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IDEA - Maintenance of Effort (MOE) Requirement

The term “Maintenance of Effort,” often shortened to “MOE,” refers to the requirement placed upon many federally funded grant programs that the State Education Agency (SEA) and Local Education Agencies (LEA) demonstrate that the level of local and state funding remains relatively constant from year to year. Failure to meet MOE requirements may result in the LEA losing eligibility to receive IDEA formula funding and requiring an LEA to repay funds, using a non-federal source, to the SEA, who is required to send the penalty funds to the US Department of Education. At the local level, IDEA requires that LEAs expend the same amount of local and state funding for special education and related services as it expended in the previous fiscal year (34 CFR §300.203). There are a limited number of provisions in IDEA to allow for decreases in an LEA’s MOE from one fiscal year to the next. The Department of Public Instruction monitors every LEA in Wisconsin every year regarding IDEA MOE compliance.

IDEA Maintenance of Effort Announcements

WISEgrants - IDEA MOE Compliance and Eligibility Reports: The IDEA MOE Compliance and Eligibility Report software was designed so LEAs would be able to access their own expenditure data and take steps to ensure their own eligibility and compliance with IDEA regulations. The IDEA Maintenance of Effort Reports are accessed through the WISEgrants web portal. All individuals who have access to the LEA’s IDEA formula budgets have access to the “Maintenance of Effort” menu item under Programs > IDEA > Maintenance of Effort.
COVID-19 National Emergency & IDEA LEA Maintenance of Effort Compliance
No additional flexibility or waivers have been granted concerning an LEA's obligation to meet the IDEA maintenance of effort requirements (investment of local funds into its special education programming). For additional information, please see our  memo that was published on April 30, 2020. 
To schedule a call to discuss an LEA's MOE compliance or eligibility status with Rachel Zellmer, please visit our Bookings page.

Maintenance of Effort (MOE) Technical Assistance

IDEA MOE Guide Technical Assistance Document 
This guide provides an overview of the IDEA MOE regulations, covers how DPI tests an LEA's compliance with the MOE regulations, and walks the reader through the web-based Eligibility and Compliance reports.  

Chapters include:
Overview of IDEA Maintenance of Effort
Testing IDEA Maintenance of Effort
The IDEA MOE Eligibility Report - WISEgrants
The IDEA MOE Compliance Report - WISEgrants
 Entering MOE Exceptions into WISEgrants
PI-1505 SE Annual Reconciliation Process
MOE Eligibility Timeline (reviewing FY 2020-2021 Fund 27 budgets)
July 1, 2020 LEA submits FY 2020-2021 IDEA Part B Formula Certification and Assurances which includes an assurance statement that the LEA will remain in compliance with IDEA maintenance of effort requirements.
Oct 2020 - Dec 2020 LEA submits its FY 2020-2021 PI-1504 SE (Fund 27) Budget report through the School Financial Services (SFS) Reporting Portal.
Dec 2020 LEAs with a 10% or greater decrease in annual October 1 Child Count numbers must provide verification through the WISEgrants MOE Eligibility Report or submit a data errata letter through WISE Admin.
Dec 2020 DPI reviews FY 2020-2021 IDEA MOE Eligibility Reports, provides initial notification to LEAs of failure to meet IDEA MOE eligibility.
Dec 2020 - Feb 2021 DPI works with LEAs to meet IDEA MOE eligibility.
March 2021 LEAs meet IDEA MOE eligibility or FY 2020-2021 IDEA claims are “shut off.”
March 2021 - June 2021 LEAs use MOE eligibility scenario calculator to monitor compliance.
MOE Compliance Timeline (reviewing FY 2019-2020 Fund 27 expenditures)
July 2020 - Sept 2020 LEA submits its FY 2019-2020 PI-1505 SE (Fund 27) Annual report through the School Financial Services (SFS) Reporting Portal.
Until Sept 30, 2020 LEAs can amend FY 2019-2020 claims, returning IDEA formula funds and reclassifying the costs to project 011 or 019, and resubmit the PI-1505 annual reports.
Oct 2020 - Nov 2020 DPI reviews FY 2019-2020 1505 SE Annual report, Project 340 and reconciles to WISEgrants. LEAs must be reconciled prior to MOE compliance determinations.
Oct 2020 DPI reviews FY 2019-2020 IDEA MOE Compliance Reports and provides initial notification to LEAs of failure to meet MOE compliance.
Oct 2020 - Feb 2021 DPI works with LEAs to meet FY 2019-2020 IDEA MOE compliance.
March 2021 Final IDEA MOE compliance for FY 2019-2020 determinations are made. LEAs receive an IDEA non-compliance letter with a penalty amount that must be paid to DPI. LEAs must demonstrate they will meet IDEA MOE compliance for the current year (FY 2020-2021).
April 2021 LEAs that failed FY 2019-2020 IDEA MOE compliance implement corrective actions.
April 2021 DPI sends FY 2019-2020 IDEA MOE non-compliance penalty amounts to the US Department of Education.
Sept 2021 DPI sends closing letters to LEAs that failed FY 2019-2020 IDEA MOE compliance if the corrective actions have been completed.

