example, an Arizona state education agency official we interviewed said the state does not maintain separate records for state and local expenditures; therefore, the state would have to redesign its system in order to use the local-only calculation. Further, a Tennessee official commented that it would be helpful if Education could assist in identifying ways to track local funds when state and local funds are separated. More information sharing across states could be helpful, as well: In Texas, where the state system also does not separate state and local expenditures, the state educational agency had recently developed a way for districts to impute their local only expenditures using a newly created state tool, which could potentially benefit other states. “We would like to be able to claim as an exception those teachers who leave the special education program but remain in the district in other positions. It is more cost-effective for us to retain trained special education teachers than to let them go because a student who needed that expertise is no longer served by the district.”

Use of exceptions. Similarly, the ability to use exceptions could also be important to districts facing challenges in meeting MOE, because these provisions may enable districts to reduce their expenditures and still meet the MOE requirement. However, we found that some state officials had questions about how to implement these provisions. For instance, a Rhode Island state official commented to Education’s 2013 NPRM that more guidance for determining the dollar threshold for an “exceptionally costly” program is needed. Another state official from Colorado asked for additional guidance on the exception for “termination of costly expenditures for long-term purchases.” Also, an official from Louisiana who responded to our state survey said examples of allowable exceptions would be helpful. The lack of clarity of how exceptions should be applied was further evidenced in the states we visited, where we found states used different criteria for applying certain exceptions (see table 3). In its 2013 NPRM, Education acknowledged that some states were not applying the exceptions correctly or were not applying them at all.

Conclusions

Across the federal government, MOE requirements are important mechanisms for helping to ensure that federal spending achieves its purpose. The local MOE requirement under IDEA is intended to safeguard local financial support for educating the over 6 million children in the United States who require special education services. Meeting MOE generally is not a problem for districts when state and local economies and tax revenues are strong and when districts experience increases in the numbers of students with disabilities. But when state and local economies falter as they did during the 2008 recession, or when districts experience declines in numbers of students with disabilities, as has been the trend recently, meeting the local MOE requirement can become a challenge. Most states reported that at least some districts faced challenges in meeting the requirement, despite exceptions intended to help in such situations. Current exceptions do not address the key challenges that districts face, including factors that are outside of their control and that do not affect the level of services provided to students with disabilities. In these situations, it is unclear whether funds spent on special education to comply with MOE result in enhanced services for students with disabilities.

Further, the MOE requirement’s lack of flexibility can lead to unintended consequences that affect services for students with disabilities. IDEA’s 100 percent MOE requirement is stricter than the 90 percent MOE requirements mandated for other K-12 education programs. Our previous work has shown that such rigidity can discourage program expansion and innovation, and we found examples of this within the IDEA program. We also found that such rigidity resulted in reductions in general education services that benefit all students—including students with disabilities, a large and increasing number of whom are served for much of their day in general education classrooms. A less rigid MOE requirement would allow districts more latitude to adjust their spending at the margins—focused on providing the best services to address the most pressing needs of students with disabilities—while mitigating the effects of unintended consequences.

Education’s lack of timely monitoring feedback has hampered some states’ efforts to facilitate school district compliance with MOE—a key requirement of the law. Although Education completed its fiscal monitoring reviews in 2012, 3 years later nearly half the states are still waiting for feedback on their monitoring results. In addition, some districts may be failing to meet MOE because limitations to their state financial systems do not allow them to use all four MOE calculations, as provided for in Education’s regulations. Because these various ways of calculating MOE are intended to provide districts with the ability to calculate MOE based on local circumstances, the ability to create workarounds to use these calculations could be the difference between a district meeting MOE or not. Providing more technical assistance and facilitating more information-sharing among states and districts could help them navigate the complexities of the local MOE requirement and avoid the detrimental effects of noncompliance.

