Special Education Construction or Remodeling Questions and Answers 1
Special Education Construction or Remodeling Questions and
Answers
How do school districts finance capital needs and construction projects?
School districts must finance both ongoing capital needs, such as equipment purchases, repairs, and
maintenance, as well as major building construction projects. Major building projects are usually financed at the
local level, often with the assistance of state-paid debt service equalization aid or long-term facilities
maintenance (LTFM) aid. Districts borrow money through the sale of bonds and levy an annual tax to repay the
money over a period of years. Districts may also levy for LTFM projects on a pay-as-you-go basis. Capital revenue
programs normally finance smaller remodeling projects, equipment purchases, and other ongoing capital needs
(Minnesota Statutes, sections 123B.70 and 123B.71).
What are the rules for capital needs and construction projects for students
with disabilities?
All guidance on the use of special education funds is based on the following premise: special education funds are
used for special education purposes, unless specifically provided otherwise. (20 United States Codes (U.S.C.),
section 1413(a) (2) used to pay the “excess cost” of providing special education); Minnesota Rules, section
3525.1400, Facilities, Equipment and Materials.)
Minnesota Rules, section 3525.1400, Facilities, Equipment and Materials, states classrooms and other facilities
in which pupils receive instruction, related services, and supplementary aids and services shall be essentially
equivalent to the regular education program; provide an atmosphere that is conducive to learning; and meet the
pupils' special physical, sensory, and emotional needs.
The necessary special equipment and instructional materials shall be supplied to provide instruction, related
services, and supplementary aids and services.
Does IDEA Section 611 Federal Flow Thru (Finance Code (FIN) 419) allow
funds to be used for capital needs and construction projects?
The Individuals with Disabilities Education Act (IDEA) allows the use of Section 611 Federal Flow Thru (Finance
Code (FIN) 419) funds for the equipment acquisition and for facility construction or alteration under certain
conditions defined in the Part B regulations.
34 Code of Federal Regulations (C.F.R.), section 300.718, Acquisition of equipment and construction or
alteration of facilities.
Special Education Construction or Remodeling Questions and Answers 2
(a) General. If the Secretary determines that a program authorized under Part B of the Act will be
improved by permitting program funds to be used to acquire appropriate equipment, or to construct
new facilities or alter existing facilities, the Secretary may allow the use of those funds for those
purposes.
(b) Compliance with certain regulations. Any construction of new facilities or alteration of existing
facilities under paragraph (a) of this section must comply with the requirements of:
(1) Appendix A of part 36 of title 28, Code of Federal Regulations (commonly known as the
“Americans with Disabilities Accessibility Standards for Buildings and Facilities”); or,
(2) Appendix A of subpart 101-19.6 of title 41, Code of Federal Regulations (commonly known as
the “Uniform Federal Accessibility Standards”).
(Authority: 20 U.S.C., section 1404)
Equipment means tangible, nonexpendable personal property including exempt property charged directly to the
award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However,
consistent with recipient policy, lower limits may be established. (34 C.F.R., section 74.2 – Definitions)
Does IDEA allow Section 619 Preschool Incentive (FIN 420) funds to be used
for capital needs and construction projects?
Part C of IDEA recognizes the need for identifying and reaching very young children with disabilities. This portion
of IDEA provides guidelines concerning the funding and services to be provided to children from birth through 2
years of age. IDEA allows the use of Section 619 Preschool Incentive (FIN 420) funds for the equipment
acquisition and for facility construction or alteration under certain conditions defined in the Part B regulations.
34 C.F.R., section 303.104, Acquisition of equipment and construction or alteration of facilities.
(a) General. If the Secretary determines that a program authorized under Part C of the Act will be
improved by permitting program funds to be used to acquire appropriate equipment or to construct
new facilities or alter existing facilities, the Secretary may allow the use of those funds for those
purposes. (b) Compliance with certain regulations. Any construction of new facilities or alteration of
existing facilities under paragraph (a) of this section must comply with the requirements of: (1)
Appendix A of part 36 of title 28, Code of Federal Regulations (commonly known as the “Americans
with Disabilities Act Accessibility Guidelines for Buildings and Facilities”); or (2) Appendix A of subpart
101-19.6 of title 41, Code of Federal Regulations (commonly known as the “Uniform Federal
Accessibility Standards”). (Authority: 20 U.S.C., section 1404)
Can special education funds be used for projects to comply with Section
504 and ADA requirements?
No. Any time a school building is altered or constructed, the building must meet the minimum standards in the
Americans with Disabilities (ADA) Accessibility Guidelines (ADAAG) or the Uniform Federal Accessibility
Standards (UFAS), 28 C.F.R., section 35.151. Costs for construction or alteration of facilities must be excess cost
of special education. A project must meet the needs of one or more children with disabilities. Cost for the
general purpose of bringing facilities into compliance with Section 504 and ADA requirements are not allowed.
