§ 300.230 SEA flexibility.

Plain English summary

This section grants SEAs limited flexibility to reduce State-source special education expenditures by up to 50% of any excess federal allotment over the prior year, provided the State fully covers the non-Federal share for all LEAs. This flexibility is prohibited if the Secretary determines the SEA cannot maintain FAPE programs or requires intervention, and any reduced funds must be redirected to ESEA-authorized activities or higher education programs. SEAs exercising this authority must report reductions and redirected activities to the Secretary, and may not reduce funding to a level where any LEA cannot ensure FAPE for all children with disabilities.

Key requirements

• For any fiscal year for which the allotment received by a State under § 300.703 exceeds the amount the State received for the previous fiscal year and if the State in school year 2003-2004 or any subsequent school year pays or reimburses all LEAs within the State from State revenue 100 percent of the non-Federal share of the costs of special education and related services, the SEA may reduce the level of expenditures from State sources for the education of children with disabilities by not more than 50 percent of the amount of such excess.
• If the Secretary determines that an SEA is unable to establish, maintain, or oversee programs of FAPE that meet the requirements of this part, or that the State needs assistance, intervention, or substantial intervention under § 300.603, the Secretary prohibits the SEA from exercising the authority in paragraph (a) of this section.
• If an SEA exercises the authority under paragraph (a) of this section, the agency must use funds from State sources, in an amount equal to the amount of the reduction under paragraph (a) of this section, to support activities authorized under the ESEA, or to support need-based student or teacher higher education programs.
• For each fiscal year for which an SEA exercises the authority under paragraph (a) of this section, the SEA must report to the Secretary the amount of expenditures reduced pursuant to that paragraph and the activities that were funded pursuant to paragraph (c) of this section.
• An SEA may not reduce the level of expenditures described in paragraph (a) of this section if any LEA in the State would, as a result of such reduction, receive less than 100 percent of the amount necessary to ensure that all children with disabilities served by the LEA receive FAPE from the combination of Federal funds received under Part B of the Act and State funds received from the SEA.
• If an SEA exercises the authority under paragraph (a) of this section, LEAs in the State may not reduce local effort under § 300.205 by more than the reduction in the State funds they receive.

Affected parties

• State Educational Agencies (SEAs)
• Local Educational Agencies (LEAs)
• Secretary of Education
• children with disabilities

Official source

https://www.ecfr.gov/current/title-34/part-300/section-300.230