98-003218 School Board Of Calhoun County vs. Department Of Education Status: Closed Recommended Order on Tuesday, April 13, 1999.

Summary: Department of Education must fund school district`s over-the-cap special program Full-Time Equivalents as basic education Full-Time Equivalents, rather than zero-fund them.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLOTTE COUNTY SCHOOL )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 98-3218

)

DEPARTMENT OF EDUCATION, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

The parties presented this case by a stipulated record to

Robert E. Meale, Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Anne Longman

Edwin A. Steinmeyer

Lewis, Longman & Walker, P.A.

Post Office Box 10788

Tallahassee, Florida 32302-0788

For Respondent: Dean Andrews

Deputy General Counsel

Department of Education

1701 The Capitol

Tallahassee, Florida 32399-0400

STATEMENT OF THE ISSUE

The issue is whether Petitioner is entitl ed to any funding,

under the Florida Education Finance Program, for those full-time

equivalent students whom Petitioner enrolled, taught, and

initially reported, in a dropout prevention program, but whom

Petitioner later reported in a lower-funded basic program after

discovering that these full-time equivalent students exceeded the

legislatively imposed enrollment ceiling applicable to the

program group of which the dropout-prevention program is a part.

PRELIMINARY STATEMENT

By letter dated February 28, 19 96, Respondent informed

Petitioner that, due to, among other deficiencies, Petitioner's

misreporting of numerous full-time equivalencies, Respondent was

reducing Petitioner's 1993-94 Florida Education Finance Program

allocation by $346,428.

By letter dated April 23, 1996, Petitioner requested a

formal hearing.

The parties waived a hearing and presented the case by way

of 21 stipulated exhibits and 10 deposition transcripts.

FINDINGS OF FACT

1. On average, Florida school districts receive about 50

percent of their financial support from state sources, 43 percent

from local sources, and 7 percent from federal sources. In

1993 -94, the Legislature appropriated $4,526,812,758 under the

Florida Education Finance Program ( FEFP) and required local

funding of $3,109,579,079.

2. Two parts of the FEFP funding process are relevant to

this case: setting weighted enrollment ceilings (caps) and

reporting full-time equivalent students ( FTEs). This case arose

when the Auditor General discovered that Petitioner reported

Dropout Prevention FTEs as lower-funded, basic education FTEs.

Petitioner reported these FTEs in this fashion due to its concern

that it would receive no FEFP funding for these FTEs, if reported

as Dropout Prevention FTEs, because they were over the cap set

for the program group of which the Dropout Prevention program was

a part.

3. Setting caps takes place in two stages. The first and

generally more important stage starts with the preparation by

each school district of projections, for the following school

year, of FTEs by program. The second stage of setting caps

requires that Respondent make complicated, technical adjustments

when actual FTEs, by program group, exceed the cap for that

program group.

4. The terms, "program" and "program group," are important.

For 1993-94, Section 236.012(1), Florida Statutes (1993) (all

references to "Section" shall be to the 1993 Florida Statutes),

identifies the following program groups and their constituent

programs:

1. Basic programs.--

a. Kindergarten and grades 1, 2, and 3.

b. Grades 4, 5, 6, 7, and 8.

c. Grades 9, 10, 11, and 12.

2. Special programs for exceptional

students.--

[list of 15 exceptional student education

programs, such as specific learning

disability and emotionally handicapped]

3. Special adult general education

programs.--

* * *

4. Special vocational-technical programs

job -preparatory.--

* * *

5. Special vocational-technical-adult

supplemental.--

* * *

6. Students-at-risk programs.--

a. Dropout prevention.

b. Kindergarten through grade 3 ESOL

[English Speakers of Other Languages].

c. Grades 4 through 8 ESOL.

d. Grades 9 through 12 ESOL.