Special Education Construction or Remodeling Questions and Answers 3
Can state special education funds (FIN 740) be used for capital needs and
construction projects?
No. Minnesota Statutes, section 125A.76 (f), excludes expenditures for facilities.
Can Third-Party or Medical Assistance reimbursement funds be used for
capital needs and construction projects?
Minnesota Statutes, section 125A.21, subdivision 3, Third-Party Payment – Use of reimbursements.
Of the reimbursements received, districts may:
(1) retain an amount sufficient to compensate the district for its administrative costs of obtaining
reimbursements;
(2) regularly obtain from education—and health-related entities—training and other appropriate
technical assistance designed to improve the district's ability to access third-party payments for
individualized education program or individualized family service plan health-related services; or,
(3) reallocate reimbursements for the benefit of students with individualized education programs or
individualized family service plans in the district.
Minnesota Statutes, section 125A.58 (Third-Party) Purchasing Guidelines.
Subdivision 1. Rights of districts to purchase school-owned assistive technology.
(a) When a child with a disability exits a district and enters a new district, the child's new district may
purchase any assistive technology devices that the child's former district has purchased on the child's
behalf. The child's new district must notify, in writing, the child's former district of the intent to
purchase the device. The child's new district must complete a purchase agreement according to
section 125A.36. The child's former district must respond, in writing, to the request to purchase
within 30 days.
When is prior approval required for capital and/or construction projects?
The Uniform Grant Guidance provides rules for equipment and other capital expenditures.
2 C.F.R., section 200.439, Equipment and other capital expenditures.
(a) See sections 200.13 Capital expenditures, 200.33 Equipment, 200.89 Special purpose equipment,
200.48 General purpose equipment, 200.2 Acquisition cost, and 200.12 Capital assets.
(b) The following rules of allowability must apply to equipment and other capital expenditures:
(1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as
direct charges, except with the prior written approval of the federal awarding agency or pass-
through entity.
(2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that
items with a unit cost of $5,000 or more have the prior written approval of the federal awarding
agency or pass-through entity.
Special Education Construction or Remodeling Questions and Answers 4
(3) Capital expenditures for improvements to land, buildings, or equipment which materially
increase their value or useful life are unallowable as a direct cost, except with the prior written
approval of the federal awarding agency, or pass-through entity. See section 200.436,
Depreciation, for rules on the allowability of depreciation on buildings, capital improvements,
and equipment. See also section 200.465, Rental costs of real property and equipment.
(4) When approved as a direct charge pursuant to paragraphs (b)(1) through (3) of this section,
capital expenditures will be charged in the period in which the expenditure is incurred, or as
otherwise determined appropriate and negotiated with the federal awarding agency.
(5) The unamortized portion of any equipment written off as a result of a change in capitalization
levels may be recovered by continuing to claim the otherwise allowable depreciation on the
equipment, or by amortizing the amount to be written off over a period of years negotiated with
the federal cognizant agency for indirect cost.
(6) Cost of equipment disposal. If the non-federal entity is instructed by the federal awarding
agency to otherwise dispose of or transfer the equipment the costs of such disposal or transfer
are allowable.
Local educational agencies (LEAs) are required to secure prior approval from the Division of School Finance prior
to undertaking any obligation or purchasing. The division has no authority to approve these expenditures after
the facts.
Edits have been added to the Special Education Data Reporting Application (SEDRA) to comply with the Uniform
Grant Guidance requirements for prior approval before obligating the federal funds. SEDRA will automatically
place an error message on service codes related to construction or remodeling expenditure. The error message
will indicate that the LEA must submit a statement justifying the expenditure to mde.spedfunding@state.mn.us
requesting that the Minnesota Department of Education (MDE) remove the error. The SEDRA service codes are:
• Service Code N – Construction and Remodeling
• Service Code O – Equipment for Office Supervision/Management ($5,000 or more)
• Service Code P – Equipment for Instruction and Technology ($5,000 or more)
• Service Code Q – Equipment for Transportation Services ($5,000 or more)
How do I obtain prior approval?
Construction or remodeling needs prior approval. The superintendent and special education director need to
sign the request and include answers to the following:
1. Describe where the remodeling or construction is to occur and what specific building or space is going to
be remodeled. Include whether the area is owned by the district or is a leased space.
2. Explain the purpose of the project.
3. Explain how the completed remodeling will benefit students with disabilities.
4. Provide the estimated start and finish date.
5. Provide the name of the construction company.
6. Provide the type of funds and the fiscal year in which funds will be obligated.
7. Provide the itemized estimate from the builders.
8. Estimate the total cost of the project.
LEAs may email a request for prior approval to mde.spedfunding@state.mn.us
.
