More Transparency and Greater Accountability

for Special Education Funding

Position Paper
January 23, 2013

Presented by:
Superintendents Special Education Advisory and Advocacy Council

022

Executive Summary
The law grants every special education student a full allocation for basic education because they are in fact, general
education students, AND additional monies specifically for the excess cost to provide an appropriate education.
Washington State legislators have established clear statutory requirements for the calculation, and use, of funding for
special education in our K-12 education system. These laws have been upheld by the States highest court. It is incumbent
upon our Districts leadership and financial experts to be cognizant of these laws and heed them.
Our school board directors, specifically Michael DeBell , assert with regularity that special education costs are excessive and
increasing at an unacceptable rate. SEAACs investigation of District and OSPI financial data shows that district and building
cost accounting DOES NOT track the individual and total BEA expenditures for our students. Further, we note that special
education costs per student have, in fact, been decreasing not growing unbounded. Special education advocates would
argue that the quality of services provided students with disabilities has also decreased, with reduced staffing ratios and
inexpert special educators. A recent State audit found that building administrators use special education funding to pay for
general education expenses: salaries for dual-certificated educators teaching social studies, math and language arts. The
special education students (most with high-incidence - mild learning disabilities) in these classes were not getting the
benefit of a general education in a regular classroom AND quality special education services. Instead of receiving BOTH
special and general education, students with disabilities receive nothing more than access to a dual-certified teacher. The
result of this practice is that students with disabilities 1) dont receive excess services intended for them, 2) are funneled
into classes with reduced content and 3) shift to become the responsibility of low incidence, reducing the availability of
students with low incidence disabilities.
1.

Stop Inflammatory Statements Regarding Special Education Costs

Portrayal of our students as hogs at the trough negatively impacts their educational experience. When portrayed as pariahs, they
are scapegoated for all the financial problems in the district and blamed for services not provided in general.

2.

Affirm that Students with Disabilities are General Education Students Regardless of Their Placement.
As general education students, students with disabilities are entitled to general education funding and opportunities. Students with
disabilities should be able to participate in every part of education.

3.

Ensure That Special Education Funding Goes to Students with Disabilities.

Fix the practices like those at Ballard High School, where students receive only special education or general education funding.
Classes with general education students ARE general education classes, even if they contain a few special students.

4.

Affirm that Students with Disabilities are Entitled to Levy Funds and Participation in Levy-Funds
Students with disabilities should benefit from levy funds as all other. Levy funding should not be a way to circumvent the obligations
to special education students.

5.

Improve the Method of Tracking Costs to Educate our Children

Track where our students receive education so that we may know the true cost of their education. IEPOnline has this
information, it should be relatively easy to use to accurately reflect the commitments of IEP teams.

6.

Educate Every District Staffer Involved in Planning, Managing, and Delivering our Students Education
All staff responsible for program delivery should understand that our students need both general education and special education.
Further they should ensure that all educational opportunities are accessible and available to students with disabilities.

7.

Increase Transparency
In addition to tracking and accurately accounting for the costs of students with disabilities, the district should make the the
information crystal clear to the community.

8.

Review the WSS to Reduce the Incentive to Exclude Students with Disabilities
WSS was changed to fully fund each student in elementary school with a disability a full seat in general education. Unfortunately,
there has been no incentive to actually allow the student to use their fully funded seat. In fact, principals are incented to use this
funding to reduce general education class size AND also exclude the student with a disability.

9.

Keep Special Education Funding in the Building, NOT at Central Administration

Central administration costs need to be regularly reviewed along with measurement of efficacy.

10. Recognize Building Administrators who Provide Quality Services

1

More Transparency and Greater Accountability for Special Education Funding

Table of Contents
Executive Summary .................................................................................................................................... 1
Table of Contents ............................................................................................................................... 2
1. Issue Statement ................................................................................................................................. 3
2. Consultation ..................................................................................................................................... 3
3. Introduction ...................................................................................................................................... 3
a. OSPI Report 1220 .................................................................................................................................. 5
4. Problem Scope ................................................................................................................................... 6
a. Table 1 State Funding per SPS Student .............................................................................................. 6
b. Table 2 FY11 Expenditures and Funding Source ................................................................................. 7
c. Table 3 Budgeted versus Actual Expenditures at 91 Buildings ........................................................... 9
d. Table 4 Ballard HS students counts in subjects w/ dual-certificated special educators ................ 14

5. Recommendations and Solutions ..................................................................................................... 11

Appendix 1 OSPI Excess Cost Methodology

Appendix 2 - Supreme Court of Washington Case No 82961-6
Appendix 3 Superior Court of Washington Case 04-2-02000-7
Appendix 4 A Citizens Guide to Washington State K-12 Finance 2012
Appendix 5 Primer on School Finance (cont.)
Appendix 6 FY13 SPS Special Education State Revenue
Appendix 7 10-years F196 and S275 Special Education Cost Data
Appendix 8 - Five-year History of SPS Programs 21, 24, 26, and 29
Appendix 9 Five-year History of SPS Program 21
Appendix 10 OSPI 1077 Excess Cost Methodology (superceded)
Appendix 11 Recommendations to the Governor re: Special Education Excess Cost Accounting
Appendix 12 - Ballard High School Special Education Schedule

More Transparency and Greater Accountability for Special Education Funding

1.

Issue Statement

Special education students in Seattle Public Schools (District) bring, by virtue of their enrollment, both school/district
generated entitlement funds for their basic education (Basic Education Allocation or BEA) AND an excess cost allocation
for their special education. For many years, parents have questioned the use of their students funding often hearing
from administrators we dont have money for that or special education is not sufficiently funded! Despite these
pronouncements, it would appear that the District does not provide, nor have, a true picture of: a) what our students
general and special education costs; and b) what our students BEA and excess cost revenue is spent on. Answers to these
questions are vital to demonstrate financial accountability and compliance with state and federal law. The Special
Education Advisory and Advocacy Council (SEAAC) calls on the District to improve its financial accounting and reporting
systems, such that its adherence to the law will be clearly evident.
2.

Consultation

Information and data for this report was derived from numerous sources. We used references from the reports and data
provided by SPS Budget Director Joe Paperman and Senior Budget Analyst Warner Danielson.
3.

Introduction

Washington State law has been interpreted by the courts as follows:

Special education students are basic education students first;

As a class, special education students are entitled to the full basic education allocation (BEA); and
Special education students are basic education students for the entire school day

School districts have challenged the sufficiency and purpose of funding for special education, arguing that the monies
provided by the state for Program 21 (Special education, Funds 3121 and 4121) includes ALL that is allocated for special
education students basic education. The districts failed to make their case. A Supreme Court decision of tremendous
import rejected the arguments of school districts that challenged the way Washington State funds special education. In
School Districts Alliance for Adequate Funding of Special Education v. The State of Washington 1, the court affirmed lower
courts ruling that Special education students are entitled to their full BEA 2 and excess funding from the State, [t}o the
extent a school district cannot provide an appropriate education for special education studentsthrough the general
apportionment allocation.3
The Office of the Superintendent of Public Instruction developed the excess cost accounting methodology (WSECM,
Appendix 1) is to ensure that special education students, as a class, receive basic education support, to which all students
are entitled, and that special education revenues are used to supplement basic education support. This bears repeating:
special education funding is intended to supplement, not supplant, basic education funding.

Case 82961-6, Sch. Dists. Alliance Appendix 2

Laws of 2005, ch. 518, 507(2)(a)(ii)
3
Laws of 2005, ch. 518, 507(1), (5)(a)(ii)
2

In rejecting plaintiffs appeal, the Supreme Court of Washington affirmed that:

Special education students shall receive their appropriate share of basic education support from basic education
staff when served in the regular classroom
When special education students are served outside the regular classroom, basic education dollars follow to
4
partially support special education services they receive.