Other Guidance

Financial Data Technical Assistance Document
Pulled from the MOE guide, this document lists the expenditure and revenue accounts used in the MOE calculation.  

Exception Checklist Technical Assistance Document
This includes a list of possible exceptions a district should review if MOE compliance has not been met. This list will be udpated as additional situations are determined. 

MOE Local Cost Reductions - COVID 19
This is a list of circumstances that have been brought to our attention regarding cost reductions due to an LEA's response to COVID-19. Several situations meet the standards of the existing IDEA MOE exceptions while others fall under the category of cost savings (not an allowed exception). 

Options for Maintaining IDEA Maintenance of Effort Technical Assistance Document
The Special Education Team has determined several options an LEA may wish to consider when planning for maintenance of effort compliance in future fiscal years. These options are described at length in this document.

LEA MOE Organizer
The Center for IDEA Fiscal Reporting (CIFR) designed the LEA MOE Organizer to provide users with a comprehensive overview of LEA MOE federal regulations and resources to support understanding and implementation. Users can easily navigate the graphical interface for information and relevant tools and resources from technical centers and OSEP.

Information from the Office of Special Education Programs (OSEP)
  • In an April 4, 2012 response to Kathleen Boundy from the Center for Law and Education(CLE), OSEP rescinded a policy interpretation originally issued on June 16, 2011 to Bill East, Executive Director of the National Association of State Directors of Special Education (NASDSE), regarding an LEA's level of effort in the case where MOE compliance has not been met. OSEP is withdrawing their interpretation as expressed in the letter to Dr. East and now believes that the level of effort that an LEA must meet in the year after it fails to maintain effort is the level of effort that it should have met in the prior year, and not the LEA’s actual expenditures.

All letters may be viewed below:

Letter to Kathleen Boundy

Center for Law and Education (CLE) Letter to OSEP

OSEP Letter to Bill East


In a March 13, 2014, letter to the Chief State School Officers, OSEP provided information that the Consolidated Appropriations Act, 2014, signed by President Obama, made the OSEP response to Kathleen Boundy law. Under this provision, if an LEA failed to maintain effort in one fiscal year, the level of effort that the LEA must maintain in the following year is the level of effort that would have been required the last year the LEA met MOE. In essence, in a situation in which an LEA fails MOE compliance, the LEA's maintenance of effort levels are not "re-set." The letter can be viewed here:  Pub. L. No. 113-76, 1238 Stat. 5, 394 (2014)

Coding Medicaid revenue and the impact on IDEA's MOE compliance

Since DPI’s standardization of monitoring IDEA’s maintenance of effort compliance requirement, past Medicaid cost settlements have resulted in a number of complicated issues for districts. The IDEA regulations state that revenue received through Medicaid should offset a district’s special education expenditures to reflect true local costs (34 CFR §300.154(g)(2); however, in the case of MAC and cost settlements, the revenue received is often years after the expenditures were made. 

Maintenance of Effort compliance is based on a July 1 to June 30 fiscal year comparison. Once the fiscal year is closed (we use the date September 30), any opportunities to “amend” the prior year expenditures by moving costs between funding sources is no longer permitted. Using the same concept with Medicaid MAC and cost settlements, we believe that revenue received after the close of a fiscal year (September 30) should be excluded from the MOE calculation. For example, a cost settlement for the 2011-12 fiscal year received in June of 2015 would be excluded from the MOE calculation. 

Beginning with fiscal year 2013-14, all MAC or Cost Settlement payments or recoupments must be booked to fund 10. All interim SBS payments or recoupments (current and immediate prior) will continue to be booked in fund 27.

For additional information and examples, please view the Medicaid Coding technical assistance document. This information was also made available as a webinar with a companion handout

Questions on IDEA Maintenance of Effort may be directed to Rachel Zellmer.

To schedule a conference call with Rachel Zellmer, please visit our Bookings page.