June 1, 1999
Dear District Administrator:
The purpose of this letter is to clarify special education categorical aid eligibility for private contract costs that have been submitted by school districts.
In calculating eligibility for special education categorical aid, the department is authorized to approve private contracts for staff costs related to physical and occupational therapy, because state statute (s. 115.88 (1m)) specifically permits the payment of categorical aid for those two services. Costs for all other types of private contracts are not eligible for categorical aid due to the lack of statutory authority for the department to include them. In conversations with a number of school district and CESA administrative staff it is clear that many understand that special education private contract costs other than occupational or physical therapy do not qualify for reimbursement through the categorical aid program.
As department staff reviewed special education annual report cost data it was apparent that some school districts and CESAs reported private contract costs under the object 310 code. Contract costs that were ineligible for categorical aids were reported under the object 310 code because the agency recognized that school districts needed to report the costs somewhere on the annual report. New fund 27 reporting requirements will allow districts to use project codes that can categorize costs as eligible or ineligible.
David Carlson, Director
School Financial Services Team
cc: Paul Halverson Beverly Kraus