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Special Education Costs PERFORMANCE AUDIT REPORT K-12 Education: Evaluating Special Education Costs A Report to the Legislative Post Audit Committee By the Legislative Division of Post Audit State of Kansas December 2018 R-18-012 Legislative Division of Post Audit The Legislative Division of Post Audit is the professional qualifications, the quality of the audit arm of the Kansas Legislature. Created in audit, and the characteristics of professional 1971, the division’s mission is to conduct audits and meaningful reports. The standards also that provide the Legislature with accurate, have been endorsed by the American unbiased information on the performance of state Institute of Certified Public Accountants and local government. The division’s audits (AICPA) and adopted by the Legislative typically examine whether agencies and programs Post Audit Committee. are effective in carrying out their duties, efficient with their resources, or in compliance with relevant laws, regulations and other requirements. LEGISLATIVE POST AUDIT COMMITTEE The division’s audits are performed at the direction Senator Rob Olson, Chair of the Legislative Post Audit Committee, a Senator Elaine Bowers bipartisan committee comprising five senators and Senator Anthony Hensley five representatives. By law, individual legislators, Senator Julia Lynn legislative committees, or the Governor may Senator Lynn Rogers request a performance audit, but the Legislative Post Audit Committee determines which audits will Representative Dan Hawkins, Vice-Chair be conducted. Representative John Barker Representative Tom Burroughs Although the Legislative Post Audit Committee Representative Don Schroeder determines the areas of government that will be Representative Ed Trimmer audited, the audits themselves are conducted independently by the division’s professional staff. The division’s reports are issued without any input LEGISLATIVE DIVISION OF POST AUDIT from the committee or other legislators. As a result, the findings, conclusions, and 800 SW Jackson recommendations included in the division’s audits Suite 1200 do not necessarily reflect the views of the Topeka, Kansas 66612-2212 Legislative Post Audit Committee or any of its Telephone: (785) 296-3792 members. Fax: (785) 296-4482 Website: http://www.kslpa.org The division conducts its audit work in accordance with applicable government auditing standards set Justin Stowe, Legislative Post Auditor forth by the U.S. Government Accountability Office. These standards pertain to the auditor’s HOW DO I REQUEST AN AUDIT? By law, individual legislators, legislative committees, or the Governor may request an audit, but any audit work conducted by the division must be directed by the Legislative Post Audit Committee. Any legislator who would like to request an audit should contact the division directly at (785) 296-3792. The Legislative Division of Post Audit supports full access to the services of state government for all citizens. Upon request, the division can provide its audit reports in an appropriate alternative format to accommodate persons with visual impairments. Persons with hearing or speech disabilities may reach the division through the Kansas Relay Center at 1-800-766-3777. The division’s office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday. LEGISLATURE OF KANSAS LEGISLATIVE DIVISION OF POSTAUDIT 800 SOUTHWEST JACKSON STREET, SUITE 1200 T OPEKA, KANSAS 66612-2212 TELEPHONE (785) 296-3792 FAX (785)296 -44 82 WWW.KSLPA.ORG To: Members, Legislative Post Audit Committee This report contains the findings, conclusions, and recommendations from our completed performance audit, K-12 Education: Evaluating Special Education Costs. The audit team included Heidi Zimmerman, Josh Luthi, Tanner Rohrer, and Josh Rueschhoff. Chris Clarke was the audit manager. Terry Collins was the audit consultant. In the course of the audit, we also noted a minor issue that was not directly related to answering the audit questions. We conveyed that issue to agency officials in a separate management letter. The management letter is not included as part of this report, but is available upon request. We would be happy to discuss the findings, conclusions, and recommendations presented in this report with any legislative committees, individual legislators, or other state officials. Sincerely, ~~ Justin Stowe Legislative Post Auditor This Page Left Intentionally Blank Table of Contents Introduction ...................................................................................................................................1 Overview of Special Education in Kansas ...................................................................................3 Question 1: What Does it Cost School Districts to Provide Special Education and Related Services?..................................................................................................................9 Question 2: Has Special Education Funding been Calculated and Distributed in Accordance with State Law in Recent Years? ..................................................21 Question 3: What Types of Funding Mechanisms Do Other Similar States Use to Calculate and Distribute Special Education Funding? ....................................25 Conclusions and Recommendations ...........................................................................................29 Appendix A: Agency Response ..................................................................................................31 Appendix B: Additional Information for the Nine Organizations We Selected ...................33 Appendix C: Detailed Methodology for Setting Staff Levels in the Cost Model ..................35 Appendix D: Total and Per-Student Cost Estimate by Special Education Organization ....37 Appendix E: Percentage of Excess Costs Covered by School District ...................................39 Appendix F: Special Education Funding by State ..................................................................41 Appendix G: Cited References ...................................................................................................43 This Page Left Intentionally Blank K-12 Education: Evaluating Special Education Costs Background Information School districts are required by state and federal law to provide services to students with special education needs. Special education services are provided to students with a range of disabilities, including, but not limited to, learning disabilities, speech and language difficulties, or other health impairments. Additionally, in Kansas, gifted students are served within districts’ special education programs. Special education services can include additional paraprofessional support in the regular classroom, therapy services such as physical therapy or speech-language therapy, or specialized technology that can assist a student in the classroom. Districts can deliver these services using district- employed staff or by joining an interlocal or cooperative. In 2018, Kansas school districts spent almost $900 million to provide special education services to about 86,500 students. School districts use a mix of federal, state, and local sources to pay for special education services. Districts can use this funding for a wide variety of special education services, such as transportation and assistance from specialists. The federal government and the state provide special education funding to Kansas school districts that districts can use for a variety of special education services. The federal government also reimburses school districts for certain special education or related services districts provide to students who are enrolled in Medicaid. Districts can also use local option budget or state general funds to pay for special education services. Objectives, Scope, and To comply with the requirements of 2018 Substitute for Senate Bill Methodology 423, the Legislative Post Audit Committee approved an audit of K- 12 special education on April 25, 2018. This performance audit answers the following questions: 1. What does it cost school districts to provide special education and related services? 2. Has special education funding been calculated and distributed in accordance with state law in recent years? 3. What types of funding mechanisms do other similar states use to calculate and distribute special education funding? To answer Question 1, we began by selecting nine special education organizations (three independent districts, three cooperatives, and three interlocals) representing several organization sizes and geographical locations in the state. We PERFORMANCE AUDIT REPORT 1 Legislative Division of Post Audit K-12: Special Education (R-18-012) December 2018 reviewed 225 individualized education plans for special education students in those districts to understand the needs students have. We surveyed and interviewed organization staff to better understand how they handled special education services and to determine whether they felt current resource levels were adequate. We hired a consultant to provide his perspective on how special education services are provided in Kansas and to provide feedback on the reasonableness of our cost methodology. We reviewed the available literature for best practices related to how to deliver services to students in special education. Based on this information, we estimated how much it would cost all special education organizations in Kansas to provide special education and related services at certain staffing levels. To answer Question 2, we compared the statutory
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