Date of Adoption: January 23, 2001.

Purpose: The purpose is to reflect policy changes made by the State Safety Net Oversight Committee for the 2000-01 school year regarding special education safety net procedure for school districts and educational service districts.

Citation of Existing Rules Affected by this Order: Amending WAC 392-140-600, 392-140-605, 392-140-609, 392-140-613, 392-140-616, 392-140-625, 392-140-626, 392-140-660, and 392-140-675.

Statutory Authority for Adoption: RCW 28A.150.290.

Adopted under notice filed as WSR 01-01-098 on December 15, 2000.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 7, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 9, Repealed 0.

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: Immediate implementation is needed in order for the Safety Net Oversight Committee to approve districts' applications at the February 7th meeting.Effective Date of Rule: At time of filing [January 30, 2001, 11:37 a.m.]

January 30, 2001

Dr. Terry Bergeson

Superintendent of

Public Instruction

OTS-4549.1

AMENDATORY SECTION(Amending WSR 00-03-015, filed 1/7/00, effective 2/7/00)

WAC 392-140-600   Special education safety net -- Applicable provisions.   The provisions of WAC 392-140-600 through 392-140-685 apply to the determination of safety net allocations of state special education moneys and Individuals with Disabilities Education Act (IDEA) federal discretionary moneys for the 2000-01 school year and thereafter.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-600, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-600, filed 9/18/96, effective 10/19/96.]

(1) School districts may make application for safety net funding on ((the basis of)) one or more of the ((following:)) four application types described below. Applications will be considered and awards made in the order shown until the district's eligibility is exhausted.

(a) Maintenance of effort (state revenue only) hereafter referred to as MOESR. State safety net funding may be requested when a district shows a MOESR loss calculated by the superintendent of public instruction pursuant to WAC 392-140-620.

(b) ((Special characteristics and costs.)) Students above the funded percentage hereafter referred to as percentage. State safety net funding may be requested ((by a school district with special education costs of providing services that are reasonable, but differ significantly from the assumptions contained in the state special education funding formula provided that the applicant school district meets the standards of WAC 392-140-613 and can demonstrate, pursuant to WAC 392-140-625 either of the following:

(i) The)) if district's actual resident special education enrollment exceeds the district's funded resident special education enrollment, the district ((has adopted)) is implementing a plan of action to contain or eliminate any unnecessary, duplicative, or ineffective enrollment practices, and all available funding, including state, federal, and local if provided in the past, is insufficient to meet the expenditure level necessary for special education((; or

(ii) The district's resident special education enrollment percentage is equal to the funded special education enrollment percentage and the district has incurred an adverse change in the demographics of its resident special education enrollment, and all available funding, including state, federal, and local if provided in the past, is insufficient to meet the expenditure level necessary for special education)).

(c) High-cost individual student. A school district may submit applications for federal safety net funding for high-cost individual students meeting the standards in WAC 392-140-616.

(d) Factors other than students above the funded level or high-cost individual students hereafter referred to as other factors. State safety net funding may be requested by a school district with unfunded special education costs due to factors beyond the district's control and not attributable to district philosophy or service delivery style. The applicant district must meet standards of WAC 392-140-613 and 392-140-625.

(2) The school district making application for safety net funding shall certify that:

(a) The application complies with the respective safety net application standards of WAC 392-140-610, 392-140-613, or 392-140-616;

(b) The application provides true and complete information to the best of the school district's knowledge; and

(c) The district understands that safety net funding is not an entitlement, is subject to adjustment and recovery, may not be available in future years, state safety net funding must be expended in program 21 which impacts the amount that must be maintained for the federal maintenance of effort test, and federal safety net funding must be expended in program 24, and federal Medicaid has been billed for all services to eligible students.

(3) Worksheets included with the application shall demonstrate the need for safety net funding. School districts are encouraged and may be required to submit additional information designed to assist the state oversight committee in analyzing the application.

(a) MOESR applications pursuant to subsection (1)(a) of this section do not require any worksheets. Applications for MOESR shall include certification of standards and criteria described in WAC 392-140-610.