Matter for Congressional Consideration

To help districts address key challenges in meeting MOE and mitigate unintended consequences that may affect services for students with disabilities, while preserving the safeguard for funding for students with disabilities, Congress should consider options for a more flexible MOE requirement. This could include adopting a less stringent MOE requirement to align with the MOE requirements in other education programs or adding to or modifying exceptions. For example, current exceptions could be changed to allow one-time increases in spending without changing a district’s MOE baseline in order to encourage pilot innovations or to allow certain spending decreases (e.g., state caps on teacher benefits), as long as a district can demonstrate the decrease does not negatively affect services.

Recommendations

To strengthen states’ monitoring and facilitate local MOE compliance, the Secretary of Education should establish and document set timeframes for providing prompt feedback to states on findings from its next cycle of IDEA fiscal monitoring; and prioritize technical assistance and information sharing across states on ways to facilitate local MOE compliance with respect to the use of the four calculation methods and the exceptions.

Agency Comments and Our Evaluation

We provided a draft copy of this report to the Department of Education for review and comment. Education’s comments are reproduced in appendix VII. Education also provided technical comments, which we incorporated into our report where appropriate. (In addition, we provided officials from the state educational agencies we reviewed with portions of the draft report that included information specific to their states. We incorporated their technical comments where appropriate.)

In its comments, Education agreed with both of our recommendations. Regarding our recommendation to establish timeframes for providing prompt feedback to states on findings from its next cycle of IDEA fiscal monitoring, Education stated that in its new system of monitoring it will include timelines for providing prompt feedback on monitoring results, including findings and corrective actions. Regarding our recommendation to prioritize technical assistance and information sharing across states on ways to facilitate local MOE compliance with respect to the use of the four calculations methods and the exceptions, Education stated it is currently working on a set of questions and answers that will place particular emphasis on the allowable exceptions, as well as calculation issues.

Education also commented on the importance of the MOE requirement as a safeguard designed to protect funding for students with disabilities. While acknowledging the challenges that meeting the local MOE requirement presents during difficult economic times, Education noted that the requirement also provides a crucial protection that helps ensure students with disabilities continue to receive a free appropriate public education. We agree; as stated in our report, we believe the requirement is an important mechanism intended to safeguard local financial support for educating the over 6 million children in the United States who require special education services. Nevertheless, we believe there are opportunities to reduce the rigidity of the requirement while continuing to preserve MOE as a safeguard of funding for students with disabilities.

We are sending copies of this report to the appropriate congressional committees, the Secretary of Education, and other interested parties. In addition, the report will be available at no charge on GAO’s web site at http://www.gao.gov.

If you or your staff should have any questions about this report, please contact me at (617) 788-0580 or nowickij@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VIII.

Appendix I: Survey of States on Local Maintenance of Effort Requirement

State Survey Methodology

To obtain information on efforts to meet the local maintenance of effort (MOE) requirement under the Individuals with Disabilities Education Act (IDEA), we designed and administered a web-based survey of state special education directors in all 50 states and the District of Columbia. The survey included questions about the extent to which school districts (referred to by law and in the survey as local educational agencies—LEA) in the state met the local MOE requirement in the 2012-13 school year, state perspectives on challenges their school districts face in meeting the MOE requirement, procedures used by state educational agencies (SEA) for monitoring compliance with the requirement, and the state and federal role in assisting school districts in complying with the requirement. The survey was in the field from January to March 2015. We received responses from the District of Columbia and all states, except Hawaii (which we determined was outside our scope), for a response rate of 100 percent. To obtain the maximum number of responses to our survey, we sent three reminder emails to non-respondents and contacted the remaining non-respondents over the telephone.

