Local Educational Agency Maintenance of Effort Flexibility Due to Recovery Act IDEA, Part B Funds

We reported on how LEAs that received increased IDEA funds through the Recovery Act exercised IDEA’s maintenance of effort (MOE) flexibility provision. MOE flexibility permits an eligible LEA to reduce the level of local expenditures for the education of children with disabilities by up to 50 percent of any increase in its annual IDEA, Part B, Section 611 subgrant allocation. We found that the 17 LEAs and 6 SEAs reviewed did not always comply with applicable laws and regulations associated with exercising MOE flexibility or properly use and account for freed-up funds resulting from exercising MOE flexibility. We made 12 recommendations to address the issues identified, including that the Department perform additional program monitoring, verify that SEAs have implemented appropriate policies and procedures, and determine the amount SEAs are required to remit to the Department.