Performance Audit of Special Education: Funding Formulas and Spending
25-03 final report | January 2025
Casey Radostitz, Zane Kelly, research analysts
Stephanie Hoffman, deputy legislative auditor; Eric Thomas, legislative auditor
Legislative Auditor's conclusion
State funding for special education does not reflect the variation in student needs or district spending. There are policy options that could help align funding and spending.
Key points
- District funding varies. Some districts receive nearly four times more state funding per student for special education than others.
- The funding formulas do not account for the variation in needs of students. The enrollment cap limits the amount of funding based on the percent of students receiving special education.
- District spending is based on the cost to meet students' individual education programs (IEPs).
- Spending also reflects factors such as the number of students served and availability of local funds.
- On average, school districts spend at least 26% more per student than they receive from state and federal sources. Many use local funds to pay for special education.
Legislative Auditor’s recommendations
The Legislative Auditor makes one recommendation.
Recommendation #1
If the Legislature wants to align special education funding with the needs of students and district spending, it should consider changing the current funding approach.
The amount of special education funding and the approach used to provide funds to school districts are policy decisions for the Legislature.
Potential changes to the current formula include:
- Removing the enrollment cap so the state provides districts with excess cost funding for all students receiving special education services.
- Adjust the excess cost multipliers to account for differences in student needs consistent with practices used in other states.
Alternatively, the Legislature could develop a new special education funding approach that is not based on general apportionment funding.
Legislation Required: Yes
Fiscal Impact: Likely, depending on the Legislature’s policy decisions.
Agency response: OSPI partially concurs.
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