5. Each district initially submits its FTE projections to

Respondent where various persons with programmatic and funding

expertise examine and review the projections for accuracy. The

cap-setting process continues when, pursuant to Section

216.136(4), Respondent forwards the FTE projections to the Public

Schools Education Estimating Conference (Estimating Conference),

which consists of representatives of the House and Senate staffs,

the Governor's Office, and the Joint Legislative Committee. The

Estimating Conference accepts, increases, or decreases the FTE

projections and sends its projections to the Florida Legislature,

which, in deciding upon FEFP appropriations for the next school

year, may accept, increase, or decrease the Estimating

Conference's FTE projections. This marks the end of the first

stage of the cap-setting process.

6. Both stages of the cap-setting process reveal a finely

tuned funding process that weighs the need for predictability in

funding, so that the Legislature can know how much it is sending

to the districts and each district can know how much it will have

to spend, against the need for flexibility, so that, for

instance, if Hurricane Andrew sends numerous ESOL students from

Dade County to Hillsborough County, after the first stage of the

cap-setting process is completed, the receiving school district

can obtain the funds properly to educate these children.

7. The second stage of the cap-setting process is described

in Section 236.081(1)(d). Section 236.081(1)(d)1 authorizes

Respondent to calculate a "maximum total weighted full-time

equivalent student enrollment for each district." Of course,

Section 236.081(1)(d)2 directs Respondent to begin the second

stage of the cap-setting process by starting with the FTEs set at

the end of the first stage, or, in other words, the "enrollment

estimates used by the Legislature to calculate the FEFP."

8. Section 236.081(1)(d)3 directs Respondent to calculate

caps by groups of program groups. Referring back to the above-

cited statute listing program groups, Group 1 is the first of the

six listed groups, which is nearly all of basic education. Group

2 includes the second and sixth groups, which are, respectively,

exceptional student education ( ESE) and students-at-risk programs

(At-Risk), including Dropout Prevention. The rest of Group 2 is

minor parts of basic education and all vocational education

programs in grades seven thorough twelve. Group 3 consists of

all adult education programs.

9. The most complicated part of the second stage of setting

caps is described in Section 236.081(1)(d)3.a-c. This section

first makes clear that this part of the cap-setting process does

not involve Group 1, which, as noted above, is nearly all of the

basic education programs. Two provisions make this clear.

First, Subsection 236.081(1)(d)3.a and b apply only to Groups 2

and 3. Second, the last sentence of Section

236.081(1)(d)3.b.(IV) states: "For any calculation of the FEFP,

the enrollment ceiling [ i.e. , cap] for [G] roup 1 shall be

calculated by multiplying the actual enrollment for each program

in the program group by its appropriate program weight."

10. Section 236.081(1)(c) directs the Legislature to

establish annually in its General Appropriations Act a cost

factor for each of the listed programs under the six program

groups. This adjustment reflects, for instance, the greater cost

of educating ESE students versus basic-education students.

11. The remainder of this recommended order will ignore

Group 3 because it plays no role in this case and its mention

unnecessarily complicates the presentation of information.

12. Section 236.081(1)(d)3.a describes the caps for Group 2

as the sum of the weighted caps ( i.e. , stage-one FTEs for each

program times a cost factor for each program) for each program

contained in Group 2. The resulting cap must be increased by the

receipt of FTEs from the Department of Health and Rehabilitative

Services (now Department of Juvenile Justice), but this

adjustment is irrelevant to this case.

13. Section 236.081(1)(d)3.b addresses the possibility of

over-enrollment. (The discussion of reporting FTEs takes place

later in this recommended order.) Section 236.081(1)(d)3.b

directs Respondent, "for any calculation of the FEFP," to follow

a specific procedure when actual enrollments exceed the cap for

Group 2; the purpose of the procedure is to reduce the "weighted

[actual] enrollment for that group to equal the enrollment

ceiling [ i.e. , cap]."

14. Section 236.081(1)(d)3.b(I) directs Respondent first to

subtract the weighted cap for each program from the weighted

actual enrollment for that program. If the result is greater

than zero for any program, Section 236.081(1)(d)3.b(II) directs

Respondent to calculate a reduction proportion "for the program"

by dividing the net amount by which the weighted actual

enrollment in the program group exceeds the weighted cap for the

group by the gross amount by which the weighted actual

enrollments in over-the-cap individual programs exceed the

weighted caps for each of these groups.

