Maintenance of Effort

What is it?

Maintenance of Effort (MOE) is a federal requirement that requires grant recipients and /or sub-recipients to maintain a certain level of state/local fiscal effort to be eligible for full participation in federal grant funding.  Grant recipients or sub-recipients not meeting MOE requirements face loss of a portion of their federal funds.  Elementary and Secondary Education Act (ESEA), as amended by “No Child Left Behind” (NCLB) MOE requirements can be found under 20 USC 7901, Section 9521 of the Act (see actual language below).  The MOE requirements are located in Part E-Uniform Provisions of Title IX-General Provisions part of the act.  This means MOE covers all the ESEA programs as defined as “cover programs” under Section 9101 (13) of ESEA of the Act (see below).

Section 9521 MOE:

‘‘Subpart 2–Other Provisions

‘‘SEC. 9521. MAINTENANCE OF EFFORT.

‘‘(a) IN GENERAL.–A local educational agency may receive funds under a covered program for any fiscal year only if the State educational agency finds that either the combined fiscal effort per student or the aggregate expenditures of the agency and the State with respect to the provision of free public education by the agency for the preceding fiscal year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding fiscal year.

‘‘(b) REDUCTION IN CASE OF FAILURE TO MEET.–

‘‘(1) IN GENERAL.–The State educational agency shall reduce the amount of the allocation of funds under a covered program in any fiscal year in the exact proportion by which a local educational agency fails to meet the requirement of subsection (a) of this section by falling below 90 percent of both the combined fiscal effort per student and aggregate expenditures (using the measure most favorable to the local agency).

‘‘(2) SPECIAL RULE.–No such lesser amount shall be used for computing the effort required under subsection (a) of this section for subsequent years. ‘‘(c) WAIVER.–The Secretary may waive the requirements of this section if the Secretary determines that a waiver would be equitable due to–

‘‘(1) exceptional or uncontrollable circumstances, such as a natural disaster; or

‘‘(2) a precipitous decline in the financial resources of the local educational agency.

Section 9101 (13) Covered Programs:

(13) The term covered program means each of the programs authorized by —

         (A) part A of title I; (B) sub-part (3) of part B of title I; (C) part C of Title I;

         (D) part D of title I; (E) part F of title I; (F) part A of title II;

         (G) part D of title II; (H) part A of Title III; (I) part A of title IV;

         (J) part B of title IV; (K) Part A of Title V; and (L) subpart 2 of part B of title VI

How does the Department of Public Instruction monitor the MOE requirements?

DPI monitors MOE requirements by accessing the Annual Report data for the most recent two years that school districts have submitted online to the Bureau for School Finance.  The chart of accounts is reviewed each year to determine what costs are appropriate, as per the requirements (see blank copy of Moe worksheet).  The net expenditures for each year are divided by the membership count for that year to arrive at a per pupil MOE annual expenditure amount.

ESEA requires each Local Educational Agency (LEA) to maintain financial support at least at a 90% support level.  If state/local support falls below 90% on both an aggregate expenditure basis and the per pupil expenditure basis, then the LEA is cited for a MOE violation.   Each LEA in violation is notified in writing and given 30 days for response.  If after the 30 days no response is received, then the LEA’s ESEA cover program entitlements are reduced proportionally by the percentage of the lesser percentage of the aggregate expenditure basis, or the per pupil expenditure basis, that falls below 90%.  Then, when computing MOE for the subsequent year, the LEA is required to maintain support at least at the 90% level as if they would have met the minimum support level for the current MOE calculation.      

Blank MOE Worksheet

School District MOE Worksheets

Specific questions related to this subject should be directed to:
Robert Sainsbury, Senior Grant Accountant
School Management Services
608-266-2428
robert.sainsbury@dpi.wi.gov

For questions about this information, contact Mary Jo Parman (608) 266-2158

Last updated on 8/3/2009 12:22:44 PM