Part B of IDEA authorizes funding for federal grants to states to  enable school districts to provide services for students with disabilities  aged 3 through 21. 2). Almost All States Reported at Least Some of Their Districts Faced Challenges Meeting MOE

Although states reported on our survey that most of their districts met  MOE in 2012-13, almost all states indicated that some districts faced  challenges, and the number of states reporting that half or more of their  districts have faced or may face challenges is increasing (see fig. In response to reduced funding, the district  made cuts to special education as well as general education spending,  and as a result it had come close to not meeting MOE for the 2011-12  school year. This effectively reduced the amount districts spent on special  education teachers and other staff, the majority of any district’s  special education spending. States and Districts Report That MOE Protects Funding, but Can Create Unintended Consequences Affecting Services for Students

State and district officials had mixed views on MOE’s effects on services  for students with and without disabilities. MOE is one of multiple  safeguards established under IDEA to protect special education funding,  and while some officials reported positive effects, others said the  requirement can sometimes have the unintended consequence of  deterring districts from innovating and implementing efficiencies in special  education services. Additionally, some states and districts pointed out that  prioritizing special education spending to meet MOE during a period of  budget constraints resulted in cuts to general education spending that  affected services for all students, including the many students with  disabilities that spend much of their days in general education  classrooms. “MOE hinders our ability to offer  innovative methods for delivery of  services, if the cost of the new, innovative  method is less than in the previous year.”  “The MOE requirement also fosters a lack  of innovation in the program [special  education] for fear of adding to the  spending base.”
At the same time, some state and district officials we interviewed said  MOE can discourage efforts to implement innovations or expand services. For example, some district officials we spoke with said that because of  MOE, they do not want to commit to a higher level of spending to  implement innovative services, despite other provisions in IDEA that are  intended to encourage innovation. Several district officials noted that protecting special education funding  does not necessarily equate to protecting or improving special education  services. General education service reductions negatively affect all students—both  those with and without disabilities. In 2010, when Education began its latest round of monitoring, it had a  performance standard to provide feedback to states within 88 days of a  verification visit. However, Education did not set a performance  standard for the merged fiscal monitoring reviews. States reported that Education’s delayed feedback has kept them from  taking corrective actions in a timely way. As of August 2015— the most recent data Education provided—22 states were still waiting for  feedback. Officials in one district we interviewed  said this was extremely helpful, allowing them to track their compliance  with MOE on an ongoing basis. Education’s lack of timely monitoring feedback has hampered some  states’ efforts to facilitate school district compliance with MOE—a key  requirement of the law. Matter for Congressional Consideration

To help districts address key challenges in meeting MOE and mitigate  unintended consequences that may affect services for students with  disabilities, while preserving the safeguard for funding for students with  disabilities, Congress should consider options for a more flexible MOE  requirement. In its comments, Education agreed with both of our recommendations. Regarding our recommendation to establish timeframes for providing  prompt feedback to states on findings from its next cycle of IDEA fiscal  monitoring, Education stated that in its new system of monitoring it will  include timelines for providing prompt feedback on monitoring results,  including findings and corrective actions. The survey included questions about the extent to which school districts  (referred to by law and in the survey as local educational agencies—LEA)  in the state met the local MOE requirement in the 2012-13 school year,  state perspectives on challenges their school districts face in meeting the  MOE requirement, procedures used by state educational agencies (SEA)  for monitoring compliance with the requirement, and the state and federal  role in assisting school districts in complying with the requirement. 1. f. Decline in local revenue

		Yes, varied

No, stayed the same 10. To examine the  characteristics of districts facing challenges and not facing challenges  meeting MOE, we linked the CCD data to responses to the question  on GAO’s 2011 survey of school districts that asked, “Do you currently  anticipate your LEA  having trouble meeting  the IDEA Maintenance of Effort (MOE) requirement for 2011-12?” This  survey was sent to a nationally generalizable sample of school  districts, which means that the results of our analysis are  generalizable to the total population of school districts in 2011.
Why GAO Did This Study

IDEA provides federal support to school districts through grants to states for the excess cost of educating students with disabilities. Education is responsible for monitoring states' oversight of district compliance with IDEA, including an MOE requirement to ensure special education spending generally is at least equal to the level spent the preceding year. A 2011 GAO report found an estimated 24 percent of districts anticipated trouble meeting MOE. GAO was asked to examine districts' recent experiences with MOE.
This report examines: (1) the extent to which districts face challenges meeting MOE and why, (2) how MOE affects services for students with and without disabilities, and (3) how well Education and states facilitate school districts' compliance with MOE. GAO surveyed the states, as well as districts that in 2011 anticipated trouble meeting MOE; analyzed MOE data; and interviewed Education officials, disability advocates, and state and district officials in three states selected to illustrate a range of experiences with MOE.

What GAO Found

States reported that nearly all school districts generally met the local maintenance of effort (MOE) spending requirement for special education, but some districts faced challenges for various reasons. Under the Individuals with Disabilities Education Act (IDEA), MOE requires districts to spend at least the same amount on special education services for students with disabilities that they spent in the preceding year, with some exceptions. In response to GAO's 50-state survey, states reported that nearly all districts met MOE based on the most recent data available in all states (school year 2012-13). However, most states reported that at least some of their districts faced challenges in doing so. In a separate GAO survey of districts, many cited budget and cost reductions—such as state or local revenue declines and new state caps on benefits, which lowered the cost of a special education teacher—as key challenges in meeting MOE.
State and district officials had mixed views on MOE's effects on services for students with and without disabilities. MOE is one of several safeguards meant to protect special education funding, and while some officials reported positive effects, others said the requirement can sometimes create unintended consequences for the services provided to special education students. They said that because the MOE requirement lacks flexibility, it can discourage districts from altering their baseline of special education spending, even when doing so would benefit students with disabilities or result in more efficient delivery of the same services. For example, despite other grant provisions in IDEA that promote innovation, some district officials commented that the MOE requirement can serve as a disincentive to districts' efforts to pilot innovative or expanded services requiring a temporary increase in funds because it would commit them to higher spending going forward. In addition, some district officials noted that prioritizing special education spending to meet MOE resulted in cuts to general education spending that affected services for all students, including the many students with disabilities who spend much of their days in general education classrooms.
The Department of Education's (Education) delayed monitoring feedback has hampered states' efforts to facilitate district compliance with MOE. In 2010, Education initiated its latest round of reviews of states' processes for overseeing their districts' compliance with IDEA, including MOE. However, Education currently has no standards for providing timely feedback on this process and—as of August 2015—had not provided feedback from these reviews to about half the states, due in part to competing priorities. Such delays are contrary to federal standards that call for prompt resolution of findings. Officials in one state said Education's untimely feedback had delayed the state's ability to provide guidance to districts regarding MOE, and in another state, monitoring was on hold until Education approved the state's process for determining MOE compliance.

What GAO Recommends

To promote innovation and efficiency while safeguarding special education funding, GAO suggests that Congress consider options for a more flexible local MOE, such as adopting a less stringent requirement. GAO also recommends, among other things, that Education take steps to establish specific time frames for providing prompt feedback to states about their fiscal monitoring of districts. Education agreed with GAO's recommendations.