Furthermore, in another significant Supreme Court decision 5, the Legislature was required to define a basic program of
education, and sufficiently and amply fund it. The Legislature now defines basic education as the following programs:

General Apportionment (RCW 28A.150.260

Special Education (RCW 28A.150.370)
Transportation (RCW28A.160.150)
Learning Assistance Program (RCW 28.A.165)
Bilingual (RCW 28A.180)
Institutions (RCW 28A,190)
Highly Capable Program
Full-Day Kindergarten

This lists places special education squarely in the definition of basic education. Likewise, the court has ruled districts may
not decouple special education funding from BEA funding. In other words, both sources of funding follow the student in
whatever setting they receive their education.6
The Legislature specifically correlated special education funding to the BEA allocation with a multiplier (.9309). OSPI
Report 1220 (page 5) shows how 93.09% of the BEA rate for special education, times the number of Special education FTE
K-12 enrollment (and a few minor adjustments) produces the value for Revenue Code 4121, one of the States Special
Purpose funds. It is often said that a Special education student bring twice the funding (193%) of a regular student because
she brings her FULL allocation for General Apportionment and her excess cost allocation. (A primer on how a Seattle
students 2013 General Apportionment is derived is in Appendices 4 and 5.)
Report 1220 also demonstrates how a portion of the General Apportionment generated by special education enrollment is
set aside in Revenue Code 3121 (a subset of the State General Purpose funds). This represents the % of student FTE
receiving general education in the special education classroom, as is the case for students in self-contained classrooms.
(The WSECM assumes basic education dollars follow the special education student when outside the regular classroom, to
partially support special education services they receive). The sum of codes 3121 and 4121 add up to the Total Allocation
for Special Education Program 21.
Parents have been informed that Revenue Code 3121 represents ALL monies that our children bring with them for general
education, however this is where the some lose sight of the General Apportionment revenues garnered by our students.
The courts have been crystal clear on this point. Our students are due their full BEA, including that portion in Program 1.
This is but one of the numerous misconceptions SEAAC wishes to clarify.

Case 04-2-02000-7, Sch. Dists. Alliance, Superior Court of Washington Appendix 3

Seattle School District No. 1 v. State, 585 P.2d 71, 978
6
From this point on in this paper, the term general education will be used to refer to the education delivered in that
setting in school buildings. Basic education will continue to connote the States funding category.
5

4.

Problem Scope

A. The District considers the revenue in Code 3121 as ALL that our students get for their general education. Thus, they do
not recognize the millions of dollars in Revenue Code 3100 that is generated due to our students enrollment.
B. Without reference to the relationship between revenue codes 3121 and 4121, the former School Board President and
others regularly decry costs for special education as out of control and consuming increasing amounts of local
revenues. This is used as the basis to complain about funding, as if our students are not entitled to levy proceeds like
any other student.
C. The districts report to OSPI, F196, shows that Program 1, General Education, also consumes levy proceeds. Why is it
okay to spend levy proceeds on Program 1 and not Program 21? General education students are not scapegoated for
their use of levy funds.
D. Parents are subjected to the inaccurate claims made by the District administration that educating our students is
costing more than their fair share. This feeds an intolerant attitude, particularly among building administrators, and
it leads to prioritizing keeping costs down, over providing training for staff and services on a childs IEP.
E. District financial reporting does not track where our students General Apportionment is spent, if not for their benefit
of general education support in the regular classroom.
F. Building budgets are based upon our students enrollment (and the weighted staffing standards WSS). Once
established, principals can spend as they see fit, without oversight. Some, as at Ballard High School, misappropriate
restricted use funds to fit their version of delivery of services. Who will hold building administrators accountable? Or
must we rely on the State Auditor?
G. The ICS delivery model brought with it poor quality services AND high cost. The changes to the WSS increased the costs
for K-5 seats in the regular classroom that may not be filled, if those students are in fact in a self-contained setting for
most of the day.
On Item A: As explained above, the General Apportionment allocation for Special Education is intended for the excess
cost of general education in the special education setting. ALL Special education students are GENERAL EDUCATION
STUDENTS FIRST (and entitled to any and all funding available for general education). The vast majority of Special
education students (70%) are in the regular classroom for most of the day.
Table 1. State Funding per SPS Student
Basic Education Allocation Rates
Guaranteed Entitlement per Student
[Total Guaranteed Entitlement]/[Enroll Total]
Total BEA per SpEd student x .9309
[Total Salary BEA]+[Total Benefits BEA]+[Substitutes BEA]+[MSOC BEA per Student] no CTE
Total Funding available for a SpEd students general and special education

Amount
$5,062.40
$4,682.44
$9,744,84

Appendix 6 shows how much TOTAL revenue special education students bring the district: $60,783,760, or 22% of all state
revenues for Apportionment (codes 3100 and 3121) and Special Education (Code 4121) combined. Our students bring
nearly $30,500,000 for their general education which corresponds to the maximum 12.7% the state allows for special
education enrollment.
On Item B: If expenditures for special education have increased of late, it can be ascribed to a number of programmatic
decisions made by the district. First of these is the leveraging of Federal stimulus dollars in the implementation if
integrated comprehensive services (ICS), starting with K students. The district very shortsightedly bargained that spreading
services more diffusedly and increasing ratios to resource room levels would lead to savings. In fact, this created a situation
where buildings had BOTH ICS rooms AND the existing programs, thereby increasing their costs. It has taken years for ICS

to expand to include more grades in K-5. In the interim, services have been degraded and children have been severely
impacted.7
Furthermore, families often hear that the Federal government should fully fund special education, as if this is somehow
an unfunded mandate. First of all, the mandate for special education in the state of Washington predates IDEA. Therefore
the full obligation of special education falls squarely on the state of Washington. Secondly, the Federal government passed
IDEA because disabled children were being denied their civil right to a free and appropriate education like nondisabled
children. Likewise, the Federal government passed the Civil Rights law, ADA, and Title IX. Should we look to the federal
government to fund: the education of black children; removal of barriers to access, and girls soccer? The expectation that
federal government will fund special education suggests a belief that education of our children is not a duty of the state or
the school district. It implies that our students are not entitled to a basic education like all other students.
Appendices 8 and 9 contain two reports. OSPIs Report of the Districts 5 year Special Education expenditure history
(Programs 21-29) shows that, as a percentage of total district costs, special education spending has decreased for three
years in a row. This decrease has been in spite of increasing special education enrollment. Further, OSPI reports that
Program 21 overages on a per student basis have steadily declined, most recently by 6% in FY11. So, contrary to what some
within the administration or board may believe, special education coasts are not out of control; in fact, on a per share basis
they have decreased.
On Item C: Table 2 shows data from the district last fiscal year filing (FY11) based on the F-196 submitted to OSPI.
Table 2. FY11 Expenditures and Funding Source
Resource to Program Expenditure
FY11 F196
01 Basic Education
21 Special Education, Supplemental

Program
Expenditures
$253,654,164
$60,767,209

State
Resources
$163,024,326
$40,576,426

Federal
Resources
$147,870
$13,977

Other (levy)
Resources
$90,481,966
$20,176,806

%Other
to Exp.
35.7%
33.2%

Program 1 requires MORE levy proceeds as a percentage of expenditures, than Program 21. Basic denial that students with
disabilities deserve a share of levy proceeds like all other students, leaves the public with the impression that our children
are not worthy of a share of taxes collected, not even a smaller share.
Additionally, there is a failure to note that general education draws on levy funds as well. Perhaps this is viewed as a just
use of these funds, that art and music classes are more necessary than reading and writing proficiency, or social-emotional
support. ALL students require additional funds from the operations and maintenance levy to fill the revenue gap for basic
education for every student. When students with disabilities are specifically cited as drawing on the levy, it scapegoats
them for the problems of insufficient funding.
According to the FY11 F196, , the District spent $90M or 81.7% of the O&M levy proceeds applied to programs 1 and 21, to
cover for inadequate funding for basic education. Likewise for special education students, $20M is required or 18.2% of the
total levy amount spent for programs 1 and 21. Special education enrollment is capped at 12.7% enrollment per WSECM.
The revenues our students bring to the school subsidize the expenditures for the activities for all other students, while
many of our children are denied access to option programs, general education classrooms, music, sports, art and field trips.
When one considers the following additional factors (beyond WSS reductions), it is likely that even more of the levy
expenditure was applied for the benefit of general education students:

Many elective courses are not available to special education students because of the pull-out nature of service
delivery

Seattle Special Education PTSA Position Paper, dated February 2010

Special education students are often tracked in limited classes for the convenience of district manpower staffing
(see Item F and Table 4)
Special education students are denied access to many programs such as language immersion and alternative
education simply because the district declines to offer support in those programs and buildings.