(b) ((Special characteristics and costs)) Percentage applications pursuant to subsection (1)(b)(((ii))) of this section require completion of ((the narrative and)) worksheet((s)) "A" described in WAC 392-140-625, certification of standards and criteria pursuant to WAC 392-140-613 and percentage application narrative.

(c) High-cost individual student applications shall include ((completed budget forms SPI F-1000B and SPI E-795B, and)) worksheets "A" and "C" and summary published in the safety net application, and certification of standards and criteria pursuant to WAC 392-140-616.

(d) Other factors applications pursuant to subsection (1)(d) of this section require completion of application narrative, worksheet "A" described in WAC 392-140-625, and certification of standards and criteria described in WAC 392-140-613.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-605, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1997 c 149 507(8). 98-08-013 (Order 98-05), 392-140-605, filed 3/18/98, effective 4/18/98. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-605, filed 9/18/96, effective 10/19/96.]

(1) The IEPs comply with federal and state procedural requirements.

(2) The delivery of specially designed instruction complies with state standards (regularly scheduled teaching or training activities provided or designed by special education qualified staff).

(3) Areas for the provision of special education services conform with areas of need identified in the students evaluation made pursuant to WAC ((392-172-152)) 392-172-111.

(4) The state oversight committee determines:

(a) There are no unresolved state audit examination findings related to special education which are material in nature;

(b) There are no unresolved state child count verification findings which are material in nature; and

(c) All corrections to state enrollment reporting, required for resolution of (a) and (b) of this subsection, are completed.

[Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-609, filed 9/18/96, effective 10/19/96.]

(1) IEPs are appropriate and are properly and efficiently prepared and formulated.

(2) The district is making reasonable effort to provide appropriate services for students in need of special education utilizing state funding generated by the basic education apportionment and special education funding formulas.

(3) The district's special education services are operated in a reasonably efficient manner and the district has adopted a plan of action to contain or eliminate any unnecessary, duplicative, or inefficient practices.

(4) Indirect costs included for purposes of determining safety net allocations do not exceed the allowable percent for the federal special education program plus one percent.

(5) Any available federal funding is insufficient to address the additional needs.

(6) The costs of any supplemental contracts are not included for purposes of determining safety net allocations. Supplemental contracts are those contracts made pursuant to RCW 28A.400.200(4) excluding extended school year contracts (ESY) required by an IEP.

(7) The costs of any summer school instruction are not included for purposes of making safety net determinations excluding extended school year contracts (ESY) required by an IEP.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-613, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-613, filed 9/18/96, effective 10/19/96.]

(1) The IEP for the eligible special education student is appropriate, and properly and efficiently prepared and formulated.

(2) All of the following criteria apply to the high-cost individual student:

(a) Costs eligible for safety net consideration must be direct expenditures for services required in the IEP.

(b) In order to deliver appropriate special education to the student, the district must be providing services which incur additional costs which exceed available district annual average per-pupil revenues, including state, federal and local revenues, by seven thousand dollars. This threshold amount shall be adjusted ((downward by the portion of the year for which the individual student was actually enrolled)) pro rata for students not counted or expected to be counted for special education services on all eight enrollment count dates (October through May). For example, for a student served and reported for only ((one-half the year)) six of the eight count dates, the threshold amount shall be reduced ((by one-half)) to three-quarters of the full amount. The state safety net oversight committee may set a lower threshold for small school districts.

(c) The total cost of educational services must exceed any carryover of federal flow-through special education funding as of August 31 of the prior school year.

(d) The cost of providing special education services, as directed in the IEP, for this student would be detrimental to the school district's ability to provide necessary services to the other students being provided special education in the district.

(3) The state safety net oversight committee shall adapt the high cost individual student application as appropriate for applications prepared by the Washington state school for the blind and the Washington state school for the deaf.

[Statutory Authority: RCW 28A.150.290 and 1997 c 149 507(8). 98-08-013 (Order 98-05), 392-140-616, filed 3/18/98, effective 4/18/98. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-616, filed 9/18/96, effective 10/19/96.]

