NC 1502-4 Maintenance of Effort

Plain English summary

This regulation establishes the Maintenance of Effort (MOE) requirements that Local Education Agencies (LEAs) must satisfy to remain eligible for special education funding, requiring them to budget and spend at least the same amount on children with disabilities as in the prior fiscal year from local or combined state and local funds. The regulation defines both an eligibility standard (budgeting requirement) and a compliance standard (actual expenditure requirement), with federal funds excluded from both calculations. Failure to maintain required expenditure levels exposes the State Education Agency (SEA) to financial liability, requiring repayment to the federal Department equal to the shortfall or the LEA's Part B sub-grant amount, whichever is lower.

Key requirements

• For purposes of establishing the LEA's eligibility for an award for a fiscal year, the SEA must determine that the LEA budgets, for the education of children with disabilities, at least the same amount, from at least one of the following sources, as the LEA spent to that purpose from the same source for the most recent fiscal year for which information is available.
• Funds provided to an LEA under Part B of the Act must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year.
• Expenditures made from funds provided by the Federal government for which the SEA is required to account to the Federal government or for which the LEA is required to account to the Federal government directly or through the SEA may not be considered in determining whether an LEA meets the standard in paragraph (a)(1) of this section.
• If an LEA fails to maintain its level of expenditures for the education of children with disabilities in accordance with paragraph (b) of this section, the SEA is liable under section 452 of the General Education Provisions Act (20 U.S.C. 1234a) to return to the Department, using non-Federal funds, an amount equal to the amount by which the LEA failed to maintain its level of expenditures in accordance with paragraph (b) of this section in that fiscal year, or the amount of the LEA's Part B sub grant in that fiscal year, whichever is lower.
• If, in the fiscal year beginning on July 1, 2013, or July 1, 2014, an LEA fails to meet the requirements of NC 1502-4 in effect at that time, the level of expenditures required of the LEA for the fiscal year subsequent to the year of the failure is the amount that would have been required in the absence of that failure, not the LEA's reduced level of expenditures.
• If, in any fiscal year beginning on or after July 1, 2015, an LEA fails to meet the requirement of paragraph (b)(2)(i) or (iii) of this section and the LEA is relying on local funds only, or local funds only on a per capita basis, to meet the requirements of paragraph (a) or (b) of this section, the level of expenditures required of the LEA for the fiscal year subsequent to the year of the failure is the amount that would have been required under paragraph (b)(2)(i) or (iii) in the absence of that failure, not the LEA's reduced level of expenditures.

Affected parties

• Local Education Agencies (LEAs)
• State Education Agency (SEA)
• Children with disabilities
• Special education program administrators
• LEA budget and finance officers

Official source

https://www.dpi.nc.gov/documents/publications/catalog/ec144-policies-governing-services/open#page=52