iowa department of education1 special education finance overview seap friday, april 5, 2013
TRANSCRIPT
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Iowa Department of Education 1
Special Education Finance
Overview
SEAP
Friday, April 5, 2013
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Iowa Department of Education 2
Iowa Funding of Special Education Foundation Formula Weighting Grants-in-Aid (IDEA) Medicaid Services Other State/Federal categorical aid & allocations
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Iowa Department of Education 3
Foundation Formula
Iowa is one of 36 states with a foundation formula
Pupil driven system (Pupils x Cost Per Pupil = Regular Program Budget)
Sets spending limit/ceiling = budget authority
Praised for its equity
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Iowa Department of Education 4
Goals and Principles
Equity in Expenditure Horizontal Vertical
Property Tax Relief Equalize Taxation Uniform State Aid
Allocation Formula Predictable Simple
Pupil Driven Provide for Local
Discretion/Incentives Establish Maximum
Spending Control One Funding Formula
AEA + K-12 Provides Adequate
Funding
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Iowa Department of Education 5
Horizontal Equity
All students treated equally. All students are FIRST regular education
students. All students have equal funding behind
them. Referred to as “1.0” funding
Comes from October 1 certified enrollment count
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Vertical Equity
• Iowa is one of 20 states that weights per pupil
• Creates weight (Pupil FTEs) based on need• Purpose is to equalize educational
opportunity• Provides additional funding for certain
populations of students
Iowa Department of Education 6
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Iowa Department of Education 7
Weighted Enrollment Funding
Pupil Driven System
Weights “Adds” Pupils (FTEs)
Weights x District Cost Per Pupil =
Additional Categorical Funding
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Iowa Department of Education 8
Weighted Enrollment Funding
Pupil Driven System Weights
– Provide funding to cover additional instructional cost
• Special Education
• English language Learners
• Shared Teachers/Students/Regional Academies
• At-Risk Students
• Called Categorical Funding
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Vertical Equity in Special Education• 3 Levels of Special Education Weighting
• Level 1 = 0.72
• Level 2 = 1.21
• Level 3 = 2.74
Iowa Department of Education 9
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Iowa Department of Education 10
Annual Growth to Cost Per Pupil
Allowable Growth
Allowable Growth Rate x State Cost Per Pupil = Growth Per Pupil
2012-2013
2.0% x $5,883 = $118 Per Pupil
$5,883 + $118 = $6,001
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Iowa Department of Education 11
AEA Program Funding
AEA Funding– Pupil Driven– Flows Through Local District Budgets
– Special Education Support Services– Media Services – Educational Services
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Iowa Department of Education 12
Revenue - Foundation Formula
Required Local Levy - Uniform Levy Minimum Local Tax Effort
State Aid Equalizing
Foundation Level Total funding is the same in all district—just source
changes (property tax or state aid)
Additional Levy
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Iowa Department of Education 13
State Aid
Increase Funding for Districts
“Fair” Method to Distribute State Aid
Provide Property Tax Relief
Equalizes Effort
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Iowa Department of Education 14
Foundation Formula
State Aid
Uniform Levy$5.40 Per$1000 Valuation
Additional Levy
Foundation Level
87.5% of State Cost ($6,001) = $5,251 Per Pupil
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Iowa Department of Education 15
Foundation Formula
Property Rich District
Property Poor District
Uniform Levy$5.40
Additional Levy
State Aid
Uniform Levy$5.40
Additional Levy
State Aid
Foundation Level
Foundation Level
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Iowa Department of Education 16
87.50% Foundation 79%
Level Foundation
Level
State Aid
AEA Special Education Support
Special Education Instruction
Additional Levy
Uniform Levy
Additional Levy
State Aid
State Aid
Additional Levy
Regular Program
Foundation Formula
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Iowa Department of Education 17
SE is Unique Among Categorical Funding
• Student Count for SE weighting is late October rather than October 1 like all others• Results in possible 1.0 and wtg in different districts
• Requires a Local Match• Portion of the 1.0 becomes categorical
• Balance of 1.0 remains general purpose
