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Special Education Spending Flexibility Focus of GAO Report

Loosening the reins on state and district special education spending could lead to more innovation without damaging student services, says a report released Monday from a congressional watchdog agency. 

The Government Accountability Office was asked to look into special education spending—specifically the provisions around "maintenance of effort." 

The Individuals with Disabilities Education Act requires, with few exceptions, that school districts and states spend the same amount or more on special education from year to year. That eliminates wild swings in funding, and insures that spending can only go up, not down.

(For the policy wonk readers: there are actually two separate requirements here. Maintenance of effort applies to school districts, and districts are able to reduce their spending for a few reasons, such as the departure of staff or of a high-cost student. "Maintenance of state financial support" is the legal provision that refers to a state's obligations. States are allowed to reduce their spending if they receive a waiver from the Secretary of Education, which some states received during the Great Recession.)

The GAO, which surveyed states and school district leaders, reported that in some cases, the maintenance of effort requirement dampens innovation in special education. For example, districts have no incentive to look for efficiencies in spending, because they can't actually reduce the amount of money they spend from year to year. And from another perspective, there's also no incentive to make a short-term increase in spending—such as to launch a new initiative—because that increase will be locked in forever. The GAO created a graphic describing the dynamic:

GAO_maintenance_of_effort.JPG

The report said that it also doesn't help that the U.S. Department of Education conducted fiscal monitoring reviews of the states in 2010 through 2012, but that 22 states are still waiting to hear back whether their district monitoring processes actually meet federal requirements. States said the delay has kept them from making adjustments in a timely way; for example, Oregon reported that it had a monitoring visit in 2010, but was told that it needed to take corrective action in 2014. The Education Department told the watchdog agency that it was juggling competing priorities and staffing issues. 

Congress should step in to develop a less-stringent maintenance-of-effort requirement, the report suggests. Districts could be given permission to do one-time increases without changing the baseline funding requirement. At the same time, districts should be allowed to cut spending if they can demonstrate that it doesn't affect student services. From the report:

Current exceptions do not address the key challenges that districts face, including factors that are outside of their control and that do not affect the level of services provided to students with disabilities. In these situations, it is unclear whether funds spent on special education to comply with MOE result in enhanced services for students with disabilities.

The Education Department also needs to develop a timeline for when it will provide the results of monitoring reports to states, the report said.. In their response, department officials said a plan is already in the works to address that problem.

Superintendents' Group Applauds Report

AASA, the School Superintendents Association, released a statement not long after the report came out, saying that it supported the GAO's findings. The organization is backing legislation that would allow school districts to cut back on special education spending if they could show that students were receiving all the services to which they are entitled.

"The GAO report underscores the obligation that district leaders have to leverage local education funding in a manner that best serves the maximum number of students," said Daniel A. Domenech, the executive director of AASA, in a statement. "IDEA must provide districts with the flexibility to ensure they are not wrongly penalized for changes in their special education funding levels that in no way impact the provision of special education to students with disabilities."

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