On Item D: The district does not track the time special education students spend in special education settings on an
individual basis. Tallies for the amounts of time spent in every restricted setting are simply not tracked. This is important,
because that information in necessary to determine how much of the General Apportionment funding should be directed
towards each restricted special education setting. Instead, it is being used to pay general education teachers salaries,
among other things. Restricted settings include special education self-contained/inclusion classrooms, and instruction in
locations other than a general education classroom setting. During these periods in restricted educational settings, the
disabled student's entire General Apportionment funding (and expenditures) should be accounted for and given to special
education settings. Instead, that funding and expenditure remains in the general education setting even though the student
is not present to receive the benefit. In other words, the Special education student got a seat in the regular classroom,
but s/he doesnt get to use it.
Since the district does not, and, it seems, cannot track where a student is receiving instruction, the district cannot
adequately account for the students' General Apportionment funding. Instead, the district counts this as zero which overcharges special education funding sources for services that should be considered General Apportionment. This poor and
erroneous accounting practice makes it appear like Program 21 costs are out of control when in fact, they are not.
On Item E: Under the new WSS, K-4 students with disabilities are funded with full general education seats. While we
applaud the presumed intent to include students with disabilities in general education, the funding mechanism has an
unintended consequence. Rather than funding disabled students for what they actually need and use in general education,
schools are incented to have disability programs AND THEN NOT make this seat available to the students with disabilities.
When this is done, disability programs in a building simply fund reduced class size for other students. There is no incentive
for principals to actually include disabled students in general education, and nobody holds them accountable to do so. In
essence, disability related funding is again funding benefits for other people while students with disabilities do not enjoy
the funding they drive to a building. Many principals note that fully-funded seats are necessary but not sufficient for
inclusion. Appropriate staffing levels are not provided to allow students the inclusion they need, and often, the inclusion on
their IEPs.
As noted above, district financial accounting does not track where our students BEA is spent. Once budget is allocated to
the schools, building staff are free to charge expenses to any cost center with little oversight. So, even though our students
bring their State allocation for Maintenance, Supplies, and Operating Costs (MSOC), our special education classrooms are
often without books and without supplies. Conversely, if a special education student is in frequent in-house suspension,
how is their BEA being used to ensure they continue to receive the benefit of general education? How are schools being
held accountable for expenditure of our students BEA?
It would appear District financial accounting is not transparent. Parents requested the FY12 financial reports, after the
closing the books for the fiscal year. The actuals are shown on Table 3 below. In subsequent meetings with District staff,
we are told that the expenditures for Program 21 do not include $7M for Time, Response and Incentive payments; that
these amounts are moved to Program 1. First, we question the propriety of this reclassification. If it costs $7M more to
employ and compensate special educators, then that should be reflected in District financial reporting. Second, we have
scrutinized a ten-year history of District S-275 reports, filtered the appropriate duty root and suffix values, and found no
more than $1.1M per year for special education staff TRI payments (Appendix 7). How does staff explain this difference?
Finally and most important, how does this cost classification impact an accurate measure of Maintenance of Effort?

On Item F: Examination of 91 schools FY12 Budget vs Actual expenditures (at closing) reveals that, in total, schools
underspent their special education budgets by $7.7M or 13%, while under-spending on general education by $2M or 1%.
Special education budget went to the buildings, but was not applied where it should. Where did it go, and for whose
benefit?
Table 3. FY12 Budgeted versus Actual Expenditures at 91 Buildings
Category (FY12)
Program 1 - GenEd
Program 21 - SpEd

Budgeted

$ 222,340,589
$ 60,104,964

Expended

$ 220,135,261
$ 52,421,861

% Underspend

-1.0%
-12.8%

A clear example of this lack of accountability is the State Auditors finding at Ballard High School. For a number of years,
Ballards principals have incorrectly charged 100% of the salaries of dual-certificated teachers to Program 21 Special
Education, even though they teach subjects like U.S. History or American Government and Economics to classes of regular
and special education students. Granted, the classes have special education students enrolled as ALL regular education
classes do and should. Simply because a teacher is dually certified in subject matter and special education, and has some
special education students in their classroom, does NOT make that a special education classroom. Those students are
being denied the benefit of their basic education allocation when they are denied access to general education staff.
Furthermore, the excess cost funding these high-incidence students bring with them, is being used to a) reduce costs for
regular education staff salaries; and b) benefit general education students with remedial coursework.
Ballards creative accounting, though lauded as out of the box thinking by some district administrators, was repudiated
by the State Auditors Office in a recent audit 8. Unfortunately, the latter applied a simplistic approach at rectifying this
serious impropriety. Much like Solomons advice to split the baby, the SAO recommended charging the dual-cert
teachers salaries 50-50 to Program 1 and Program 21. This is NOT compliant with the States excess cost methodology.
The SAO recommendation does not even comply with the old excess cost accounting methodology which required districts
to use the previous years LRE (least restrictive environment) to compute Special education FTEs in the regular classroom.
(The WSECM supercedes the old 1077 method, shown in Appendix 10, which was deemed by a 2007 Governors Excess Cost
Accounting Ad Hoc Committee, as nontransparent and inaccurate.)
The Committees report, transmitted on January 15, 2007, (Appendix 11, which built upon the Joint Legislative Audit and
Review Committee, JLARC, Report 06-39) provides the following specific direction on Pg 3:
The proposed method has two objectives. First, to ensure that special education eligible students, as a class, receive their
full share of general apportionment (basic education) funding before accessing the state excess cost funding. Second, to
simplify and consistently apply the cost accounting necessary to achieve the first objective by shifting the majority of the
cost accounting function from the local school district to the state apportionment office.
The proposed accounting method will:
a) Shift a portion of basic education revenue to the special education program based on students full-time
equivalency (FTE) in the special education setting; and
b) Require all costs for the special education program (e.g., the full cost of special education teachers and program) be
captured within a single program rather than splitting program costs between basic and special education.

8
9

Audit Report 1007982, released 7/2/2012

http://www.leg.wa.gov/JLARC/AuditAndStudyReports/2006/Documents/06-3.pdf

The basic education revenue shifted to the special education program, revenue 3121, is intended to establish a minimum
amount of spending of state program 21 before the school district accesses the excess revenues, revenue 4121, generated by
the excess cost formula (.9309 of general apportionment revenue).
The method is referred to as the Washington State Excess Cost Accounting Method (WSECM).
Specifically:
1.
Districts would continue to use the 1077 to generate student FTEs served in the special education setting. The
number will be specific/unique for each school district. (Currently of the approximate113,000 school-age students eligible for
specially designed instruction and generating general apportionment revenue, ~70% of full-time equivalent students are
served in the regular education setting; ~30% of FTE students are served in the special education setting.)
2.
Based on the split of FTE described above, OSPI would split general apportionment funds associated with these
students eligible for special education into three categories:
a.
b.
c.

General apportionment for the regular education classroom (current account code 3100);
General apportionment for the special education setting (new account code 3121);
Indirect support for utilities, administration, district-wide services, etc.

3.
Districts will code their staff and appropriate expenses related to providing specially designed instruction to the
special education program (emphasis added).
4.
Districts will first expend the general apportionment funding (emphasis added) associated with revenue code
3121 and then expend excess cost funding attributed to revenue code 4121.
Clearly, Ballards creative accounting has served to supplant its Special education students BEA and general apportionment
funding by paying for their general education teachers with the students excess funding for specially-designed
instruction. Where are our students regular classroom teachers when the students are served and tracked in Ballards
special education classrooms all day? The auditors recommendation was deficient and not supported by State law,
legislative budget provisions, OSPI regulations and Supreme Court rulings.
The districts Budget Book includes Ballards initial budget details, including acknowledgement that special education
students supply 20% of the schools entire budget. Actual FY12 Program 21 costs were 17% of total school expenditures.
Where was the other 3% expended if not for SDI and services? Why did administrators inform parents of students requiring
transition services that there were no funds to supply a study space for these students? A recent OSPI Citizen Complaint
has faulted Ballards principal for NOT providing resources like space, computers and supplies for Special education
transition students enrolled in Ballards program.
Finally, Ballards enrollment of Special education students calls for 75 periods (at varying levels of support according to
collective bargaining and the WSS). The funding formula negotiated in the collective bargaining agreement divides students
into essentially three basic categories of need: SM1, 2 and 4. Students are placed into this leveled system according to the
intensity of the service they require. At the secondary level, teachers are assigned and FUNDED full time to students at the
following ratios:
SM1: 22:1

SM2: 9:1

SM4: 8:1

Secondary teacher FTEs are budgeted at 5 teaching periods and 1 preparation period each. In particular, special education
students enrolled at Ballard High School bring BEA funding for regular education and excess cost funding for a very
specific number of periods of special education (only) service, calculated below:
(11-12 Ballard students enrolled at SM1 level) 112/22 * 6 periods = 30 SM1 sped periods.
(11-12 Ballard students enrolled at SM2 level) 17/9 * 6 periods = 11 SM2 sped periods.