15. An illustration is useful. Assume a hypothetical group

subject to capping that contains only four programs with caps of

100, 100, 300, and 500 FTEs. Assume actual enrollments,

respectively, of 100, 100, 380, and 490 FTEs. The reduction

proportion for the third program, which is the only over-the-cap

program, would contain a numerator of 70 (because of the netting

of the 10 under-the-cap FTEs in the fourth group) and a

denominator of 80.

16. Section 236.081(1)(d)3.b(III) directs Respondent to

multiply the resulting reduction proportion by the total amount

by which the program group's enrollment exceeds the cap. The

first sentence of Section 236.081(1)(d)3.b(IV) directs Respondent

to subtract the resulting prorated reduction amount from the

program's weighted enrollment.

17. An important principle emerges at this point: the

over-the-cap issues are determined on the basis of the program

group. Over-the-cap FTEs in programs within a group are offset

by unused FTEs from under-the-cap programs in the same group.

18. As already noted, the last sentence of Section

236.081(1)(d)3.b(IV) directs Respondent to calculate the cap for

Group 1 by multiplying the actual enrollment in each program by

its cost factor. In the same vein, Section 236.081(1)(d)3.c

limits the maximum reduction for Group 2 (and Group 3) by

stipulating that the weighted enrollment shall be not less than

the sum of the following two numbers. For programs with cost

factors of 1.0 or more, such as ESE and At-Risk programs,

Respondent must, as required by Section 236.081(1)(d)3.c(I),

multiply the "reported FTE" by 1.0. For programs with cost

factors of less than 1.0, Respondent must, as required by Section

236.081(1)(d)3.d(II), multiply the "projected FTE" by the actual

cost factor.

19. Thus, the effect of Section 236.081(1)(d)3.c(I) is to

provide that the weighted cap for Group 2 is never less than the

amount yielded by multiplying the "reported FTE[s]" for all

programs in the group with a cost factor of 1.0 or more by 1.0.

However, it is important to note that the minimal funding

guaranteed by Section 236.081(1)(d)3.c(I) does not ensure that

all over-the-cap FTEs in, say, Dropout Prevention or Specific

Learning Disabilities, will receive a cost factor of no less than

1.0, even if over the cap; instead, the statute guarantees only

that, after all adjustments, no district will receive less than a

cost factor of 1.0 for all reported FTEs in Group 2.

20. Turning to the reporting of FTEs, Section 236.081(1)(a)

requires each school district to conduct no more than nine week-

long surveys for the purpose of reporting actual FTEs. This

statute also requires that each district compute its FTEs "in

accordance with the regulations of the state board."

21. For 1993-94, Respondent issued a document entitled

"Standard Procedures for Reporting FTE Earned, Course and Other

Issues Regarding the Florida Education Finance Program 1993-94"

(Standard Procedures).

22. Standard Procedures requires districts to use the cited

procedures "for reporting unweighted FTE by student by course,

for allocating residual FTE to courses funded through the Basic

Program categories after special program by student by course FTE

is allocated, and for maintaining audit documentation for FTE

reporting procedures and elements." Standard Procedures, page 1.

23. Standard Procedures requires districts to sort their

course records into "rank order" with all so-called "special"

programs, which includes all programs in the ESE and At-Risk

program groups, in the first group to be reported, and all basic

programs in the second group to be reported. Standard

Procedures, page 11.

24. However, each district may choose

in which order the special program category

courses will, in fact, receive consideration.

That is, if a student has course records with

FEFP Program Numbers in two special program

categories and one Basic Program, the

district may chose [ sic ] which of the special

program categories gets selected for

consideration first for determination of FTE

Earned, Course, except that BOTH special

program categories are considered and FUNDED

before any time for the Basic Program is

considered for funding. . . .

Standard Procedures, pages 11-12.

25. Prior to submitting its FTEs on the approved form, each

district must edit its data so that, among other things, "[a] ll

courses with special program FEFP Program Numbers must be

considered and funded prior to considering courses with Basic

program numbers [subject to two exceptions irrelevant to this

case]." Standard Procedures, page 20.