We took steps to minimize non-sampling errors, including pretesting draft instruments and using a web-based administration system. During survey development, we pretested the draft instrument with five state special education directors from October through November 2014. In the pretests, we were interested in the clarity of the questions and the flow and layout of the surveys. Based on feedback from the pretests, we made minimal revisions to the survey instrument. As an additional step to minimize non-sampling errors, we used a web-based survey. By allowing respondents to enter their responses directly into an electronic instrument, this method automatically created a record for each respondent in a data file and eliminated the errors associated with a manual data entry process. We also checked the accuracy of our work by independently verifying programs used to analyze the survey data and make estimations. Lastly, after we closed the survey, we contacted respondents in some states to conduct follow-up interviews in order to clarify their responses and gather further information.

State Survey Results

The questions we asked in our survey of state special education directors are shown below. Our survey was comprised of closed- and open-ended questions. In this appendix, we include all the survey questions and aggregate results of responses to the closed-ended questions; we do not provide information on responses provided to the open-ended questions. All survey respondents did not always respond to each individual survey question; therefore, the total responses for each question do not always add up to the number of total survey respondents.

1. Has funding from state sources for K-12 education for each of the years listed below decreased, remained about the same, or increased compared with the previous school year?

Increased by 10% or more 2. Has funding from state sources for special education for each of the years listed below decreased, remained about the same, or increased compared with the previous school year?

Increased by 10% or more 3. What was the total number of local educational agencies (LEAs) in your state that were subject to the LEA maintenance of effort (MOE) requirement for the 2012-2013 school year?

6. During the 2012-2013 school year, about how many LEAs in your state used the following exceptions or a funding adjustment to meet the MOE requirement or lessen the shortfall if not meeting the MOE requirement? (Please answer based on exceptions or funding adjustments actually used by your LEAs rather than whether they were eligible for the exception or adjustment.) Most All

8. LEAs might experience challenges in meeting the MOE requirement for several possible reasons. Based on your general sense of your LEAs' experiences, were any of the following main reasons why LEAs in your state experienced challenges meeting the MOE requirement?

f. Decline in local revenue

Yes, varied

No, stayed the same 10. In your state, does your state agency (or the LEAs) routinely calculate the LEAs' MOE using each of the following calculations?

Don’t know Total a. Total local expenditures b. Total local and state expenditures c. Per capita local expenditures d. Per capita local and state expenditures 11. What comments do you have about why LEAs in your state might not use certain allowable calculations? 12. Does your state routinely monitor MOE compliance in the following ways for all, a subgroup, or none of the LEAs in your state?

14. Does your state routinely assist LEAs in complying with the MOE requirement in any of the following ways?

e. Contact U.S. Department of Education for clarification of LEA MOE requirements

15. With respect to your state's efforts to assist LEAs in complying with the MOE requirement, how useful are the following resources provided by the U.S. Department of Education?

Resource not provided/ Don’t know 16. What other resources (not directly from the U.S. Department of Education), if any, has your state relied on for monitoring or assisting LEAs with MOE compliance? 17. What additional resources, if any, from the U.S. Department of Education would your state find useful for monitoring or assisting LEAs with MOE compliance? 18. Do you have any other suggestions for potential changes that could be made at the federal level related to the LEA MOE requirement under IDEA?

Appendix II: Survey of School Districts’ on Local Maintenance of Effort Requirement

District Survey Methodology

To obtain information on efforts to meet the local MOE requirement under IDEA, we conducted a web-based follow-up survey of school districts (referred to by law and in the survey as local educational agencies—LEA) that had indicated previously that they anticipated having trouble meeting the MOE requirement in future years. Specifically, we sent a follow-up survey to the superintendents of the 103 school districts that had indicated in a 2011 GAO survey on the use of Recovery Act funds that they anticipated they would have trouble meeting the MOE requirement in the 2011-12 school year. Our 2015 follow-up survey included questions about whether school districts met the MOE requirement in 2011-12, 2012-13, and 2013-14, as well as their perspectives on challenges, effects on services, and the roles of SEAs and Education in assisting school districts in complying with the requirement. The survey was conducted from January through March 2015. We received responses from 87 school districts, for a response rate of 84 percent. To obtain the maximum number of responses to our survey, we sent three reminder emails to non-respondents and contacted the remaining non-respondents by telephone.

