What does the excess cost standard require?

IDEA Part B funds can be used only for expenses above and beyond what is spent on average on an elementary or secondary school student, which is known as “excess cost.” The excess cost standard requires that an LEA spends at least as much on children with disabilities as is spent on children without disabilities before using IDEA funds.

Is the excess cost requirement applied at the district level or the Intermediate School District (ISD) level?

The excess cost requirement is applied at the ISD level. This means that member districts expenditures and student counts are aggregated together before Catamaran calculates thresholds for the ISD. Member district thresholds will be available in Catamaran for reference, but MDE OSE will only conduct compliance testing at the ISD aggregate level.

How is the excess cost threshold calculated?

The following steps are used to calculate a threshold for a given school year:

  1. Sum all local, state, and federal expenditures from the prior school year.
  2. Deduct certain expenses, such as debt service, capital outlays, and other expenses from the total above, resulting in an adjusted expenditure amount.
  3. Divide the adjusted expenditure amount by the total number of students (general and special education) from the prior year, resulting in an annual per-pupil expenditure (APPE).
  4. Multiply the APPE by the number of students with disabilities in the ISD during the current year, resulting in the threshold.

The excess cost threshold is the total minimum amount of funds that must be spent within an ISD—in the aggregate—on educating students with disabilities before using IDEA Part B funds. This calculation is described in 34 CFR Appendix A to Part 300.

Note: Federal regulations require excess cost thresholds be calculated separately for elementary and secondary students.

If the excess cost requirement is applied at the ISD level, do member districts have a role in excess cost?

Yes. Member districts, together with ISDs, must record expenditures and student counts that Catamaran will use to calculate thresholds at the ISD aggregate level. Member districts will submit expenditure and student count data to the ISD for review and inclusion in the aggregate calculation.

Why can’t MDE perform excess cost calculations using data my district/ISD already submitted elsewhere?

Federal regulations require excess cost be calculated separately for elementary and secondary students and prohibit simple proration based on the number of elementary and secondary students. Therefore, none of the existing reporting mechanisms allow for excess cost to be calculated in accordance with federal regulations.

What is the difference between Excess Cost Threshold Setting and Excess Cost Compliance?

The excess cost requirement will take place in two phases in Catamaran.

First, in the fall of 2019, the Excess Cost Threshold Setting activity will take place in order to establish thresholds that will be used to test compliance with the excess cost standard for the 2019-20 school year. No compliance testing will occur at this time.

Then, in the fall of 2020, the Excess Cost Compliance activity will take place in order to test compliance with the thresholds that were established for the 2019-20 school year.

What is the difference between maintenance of effort and excess cost?

The maintenance of effort (MOE) requirement considers only expenditures for special education and ensures that ISDs expend the same level of local, or state and local, effort on special education comparing the current year to the prior year(s). The excess cost requirement considers all expenditures and ensures IDEA Part B funds are only used for the excess costs of special education, or those costs which are in excess of an average per-pupil general education calculation. The excess cost calculation is done annually and is not compared to the prior year(s). More information about these differences is available in the resource, Key Differences between IDEA Local Educational Agency Maintenance of Effort and Excess Cost Requirements.