26. For reporting FTEs in a Dropout Prevention program,

Standard Procedures provides:

Section 228.041(29), Florida Statutes as

amended, provides the definition of a dropout

student. However, a student meeting this

definition must also meet the eligibility and

program requirements as set forth in Section

230.2316(4), Florida Statutes. Finally, only

those students who meet the eligibility

criteria, are admitted to the program

according to the admission procedures, and

participate in instruction specified in any

one of the eligible dropout prevention

programs under operating procedures in an

approved district dropout plan, as approved

by the Department of Education for 1993-94,

may be reported as FTE in FEFP Program Number

120 [Dropout Prevention Program]. . . .

All students who are reported as

participating in the Dropout Prevention

Program must be properly shown as being in

one of the Dropout Prevention Program

categories. Failure to properly identify the

program will result in the FTE Earned,

Course, being nulled for the record

submitted.

Standard Procedures, page 27.

27. After each district reports its FTEs, Respondent

calculates the proper FEFP funding by multiplying the appropriate

FTEs by the appropriate base student allocation, which, under

Section 236.081(1)(b), the Legislature must set annually in its

General Appropriations Act. Under Section 236.081(1)(c),

Respondent then multiplies applies the cost factor for each

program before undertaking the second stage of the cap-setting

described above and in Section 236.081(1)(d).

28. In 1993-94, the base student allocation was $2501.05,

the cost factor for grades 4-8 basic education was 1.0, the cost

factor for grades 9-12 basic education was 1.224, and the cost

factor for dropout prevention was 1.615. In 1993-94, the funding

allocated for basic-education students was $1000-$1500 less per

student than the funding allocated for dropout prevention.

29. During 1993-94, Respondent reported 15,166.04 full-time

equivalent students ( FTEs) in nine elementary schools, four

middle schools, three high schools, one adult education center,

one area vocational-technical school, two exceptional centers,

and two other educational centers.

30. Rule 6A-1.0451, Florida Administrative Code, provides

that the Commissioner of Education shall prescribe the dates for

FTE surveys. ( All references to Rules are to the Florida

Administrative Code.) For 1993-94, the FTE surveys took place

July 12-16, 1993; October 4-8, 1993; February 7-11, 1994; and

June 20-24, 1994.

31. Rule 6A-1.0451(7) provides that districts shall report

the FTEs in all special programs in the special program cost

factor prescribed in Section 236.08(1)(c), "when the student is

eligible and is attending a class, course, or program which has

met all of the criteria for the special program cost factor."

32. By memorandum dated March 9, 1994, in connection with

the February FTE survey, one of Petitioner's deputy

superintendents directed Petitioner's Director of Management

Information Services to change 127 unweighted FTEs from the

Dropout Prevention program to a basic program to "prevent us from

exceeding our caps in Category [Group] 2 programs."

33. Petitioner later reported these FTEs by reporting them

as basic education FTEs when they were eligible for, enrolled in,

and previously reported in the Dropout Prevention program.

34. By Audit Report issued October 20, 1995, the Office of

the Auditor General determined that Petitioner misreported 86.52

unweighted FTEs as basic education FTEs, when it should have

reported them as Dropout Prevention FTEs. The Audit Report also

reclassified one student, at 0.4165 unweighted FTEs, from the

Dropout Prevention program to a basic education program due to

the absence of adequate documentation.

35. Rule 6A-1.0453(2) authorizes the Auditor General to

conduct audits of districts receiving FEFP funding. Rule

6A -1.0453(3) requires the audit report to identify:

(a) Errors in the reported full-time

equivalent membership by program category;

(b) Improper classification or placement of

individual students assigned to educational

alternative or exceptional student programs;

and

(c) Failure of classes or programs to meet

criteria established by the State Board

[citations omitted] for basic or special

programs.

