Special education finance: An examination of the impact of compliance requirements and the potential for flexible funding on special education resources

An underfunded mandate, special education as it currently operates is failing too many children. Without addressing both the escalating costs of compliance and the potential flexible funding sources, any proposed solution will not be adequate. This study addressed flexible funding; a companion study addressed compliance (Barnes, 2004).;Schools are under increased pressure to promote student learning as measured by standardized test scores. The movement toward more accountability through high stakes testing offers a compelling argument for a collaborative model to meet the needs of all students. Federal funding is especially important for low-income and disadvantaged students, a population from which there are a disproportionate number of children identified as needing special education as compared to the general student population (OSEP Report, 2002). Fluctuating revenue for schools leaves our most vulnerable students the first to feel the lack of support services.;A national report noted that the largest cost associated with special education is compliance; no state has ever been in full compliance since the inception of IDEA. California remains under federal monitoring while California schools struggle to address issues of noncompliance, often settling instead of going to hearing because the costs of settling are cheaper than the costs of litigating. A national study found that schools do not take advantage of opportunities to use federal funding more flexibly because of a significant information gap. Assisting schools in using federal funding programs more flexibly has been hit-or-miss and not nationally uniform due to individual State requirements that may hamper flexibility allowed by federal law.;To capture useful data and provide for California-specific recommendations, this study involved qualitative research methods of interviews and document analysis and quantitative research methods including a survey and data analysis. With the recent passage of the No Child Left Behind Act and the reauthorization of IDEA, research regarding flexibility in funding was exploratory in nature. Successful special education compliance techniques are tailored to the specific school or district; cost-effectiveness analysis could enhance the effective use of resources but due to flawed data collection and escalating costs of compliance, local versus system-wide applications are most feasible. Flexible funding opportunities exist; many districts remain hesitant to implement them due to compliance concerns and the lack of clarity regarding requirements of various funding streams that have flexible funding potential. Legislative change to contain costs of compliance, clarify flexible funding opportunities, and shift special education from an adversarial model that focuses on compliance and pro forma accountability to a collaborative model is necessary for meaningful change.