IDEA-B LEA MOE Exceptions Part 3: Termination of Obligation 34 CFR 300.204(c) – Termination of Obligation

Cindy Watson

The purpose of the IDEA-B LEA MOE allowable exceptions is to allow LEAs to reduce the level of their state and/or local expenditures below the level of those expenditures for the last compliant fiscal year. This means, that exceptions lower the total expenditure amount (the baseline/level amount) an LEA must spend each year from state and local budgets. While the result of claiming exceptions may bring an LEA into compliance with the MOE requirement, it is because the expenditure baseline is lowered (the intended purpose). To ensure the state and local baseline expenditures are not overstated with costs related to unclaimed exceptions, eligible exceptions should be claimed every year regardless of compliance status.

The Termination of Obligation exception is often overlooked by LEAs.

The Termination of Obligation Exception is often overlooked both by compliant and non-compliant LEAs.  This is because the exception isn’t as common as the voluntary departure of personnel or the termination of costly expenditures for long-term purchases. 

34 CFR 300.204, states that an LEA can reduce the level of its state and/or local expenditures for the termination of obligation for an exceptionally costly program to a particular student with a disability for one of the following reasons:

  • the child has left the jurisdiction
  • the child has reached the age at which the obligation to provide a free appropriate public education (FAPE) to the child is terminated
  • the child no longer needs the program of special education

To qualify as an exceptionally costly program when the obligation ends, the expenditures must be greater than $10,830 for the fiscal year and coded to state/local special education funds.

What is an Exceptionally Costly Program?

An “exceptionally costly program” refers to individualized services for a particular special education student such as (but not limited to):

  • one-on-one paraprofessional or attendant care aide
  • specialized transportation
  • specialized equipment
  • private or public placement tuition
  • educational interpreter
  • hearing impaired or visually-impaired teacher


A student required a one-on-one paraprofessional.  The salary of the paraprofessional assigned to the student was $45,000, per year (coded to state/local special education funds).  The student moved out of the district, and the paraprofessional was reassigned to general education (coded to state/local special education funds). 

In this instance, the paraprofessional is considered the “exceptionally costly program” and can be claimed as a Termination of Obligation exception.  With the reassignment of the paraprofessional, the PIC 23 budget was reduced by $45,000.00.  The reduction cannot be claimed as a voluntary departure of personnel exception because the staff member did not voluntarily depart the position and was reassigned.  However, the costs in excess of $10,380 ($34,170) can be claimed under the Termination of Obligation Exception. 

It is important to monitor and record all departing special education students that received individualized services. If the student’s individualized services were coded to state/local special education funds, the costs in excess of $10,380.00, should be claimed as an exception.

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