36. Rule 6A-1.0453(4) provides:

Upon receipt of an official audit report, the

Deputy Commissioner for Planning, Budgeting

and Management shall compute the amount of

adjustment to the district's allocation of

state funds necessary to compensate for the

errors or deficiencies noted in

subsection (2). In those instances where a

student has been improperly classified or

placed in an exceptional student program, and

in those instances were a special program

fails to meet the prescribed criteria, the

adjustment shall be computed on the basis of

the basic program cost factor for which each

student qualifies. Except for adjustments

made during the fiscal year in which the

discrepancies occurred[,] adjustments shall

be limited to fund allocations and no changes

shall be made in full-time equivalent

membership data.

37. By letter dated February 28, 1996, Respondent advised

Petitioner of a reduction in FEFP funding for the 1993-94 school

year, resulting from the findings of the Audit Report, of

$346,428. A letter dated February 12, 1999, from counsel for

Respondent to counsel for Petitioner, identifies the portion of

this sum attributable to the misreporting of Dropout Prevention

FTEs as $267,715.

38. Rule 6A-1.0453(5) requires Respondent to provide

official notice to Petitioner of all adjustments following the

issuance of the audit report. This notice must include a

"statement citing the specific law or rule upon which the finding

of each discrepancy is based, and the authority under which the

adjustment is to be made . . .."

39. The parties participated in an informal conference, as

provided by Rule 6A-1.0453(6). The parties have largely framed

the issue in the informal conference as whether Petitioner is

free to report Dropout Prevention FTEs as basic education FTEs.

The parties were unable to resolve this issue.

40. Attempting to find a basis for compromise, Respondent's

representatives reviewed Petitioner's Dropout Prevention records

in the hope of finding grounds for determinations of

ineligibility, so as to permit a reclassification of over-the-cap

Dropout Prevention FTEs as basic education FTEs and allow some

funding, as the Audit Report did in the case of the one student

improperly classified for the Dropout Prevention program.

41. However, Respondent's representatives were unable to

find such documentation errors. Thus, Respondent has maintained

its position that the Dropout Prevention FTEs in excess of the

enrollment cap are funded at zero, not even at the lesser basic

education rate. (Sometimes, Respondent's witnesses express the

zero funding differently by saying that the over-the-cap Dropout

Prevention FTEs do not generate their own FEFP funds, but

participate pro rata in the FEFP funds generated by the

under -the -cap Dropout Prev ention FTEs. However, this amounts to

the same thing: no more FEFP funding for enrolling and teaching

over-the-cap Dropout Prevention FTEs. All references in this

recommended order to zero funding thus include prorate funding.)

42. Nothing in the record cites the authority by which

Respondent zero-funded the over-the-cap Dropout Prevention FTEs,

whom Petitioner reported as basic education FTEs. Interestingly,

six of Respondent's employees cited the "law" that over-the-cap

FTEs, presumably by group rather than individual program, receive

zero funding, but not one of them could cite to the authority for

this "law." ( Eggers, page 17; Stewart, page 11; Goff, page 11;

Pierson, page 10; Butler, page 30; and Jarrett, pages 20 and 22.)

43. Section 236.012(2) states in part that the purpose of

the FEFP is:

(2) To increase the authority and

responsibility of districts for deciding

matters of instructional organization and

method and to encourage district initiative

in seeking more effective and efficient means

of achieving the goals of the various

programs.

1. The material provisions of the above-described laws

remain in effect today. The issue of funding over-the-cap FTEs

in At-Risk programs is not unique to this case. Another case

involving Putnam County is reportedly pending. Also, an Audit

Report issued June 15, 1995, involving FEFP funding for the

Hillsborough County School District found intentional

misreporting of over-the-cap ESOL FTEs as basic education FTEs to

avoid zero funding.

2. Respondent's Policy Director, Link Jarrett introduced a

much-needed perspective when he alluded to the necessity of

balancing the educational needs of children against the complex

funding considerations that have dominated this dispute.

Mr. Jarrett testified:

. . . we are making a good faith effort to

the parent and to the child to place the

student in the program, regardless of what

the funding is. That's easy for me to maybe

say at the State level.

