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U.S. Department of Education: Promoting Educational Excellence for all Americans

Exception to maintenance of effort (Sec. 300.204)

Comment: One commenter recommended expanding the exceptions to the maintenance of effort requirements in Sec. 300.204(a) to include negotiated reductions in staff salaries or benefits so that LEAs are not penalized for being proactive in reducing costs. Another commenter recommended revising Sec. 300.204 to allow LEAs to apply for a waiver of the maintenance of effort requirements in cases of fiscal emergencies.

Discussion: Section 300.204(a) through (d) reflects the language in section 613(a)(2)(B) of the Act and clarifies the conditions under which LEAs may reduce the level of expenditures below the level of expenditures for the preceding year. Nothing in the Act permits an exception for negotiated reductions in staff salaries or benefits or financial emergencies. Accordingly, to expand the exceptions to the maintenance of effort requirements, as recommended by the commenters, would be beyond the authority of the Department.

Changes: None.

Comment: Some commenters requested clarification as to whether the exceptions to the maintenance of effort requirements apply to an LEA that uses funds from its SEA's high cost fund under Sec. 300.704(c) during the preceding year.

Discussion: We do not believe further clarification is necessary because Sec. 300.204(e) clearly states that the assumption of costs by a State-operated high cost fund under Sec. 300.704(c) would be a permissible reason for reducing local maintenance of effort. This provision was included in the proposed regulations in recognition that the new statutory authority in section 611(e)(3) of the Act that permits States to establish a fund to pay for some high costs associated with certain children with disabilities could logically and appropriately result in lower expenditures for some LEAs.

Changes: None.