Small school districts find special ed ‘safety net’ can be tangled web

Lake Stevens lost about $140K in special education refunds due to clerical errors. Avoiding a repeat will consume staff resources.

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LAKE STEVENS — A single typo on an application for special education funding can cost the Lake Stevens School District thousands of dollars.

Last year, Lake Stevens lost out on about $140,000 of “safety net” refunds because of “fiscal adjustments,” largely due to paperwork errors. This year, district staff will dedicate more time and resources to document their costs in hopes of boosting safety net earnings by a half-million dollars.

“We have never chased the dollar as much as we are now,” Assistant Superintendent of Business and Operations Teresa Main told the school board in July.

The chase highlights a “massive inequity” in the safety net system, said Mari Taylor, school board president. Smaller school districts can’t afford dedicated staff to file the reimbursement paperwork, leaving them at a disadvantage to get state funding.

The state’s special education safety net has existed in some capacity since the mid-1990s, said Amber O’Donnell, program specialist for the state superintendent’s office. It pays back money that school districts spent on special education, beyond what was funded by the state and federal goverments.

The burden is on school districts to ask for the refund and prove their spending qualified for a return, Main said.

Jeff Moore, director of finance for Everett Public Schools, likened it to submitting an expense report for work. You pay for the gas or food, then file a request to have those work-related costs reimbursed. The same goes for the safety net: A school district pays extra for special education programs, then they apply to recoup some of those costs.

Instead of a picture of a receipt or mileage log, though, districts have to submit pages of paperwork. That includes expense reports, safety net worksheets, purchase orders, invoices, detailed learning plans and supporting documents, such as a behavior intervention plan. Any errors — a typo, an unaccounted for absence, a missing signature — decreases the final reimbursement. Four mistakes disqualifies an application entirely.

‘Burdensome on our system’

The state has strict requirements for what can be reimbursed. For example, districts last year could only apply for costs related to special education over $35,000. If a student spent time in a regular classroom with a “general education” teacher, those costs were not refundable. If a child’s special education cost $34,999, the expenses didn’t qualify for safety net dollars.

“It’s a really highly scrutinized application process,” Moore said.

Larger school districts often dedicate one or two employees to focus on safety net applications. That’s the case in Everett, a district of about 20,300 students.

But smaller school districts usually have multiple people from their special education and finance departments work together to gather paperwork and apply.

In Arlington, a district of about 5,500 students, assembling safety net applications takes about a month, said Dave McKellar, Arlington schools’ director of special education. A four-employee team goes “all hands on deck” and works “around the clock,” McKellar said. During that time, the department’s response time lags for phone calls and emails.

“It’s burdensome on our system,” McKellar said.

Last school year, Arlington submitted applications for 18 students, totaling about $629,000. In its final award, the district received about $529,000.

“The experience and the process is a lot of work to get that money back,” McKellar said. “This is why Seattle Public Schools can hire people to do safety net, because they get so much back, it pays for their salary.”

OSPI officials said they know the application process is cumbersome. They continue to adjust the system in an effort to make it easier for districts.

In recent years, for example, the state started prorating awards, said O’Donnell, the state program specialist. Instead of completely denying an application if a student’s learning plan contained just one error — as the office used to do — now the state agency decreases a request based on the number of errors found. If there’s just one thing wrong, a district will receive 85% of its ask. An application being denied altogether is “really uncommon,” O’Donnell said.

“It’s usually just one, maybe two (mistakes),” she said. “… It’s pretty common to have adjustments on applications, but they still receive funding for the majority.”

‘I know it’s a lot’

The safety net team knows smaller districts often struggle to navigate the system. It’s something that comes up almost every year in an annual survey, O’Donnell said.

One unidentified district in 2021 wrote that the process was “an exceptional burden for districts that do not have the manpower to spend on each IEP (individualized education plan)/cost.” The submission added that the burden “creates inequity.”

“We are in the process of trying to get a contract in place to build an application platform to help streamline the application process and have it all in one place,” O’Donnell said. “I’m really hoping if we can get that. … It will help to make it a little easier to navigate applications, because I know it’s a lot.”

She added that the safety net — and potential improvements to the system — will inevitably come up in legislative discussions this fall.

At a Lake Stevens School Board meeting in July, board Vice President David Iseminger noted the “necessity of holding discussions with legislators” to improve the safety net, not just for his district but others with fewer resources. It would help address the inequity rural locations face in affording robust special education programs, he said.

“Clearly it’s possible (to get funding). It’s just a matter of being unable to access those safety net dollars because it’s such an arduous process,” Iseminger said.

The Lake Stevens School District is considering hiring another staff member to focus on safety net applications. Regardless of what happens, the finance department will dedicate more attention to application materials, said Main, the assistant superintendent of business and operations. She said she is grateful districts can recover some costs.

“I just wish it was a little bit easier for districts to capture all the dollars they are spending above what’s allocated to them,” Main said. “In layman’s terms, I wish the state and feds would fully fund special education.”

Mallory Gruben is a Report for America corps member who writes about education for The Daily Herald.

Mallory Gruben: 425-339-3035; mallory.gruben@heraldnet.com; Twitter: @MalloryGruben.

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