Effective Date of Rule: Thirty-one days after filing.

     Purpose: To reflect legislative changes and policy changes for the 2007-08 school year pertaining to the safety net process. Legislative changes include: Elimination of the 1077 excess cost methodology, adoption of full-cost accounting and the creation of a new category of state funding due to community impact factor(s). Rule language additions describe the application process for the new category and allow institutional education students pursuant to WAC 392-122-205 (4) and (5) as eligible for safety net funding.

     Citation of Existing Rules Affected by this Order: Amending WAC 392-140-600, 392-140-602, 392-140-605, 392-140-609, 392-140-616, 392-140-626, 392-140-640, 392-140-643, 392-140-646, 392-140-653, 392-140-656, 392-140-660, 392-140-675 and 392-140-685; and new WAC 392-140-60110 and 392-140-617.

     Statutory Authority for Adoption: RCW 28A.150.290.

      Adopted under notice filed as WSR 07-21-023 on October 8, 2007.

     Changes Other than Editing from Proposed to Adopted Version: Propose[d] change to WAC 392-140-616 with fiscal impact has not been made as the office of superintendent of public instruction has been instructed to postpone the adoption until the legislature has had time to deliberate the proposed changes.

     Reason for Adoption: Amendment of the state regulations is necessary to implement state regulations consistent with the state special education safety net program modifications made in the 2007-09 legislative session. The amendment allows for a new category of safety net funding (community impact) for districts requesting funding due to an identified, quantifiable factor beyond the control of the district which justifies disproportional and extraordinary costs. Additionally, minor changes were made to some wording for clarity and streamlining of the safety net application process.

     We received seven written oral comments addressing a variety of areas. The table below addresses the actions taken in response to the comments received, or the reasons if no actions were taken.

     The WAC section citation appears first in the table below. The use of numbers addresses the comments received addressing a particular section.

SUMMARY OF COMMENTS RECEIVED	THE AGENCY CONSIDERED ALL THE COMMENTS. THE ACTIONS TAKEN IN RESPONSE TO THE COMMENTS, OR THE REASONS NO ACTIONS WERE TAKEN, FOLLOW.
WAC 392-140-60105 Definition. Commenters suggested that a state threshold calculation for high need individual applications be included in the regulations.	No action taken. The calculation of the state threshold amount is published in the annual safety net bulletin. Incorporating the state funding threshold into the regulations would unnecessarily complicate the rules requiring annual rule revisions and delay the safety net funding process.
WAC 392-140-616 Application standards. One commenter suggested that the term "properly formulated" be inserted prior to the term "IEP" in WAC 392-140-616 (2)(a).	Action taken. Clarification of the legislative language in the Appropriations Act accepted.
WAC 392-140-617 Application standards.
1. Commenters expressed concern that the use of the term "convincingly" prior to the term "demonstrate" in WAC 392-140-617 when referring to community impact safety net applications was inconsistent with use of the term "demonstrate" in WAC 392-140-616 when referring to high need individual applications.	1. Action taken. Commenters correctly point out that the term "convincingly demonstrate" is used in the Appropriations Act that applies to safety net funding regardless of category. Therefore, the term "convincingly" will be inserted into WAC 392-140-616 to ensure it is clear that "convincingly demonstrate" applies to both the community impact and high need individual applications.
2. One written comment was that WAC 392-140-617(3) be modified to add the term "negative" prior to the term "fiscal impact" to clearly distinguish the related costs associated with community impact category factor(s) identified in the application.	2. Action taken. The word "adverse" was inserted prior to the term "fiscal impact."
3. A commenter suggested including the phrase "some or all" prior to "factor(s)" to indicate that the district did not have to demonstrate a fiscal impact for all of the factors that were identified in the application.	3. No action taken. The insertion of the term "adverse" prior to the term "fiscal impact" in subsection (3) will assist the districts in developing their application and the use of the term "factor(s)" indicates that all factors identified by the districts may or may not necessarily have an adverse fiscal impact.
4. Regarding WAC 392-140-617(4), the term "prior years" was confusing and the following language was recommended: "(4) The district summarizes the steps taken in the current year or steps the district plans to take in the future in response to the factor(s) identified in the application."	4. Action taken. Recommended language inserted.
WAC 392-140-640 Committee membership, structure. Suggestion that proposed rules should not strike the one-year term limitation of safety net oversight committee members but keep the language and include the phrase "unless OSPI agrees on an annual basis that the member will continue to serve on the committee."	Action taken. Language pertaining to one-year term limitation was retained and the phrase "unless OSPI agrees on an annual basis that the member will continue to serve on the committee" was added.
WAC 392-140-653 Reapplication. Commenters suggested that WAC 392-140-653 be modified to clearly indicate that districts can resubmit applications that have been disapproved in an earlier review cycle.	Action taken. The language (district) "wishes to resubmit an application" was inserted as a reason for reapplication in WAC 392-140-653.

