To: the Honorable Ross Hunter, Chair, Joint Legislative Audit and Review Committee

January 15, 2007

To: The Honorable Ross Hunter, Chair, Joint Legislative Audit and Review Committee

The Honorable Margarita Prentice, Chair, Ways and Means

The Honorable Helen Sommers, Chair, Appropriations Committee

Victor Moore, Director, Office of Financial Management

From: Dr. Terry Bergeson, State Superintendent of Public Instruction

Re: Special Education Excess Cost Accounting Method Recommendations

The current biennial operating budget directed me to evaluate our current method of Special Education Excess Cost Accounting in light of the February 2006 report of the Joint Legislative Audit and Review Committee and their findings, concerns, and recommendations. As you know, our excess cost accounting method is our mechanism to ensure that special education-eligible students, as a class, receive their full share of basic education funding, before their education is funded with special education excess cost funds. Concerns with our current method of accounting for excess cost funds have undermined trust in our funding structure and our commitment to the special education needs of students.

In response my office convened a committee of special education advocates, program managers, school district business officials and a large-district superintendent. I am pleased to transmit their recommendation with my wholehearted endorsement.

I hope you concur with the recommended method. The operating budget for special education funding currently contains language directing the accounting method’s use by school districts. This language will need to be revised in order to implement a new method. My staff will assist you in any language revisions to reflect a new method.

Thank you for the opportunity to review this important component of our funding structure. Please contact me if I may help as you deliberate on the attached recommendation.

January 15, 2007

Page Two

Attachment

Cc: The Honorable Gary Alexander, Ranking Minority, Appropriations

The Honorable Hans Dunshee, Vice Chair, Appropriations Committee

The Honorable Kathy Haigh, Chair, Appropriations Subcommittee on Education

The Honorable Rosemary McAuliffe, Chair, Early Learning and K-12 Education

The Honorable Craig Pridemore, Vice Chair, Operating Budget Ways and Means

The Honorable Dave Quall, Chair, Education

The Honorable Joseph Zarelli, Ranking Minority, Ways and Means

Ruta Fanning

Ben Rarick

Bryon Moore

Susan Mielke

Barbara McLain

Denise Graham