As with our state survey, we took steps to minimize non-sampling errors, including pretesting the draft instrument and using a web-based administration system. During survey development, we pretested draft instrument with officials in four school district in November 2014. In the pretests, we were interested in the clarity of the questions and the flow and layout of the survey. Based on feedback from the pretests, we made minimal revisions to the survey instrument. As an additional step to minimize non-sampling errors, we used a web-based survey. By allowing respondents to enter their responses directly into an electronic instrument, this method automatically created a record for each respondent in a data file and eliminated the errors associated with a manual data entry process. We also checked the accuracy of our work by independently verifying programs used to analyze the survey data and make estimations.

District Survey Results

The questions we asked in our survey of school districts are shown below. Our survey was comprised of closed- and open-ended questions. In this appendix, we include all the survey questions and aggregate results of responses to the closed-ended questions; we do not provide information on responses provided to the open-ended questions. All survey respondents did not always respond to each individual survey question and, in some cases, the survey asked respondents to skip a question based on their response to the prior question; therefore, the total responses for each question do not always add up to the number of total survey respondents.

1. In our 2011 survey, your LEA indicated it thought it may have trouble meeting the MOE requirement in the future. Was your LEA able to meet the MOE requirement in the following school years?

Don’t know - b. Local actions to increase efficiencies in administrative functions c. Local actions to increase efficiencies in the provision of direct services to children with disabilities d. Reductions in the state contribution to your district's local funding of special education e. Reductions in state funding of general K-12 education f. Decline in local revenue g. LEA does not have authority to raise its own revenue If you indicated that your LEA did not meet MOE in ALL of the years in question 1, please skip to question 6. Otherwise, continue to question 3. 3. For the school years when your LEA met MOE, was it a challenge or not a challenge to meet the MOE requirement?

Don’t know - b. Local actions to increase efficiencies in administrative functions c. Local actions to increase efficiencies in the provision of direct services to children with disabilities d. Reductions in the state contribution to your district's local funding of special education e. Reductions in state funding of general K-12 education f. Decline in local revenue g. LEA does not have authority to raise its own revenue 5. Did the reasons that your LEA experienced challenges meeting the MOE requirement vary by school year?

No, stayed the same 6. Do you have any other comments on factors that may have affected your Open-ended LEA's ability to meet the MOE requirement? 7. Did your LEA use an exception or funding adjustment provided by law to help meet the MOE requirement in any of the following school years?

Total responses 84 84 84 7ABC. In the school year, did your LEA use any of the following exceptions or a funding adjustment? a. Voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel 2011-2012 2012-2013 2013-2014 b. Decrease in enrollment of children with disabilities 2011-2012 2012-2013 2013-2014 c. Termination of an obligation to provide an exceptionally costly program of special education to a particular child 2011-2012 2012-2013 2013-2014 d. Termination of costly expenditures for long-term purchases (e.g., acquisition of equipment or construction of school facilities) 2011-2012 2012-2013 2013-2014 e. Assumption of cost by the high cost fund operated by the SEA under 34 C.F.R. § 300.704(c) 2011-2012 2012-2013 2013-2014 f. Funding adjustment to reduce local MOE expenditures by up to 50 percent of the increase in the LEA's subgrant allocation over that of the previous year 2011-2012 2012-2013 2013-2014 8. For any of the following school years, did your LEA reduce general education spending?

10. For any of the following school years, was the IDEA MOE the main reason, one of several reasons, or not a reason for the reduction in general education spending?

Total responses 37 30 27 11. In general, has the IDEA MOE requirement (i.e., prohibiting the reduction of local spending on special education) had a positive effect, no effect, or negative effect on services overall for students with and without disabilities?

Don’t know 7 12. Do you have any additional comments about why or how the IDEA MOE requirement affected services for students with and without disabilities?