(1) Applications from districts with actual enrollment greater than funded enrollment pursuant to WAC 392-140-605 (1)(b)(((i))) must demonstrate, through the application narrative, that the district ((has adopted)) is implementing a plan of action to contain or eliminate any unnecessary, duplicative, or ineffective enrollment practices. The district shall demonstrate a financial need on worksheet "A" of the application. Applicants shall cooperate with the special education program audit team and shall provide the team with any information required by the team to review and verify certifications made on the safety net application.

(((2) Applications from districts with actual enrollment equal to funded enrollment pursuant to WAC 392-140-605 (1)(b)(ii) must demonstrate, through the application narrative and on application worksheet "A" and "B," an adverse change in resident special education enrollment characteristics and program costs. For initial awards, the district must demonstrate adverse change since the prior school year. For continuing awards, the district must demonstrate continued adverse change.))

(a) The application narrative completed by the school district shall provide any information and explanations related to ((special enrollment characteristics)) students above the funded percentage as required in the published instructions.

(b) Application worksheet "A" shall demonstrate a financial need by displaying the school district's special education expenditures, revenues, and special education enrollments for the prior and current school years. ((Application worksheet "B" shall display changes in staff services and staff-to-ratios between the prior and current school years.))

(c) Cost differences between the current and prior school years shall be explained in the application narrative. The application narrative shall detail cost differences in services to students which occurred between the current school year and the prior school year. Such details shall include costs and savings associated with each change in services.

(d) A fiscal need shall be demonstrated through the application narrative, on application worksheet((s)) "A" ((and "B,")) and other information available to the state oversight committee.

(2) Applications for other factors pursuant to WAC 392-140-605 (1)(d) must demonstrate, through application narrative and on application worksheet "A," financial need caused by factors other than the presence of students above the funded percentage or high-cost individual student(s).

(a) The narrative shall identify causal factors beyond the district's control and not attributable to the district philosophy or service delivery style, and:

(i) Outline each causal factor asserted in the application;

(ii) Provide a clear explanation of the impact of each factor to the district in terms of number and/or severity of students;

(iii) Quantify the safety net funding need due to the factor. Show the assumptions and calculations used to arrive at the dollar amount of unfunded costs attributable to each factor.

(b) Provide a copy or explanation of any action plan the district has adopted to contain or eliminate any unnecessary, duplicative, or inefficient practices pursuant to WAC 392-140-613.

(c) If the district received an award in a prior year, describe the program, prior year costs, and compare and contrast to the current year program and costs.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-625, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1997 c 149 507(8). 98-08-013 (Order 98-05), 392-140-625, filed 3/18/98, effective 4/18/98. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-625, filed 9/18/96, effective 10/19/96.]

(1) Application worksheet "A" shall demonstrate a fiscal need in excess of ((the sum of)):

(a) ((All current school year safety net awards to the district)) The district's maximum eligibility for MOESR ((or special characteristics and costs));

(b) Any previous safety net awards for the current school year; and

(c) All other available revenue for special education, including all carryover of federal special education revenue.

(2) Awards ((for special characteristics and costs pursuant to WAC 392-140-605 (1)(b)(ii) and high cost individual awards)) shall not exceed the amount of need demonstrated on the worksheet "A."

(3) Worksheets submitted with safety net applications are to reflect ((an)) the state adopted excess cost ((basis)) method of accounting, consistently applied for both years presented. ((The district may be required to describe the district's excess cost methodology.))

(4) The safety net oversight committee may revise the district's worksheet "A" submitted for errors or omissions.

(5) The school district shall provide additional information as requested by the state oversight committee.

(6) After the close of the school year, the safety net oversight committee may review the worksheet "A" used to determine need for a district's award against the actual final school year enrollments, revenues, and expenditures reported by the district. Based upon the results of this review:

(a) The safety net allocation for the school year may be adjusted or recovered; or

(b) If the committee finds that a portion of the safety net allocation was not needed to balance revenues and expenditures, the committee may consider that portion of the allocation available to meet the needs of the ensuing school year.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-626, filed 1/7/00, effective 2/7/00.]