     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 10, 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 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 5, 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 0, Repealed 0.

     Date Adopted: November 28, 2007.

Dr. Terry Bergeson

Superintendent of

Public Instruction

OTS-1102.2

AMENDATORY SECTION(Amending WSR 06-01-017, filed 12/9/05, effective 1/9/06)

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 funds for the ((2005-06)) 2007-08 school year and thereafter.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-600, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-600, filed 4/6/04, effective 5/7/04; 03-02-053, § 392-140-600, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 01-04-023, § 392-140-600, filed 1/30/01, effective 1/30/01. 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.]

[]

     (2) An interdistrict cooperative of at least fifteen districts in which all excess cost services for special education students of the districts are provided by the cooperative is eligible to apply for special education safety net moneys. The cooperative and the participating school districts shall be treated as a single school district for the purposes of this chapter. Participating school districts are not eligible to apply for safety net moneys individually.

     (3) The Washington school for the deaf and the Washington state school for the blind are eligible to apply for high need students under WAC 392-140-616.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-602, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1997 c 149 § 507(8). 98-08-013 (Order 98-05), § 392-140-602, 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), § 392-140-602, filed 9/18/96, effective 10/19/96.]

     (1) School districts may make application for safety net funding ((for)) in two application categories - high need student(s) and/or community impact factors for costs associated with communities that draw a larger number of families with children in need of special education services. The school district making application for either or both categories of safety net funding shall certify that:

     (a) The district recognizes that differences in costs attributable to district philosophy, service delivery choice, or accounting practice are not a legitimate basis for safety net awards.

     (b) The application complies with the respective safety net application standards of WAC 392-140-616 and 392-140-617;

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

     (d) The district understands that safety net funding is not an entitlement, is subject to adjustment and recovery, may not be available in future years, must be expended in program 21 or program 24 as specified in the award letter, and certifies that federal Medicaid has been billed for all services to eligible students;

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

     (f) The district's special education services are operated in a reasonably efficient manner;

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

     (h) Any available state and federal funding is insufficient to address the additional needs;

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

     (j) 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.

     (2) Worksheet A shall be included with the application and must demonstrate the need for safety net funding. Worksheet A is used to determine a maximum amount of eligibility for a school district. Award amounts may be less than the maximum amount of eligibility determined on Worksheet A. School districts are encouraged and may be required to submit additional information designed to assist the state oversight committee in analyzing the application.

     (3) All high need student applications shall include worksheets "A" and "C" and individuals summary published in the safety net application, and certification of standards and criteria pursuant to WAC 392-140-616.

     (4) All community impact applications shall include worksheet A, the community impact application, all supporting documentation, and certification of standards and criteria pursuant to WAC 392-140-617.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-605, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-605, filed 4/6/04, effective 5/7/04; 03-02-053, § 392-140-605, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 02-05-036, § 392-140-605, filed 2/12/02, effective 2/13/02; 01-04-023, § 392-140-605, filed 1/30/01, effective 1/30/01. 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 identified on the IEP also complies with state and federal requirements (i.e., regularly scheduled teaching or training activities provided or designed by special education qualified staff).

     (3) The provision of special education services conforms with areas of need identified in the student's evaluation and/or reevaluation made pursuant to chapter ((392-172)) 392-172A WAC.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-609, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-609, filed 4/6/04, effective 5/7/04; 03-02-053, § 392-140-609, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 02-05-036, § 392-140-609, filed 2/12/02, effective 2/13/02; 01-04-023, § 392-140-609, filed 1/30/01, effective 1/30/01. 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) 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 need student:

     (a) Costs eligible for safety net consideration must be associated with providing direct special education and related services identified in ((the)) a properly formulated IEP.

     (b) In order to deliver appropriate special education and related services to the student, the district must be providing services which incur costs exceeding:

     (i) The annual threshold as established by the office of superintendent of public instruction for state funding; then

     (ii) Three times the average per pupil expenditure (as defined in section 9101 of the Elementary and Secondary Education Act of 1965) for the state of Washington for federal funding. Threshold amounts shall be adjusted 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 six of the eight count dates, the threshold amount shall be reduced to three-quarters of the full amount.

     (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.