13. Did your LEA use a funding adjustment under IDEA during any of the following school years? (Section 613(a)(2)(C) of IDEA (20 U.S.C. § 1413(a)(2)(C)) allows certain LEAs to reduce local MOE expenditures by up to 50 percent of the increase in the LEA's subgrant allocation over that of the previous year.)

17. How useful are the following resources provided by the SEA in assisting your LEA to comply with the MOE requirement?

Resource not provide/ Don't know 8 18. What additional resources, if any, from the SEA would you find useful in assisting your LEA to comply with the MOE requirement? 19. Has your LEA accessed any resources directly from the U.S. Department of Education in its efforts to comply with the MOE requirement?

Don’t know 17 19A. What U.S. Department of Education resource(s) has your LEA used and how useful have these resources been in assisting your LEA in complying with the MOE requirement? 20. Do you have any suggestions for potential changes that could be made at the federal level related to the MOE requirement under IDEA?

Appendix III: Profiles of States Selected for In-Depth MOE Data Analysis

Appendix IV: Analysis of School District Characteristics

To determine the characteristics of districts meeting, not meeting, and facing challenges meeting MOE, we analyzed data from the Department of Education’s Common Core of Data (CCD). This data set is comprised of fiscal and non-fiscal data collected annually about all public schools, public school districts, and state educational agencies in the United States. The CCD data elements and years we used for each part of our analysis are summarized in table 5. To assess the reliability of the CCD data elements used for our analysis, we reviewed existing documentation about the data system from the National Center for Education Statistics and conducted electronic testing. In a few cases where a district’s variable values were illogical, we changed the values or set them to missing for purposes of our analysis.

We linked the CCD data to three different sources of information on district experiences with MOE. The methodology and results of each of these analyses are described below. 1. GAO’s 2011 survey of school districts. To examine the characteristics of districts facing challenges and not facing challenges meeting MOE, we linked the CCD data to responses to the question on GAO’s 2011 survey of school districts that asked, “Do you currently anticipate your LEA having trouble meeting the IDEA Maintenance of Effort (MOE) requirement for 2011-12?” This survey was sent to a nationally generalizable sample of school districts, which means that the results of our analysis are generalizable to the total population of school districts in 2011. For our characteristic analysis of 2011 survey respondents, we primarily used CCD data from the 2010-11 school year, which described district characteristics in the year of the survey. See table 6 below for the findings of this analysis. 2. GAO’s 2015 follow-up survey of a subset of school districts. To examine the characteristics of a subset of districts both meeting and not meeting, as well as facing challenges and not facing challenges meeting MOE, we linked the CCD data to responses to our 2015 follow-up survey of those school districts that anticipated having trouble meeting MOE for 2011-12. For our characteristics analysis of our follow-up survey respondents, we primarily used the most recent CCD data available at the time.

In comparing the districts responding to our survey that they met MOE with those responding that they did not, we found some differences in the average characteristics between these two groups but did not report on these differences because the small size of the not-meeting group (7 districts) made it unlikely that these differences were meaningful. In comparing the districts responding to our survey that meeting MOE had been a challenge with those responding that it had not been a challenge, the largest differences were in total enrollment, change in total enrollment and number of students with IEPs from the prior year, and change in local revenue from the prior year. However, the results of this analysis reflect only the characteristics of those districts that responded to the follow-up survey and are not generalizable to the total population of school districts in either 2011 or 2015. 3. Five states’ MOE data for all their districts. To examine the characteristics of districts meeting and not meeting MOE in the five states that provided us with detailed MOE data on all their districts statewide (Alabama, Arizona, Michigan, Texas, and Virginia), we linked the CCD data to information provided to us by these five states on their school districts’ MOE status for school years 2011-12 and 2012-13. For our characteristics analysis of the districts in our five selected states, we primarily used CCD data from the years corresponding to their MOE data. To assess the reliability of state MOE data, we interviewed state officials and reviewed the data for logical inconsistencies. In two cases, states submitted revised MOE data based on our follow-up questions. Although we could not verify that all state MOE data were completely accurate, we determined that these data were sufficiently reliable for our purposes, which were to examine the general extent of districts meeting and not meeting MOE and their use of the exceptions and funding adjustment.

