Accounting and Auditing

Clarification on Budgeting for FY03 Special Education Costs

We have been asked to clarify the Department's guidance regarding budgeting for FY03 special education expenses. As noted in the Commissioner's October 22 memo, the new circuit breaker reimbursement program is currently scheduled for implementation on July 1, 2002. This program will significantly increase the state's support for special education services. However, because of the state's current fiscal situation, we cannot guarantee that this program will be fully funded in FY03. Therefore, we advised districts not to assume the higher level of reimbursement which the circuit breaker will provide.

If the circuit breaker implementation is delayed, we fully expect that the existing residential school cost-sharing program (the "50/50" program) will be continued for another year. We recommend that districts budget as they have in the past for special education services, taking into account any expected increases in program costs or enrollments. For residential placements, it would be reasonable to assume that the state will continue to pay its share directly to the service provider.

If the circuit breaker is funded for FY03 (which we will not know for certain until the FY03 state budget is enacted), you will obviously need to make some adjustments to your budget at that time. For most districts, the circuit breaker will mean a higher level of funding than is currently provided under the 50/50 program.

If you have any further questions, please contact Jay Sullivan (781-338-6594) or Jeff Wulfson (781-338-6500).