Education: Recurring Less severe Noncompliance
||First Year Reported
|Special Education - Grants to States (IDEA, Part B)
||During our audits for fiscal years 2011-12 and 2012-13, we reported that Education did not meet its maintenance of effort (MOE) requirements and did not obtain a waiver from the U.S. Department of Education. In fiscal year 2013-14, Education again did not meet its MOE requirement by $19,172,953, nor did it request a waiver. Failure to meet MOE requirements increases the risk of reduced federal funding.
|Education appropriates special education expenditures on the basis of the AB 602 funding formula. The AB 602 funding formula requires Education to make multiple calculations/appropriations of state special education funds over a two year period. Thus, the fiscal year 2013–14 AB 602 final principal apportionment will not be calculated and made available until July 2016. As part of California’s Annual State Application for 2015, Section V – Maintenance of State Financial Support (SMFS), Education provides the U.S. Department of Education, Office of Special Education Programs (OSEP), preliminary maintenance of state financial support for fiscal year 2012–13 and fiscal year 2013–14 which is based upon the most current certified special education appropriation amounts. In prior year applications, the CDE has informed OSEP that the SMFS is preliminary; this approach has been acceptable to OSEP in previous years. Education monitors the budget process; if the proposed budget threatens the State’s ability to meet federal Maintenance of Effort (MOE) for the Individuals with Disabilities Education Act (IDEA), Education promptly notifies the Legislature of the potential shortfall. If the expenditure data demonstrates that state financial support did not meet MOE requirements, Education will request the necessary funding from the Legislature. In prior years, the Legislature has responded to our identification of final MOE shortfalls in the past by appropriating additional funding to offset the shortage of funds; however, there have also been years where the final data reflected no shortfall. The Legislature controls the appropriations that provide financial support for services to students with disabilities across state agencies. Education exercises control over the distribution and expenditures of the allocations received, but has no control over the financial support appropriated by the Legislature and approved by the Governor. If the Legislature does not provide Education with sufficient funding to meet MOE requirements, Education will seek a remedy, such as a waiver, from the federal Office of Special Education Program.