The results of this analysis reflect only the characteristics of the districts in these five states and are not generalizable to the total population of school districts. In addition, because so few districts did not meet MOE in these states, we could not identify meaningful differences between districts that did and did not meet, and patterns in the characteristics of districts not meeting MOE were inconsistent.

Appendix V: Shortfall Amounts in Districts Failing to Meet Local MOE Requirement

When a school district fails to meet MOE, the state is liable to return to the Department of Education—using non-federal funds—an amount equal to the district’s shortfall amount or its IDEA grant, whichever is lower. According to Education officials, states return funds to Education’s Office of the Chief Financial Officer. These funds are identified by the grant number, but there is no way to identify monies returned due to noncompliance with MOE, specifically. Officials in the Office of Special Education Programs said they were working with the Office of the Chief Financial Officer to better track funds returned for this reason. We followed up with the 14 states reporting in our survey that some of their school districts failed to meet the local MOE requirement in the 2012-13 school year and requested information on the amount of the shortfall for those districts that year. Based on the states’ responses, we estimate that, as of May 2015, the shortfall nationwide in the 2012-13 school year amounted to at least $877,000 total. However, this amount is understated because 2 of the 14 states were unable to provide the amounts of their districts’ shortfalls at the time.

Of the 14 states reporting district shortfalls, 11 confirmed they had returned at least a portion of the funds to Education, with 10 of the 11 confirming that they had recouped at least a portion of the shortfall amounts from the districts. At the time we did our work, repayment of funds was still pending in the remaining 3 states.

Among the five states for which we analyzed MOE data, three had at least one district that did not meet MOE in 2011-12 or 2012-13. According to the data provided by these states, the shortfalls for their districts were as follows: In Virginia, while all districts met MOE in 2011-12, one district did not meet MOE in 2012-13, and its shortfall, after accounting for allowable exceptions, was about $320,000, which represented less than 1 percent of the district’s expenditures of state and local funds for special education in that year. Virginia officials reported that the state had returned this amount to Education.

In Arizona, six districts did not meet MOE in 2011-12, and five did not meet in 2012-13. The shortfall amounts, after accounting for allowable exceptions, ranged from less than $100 to about $220,000. The average shortfall in these districts was about 6 percent of the districts’ state and local expenditures in 2011-12, and about 4 percent in 2012- 13. At the time Arizona reported these data, the state noted it had returned some but not all of these shortfall amounts to Education.

In Texas, officials reported that one district did not meet MOE in 2011- 12, and four did not meet MOE in 2012-13. In three of these five districts, the state reported that auditors had not found an actual shortfall. State officials later clarified that in the district originally found out of compliance with MOE for 2011-12, they had not sustained this finding. For the two districts for which the state reported shortfalls, the amounts were about $25,000 and about $40,000.

Appendix VI: Comparison of Education’s 2006 and 2015 Regulations on MOE

Appendix VII: Comments from the Department of Education

Appendix VIII: GAO Contact and Staff Acknowledgments

GAO Contact

Jacqueline M. Nowicki, (617) 788-0580 or nowickij@gao.gov.

Staff Acknowledgments

In addition to the contact named above, Margie K. Shields (Assistant Director), Cady S. Panetta (Analyst-In-Charge), Sandra Baxter, Justin Dunleavy, Lauren Gilbertson, and Nina Thomas-Diggs made key contributions to this report. Also contributing to this report were James Bennett, Deborah Bland, Caitlin Croake, Holly Dye, Ying Long, Jean McSween, Chris Morehouse, Karen O’Conor, Jonathon Oldmixon, James Rebbe, and Jessica Tollman.