* * *

. . . the basic [tenet] on equal education

opportunity in serving these children is you

place them in the programs that they need to

be served in. And to some extent, you might

take a risk in exceeding your cap. And is

that worth not placing a student in a program

and not giving him the appropriate--I would

say no. . . .

[If I were a District Finance Officer], I

would be saying serve the kids, and where

they fall--I would give you my best estimate

of the children to be served, and I would

serve them in those programs, and I would let

the chips fall where they may.

Transcript of Link Jarrett deposition, pages 39-40.

CONCLUSIONS OF LAW

3. The Division of Administrative Hearings has jurisdiction

over the subject matter. Section 120.57(1).

4. Neither party argues the burden of proof in its proposed

recommended order. Courts generally assign the burden of proof

on the party with the affirmative of the issue. See, e.g. , Young

v. Department of Community Affairs , 625 So. 2d 831 (Fla. 1993);

Department of Banking and Finance v. Osborne Stern and Company,

Inc. , 670 So. 2d 932 (Fla. 1996). Absent the Audit Report and

the action taken by Respondent to recalculate the Group 2

weighted cap, Petitioner would have retained the funds in dispute

over the classification of the Dropout Prevention FTEs.

Respondent has the affirmative of the issue to show that

Petitioner is entitled to zero funding for its over-the-cap

Dropout Prevention FTEs. Although the burden of proof is on

Respondent, the same findings, conclusions, and recommendation

would have followed if the burden of proof had been on

Petitioner.

5. Petitioner's main argument is that Dropout Prevention

FTE reporting is voluntary and, thus, Petitioner could, for any

reason, choose to report these FTEs as basic education FTEs.

6. This argument is unsupported by Rule 6A-1.0451(7),

which requires that districts report students in special programs

as FTEs in the special program in which they are receiving

instruction. The cited provision at page 11 of Standard

Provisions, which requires the presentation of special program

FTEs prior to basic program FTEs, also compels that Petitioner

classify its Dropout Prevention FTEs in the Dropout Prevention

program (unless they qualified for another special program, in

which case Petitioner could exercise discretion—as between or

among two or more such special programs, but not as between or

among one or more special programs and one or more basic

programs). The contrary result would, among other things,

distort the enrollment data, on which future educational planning

is based.

7. In support of its contrary argument, Petitioner relies

primarily on the cited provisions of page 27 of the Standard

Procedures, which provides that Petitioner "may" report as

Dropout Prevention FTEs only those students meeting various

criteria. This use of "may" does not mean that such reporting is

permissive or voluntary, rather than mandatory. Rather, such use

of "may" means that districts are only permitted to report as

Dropout Prevention FTEs those students who meet the various

criteria.

8. Close examination of the Dropout Prevention provisions,

including the "may" clause, and the other cited portions of the

Standard Procedures explains the use of "may." The assumption of

the Standard Procedures is that districts will want to report

FTEs in the programs with the highest possible cost factors.

This bias built into the Standard Procedures acknowledges no

downside to this reporting practice, as would be consistent with

the absence of punitive zero funding for over-the-cap Group 2

FTEs.

9. Although Petitioner may not generally report Dropout

Prevention FTEs as basic education FTEs, the cited provisions at

pages 11 -12 and 20 of the Standard Procedures establish an

exception to this general prohibition. As provided by these

cited provisions, the general requirement to report special

program FTEs only as special program FTEs, rather than basic

program FTEs, applies only as long as the special program FTEs

are funded. By implication, once the special program FTEs are no

longer funded, a district may report these FTEs under basic

programs, which would ensure the minimal cost factor accorded

basic education FTEs.

10. The exception that allows districts to report and

Respondent to fund as basic education FTEs what would otherwise

be unfunded special program FTEs explains the action of the

Auditor General, upon discovering inadequate documentation for

one reported Dropout Prevention student, in converting his

Dropout Prevention FTE to a basic education FTE, rather than zero

funding the student. Similarly, this exception explains the

actions of Respondent's representatives in seeking evidence of

additional students failing to meet the criteria of the Dropout

Prevention program; Respondent, too, sought the chance to

reclassify these over-the-cap Dropout Prevention FTEs as basic

education FTEs in order not to zero fund them.

