Maintenance of Equity

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The MDE introduced maintenance of equity (MOEquity) to us this month.  MOEquity is a provision brought to us by the American Rescue Plan Act of 2021 (ARP Act).  The State departments and LEAs must show MOEquity as a condition of receiving ARP ESSER funds.  This provision ensures that students most in need receive the essential resources to help close the learning gaps resulting from the COVID-19 pandemic.  The State and LEAs must show that the schools serving historically underserved students receive an equitable share of the State and local funds.  The State and LEA must make sure that funding and staffing to its high-poverty schools are not cut disproportionately by any cuts in revenue.  MOEquity will compare the school year 2022 (July 1, 2021-June 30, 2022) and FY2023 (July 1, 2021-June 30, 2023) to FY2021.

There are two ways an LEA will check for MOEquity: 1) spending test and 2) FTE staffing test.  The LEA must ensure that it does not disproportionately reduce 1) per-pupil state/local funding and 2) full-time equivalent (FTE) staff in high-poverty schools. The district per-pupil funding reduction and FTE staffing will be calculated and used as the comparison number.  Any district receiving ARP ESSER funds must comply with MOEquity.  The following are exceptions to MOEquity.

• LEAs with fewer than 1000 students,
• LEAs with one school per grade span,
• single-school LEA (charter schools), and
• LEAs with situations outside of their control, such as unexpected changes in enrollment or a steep decline in financial resources.

So what does all of this mean?  The school district cannot reduce FY2022 and FY2023 per-pupil funding to the high-poverty schools more than the reduction in average per-pupil funding for the LEA as a whole compared to FY2021.  The funding sources include state and local revenue and exclude capital outlays, debt service, federal funds, and private donations. The same applies to FTE staffing.  The LEA cannot reduce the number of staff to the high-poverty schools more than the total reduction of staff FTEs for the district.  The personnel to be counted includes all staff assigned to a school, including janitorial and clerical staff.  The funding source of the personnel does not apply when calculating MOEquity.

Most of us are familiar with Maintenance of Effort.  So what is the difference between Maintenance of Equity and Maintenance of Effort?  Maintenance of Effort is an annual fiscal review that compares overall state and local expenditures from one year to the next year to ensure that there is not a decrease of more than 10% in funding to schools.  The comparison ensures the LEA maintains its fiscal responsibilities in light of increased federal funding, so federal funds remain supplemental.  On the other hand, Maintenance of Equity is a review to ensure that the LEA does not disproportionately reduce allocations or staff to high-poverty schools if funding reductions occur.

Our MDE has published a webinar and PowerPoint addressing MOEquity.  Much of the information in this blog has come from that PowerPoint.  The PowerPoint goes on to explain how the LEAs will be calculating MOEquity.  You can find the MDE presentation and PowerPoint in MCAPS under the MDE Library/Technical Assistance/Session #23.  This site is a public access site. https://mcaps.mdek12.org/DocumentLibrary/Default.aspx?ccipSessionKey=637756350278342544. In addition, one can find an FAQ on MOEquity at the USDE website – https://oese.ed.gov/files/2021/10/Maintenance-of-Equity-updated_10_1_21-FAQs.Final_.pdf.

Good luck in working with MOEquity.