• Different portions for each wtg level
• Makes it difficult to budget
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Iowa Department of Education 18
SE is Unique Among Categorical Funding
• SE weighting is not the final amount like all others—more like an estimated advanced• Focus is SE is NOT on balance
• Focus is on meeting every IEP need
• May cost less than wtg—may cost more than wtg
• If less• “Use it or Lose it” is WRONG in SE
• Excess over 10% of receipts goes to other districts that need it—does NOT revert to the state
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Iowa Department of Education 19
SE is Unique Among Categorical Funding
• If more• Called “deficit”
• District may levy additional property tax
• Unlimited funding—whatever it takes to meet IEP needs
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Iowa Department of Education 20
SE is Unique Among Categorical Funding—Creates Issues
• If less:• Districts have “Use it or Lose it” concept
• Try to spend needlessly to prevent sharing with other districts
• If more:• Unlimited funding can cause district to lose incentive
to be good financial stewards
• Unlimited funding causes districts to be victims of those who perceive them as “deep pockets”—whatever the market will bear attitude
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Iowa Department of Education 21
SE is Unique Among Categorical Funding -- AEAs
• If less:• Revert to the state treasury special education support
services balances greater than 10% of expenditures
• If more:• Iowa Code allows special education support services
to scoop funding from education services and media services to ensure that all special education support services needs are met
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Iowa Department of Education 22
School Budget Review Committee’s Role in SPED
“Manage” Foundation Formula• Adjust Special Education Weights• Approve Positive & Negative Balances• Direct Payment of Supplemental Aid• Grant Authority to Charge Administrative
Costs to Special Education Weighted Funding
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Iowa Department of Education 23
SBRC Action
• Special Education Deficits approved– More on this later
• Weightings did not change• Special Ed Admin Costs – generally ok
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Iowa Department of Education 24
Special Education Reviews & Audit of Provider
• Special Ed deficits increased from $19 million in FY11 to $55 million in FY12.
• SBRC wanted to know more on the ground about this trend
• Visited four locations: Cedar Rapids, Dubuque, Waterloo, Atlantic
• Reviewed expenditure detail
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Iowa Department of Education 25
SE Review (cont.)
• Findings– 1) Loss of ARRA funds negatively impacted
balances– 2) Little or no allowable growth magnified
deficits– 3) DE’s rubric for qualifying students pushes
more students toward a level II service vs. level I
– 4) High growth in paras
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Iowa Department of Education 26
SE Review (cont.)
• Will always find some expenditures coded incorrectly
• Concerns with third party billings• Concerns with Special Education Admin• Iowa law does not allow any expenditures
for SPED other than instructional program expenditures pursuant to IEP
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Iowa Department of Education 27
Audit
• Key finding – Third party provider was including nonpermissive items in billing
• Responsibility for both implementing special education programming (at any site) and to ensure legal spending lies with the district
• District must ensure there is enough detail to know whether billable expenditures are legal
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Iowa Department of Education 28
What’s Next – SPED Issues
• General Deficit
– Property Taxes vs. state aid• SPED Counts
– SPED Counts vs. Actual Enrollment
– AEAs vs. direct to DE
– Certified Enrollment vs. SPED Count
– IMS vs. RTI• General Purpose Percentage
– General purpose costs are never accounted for on a student basis or student classification basis.
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Iowa Department of Education 29
What’s Next – SPED Issues
• Transportation– Only allowable if in IEP
• Carryover Provision– Limit of 10%
• Supplanting– SPED Students always general ed first, then
weighted next if IEP
• Claims and timing of revenues
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Iowa Department of Education 30
What’s Next – SPED Issues
• Rules – In need of updated guidance on SPED finance
• Mixed classrooms– Need for additional guidance
• Audits– Need for additional training of local auditors
• Look Back Rule– Already fixed – look back to October