11. The exception that allows districts to report and

Respondent to fund as basic education FTEs what would otherwise

be unfunded special program FTEs is not limited to special

program FTEs that are unfunded due to the disqualification of the

program or the student. This exception applies equally to

special program FTEs that would otherwise be unfunded because

they exceed the group cap.

12. In providing for caps, the Legislature did not

expressly authorize zero funding for all over -the -cap Group 2

FTEs. What is clear from the complicated capping statute is that

the Legislature allowed a district effectively to borrow unused

weighted, below-the-cap FTEs from one program in Group 2 to

offset weighted, above-the-cap FTEs from another program in

Group 2. This liberal approach to funding over-the-cap programs

does not suggest an intent to zero fund over-the-cap programs in

over-the-cap groups.

13. Consistent with this Legislative intent are the

already-discussed provisions of the Standard Procedures

prioritizing the reporting of "funded" special-program FTEs.

14. In addition to the lack of legal support for the policy

of zero funding over-the-cap special program FTEs, two practical

issues may arise as a result of this policy of depriving

districts even of basic education funding for such FTEs. First,

districts that would take the risk of reduced funding of FTEs in

nonmandatory special programs, such as Dropout Prevention and

ESOL (as opposed to ESE), might find themselves unable to take

the risk of no funding whatsoever. These districts would thus

reduce or eliminate these important programs. Second, districts

belatedly finding themselves in a grave financial situation due

to zero funding may be tempted to take advantage of the more

liberal treatment afforded by Respondent and the Auditor General

to students or programs determined not to meet the criteria of

the applicable special program. The funding distinction

maintained between over-the-cap special program FTEs and

disqualified special programs or students in special programs

invites abuse of the FEFP funding process by individual district

employees achieving the noncompliance of sufficient number of

cumulative files or even of program documentation to ensure that

the over-the-cap special program FTEs are funded as basic

education FTEs. A funding policy that prefers disqualified FTEs

to over-the-cap FTEs defies logic because the greater culpability

attaches to the acts and omissions that produce the

disqualification of a student or an entire program than to the

acts and omissions that result in the over-enrollment of special

program students, especially when the enrollment census of a

large component of the Group 2 students-- ESE--is mandatory and

largely out of the control of the districts.

15. In the final analysis, Petitioner has provided

important Dropout Prevention educational services through an

eligible program to eligible students, but has provided the

services to more students than the Legislature agreed to fund at

enhanced levels. Respondent's punitive remedy of zero funding

these over-the-cap special program FTEs lacks any explicit legal

authority, serves no legitimate educational or funding policy,

and is arbitrary and capricious. Funding these over-the-cap

special program FTEs as basic education FTEs is supported by the

law and logic.

RECOMMENDATION

It is

RECOMMENDED that the State Board of Education enter a final

order declaring that Petitioner is entitled to: a) funding at

the Dropout Prevention cost factor for any FTEs that qualified to

be reported as Dropout Prevention FTEs and that were not over the

Group 2 cap; and b) funding at the basic education cost factor

for any remaining FTEs that qualified to be reported as Dropout

Prevention FTEs, but were over the Group 2 cap.

DONE AND ENTERED this 13th day of April, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of April, 1999.

COPIES FURNISHED:

Anne Longman

Edwin A. Steinmeyer

Lewis, Longman & Walker, P.A.

Post Office Box 10788

Tallahassee, Florida 32302-0788

Dean Andrews

Deputy General Counsel

Department of Education

1701 The Capitol

Tallahassee, Florida 32399-0400

Michael H. Olenick, General Counsel

Department of Education

The Capitol, Suite 1701

Tallahassee, Florida 32399-0400

Honorable Tom Gallagher

Commissioner of Education

Department of Education

The Capitol, Plaza Level 08

Tallahassee, Florida 32399-0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order must be filed with the agency that will

issue the final order in this case.