High Cost Fund for 2014-2015

During the 83rd Texas Legislative Session (2013), the legislature appropriated funds for the Local Educational Agency Risk Pool, Rider 36. These high cost funds (HCF) are to assist local education agencies (LEAs), including school districts and charter schools, in addressing the needs of "High Need Children with disabilities," including the financial impact on the budget of the child’s LEA. The legislature further clarified that the use of these funds by school districts and charter schools must not violate the least restrictive environment (LRE) requirements of the Individuals with Disabilities Education Act (IDEA) 2004, as addressed in 34 CFR §300.114.   

The state reserves ten percent of the amount of funds reserved for other state-level activities under 34 CFR §300.704 (b)(1). These funds are not used for costs associated with establishing, supporting, or otherwise administering the program. These funds remain under the control of the state until disbursed to an LEA to support a specific child.   

Definition of a High-Need Child with a Disability

A high-need child with a disability has a significant financial impact on the budget of the LEA due to the high costs associated with providing direct special education and related services.  To meet eligibility requirements for an HCF award, the costs of each high-need child must be greater than three times the average per pupil expenditure (APPE), as defined in section 9101 of the elementary and secondary education act (ESEA).

The current APPE for Texas is $8,685. A high-need child with a disability would therefore cost the district more than $26,055. Only costs identified in that child’s individualized education program (IEP) and associated with providing direct special education and related services to the child are to be considered in determining whether a child is a high-need child. To determine whether a child is a high-need child, LEAs may track expenses from the beginning of the school year or the date the services began in the case of a child who enrolled after the first day of school.

LEA Eligibility Criteria

The LEA may request an HCF award provided the following:

  • The LEA has not violated the LRE requirements of IDEA of 2004.
  • The LEA has not lapsed IDEA-B Formula or Formula Deaf funds from the previous school year.
  • The LEA has not carried forward 60% or more of its IDEA-B formula funds from the previous year.

HCF Eligibility Application 

The special education director or designee must submit the HCF Eligibility Application. If the district is a member of a shared services arrangement (SSA), the SSA Fiscal Agent must submit the application. The application will be available to LEAs on Monday, November 10, 2014, and will remain open until Friday, December 19, 2014.

A Texas Education Agency Secure Environment (TEASE) account is required in order to access and submit the application. For information on how to apply for a TEASE account or for assistance regarding TEASE issues, access TEASE HELP or email computer.access@tea.texas.gov. Only one submitter per LEA or SSA is allowed.

Use of Funds 

Consistent with LRE requirements of IDEA 2004 (34 CFR 300.114), the costs associated with educating a high need child with a disability are only those costs associated with providing the direct special education and related services that are identified in that child’s IEP, including the cost of room and board for a residential placement determined necessary to implement a child’s IEP.  Additional requirements regarding the use of funds include the following:

  • Eligible LEAs receive discretionary residential funds to assist with the costs of children with disabilities who are served in residential care and treatment facilities; therefore, the HCF disbursements are limited to a portion of the LEA’s 25% residential amount set aside for a specific high need child.
  • The LEA must incur these costs during the 2014-2015 school year.
  • Do not use the HCF to limit or place conditions on the right of a child with a disability who is assisted under Part B of the Act to receive a free appropriate public education (FAPE) in the LRE pursuant to section 612(a)(5) of the Act.
  • Do not use the HCF to support legal fees, court costs, or other costs associated with a cause of action brought on behalf of a child with a disability to ensure FAPE.
  • Do not use the HCF to pay costs that would be reimbursed as medical assistance for a child with a disability under Title XIX of the Social Security Act’s State Medicaid program.
  • All cost items documented in the HCF Eligibility Application must be clearly identified in the child’s IEP.
  • The HCF is used only to provide the services documented in the HCF Eligibility Application for a specific high need child. Do not use the HCF to support other activities.

Allowable Costs

The costs must be child-specific, not program-specific. The pre-populated cost items in the Non-Residential section of the HCF Eligibility Application are allowable if identified in the child’s IEP.

  • The salary of special education teachers and related services personnel who provide services identified in the child’s IEP are allowed if pro-rated. Use the pro-rating tool to calculate allowable cost. The tool is located in the "Additional Resources" section of the Help file.
  • The salary of the bus aide is allowable if the aide is identified as a requirement in the child’s IEP.  The aide’s salary may be pro-rated if the aide’s is required to assist other high need children on the bus.
  • The TEA staff evaluates and determines if write-ins or other costs on the HCF Eligibility Application are allowable.

Unallowable Costs  

The indirect cost associated with addressing the needs of a high need child is unallowable.

  • The pro-rated salary of a bus aide, who is assigned to a bus regardless of whether a high need child is a passenger, is unallowable.
  • The costs associated with diagnostic evaluations are unallowable.
  • The cost associated with group therapy is unallowable.
  • The service provided by a licensed specialist in school psychology (LSSP) or social worker is unallowable, unless specifically identified in the child’s IEP.


States and LEAs must maintain records to show compliance with program requirements. LEAs must create and maintain adequate and sufficient documentation for all HCF expenditures. The LEA must submit the appropriate time and effort and certification reports, if the award funds the pro-rated salaries of any personnel who provide services to a high cost child.  The LEA must submit the HCF child’s IEP and any supporting documents when requested by TEA.  Submit IEPs and supporting documents through a secure email system that requires a login name and password.

Calculation of the Award Amount

The following considerations are used by TEA to approve cost in excess of $26, 055:

  • The adjusted allotment and school health and related services (SHARS) reimbursements, are subtracted from the submitted costs for non-residential children, if applicable.  
  • The state funds received through the SPE-106 submission process and SHARS reimbursements are subtracted for non-public day school children, if applicable.
  • An amount over the 25% residential set-aside amount is subtracted for residential children.

The final award will be based on availability of funds. Districts will be required to pay the first $26,055 and the HCF grant will pay a percentage of the amount over $26,055.

Notification of Status

After the HCF Eligibility Applications are submitted to the TEA, the Division of Federal State and Education Policy will begin the review process. Once TEA reviews all applications for eligibility, the award amount is determined. An award letter or denial letter is generated and mailed to the Superintendent of the Single Member District or to the Superintendent of the Fiscal Agent of a SSA. A copy of the letter is mailed to the Special Education Director of the LEA and to the Special Education Contact of the Education Service Center (ESC).

The deadline to submit the eGrants application is July 15, 2015. Once TEA reviews and approved this eGrants application, the system genereates a HCF Notice of Grant Award (NOGA).


The HCF Eligibility Application (to request an award) must be submitted electronically by 11:59 pm December 19, 2014. All HCF Eligibility applications received by this deadline will be considered for a High Cost Fund award, subject to eligibility criteria. HCF Eligibility applications received after the deadline will not be considered for a HCF award.

The deadline to submit the eGrants IDEA-B Discretionary High Cost Fund (SPED AH15) application (to budget the funds) is July 15, 2015.

Technical Assistance Contact Information

(512) 463-9414 | High Cost Funding Team or email hcf@tea.texas.gov
TEA SE Support or e-mail computeraccess@tea.texas.gov
ESC Special Education Contact at your regional education service center
(512) 463-7025 | eGrants Help Desk or e-mail egrants@tea.texas.gov