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

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-616, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 03-02-053, § 392-140-616, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 02-05-036, § 392-140-616, filed 2/12/02, effective 2/13/02; 01-04-023, § 392-140-616, filed 1/30/01, effective 1/30/01. 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) Demographic, environmental, sociological or other factor(s) cause the district's special education enrollment to be disproportional by category of disability or the overall number of students identified as eligible for special education;

     (2) The unique factor(s) identified by the district is not the result of district philosophy, service delivery choice, or accounting practice;

     (3) The identified factor(s) creates an adverse fiscal impact upon the district's special education program; and

     (4) The district summarizes the steps taken in the current year or steps the district plans to take in the future in response to the factors identified in the application.

[]

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

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

     (b) All available revenue for special education, including all carryover of state and federal special education revenue.

     (2) Awards shall not exceed the ((amount of need demonstrated)) potential capacity for safety net funding on the worksheet "A."

     (3) Beginning with the 2007-08 school year, worksheets submitted with safety net applications are to reflect the ((state adopted excess)) full cost method of accounting, ((consistently applied for both years presented)) pursuant to section 501(1)(k), chapter 372, Laws of 2006.

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

     (5) The school district shall provide clarifying 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.

     (7) The state safety net oversight committee shall adapt the worksheet "A" - Demonstration of Need as appropriate for applications prepared by districts participating in the pilot program according to the provisions of RCW 28A.630.015(4).

     (8) In accordance with the state of Washington Accounting Manual for Public School Districts and statutory federal language, ((demonstrated need)) potential capacity for safety net funding shall not include legal fees, court costs, or other costs associated with a cause of action brought on behalf of a child to ensure a free appropriated public education.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-626, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-626, filed 4/6/04, effective 5/7/04; 03-02-053, § 392-140-626, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 01-04-023, § 392-140-626, filed 1/30/01, effective 1/30/01. 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 state oversight committee members will be appointed by the office of superintendent of public instruction.

     (2) The state director of special education shall serve as an ex officio, nonvoting committee member and act as the state oversight committee manager.

     (3) Members of the state oversight committee from school districts and/or educational service districts will be appointed based on their knowledge of special education program service delivery and funding, geographical representation, size of district(s) served, and other demographic considerations which will guarantee a representative state committee.

     (4) Alternate members shall be appointed. In the event a member is unable to ((attend)) vote at a committee meeting, an alternate member shall ((attend)) vote.

     (5) Membership appointments shall be made for a period of one year unless OSPI agrees on an annual basis that the member will continue to serve on the committee. The oversight committee manager may replace a portion of the committee each year in order to enhance representation.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-640, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-640, filed 4/6/04, effective 5/7/04. Statutory Authority: RCW 28A.150.290 and 1997 c 149 § 507(8). 98-08-013 (Order 98-05), § 392-140-640, 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), § 392-140-640, filed 9/18/96, effective 10/19/96.]

     (2) All applications received by the state oversight committee will be reviewed for completeness by the state oversight committee manager or designee. Applications must include all necessary forms, worksheets, and attachments described in the instruction bulletin published by the superintendent of public instruction. ((If)) Incomplete applications ((are not complete, they)) will not be considered by the committee.

     (3) The state oversight committee manager will forward to the committee members copies of the applications in a timely manner.

     (4) The state oversight committee manager or designee will be responsible for presenting each application for consideration to the committee.

     (5) Committee members shall review and discuss the application content for completeness, accuracy, and understanding of the reason(s) for the applicant's need for safety net funding.

     (6) The committee may request that a submitting school district provide clarifying information.

     (7) Committee members will individually indicate their agreement, disagreement, or abstention with the action of the committee pursuant to WAC 392-140-646.

     (8) A majority vote by the committee members will be sufficient to determine the committee action.

     (9) The state oversight committee manager will ensure that notes are taken which summarize the questions and discussion related to each application. A decision summary for each application shall include the amount of the initial request, funding adjustments recommended by the committee, the amount of any award to be made, and the reasons for and against the action taken by the committee.

     (10) Committee members shall each sign the decision summary.

     (11) The state oversight committee manager, on behalf of the committee, will notify the applicant school district in writing of the determination of the committee. The school district will be provided a copy of the decision summary.

     (12) All applications received by the state oversight committee will be retained by the superintendent of public instruction for use in the evaluation of the safety net funding process and to provide the superintendent of public instruction with information with which to make future decisions regarding the safety net process.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-643, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-643, filed 4/6/04, effective 5/7/04; 03-02-053, § 392-140-643, filed 12/26/02, effective 1/26/03. 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), § 392-140-643, filed 9/18/96, effective 10/19/96.]