10

(11-12 Ballard students enrolled at SM4 level 46/8 * 6 periods = 34 SM4 sped periods.
Number of SpEd Periods = 75
But, from the BHS course schedule we see only 48 periods of special education are actually made available to students with
disabilities (Appendix 12). Of these, five periods have only 3-6 high incidence students each (Page 14). 27 periods were
budgeted but not provided to students with disabilities. This represents 36% of the monies budgeted for special education
at Ballard. . It means that 27 periods of special education funding are being misappropriated for general use. It means that
other students enjoy reduced class sizes because special education funding is available to them, and that high incidence
students are clustered in but a few general education classes. It means the other Ballard general education teachers
teaching the same subjects, have 7% or fewer special education students in their classes, far less than the % total in the
school (see Page 9). This is not a mere oversight, nor an inconsequential loss. Students at other district schools do not have
their BEA and excess costs funding similarly misused or withheld. These conditions convey bad faith and a mindset of
exclusion to special education families.
Is it any wonder Ballard has a unique video production program, Maritime Academy, BioTechnology Academy, Agricultural
VocEd etc? All funded from the General Fund (with the exception of a $25K grant). Where does the money come from to
pay for these enrichments? Ballard HS is a textbook case of how an administrator can use his discretion to direct funds for
privileged projects benefitting the few, while our Special education students are denied access to these programs and
tracked in classrooms with little rigor and low expectations.
On Item G: The Districts ill-conceived Integrated Comprehensive Services roll-out (ICS) has led to increasing costs. For
numerous reasons, the District elected not to follow the recommendations in its own 2008 peer-review of special
education. It assumed the temporary infusion of Federal ARRA stimulus funds would carry the costs of initial
implementation. These costs included changes to the WSS that essentially purchased a general education seat for every K-5
student, whether some Special education students in self-contained programs occupied those seats. Now, with ARRA funds
gone, the District has buildings with both ICS AND grandfathered programs, doubling the cost.
Perhaps worse than the increase in costs is the deterioration of special education services. Where Level 4 students were
once served at ratios of 1:8:2 and allowed access to regular classrooms, they are now unsupported in enhanced Resource
rooms at 1:18:1: the alternative is self-contained. This presents a Hobsons choice to families who want their child to
receive services, but also be included to the maximum extent possible. Simply because administrators change the name of
a program or service delivery model does not change the level of support that low-incidence students require and should,
by law, receive.
5.

Recommendations and Solutions

The District can lay out a more constructive path with greater accountability and the support of special education families,
by implementing the following steps:

Cease and Desist Derogatory Statements regarding Special Education Costs - District officials should not repeat
inaccurate and divisive statements regarding provision for our students education and services. As some of the comments
on recent newspaper articles illustrate, there is vast ignorance about the capabilities and promise our children bring.
Similar ignorance is exhibited at school level, where staff and parents complain about the burden of educating our
students. Statements by senior administrators that the district loses money by offering inclusion, have no place in any
discussion of civil and disability rights, and special education. Leadership must show, by words and actions, that children
with disabilities have every right to a free and appropriate education.

Recognize that Special education Students are Entitled to Levy Funds and Participation in Levy-funded
Opportunities Building administrators must consciously offer opportunities for our students to participate in ALL school
activities. To do otherwise is exclusionary and damaging to students. Evaluate building staff on this point.

11

Educate every District staffer involved in planning, managing, and delivering our students education - The District
must educate district/building administrators and teachers that our students bring their full BEA wherever they receive
general education. Furthermore, train staff that Special education funding shall be used ONLY for the providing our
students special education and related services. Provide staff a copy of this position paper, if necessary, so that they may
more fully understand the statutory and legal underpinnings of these points of fact.

Increase Transparency - The District must restore trust with families after a damaging audit finding that disclosed yearslong misuse of Special education students funding. Building administrators must: a) budget and staff according to the level
of services listed on IEPs; and b) account for expenditure of the excess cost funding for those services. This information
should be available during the budgeting process, and on demand throughout the fiscal year. The Districts Internal Auditor
should review ALL charges to Special education cost centers, to guard against further misuse of funds set aside for the
excess cost of our students FAPE.

Improve the Method of Tracking Costs to Educate our Children District financial staff can take a more professional,
businesslike, approach to accounting for the costs to provide our students education. Once an IEP is complete, it is
possible to assemble projected costs to provide the services listed. Use standard or unit costs per minute/type of service.
As noted in the JLARC report 10:
The IEP would then become not only a service plan, but an itemized record of every special education students
expenses. This methodology is the most like to capture coasts in their fullest form and would be the most
responsive to changes in the special education population and needs
This methodology would be extremely good at capturing costs because it would do so at the level of the individual
special education student.
As it stands now, the District takes a Total Cost approach, which reveals little information for sound programmatic
assessment and decisionmaking.
To determine appropriate funding streams, and therefore the viability of those funding streams, we need an accurate
understanding of where students receive their education. All the funding streams for students with disabilities is
supposed to follow the student to any environment that they receive services during the day. Without an understanding
of where students receive services, there can be no accounting for the use of the appropriate funding streams.
Fortunately, the district maintains IEPonline which has this specific information. The amount of time a student spends in
his special education setting is known, and appropriate amounts of BEA can be applied and account for in that setting.
This information is not completely accurate because IEPs are not always fully implemented or followed with fidelity.

Stop the Improper Practice at Ballard High School Our students excess cost funding is being used for general
education remedial courses at Ballard. They do not meet the letter or spirit of the definition for special education. But
District leaders and non-Special education staff dont know that and dont want to know that. Frankly, this is theft and
deprives our students of equitable access to regular education staff and coursework. District leadership must put stop to
this misuse of funds intended for our students IEP services.

Review the WSS to Reduce the Incentive to Exclude Special education Students - Schools should return the funding
of seat time that goes unused in elementary schools to their Special education budget. That should be applied to IAs and
other supports for our students. It would remove the incentive for schools to fail to seat Special education students.

10

Page 22

12

Keep Special education funds in the Building, NOT at Central Administration At FY12 closing, nearly $28M was
charged to Central Special education cost centers (not including transportation). This includes, of course, wages for SLPs,
OT/PT, Nursing and Adaptive PE. However, that amount represents over 50% of the amount actually spent in classrooms.
Records show approximately $1.3M is spent on supervision and Legal (primarily outside counsel). These funds should be
used to hire the staff needed to support students in classrooms.

