Revised Guidance: Excess Costs

Word Version

May 12, 2015

TO THE ADMINISTRATOR ADDRESSED:

SUBJECT: Revised Guidance: Excess Costs

TEA has updated guidance regarding the calculation of excess costs as required by the Individuals with Disabilities Education Act, Part B (IDEA-B). The revised Excess Costs Guidance Handbook and Excess Cost Calculator Tool Instructions are now available on the Excess Cost page of the TEA website.

Summary of Significant Changes

The most significant changes include the following:

  • The excess costs calculation for elementary and secondary must include all expenditures (not just instructional) from all fund sources (federal, state, and local), including district-level expenditures (not just campus-based) when calculating annual average per pupil expenditure (APPE).
  • District-level expenditures must be allocated to elementary and secondary according to local written policies and procedures. A recommended method of allocating is to prorate district-level expenditures based on a ratio or percentage of the all student enrollment at the elementary and secondary levels.
  • A new Chart 1 with an elementary example has been added to aid LEAs in the required calculation and documentation of compliance.

Completing the Excess Costs Calculation

You must comply with the excess costs standard to be eligible for IDEA-B grant funds. LEAs use preliminary data to calculate excess costs before submitting the Special Education Consolidated Grant application, and calculate their final excess cost amount by early spring after final data are available. TEA requires LEAs to annually conduct their own excess costs calculation and retain documentation for audit purposes. LEAs are not currently required to report the excess costs calculation to TEA.

For Further Information

For any questions about the excess costs calculation, please email compliance@tea.texas.gov.

Sincerely,

Ed Santiago, Senior Director
Division of Federal Fiscal Compliance and Reporting