(1) The special education safety net allocation shall be the smaller of:

(a) The amount requested by the school district; or

(b) The amount authorized by the state oversight committee.

(2) If the district requests and the oversight committee approves the "full" allocation permitted by a state formula, then the allocation shall be adjusted periodically during the year and again in January after the close of the school year to reflect the amount determined under the formula.

(3) Special education safety net allocations of state moneys for ((special characteristics)) percentage and other factors applicants under WAC 392-140-605 (1)(b) and (d) shall be prorated if total year-to-date state allocations for all safety net applications under WAC 392-140-605 (1)(a) ((and)), (b), and (d) exceed the authorized appropriation for that school year.

(4) Special education safety net allocations for high-cost individual students under WAC 392-140-605 (1)(c) shall ((first)) use appropriated federal moneys. ((If federal moneys are insufficient, state moneys may be used if provided for this purpose in the state Operating Appropriations Act, otherwise high-cost individual student allocations shall be prorated as needed to stay within the authorized federal appropriation.)) If safety net awards to meet the extraordinary needs of one or more individual special education students exceed the general fund -- federal appropriation, the superintendent shall expend all available federal discretionary funds necessary to meet this need. General fund -- state funds shall not be expended for this purpose.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-660, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1997 c 149 507(8). 98-08-013 (Order 98-05), 392-140-660, filed 3/18/98, effective 4/18/98. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-660, filed 9/18/96, effective 10/19/96.]

(1) For those districts not maximizing Medicaid billing for special education students under ((chapter 318, Laws of 1999)) RCW 74.09.5255, special education safety net allocations shall be reduced by the estimated potential additional incentive payments for the school year if the district maximized Medicaid incentive payments. Potential additional incentive payments shall be estimated by the superintendent of public instruction based on the district's percent of Medicaid eligible students billed and a state-wide average incentive payment per student determined by the superintendent in October of the school year. The average incentive payment per student shall be determined using the prior school year's state-wide Medicaid billing data assuming fifty percent incentive payments for all school districts. The superintendent of public instruction shall update Medicaid billing adjustments to safety net allocations periodically during the school year and again in January following the close of the school year.

(2) Special education safety net allocations for a school district may be adjusted to reflect changes in factors for which additional or revised information becomes available after the awarding of the initial safety net allocation. This means:

(a) MOESR awards for the "full" amount shall be increased, reduced, or nullified when a recalculation pursuant to WAC 392-140-620 results in a change in the amount previously calculated pursuant to WAC 392-140-620.

(b) ((Special characteristics and costs)) Percentage awards for the full amount under WAC 392-140-605 (1)(b)(((i))) shall be increased, reduced, or nullified when the district's enrollment or state funding factors change.

(c) ((Special characteristics and costs)) Percentage and other factors awards may be reduced or nullified when the school district's actual revenues and expenditures for the school year differ significantly from the estimates on which the initial safety net award was based.

(d) A school district's safety net award may be adjusted by the safety net oversight committee based on the results of the review conducted by the special education program audit team pursuant to WAC 392-140-630.

(3) Allocations of state moneys ((for special characteristics applicants)) under WAC 392-140-605 (1)(b) and (d) shall be prorated if total state allocations for all safety net applications under WAC 392-140-605 (1)(a) ((and)), (b), and (d) exceed the authorized appropriation for that school year. Allocations shall be restored to full funding if additional appropriation authority becomes available.

[Statutory Authority: RCW 28A.150.290(2) and 1999 c 309 507(7). 00-03-015, 392-140-675, filed 1/7/00, effective 2/7/00. Statutory Authority: RCW 28A.150.290 and 1997 c 149 507(8). 98-08-013 (Order 98-05), 392-140-675, filed 3/18/98, effective 4/18/98. Statutory Authority: RCW 28A.150.290 and 1995 2nd sp.s. c 18 as modified by 1996 c 283. 96-19-095 (Order 96-15), 392-140-675, filed 9/18/96, effective 10/19/96.]

Washington State Code Reviser's Office