Recognize Building Administrators who Provide Quality Services, Not Cost Cutting At FY12 closing, 80 of 91
schools analyzed spent LESS on Special education than originally budgeted. Conversely, 87 of the schools spent MORE on
GenEd than originally budgeted. This partially explains the phenomenon (not uncommon) when principals deny our
students the services in IEPs, claiming poverty. Recognize and reward administrators who follow the law and provide the
services and support on our students IEPs.
Respectfully submitted,
SEAAC

13

Table 4

OSPI Citizen Complaint 12-50

Ballard HS student counts in subjects w/ dual-certificated "special educators"

Period
Subject/Teacher

1
GenEd

2
SpEd

GenEd

3
SpEd

GenEd

4
SpEd

GenEd

5
SpEd

GenEd

6
SpEd

GenEd

SpEd

Total SpEd

% Tot

Language Arts
Blish
Calderwood
Coe
Foster
Kelly
MacDougall
Reardon
Riley
Smith
Spencer
Bolen
Tucker
Mathematics
Bower
Broom
Cartales
Clem
Day
Drabek
Guerrero
Kimes
Nutting
Rus
Vertucci
Social Studies
Feise
Green
Hale
Hering
Kemp
Locklin
McArdie
Thompson
Nygaard
Washington

21
30
29

0
1
0

31

27
23
Prep
Prep
12
18

1
3

24
24

19
29
28
22

28
25
26
30

0
2
0
0
3
4

21
25
Prep
23
31
22
Prep
22
17
18
18
19

26
26

5
5

28
28

15
9
0
0

33
33
16
24
27
22
20

1
0
2
2
3
0
5

35
25
17
24
27
27

26
27
28

1
0
3

29
Prep
34

23

30
24
21
15
28

Prep
19
24

12
5

2
1
4
1

4
2

0
0

2
0
0
3
0
0
4
9

0
4
2
0
0
0
6

17
31
Prep
30
20
Prep
17

26
29
Prep

5
2

26
26
34
26

4
0
0
3
4
0

2
0
3
12
0

24

8
1
1
0
11

Prep
26
25
28
30
24
25
Prep

1 Prep
0
23
2
Prep
0
29
0
29
0
32

26
0
24

0
2
6

30
14
Prep

3
13

Prep
Prep
30
28
11
17
30
32

1
1
1
1
2
1

32
32
27
26
36
Prep
29
Prep

0
0
3
0
1

29
20

0
8

24
Prep
29
32
24
25
29
Prep
32
30
15

Prep
27
24
32
32
31
Prep
29
13
21

1
2
0
0
0
1
13
8

23
24

0
1

1
1
0

25

31
28
11
19

0
1
10
7

24
24
19
17

5
5
5
0

31
22
34

0
3
1

25
2

0
5

1
0
1
6
4

29
29
25
30
22
18
28
32

1
0
0
1
3
3
0
1

0
1
12
6

Prep

6
5
7
5
1
1
1
8
0
4
47
35

10%
4%
5%
7%
1%
1%
1%
11%
0%
3%
85% <== Least restrictive?
44% <== Least restrictive?

10
10
9
1
11
1
11
5
3
3
35

7%
7%
12%
1%
8%
1%
10%
3%
4%
2%
59% <== Least restrictive?

10
3
6
7
11
7
0
9
53
19

7%
2%
4%
8%
10%
5%
0%
7%
85% <== Least restrictive?
20% <== Least restrictive?

Exhibit 6 Analysis of SpEd Revenues and Expenditures

Special Education Enrollment Revenues (per OSPI F-203)

FY13 F-203
Guaranteed Entitlement

less GenEd Apport for SpEd alloc

3100 Revenue

Amt of FY13 Guaranteed Entitlement attributed to SpEd

FTE Type

SpEd 12.7% of enrollment and FTE count (3100 CIS SPED)

SpEd 12.7% of enrollment and FTE count (3100 CLSCAS SPED)
SpEd 12.7% of enrollment and FTE count (3100 CLSCAS SPED)
assume SpEd 20% of substitutes
SpEd 12.7% of enrollment and FTE count (3100 CLSCAS SPED)
SpEd 12.7% of enrollment and FTE count (3100 CLSCAS SPED)

SGCIS
SGCLS
SGCAS
Subs
DGCLS
CACAS

SpEd 12.7% of MSOC From F-203 pg 12 (approx)

Portion of Guaranteed Entitlement stemming from Sped FTEs
Portion of GE attributable to SpEd enrollment

MSOC

Notes
232,478,065 This number is based upon Staff Mix and enrollment counts (including SpEd)
(7,122,915) Instructional component of (BEA*SpEd enrollment) * 34%
225,355,150

3100 Spreadsheet
Tabs
273.486
69.876
18.090
38.000
16.550
20.034

Salaries
$
$
$
$
$
$

13,888,438
2,520,986
1,051,590
23,083
597,091
1,164,603

Insurance

Tax & Bens

$
$
$

2,520,447 $
741,862 $
166,717 $

$
$

175,709 $
184,634 $

% of GE

Acct 3100 for SpEd enrollment FTEs + MSOC

Less transfer of 27.58% of Gen Appor for Instruction (1220)
Amt of Guaranteed Entitlement attributed to SpEd enrollment in 3100

$
$
$

Total SpEd GE

2,269,371 $
472,181 $
171,830 $
$
111,835 $
190,180 $
SubTotal $
MSOC $
Total $

18,678,256
3,735,029
1,390,137
23,083
884,635
1,539,417
26,250,555
2,303,404
28,553,959
12.3%

28,553,959
(7,122,915)
21,431,044 <========
Minimum. May be higher based
on other state revenues

All revenue for SpEd FTEs

Balance of Acct 3100 for SpEd count
Acct 4121 (F-203)
Gen Appor for SpEd Allocation
Actual Revenue

$
$
$

21,431,044 <========
32,229,801
7,122,915

60,783,760

Counts toward SpEd students

regular instruction

Exhibit 8

Washington State Public School Districts

Special Education - Programs 21, 24, 26, and 29
(Source: Office of Superintendent of Public Instruction F-196 Annual Financial Statements)
SEATTLE SCHOOL DISTRICT
17001
Enter County District number above.
See the CCDDD worksheet for an alphabetical list of County District numbers.
Enter 99999 for State Summary.
Special Education

Fiscal Year

% to

Fiscal Year

% to

Fiscal Year

% to

Fiscal Year

% to

Fiscal Year

% to

Programs 21, 24, 26, and 29

2010-2011

Total

2009-2010

Total

2008-2009

Total

2007-2008

Total

2006-2007

Total

99 Total All Special Education Programs

Enter an individual Special Education program number in the yellow shaded cell (21-29).
Enter 99 in the yellow shaded cell to display the total of all programs included in Special Education (21-29).
Expenditure By Activity
21 Activity 21 - Instruction Supervision
2

Salary & Benefits

NERC

981,360

1.46%

3,088,388

4.52%

2,782,833

3.99%

2,752,495

4.12%

2,818,956

4.98%

1,177,528

1.75%

1,181,482

1.73%

1,355,920

1.95%

1,022,609

1.53%

925,578

1.64%

321

0.00%

108,599

0.19%

312

0.00%
82,612

0.15%

22 Activity 22 - Learning Resources

2

Salary & Benefits

NERC

23 Activity 23 - Principal's Office

2

Salary & Benefits

NERC

24 Activity 24 - Guidance and Counseling

2

Salary & Benefits

NERC

202

0.00%

25 Activity 25 - Pupil Management & Safety

2

Salary & Benefits

NERC

26 Activity 26 - Health Related Services

2

Salary & Benefits

NERC

13,354,881

19.90%

15,519,280

22.69%

15,085,961

21.65%

13,354,262

20.01%

12,264,445

21.67%

194,891

0.29%

410,154

0.60%

405,355

0.58%

457,940

0.69%

693,596

1.23%

48,922,971

72.90%

45,472,875

66.49%

47,775,664

68.56%

46,406,229

69.53%

37,129,491

65.59%

2,480,972

3.70%

2,723,287

3.98%

2,279,460

3.27%

2,751,524

4.12%

2,586,048

4.57%

27 Activity 27 - Teaching
2

Salary & Benefits

NERC

28 Activity 28 - Extracurricular
2

Salary & Benefits

NERC

29 Activity 29 - Payments to School Districts

5

NERC

Total Special Ed. Salary & Benefits

63,259,213

94.26%

64,080,542

93.69%

65,644,458

94.20%

62,512,986

93.66%

52,404,102

92.57%

Total Special Ed. NERCs

3,853,593

5.74%

4,314,923

6.31%

4,041,368

5.80%

4,232,073

6.34%

4,205,223

7.43%

Total Special Education

67,112,806

69,685,826

13.2%
increase

66,745,060

13.9%
increase

56,609,325

Total District Expend. (all Programs)

% Special Ed. to Total District Expend.

*Total State Special Ed. Enrollment

Total State Special Ed. Per Pupil
*Total District Special Education
Enrollment
Total District Special Ed. Per Pupil

12.7%
decrease

529,640,330

68,395,465
531,774,465

12.67%

132,200.75

8,680.23

8,436.69

10,289.43

528,663,176

12.86%

134,674.25

6,522.50

12.9%
decrease

less than 0910

95.7%

481,243,117

13.18%

462,537,934

13.87%

129,802.60
9044.66

12.24%

127,685.18

126,281.28

8,600.54

7,124.88

6,359.00

less than
08-09

6,177.50

more than
07-08

6,058.74

more than
06-07

6,005.13

10,755.70

95.3%

11,280.59

102.4%

11,016.33

116.9%

9,426.83

*Special Education enrollment includes headcount for birth-to-five programs as reported to OSPI.

