SHARS and IDEA MOE Relationship

TEA Division of Federal Fiscal Compliance and Reporting provided the following information on the GRANTSADMIN listserv on 10.4.2013.

TEA is currently finalizaing a handbook that describes the relationship between SHARS and the IDEA-B MOE requirement. To help LEAs understand this relationship before the handbook is released, TEA has prepared the information below outlining the requirement that LEAs deduct the Medicaid Cost Share from their total special education expenditures for the purpose of calculating their IDEA-B MOE.

While the calculation tool is new for fiscal year 2014, the requirement that LEAs deduct the SHARS Medicaid Cost Share from their total state and local special education expenditures has been published in Module 1 of TEA’s Financial Accountability System Resource Guide since at least January 2010:
R 5931 School Health and Related Services (SHARS)
This code is to be used to account for funds received from the School Health and Related Services (SHARS) Program. Funds received represent reimbursements to the school district for school-based health services, which are provided to special education students enrolled in the Medicaid Program. These receipts are not considered “federal financial assistance” for inclusion in the Schedule of Federal Financial Assistance. In addition, the expenditures associated with SHARS reimbursements will be subtracted from special education expenditures for maintenance of effort purposes.
As the forthcoming SHARS guidance handbook explains, two things are fundamental to understanding why the LEA must deduct its Medicaid Cost Share related to SHARS:

· The SHARS program has a cost share requirement, which requires the state to bear an approximate 40% share of the total Medicaid reimbursement. In Texas, the LEA bears the state’s share of the reimbursement cost directly. When an LEA receives a reimbursement under SHARS, the amount it receives is the federal share of the total Medicaid reimbursement-approximately 60% in FY 2014. The LEA pays the remaining 40% of the total Medicaid reimbursement out of its state and local special education allocation. This 40% cost share is the Medicaid Cost Share Amount described in the calculation tool instructions. When the FASRG refers to “the expenditures associated with SHARS reimbursements” that must be subtracted from special education expenditures, the reference is to the 40% Medicaid Cost Share Amount in FY 2014.

· The LEA’s 40% Medicaid Cost Share Amount of the total Medicaid reimbursement is paid in answer to a Medicaid requirement. This 40% can only be counted toward one cost share requirement; it cannot count toward both the Medicaid cost share requirement and toward the LEA’s IDEA-B MOE. Therefore, this 40% share must be reduced from the LEA’s total state and local special education expenditures when the LEA is calculating its IDEA-B LEA MOE.
As explained in the first bullet above, the SHARS reimbursement that an LEA receives and codes under R5931 consists only of the federal share-approximately 60% in FY 2014-of the total Medicaid reimbursement. The LEA is required to deduct the remaining 40%, the Medicaid Cost Share Amount, from its state and local special education expenditures. Multiplying the amount of funds coded to R5931 by 0.667 yields the 40% Medicaid Cost Share Amount that must be deducted from the LEA’s state and local special education expenditures.
Example: Under SHARS, the LEA receives $60, the federal share of the Medicaid reimbursement for a service. The LEA codes this $60 under class/object code R5931. Because it is known that the amount coded under R5931 equals 60% of the total Medicaid reimbursement, it is possible to use the R5931 amount to derive 40% of the total Medicaid reimbursement. Multiplying $60 × 0.667 yields the 40% Medicaid Cost Share Amount of $40. This is the amount that the LEA must deduct from its state and local special education expenditures.

Upcoming Training
To coincide with the upcoming TASBO Business Officer Conference, TEA has scheduled training sessions for IDEA-B LEA MOE on November 4, 2013, in Ft. Worth and on November 11, 2013, in Austin. TEA, in conjunction with ESC 13, has also planned a November 20, 2013, IDEA-B LEA MOE training session. The ESC training will be recorded and made available to all ESCs for replay.
Further, TEA will work to offer additional training opportunities at various clusters of ESCs. We hope to have a training schedule available in the near future.

ESC 13 IDEA MOE Contacts: Linda McDaniel at linda.mcdaniel@esc13.txed or Shirley Sanford at shirley.sanford@esc13.txed.net

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