     (1) After the state oversight committee determines:

     (a) There are no unresolved audit examination issues related to special education that are material in nature;

     (b) There are no unresolved child count verification issues 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.

     (2) An application reviewed during an application cycle may be:

     (a) Approved; or

     (b) Disapproved((; or

     (c) Returned to the submitting school district, for possible resubmission at a later date during the school year, because information contained in the application is insufficient to establish a need for safety net funding)).

     (3) The amount approved shall be equal to or less than the amount for which application was made.

     (4) The approval may be contingent on additional requirements imposed by the committee such as development of an action plan to resolve a specified problem prior to submission of any future safety net application to assure school district compliance with the criteria and standards set forth in these safety net regulations.

     (5) The approvals are subject to adjustment and recovery pursuant to WAC 392-140-675 through 392-140-685.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-646, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-646, filed 4/6/04, effective 5/7/04. 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), § 392-140-646, filed 9/18/96, effective 10/19/96.]

[Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 04-08-118, § 392-140-653, filed 4/6/04, effective 5/7/04. 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), § 392-140-653, filed 9/18/96, effective 10/19/96.]

     (1) The district shall make the request in writing to the office of the superintendent of public instruction within thirty days of the date that the state oversight committee's written determination notice is sent to the district pursuant to WAC 392-140-643(11).

     (2) The applicant district shall request reconsideration of the state oversight committee's action on one or more of the following grounds:

     (a) The action was outside the statutory authority of the committee;

     (b) The action failed to follow prescribed procedures;

     (c) The action erroneously interpreted or applied the law;

     (d) The action was not supported by substantial evidence; or

     (e) The action was inconsistent with the agency rules regarding safety net funding.

     (3) If the office of the superintendent of public instruction finds grounds for reconsideration pursuant to subsection (2) of this section, ((the superintendent)) OSPI shall request reconsideration of the action by the state oversight committee. ((The superintendent's request)) OSPI shall state the grounds for reconsideration supported by the facts considered ((by the superintendent)).

[Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 03-02-053, § 392-140-656, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290 and 1997 c 149 § 507(8). 98-08-013 (Order 98-05), § 392-140-656, 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), § 392-140-656, filed 9/18/96, effective 10/19/96.]

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

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

     (2) Special education safety net allocations for high need students under WAC 392-140-605 (1) shall use appropriated federal and state moneys. ((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 and otherwise uncommitted federal discretionary funds necessary to meet this need.))

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-660, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 03-02-053, § 392-140-660, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 01-04-023, § 392-140-660, filed 1/30/01, effective 1/30/01. 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 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 statewide 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 statewide 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) High need awards and/or community impact 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.

     (b) 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.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-675, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1999 c 309 § 507(7). 03-02-053, § 392-140-675, filed 12/26/02, effective 1/26/03. Statutory Authority: RCW 28A.150.290. 01-04-023, § 392-140-675, filed 1/30/01, effective 1/30/01. 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.]

     (1) Shall be recovered or awards reduced for the following reasons:

     (a) The application contains a falsification or deliberate misrepresentation, including omission of a material fact.

     (b) The allocation is unexpended for the purpose allocated including but not limited to situations where the student leaves the district or has a change in services. For students who transfer to another Washington public school district, expenditures for specialized equipment purchased with these funds shall not be recovered provided the district transfers the equipment to the other school district.

     (c) The IEP is determined at a later date, through state audit or child count verification, to be inappropriate or improperly prepared and appropriate and proper preparation would materially affect the justification or amount of need for safety net funding.

     (2) May be recovered or awards reduced for the following reasons:

     (a) The school district has carryover of state and/or federal flow-through special education funding from the school year for which the award was made.

     (b) The district's actual revenues are significantly higher than estimated revenues on which the award was based or the district's actual expenditures are significantly lower than the estimated expenditures on which the award was based.

     (c) The state oversight committee finds grounds for adjustment in the special education program audit team's review pursuant to WAC 392-140-630.

     Recovery adjustments not made in the current school year shall be added to the amount calculated pursuant to WAC 392-140-616 (2)(c) for the following school year. Such amounts reduce state and/or federal safety net awards in the following year.

[Statutory Authority: RCW 28A.150.290. 06-01-017, § 392-140-685, filed 12/9/05, effective 1/9/06. Statutory Authority: RCW 28A.150.290 and 1997 c 149 § 507(8). 98-08-013 (Order 98-05), § 392-140-685, 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), § 392-140-685, filed 9/18/96, effective 10/19/96.]

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