Salary & Benefits reflect Certificated and Classified Salaries and total benefit related expenses.
NERCs are Non-Employee Related Costs such as supplies, contractual services, travel, and capital outlay.
OSPI/SAFS

12.2%

Exhibit 8
Washington State Public School Districts
Special Education - Program 21
(Source: Office of Superintendent of Public Instruction F-196 Annual Financial Statements)
SEATTLE SCHOOL DISTRICT
17001
Enter County District number above.
See the CCDDD worksheet for an alphabetical list of County District numbers.
Enter 99999 for State Summary.
Special Education - Program 21
Expenditure By Activity
Activity 21 - Instruction Supervision
Salary & Benefits
NERC
Activity 22 - Learning Resources
Salary & Benefits
NERC
Activity 23 - Principal's Office
Salary & Benefits
NERC
Activity 24 - Guidance & Counseling
Salary & Benefits
NERC
Activity 25 - Pupil Management & Safety
Salary & Benefits
NERC
Activity 26 - Health/Related Services
Salary & Benefits
NERC
Activity 27 - Teaching
Salary & Benefits
NERC
Activity 28 - Extracurricular
Salary & Benefits
NERC
Activity 29 - Payments to School Districts
NERC
Total Program 21 Salary & Benefits
Total Program 21 NERCs
Total Special Education
Total Dist. Expend. (all Programs)
% of Program 21 to All Expenditures

Fiscal Year
2010-2011

421,050
1,169,625

% to
Total

0.74%
2.06%

Fiscal Year
2009-2010

690,842
1,155,205

% to
Total

1.21%
2.03%

Fiscal Year
2008-2009

% to
Total

553,805
1,322,331

0.93%
2.23%

321

0.00%

312

0.00%

Fiscal Year
2007-2008

235,067
957,932

0.41%
1.68%

202

0.00%

10,857,412
15,029

19.15%
0.03%

13,166,572
265,995

23.08%
0.47%

12,766,981
103,437

21.49%
0.17%

11,372,722
118,102

19.94%
0.21%

43,251,024
990,923

76.27%
1.75%

40,599,340
1,162,414

71.18%
2.04%

43,612,324
1,059,979

73.40%
1.78%

43,092,275
1,254,941

75.56%
2.2%

54,529,486.55
2,175,778.90
56,705,265.45

96.16%
3.84%

54,456,753.74
2,583,613.82
57,040,367.56

95.47%
4.53%

56,933,110.34
2,486,379.14
59,419,489.48

95.82%
4.18%

54,700,064.03
2,330,974.93
57,031,038.96

95.91%
4.09%

529,640,330
10.71%

531,774,465
10.73%

528,663,176
11.24%

481,243,117
11.85%

6,522.50
8,693.79

6,359.00
8,970.02

6,177.50
9,618.70

6,058.74
9,413.02

Revenue 3121 - Special Education - General Apportionment

Total 3121 Revenue
8,472,070

7,644,500

*Total Special Education Enrollment

Total Special Education Per Pupil

8,422,604

8,375,957

14.94%

14.77%

14.10%

13.40%

1,298.90

1,324.52

1,355.88

1,261.73

31,466,561
55.49%
4,824.31

30,953,412
54.27%
4,867.65

30,879,944
51.97%
4,998.78

28,091,152
49.26%
4,636.47

Revenue 4321 - Special Education - Other State Agencies

Total 4321 Revenue
Revenue 4321 % to Program 21 Expend.
0.00%
Revenue Per Pupil
0.00

0.00%
0.00

0.00%
0.00

0.00%
0.00

Revenue 6121 - Special Education - Medicaid Reimbursements

Total 6121 Revenue
1,505
Revenue 6121 % to Program 21 Expend.
0.00%
Revenue Per Pupil
0.23

0.00%
0.00

536,033
0.90%
86.77

468,393
0.82%
77.31

Revenue 6221 - Special Education - Medicaid Reimbursements

Total 6221 Revenue
Revenue 6221 % to Program 21 Expend.
0.00%
Revenue Per Pupil
0.00

0.00%
0.00

0.00%
0.00

0.00%
0.00

Revenue 6321 - Special Education - Medicaid Reimbursements

Total 6321 Revenue
245,863
Revenue 6321 % to Program 21 Expend.
0.43%
Revenue Per Pupil
37.69

554,458
0.97%
87.19

0.00%
0.00

0.00%
0.00

61,658
0.11%
9.70

0.00%
0.00

0.00%
0.00

39,992,131.97

39,791,933.90

36,204,045.37

Revenue 3121 % to Program 21 Expend.

Revenue Per Pupil
Revenue 4121 - Special Education
Total 4121 Revenue
Revenue 4121 % to Program 21 Expend.
Revenue Per Pupil

Revenue 7121 - Special Education - Revenue From Other School Districts

Total 7121 Revenue
13,583
Revenue 7121 % to Program 21 Expend.
0.02%
Revenue Per Pupil
2.08
Total Special Education Revenue

% to
Total

40,199,582.94

Program 21 Expenditures Over(Under) Revenue 3121, 4121, 4321, 6121, 6221, 6321, & 7121 Per Pupil
Expend. Over(Under) Revenue Per Pupil
2,530.58
94.4%
2,680.96
84.4%
decrease
decrease
*Special Education enrollment includes headcount for birth-to-five programs as reported to OSPI.
Salary & Benefits reflect Certificated and Classified Salaries and total benefit related expenses.
NERCs are Non-Employee Related Costs such as supplies, contractual services, travel, and capital outlay.
OSPI/SAFS

3,177.27

92.4%
decrease

3,437.51

EXCESS COST ACCOUNTING FOR SPECIAL EDUCATION

PURPOSE
The purpose of the special education excess cost accounting methodology is to ensure that special
education students as a class receive basic education support to which all students are entitled and that
special education revenues are used to supplement basic education support.
The 1077 method provides a uniform statewide method of allocating basic education support for special
education services. This uniformity will permit comparison of school district special education programs
and expenditures, and help identify districts in need of state special education safety net funding.
ACCOUNTING DEFINITION
The Accounting Manual for Public School Districts in the State of Washington defines special education
excess costs as follows:
Excess costs are those expenditures for special education and related services for special
education students that exceed the amount needed to provide a basic education to those
students.
ASSUMPTIONS OF THE 1077 METHOD
The 1077 method relies on each school districts December federal child count Report 1077
Implementation of Least Restrictive Environment Requirement to determine the amount of service
provided to special education students outside the regular classroom.
This methodology assumes that:

Special education students receive their appropriate share of basic education support from
basic education staff when served in the regular classroom.

When special education students are served outside the regular classroom, basic education
dollars follow them to partially support special education services they receive.

The amount of basic education support that follows students is approximated by providing one
FTE certificated staff unit to each 20 FTE students.

The resulting level of basic education support is provided for special education services by
charging a portion of each special education teacher to basic education.

Nonemployee related costs (NERC) and administrative costs are charged to the special
education program only to the extent they exceed the costs of regular education.
Federally-funded special education services are also supplemental and are charged to the federal special
education program consistent with federal guidance. (See OMB Circular A-87 and SPI Bulletin No. 00604.)
REQUIRED EXCESS COST METHODOLOGY (1077 METHOD)
All school districts are required to use the following method to determine the special education service
costs allocated to basic education. Key elements of this methodology are:
All special education staff are identified as either pure excess cost or part basic education.
The part basic education staff are divided between basic and special education by a uniform
percentage derived from the prior school years staffing information and federal child count data
(Report 1077Implementation of Least Restrictive Environment Requirement). The percentage is
based on the amount of time special education students spend outside the regular classroom.
Salary and benefit costs are allocated accordingly.
Nonemployee related costs are allocated between basic and special education.
Effective Date
9/1/06

Supersedes
9/1/05

Form

Chapter
BUD PREP

Section
9

Page
1

EXCESS COST ACCOUNTING FOR SPECIAL EDUCATION

School districts are to use this method consistently for budgeting (Report F-195), state personnel
reporting (Report S-275), annual financial reporting (Report F-196), and safety net applications.
1.

Identify all employees serving the special needs of special education students for the prior
and current school years. These services include:
Services required by student individualized education programs (IEPs).
Evaluation of students for special education services.
Direct administrative and clerical support for special education staff and students.

2.

Determine the special education full-time equivalent (FTE) of each employees services as
follows:
Select a typical week of service.
Determine the amount of time the employee provides special education services.
Divide by the employees total hours of employment.
For federally funded employees use time and effort distribution or other approved methods.
(See OMB Circular A-87 and SPI Bulletin No. 006-04.)
A 1.0 FTE indicates that the employee serves only special education students.

3.

Identify special education FTEs that are pure excess cost.

Pure Excess Cost FTEs
Special education administrators
Duty roots 1125
Certain certificated teachers:
Prekindergarten teachers
Teachers charged fully to federal special education
programs using approved federal methodology
Duty roots 31, 32, 33, 52, and 63
Educational staff associates (ESAs) Duty roots 4049
Classified staff
Duty roots 9099

4.

Charge the pure excess cost FTEs to the following special education programs:
Program 21 Special EducationSupplementalState.
Program 24 Special EducationSupplementalFederal.
Program 29 Special EducationOther Federal.

5.

Identify all other teachers as part basic education funded.

Part Basic Education FTE Teachers
All certificated teachers* except:
Prekindergarten teachers
Pure excess cost federally funded teachers
* Duty roots 31, 32, 33, 52, and 63

6.

Allocate each part basic education FTE teacher identified in step 5 for the current school
year to basic education (Programs 01, 31, and 45) and special education (Program 21)
based on the prior school years percentage determined in steps AG below:

Effective Date
9/1/06

Supersedes
9/1/05

Form

Chapter
BUD PREP

Section
9

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EXCESS COST ACCOUNTING FOR SPECIAL EDUCATION

A.

Obtain the prior years Federal Child Count Form SPI 1077 Implementation of Least
Restrictive Environment Requirement (use December 2005 for the 20062007
calculations).

B.

Calculate an approximate full-time equivalent (FTE) of students served in the regular

classroom by summing the following:
The number of 611 year old students in Table 1 times 92 percent.
The number of 1221 year old students in Table 1 times 87 percent.
The number of students in Table 2 times 64 percent.
The number of students in Table 3 times 13 percent.

C.

Subtract the number of students from step B from the total number of students in tables
1, 2, and 3. This gives the approximate FTE of special education students served
outside the regular classroom.

D.

Divide the number of students from step C by 20. This is the assumed number of basic
education FTE staff needed to serve special education students outside the regular
classroom.

E.

Determine the total part basic education FTE teachers for the prior school year (duty
roots 31, 32, 33, 52, and 63) in step 5. (Include both basic education Programs 01, 31,
and 45 and special education Program 21 parts in the total.)

F.

Divide the result of step D by the result of step E to get the percent of each part basic
education FTE teacher to be charged to basic education in the current year.

G.

For each current year part basic education FTE teacher identified in step 5, charge the
percentage derived in step F to basic education (Programs 01, 31, or 45) and the
remainder to special education (Program 21).

Illustration for 20062007 School Year

A.

The districts Form 1077 from December 2005 is summarized as follows:

Table 1
Table 2
Table 3
Grand Total

Percent of day in
regular class
80%100%
40%79%
0%39%

Ages
611

Ages
1217

Ages
1821

137
75
25

61
91
58

16
13

Total

198
182
96
476

B.

Calculate approximate FTE students in the regular classroom:

Table 1 ages 611 = 137 students * 92% = 126.04
Table 1 ages 1221 = 61 students * 87% = 53.07
Table 2 all ages = 182 students * 64% = 116.48
Table 3 all ages = 96 students
* 13% = 12.48
Total of above calculations
= 308.07 FTE in the regular classroom

C.

476 308.07 = 167.93 (approximate FTE of students outside the regular classroom)

D.

167.93 / 20 = 8.40 (basic education FTE staff needed for 167.93 FTE students)

Effective Date
9/1/06

Supersedes
9/1/05

Form

Chapter
BUD PREP

Section
9

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3

EXCESS COST ACCOUNTING FOR SPECIAL EDUCATION

E.

The district identified 30 part-basic education FTE teachers for the prior year (20052006)
in step 5 of the step-by-step methodology. (Include the total FTE including both the basic
and special education parts.)

F.

8.40 / 30 = 28.0% (Round to one decimal.) If this ratio is over 100% the district shall
allocate 100% of the part basic education FTE teachers to basic education and shall
allocate additional pure excess cost certificated FTE staff to basic education as needed.

G.

Charge 28.0% of each current year (20062007) part basic education FTE teacher to basic
education. Charge the remaining 72% to special education.

7. Excess cost accounting principles also apply to supplemental contracts.

Supplemental contract costs may be all basic ed costs, part basic ed costs, or pure excess costs,
depending upon the services provided.
8. Contractual payments for special education services are to be allocated between basic and
special education programs if:
The services are provided by employees defined as part basic education in step 5.
The district is receiving basic education funding for the student for the time of services.
9. Charge other nonemployee related costs (NERC) to special education programs if:
Costs are directly traceable to enhanced services for special education students.
Costs are required by the IEP.
For other costs, determine what portion is in excess of the costs required for basic education
students and staff. (Costs that are part basic education may be allocated based upon a
reasonable methodology. It is not necessary to divide each transaction as long as the
cumulative NERC expenditures are reasonably divided.)
10. Special Education Excess Cost Worksheet Form 1077
For your convenience, the 1077 worksheet for FY 20062007 has been posted to the OSPI
School Apportionment and Financial Services website.
To calculate a districts split coding percentage based on 2005 Federal child count data
simply:
o Key in the districts county district number in highlighted Cell G3.
o Federal child count data for the district will auto-populate.
o In Cell L17, Step E, enter the districts special education pool for 20052006. This
is the total FTEness of certificated special education teachers who are coded to
Program 21, Activity 27, Duty Roots 31, 32, 33, 52, and 63 PLUS the portion of
their FTEness that has been split coded to Program 01. Do not include prekindergarten teachers!
o Completing steps 1 and 3 (above) will generate the split coding percentages to be
charged to Basic Education (Program 01) and Special Education (Program 21).

Effective Date
9/1/06

Supersedes
9/1/05

Form

Chapter
BUD PREP

Section
9

Page
4

Recommendations to the Governor and Legislature re: Special

Education Excess Cost Accounting

Excess Cost Accounting Ad Hoc Committee

Mary Alice Heuschel (Renton)
Kris Lenke (Puyallup)
Fred Row (Renton)
Dennis Mathews (ESD 112)
Trip Goodall (Deer Park)
Doug Matson (W. Valley, Spokane)
Carol Gray (Vancouver)
Brian Aiken (Fife)
Sue Curtis (Anacortes)
John Molohon (ESD 113)
Christie Perkins (Coalition)
Mike Merlino (Evergreen, Clark)
Michelle Corker-Curry (Seattle)
Neil Sullivan (Spokane)
OSPI Staff
Jennifer Priddy, Doug Gill, Calvin Brodie, Mary Ellen Parrish, John Bresko, Michelle
Sabin, Kim Thompson
Mandate of Committee
The following operating budget language governs the mandate of committee to review
and recommend a Special Education Excess Cost Accounting method:
conduct further evaluation of issues raised in the recently completed joint legislative audit
and review committee report on the accounting of special education excess costs. Within the
amounts provided in the subsection, the office of the superintendent of public instruction will
convene a work group to evaluate modifying or replacing the current 1077 methodology. This
work group will deliver a report to the appropriate committees of the legislature, including the
joint legislative audit and review committee, and the office of financial management, by January
1, 2007. The work group will take into consideration recommendations of the Washington
learns steering committee.

As background, the related JLARC recommendations follow:

JLARC Report Recommendation # 2
The Superintendent of Public Instruction, with the assistance of interested
stakeholders, should examine whether the current excess cost methodology might
be improved through various modifications to the 1077 Special Education Excess
Cost Worksheet.
JLARC Report Recommendation # 3
The Office of Superintendent of Public Instruction should provide clear guidance and
instruction, and periodic training on how to accurately and appropriately:
A. Complete the 1077 Least Restrictive Environment child counts through:
1. Better identification, in the individualized education programs, of the
location where minutes of specially designed instruction are provided; and
2. A consistent base of minutes of weekly instruction used for calculating
percentage of time students spend in the regular classroom.
B. Allocate costs of contracted services between basic education and special
education programs.

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JLARC Report Recommendation # 4

The Office of Superintendent of Public Instruction should require school districts to
report the full costs of serving their special education students (i.e., both basic
education and special education programs separately).
Committee Process
The committee met four times during November through January, reviewing the:
JLARC report,
Washington Learns K-12 Advisory Committee recommendations,
Background information on the current 1077 process, and
Strengths and weaknesses of the current 1077 method.
Further, the committee discussed new methods, the exact calculations of such
methods, and the advantages and pitfalls of such methods.
In mid-December the committee reached consensus on a proposed new excess cost
accounting method. This method and related background detail is described below.
Superintendent Bergeson accepted the committees recommendation in full.
Standards for an Improved Method
The committee identified several standards and requirements by which to evaluate a
recommended method:
Transparency and Ease of Understanding
Accuracy
Equitable and Fair
Incentive Neutral
In addition, the committee put a very high premium on an accounting method that would
reinforce the current state priority to treat every student as a basic education student
first. To this end, the committee focused on developing a method that easily identified
the amount of basic education revenue that was being expended on students specially
designed education or instruction.
COMMITTEE RECOMMENDED STATE SPECIAL EDUCATION EXCESS COST
ACCOUNTING METHOD
Description of Method
The proposed method has two objectives. First, to ensure that special education
eligible students, as a class, receive their full share of general apportionment (basic
education) funding before accessing the state excess cost funding. Second, to simplify
and consistently apply the cost accounting necessary to achieve the first objective by

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shifting the majority of the cost accounting function from the local school district to the
state apportionment office.
The proposed accounting method will:
a) Shift a portion of basic education revenue to the special education program
based on students full-time equivalency (FTE) in the special education setting;
and
b) Require all costs for the special education program (e.g., the full cost of special
education teachers and program) be captured within a single program rather than
splitting program costs between basic and special education.
The basic education revenue shifted to the special education program, revenue 3121, is
intended to establish a minimum amount of spending of state program 21 before the
school district accesses the excess revenues, revenue 4121, generated by the excess
cost formula (.9309 of general apportionment revenue).
The method is referred to as the Washington State Excess Cost Accounting Method
(WSECM).
Specifically:
1.
Districts would continue to use the 10771 to generate student FTEs served in the
special education setting. The number will be specific/unique for each school
district. (Currently of the approximate113,000 school-age students eligible for
specially designed instruction and generating general apportionment revenue,
~70% of full-time equivalent students are served in the regular education setting;
~30% of FTE students are served in the special education setting.)
2.
Based on the split of FTE described above, OSPI would split general
apportionment funds associated with these students eligible for special education
into three categories:
a. General apportionment for the regular education classroom (current
account code 3100);
b. General apportionment for the special education setting (new account
code 3121);
c. Indirect support for utilities, administration, district-wide services, etc.
3.
Districts will code their staff and appropriate expenses related to providing
specially designed instruction to the special education program.
4.
Districts will first expend the general apportionment funding associated with
revenue code 3121 and then expend excess cost funding attributed to revenue
code 4121.

The 1077 Form collects the school districts information of implementation of Least Restrictive
st
Environment (LRE) on December 1 each school year. Districts report the percentage of time that special
education students spend in the basic education classroom; it is a federal reporting requirement under
IDEA part B.

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Proposed Method measured against Standards for Improved Method
Transparency and Ease of WSECM is easier to understand because OSPI will
Understanding
display and account for all revenues that districts are
allocated in general apportionment and special
education.
Because districts will not split code staff, expenditures
for special education are contained in one set of codes
and easily identifiable on current OSPI reports.
Accuracy
Revenue splits are calculated by OSPI for each school
district using current apportionment formulas and
reported student data.
Equitable and Fair
All students in specially designed services will be
included in revenue calculations (tables 1-8 of 1077) to
the extent they generate general apportionment
funding.
WSECM is responsive to districts unique mix of
students and continuum of service delivery settings.
WSECM is consistently applied for all districts by the
OSPI.
Special education students, as a class, receive a full
share of general apportionment revenues in addition to
excess cost revenues. Districts will first expend
general apportionment funding attributed to revenue
code 3121.
Incentive Neutral
Method reflects, but does not influence, a districts
LRE decisions.
No additional revenue is generated by a district based
upon students placement on the 1077.
Revenue split between programs is based on prior
year 1077 tables, removing any incentive related to
student placement in the special education setting.
Use of the prior years 1077 data presents a stable
and consistent basic for district to use in budgeting
and accounting for the school year.
Other
WSECM is consistent with the federal excess cost
threshold requirements that will govern how much
districts must spend in total resources before
accessing federal IDEA funds. OSPI will develop
future guidelines consistent with the federal excess
costs.

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JLARC Recommendations and Findings: Committee Response
JLARC

Committee Response

Recommendation 1: The Legislature should decide

whether the current or alternative approach should be
used.

We recommend that the

legislature adopt the
WSECM.

Recommendation 2: If the current method is

maintained, the OSPI should examine modifications to
improve the accuracy of the current 1077 worksheet.

Agree: Improving the 1077

accuracy remains relevant to
the new WSECM.

Recommendation 3: If the current method is

maintained, the OSPI should provide clear guidance
and instruction on how to a) complete the 1077 Least
Restrictive Environment child counts; and b) assign
costs of contracted services and non-employee related
costs between basic education and special education
programs.

Agree:

Recommendation 4: The OSPI should require school

districts to report the full cost of serving their special
education students.

Agree; WSECM will enable

such reporting.

JLARC Finding: Some districts have not implemented

the current excess cost accounting method.

Upon adoption, WSECM will

be consistently calculated by
OSPI for each district using
data already reported to the
state.

JLARC Finding: Some districts split code staff

incorrectly.

WSECM provides for full cost

special education accounting.
Accordingly spilt coding of
staff is no longer appropriate.

a) JLARC 1077
recommendation is relevant
to WSECM also.
b) Under the WSECM,
concerns about split coding of
contracted services and nonemployee related costs are
no longer relevant.

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JLARC

Committee Response

JLARC Finding: Some districts make mistakes in

Training by OSPI and ESDs
identifying and reporting Least Restrictive Environment will address identifying and
because:
reporting Least Restrictive
Environment.
a. IEPs do not clearly state where services are
provided.
b. Number of minutes in a location is not defined
on IEP.
c. Process for determining the number of minutes
on which to base table placement is unclear to
some districts.
Items a through c result in possible incentives and
disincentives for student placement.
JLARC Finding: Current method does not address
assignment of key costs:
a. NERCs.
b. Contracts.

Upon adoption of the new

WSECM, these costs would
be included in full. Concerns
about assignment of
contracted services and nonemployee related costs are
no longer relevant.

JLARC Finding: Total cost of serving special education Upon adoption of the
eligible students is not reported; total revenue is not
WSECM, OSPI will revise the
accounted for.
School District Accounting
Manual, and budget and
expenditure reports to track
total cost of serving and the
total revenue generated by
special education-eligible
students.
Use of the 1077 Form in the Proposed Method
The committee has carefully considered the findings and concerns that JLARC
expressed about the 1077 form report. However, the committee concluded that the LRE
was the best available statewide data for use in an excess cost accounting method.

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Additional Work Products Required by OSPI to Implement Method
1.
Revise apportionment reports for new revenue coding (1220 report and others).
2.
Define adjustments to the K-4 calculation to mitigate unintended consequences
of implementing a new method.
3.
Modify the carryover and expenditure rules related to special education excess
cost revenues for the WSECM.
4.
Develop a training module to ensure districts appropriately place students on
1077 tables. Address including students in LRE tables 4-8 in the WSECM
method.
5.
Review the School District Accounting Manual requirements for the special
education programs, consulting the OSPI School District Accounting Advisory
Committee and the Special Education Advisory Committee.
6.
Revise the current special education safety net process to accommodate the
WSECM.
7.
Reconvene its Excess Costs Accounting Ad Hoc Committee during school years
2007-08 and 2008-09 to review and evaluate school district implementation of
the WSECM and report to the legislature any potential changes or modifications
to the method.

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