Price Authorization for M.G.L. c. 71B Approved Private School Programs

808 CMR 1.06 sets forth the eligibility and procedural requirements applicable to M.G.L. c. 71B Approved Private School Programs seeking Massachusetts approved prices. 808 CMR 1.06 does not limit the prices a Contractor may charge to other purchasers of a Program, however, pursuant to 808 CMR 1.03(4) no price authorized under 808 CMR 1.06 may exceed the lowest price charged by a Contractor to other purchasers of the Program. In the calculation of an Authorized Price for an M.G.L. c. 71B Approved Private School Program, OSD shall not apply unrestricted funds or unrestricted revenue not specifically designated for such calculation by the Contractor. Any voluntary use of unrestricted funds or unrestricted revenues shall be governed by an annual written agreement between the Contractor and OSD. Any price authorization made as a result of such a written agreement shall not extend beyond June 30th of the Fiscal Year for which the price is authorized. (1) Annual Price Authorization for Approved Private School Programs Located within the Commonwealth. (a) Eligibility for a Price Increase. In order for an Approved Private School Program to be eligible for an increase to its currently Authorized Price, the Contractor must have filed a UFR or appropriate documentation of exemption for the designated Base Year in accordance with 808 CMR 1.04 or predecessor regulation and the instructions to the UFR. (b) Price Determination for Eligible Programs. If a Program has been determined to be eligible for a price increase in accordance with 808 CMR 1.06(1)(a), OSD may establish a subsequent year price for the Program by adding a per student annual adjustment amount to the current Authorized Price as follows: 1. Where the Program’s Authorized Price has been calculated pursuant to 808 CMR 1.06(3) or recalculated pursuant to 808 CMR 1.06(4) or predecessor regulation as a result of a revision by ESE of the Programs approved staffing and other components since the Base Year, the per student annual adjustment amount will be determined by multiplying the current Authorized Price by a percentage factor, as determined on an annual basis by OSD, which reflects adjustments to employee compensation. 2. Except as provided in 808 CMR 1.06(1)(b)1., the per student annual adjustment amount will be determined by multiplying the current Authorized Price by a percentage factor, as determined on an annual basis by OSD. 3. Unless otherwise provided in 808 CMR 1.06, the price as determined in 808 CMR 1.06(1)(b)1. or 2. will be the annual price authorized for the subsequent Fiscal Year. (c) Price Determination for Other Programs. If a Program does not satisfy the criteria for a price adjustment under 808 CMR 1.06(1)(a), OSD will authorize a price for the Program equal to the current Program price, unless otherwise provided in 808 CMR 1.06. (d) Additional Price Adjustments. 1. Adjustments to Account for Surplus Revenues and Audit Findings. Where a Contractor has accumulated a surplus in the Base Year in excess of the limitations contained in 808 CMR 1.03(7), or an audit of the Program by the Office of the State Auditor has determined that Program funds are subject to recoupment or OSD has determined that Department funds have been expended by the Program on non- reimbursable costs, OSD may adjust the Program price to recoup such excess surplus or inappropriate expenditures. Such adjustments may reduce the base upon which future years’ prices are determined. 2. Adjustments for Failure to Comply with Audit Requirements. OSD will rescind any price increase authorized under 808 CMR 1.06 and will adjust the Authorized Price st accordingly if, by June 1 : a. the Contractor has failed to correct UFR filing deficiencies identified by OSD; or b. OSD has not received a corrective action plan incorporated into an administrative agreement which has been prepared and signed in accordance with the OSD Audit Resolution Policy relative to material and reportable internal control and compliance findings contained in its UFR for the Base Year. (e) Adjustments to Reflect Price Increases Due to Extraordinary Circumstances. The Program price authorized under 808 CMR 1.06(1) may be prospectively adjusted for increases subsequently granted under 808 CMR 1.06(4), however any adjusted price shall not exceed the greater of the price authorized under 808 CMR 1.06(1), or that granted under 808 CMR 1.06(4). (f) Annual Adjustment Limitation. No price authorized under 808 CMR 1.06(1) except a price authorized under 808 CMR 1.06(1)(e) may exceed the price in effect for the current Fiscal Year plus the annual adjustment percentage determined annually by OSD. (g) Prices authorized pursuant to 808 CMR 1.06(1) will be authorized on or before the first Wednesday in February of each year and shall become effective on July 1st following authorization. (2) Annual Price Authorization for M.G.L. c. 71B Approved Private Schools Located Outside the Commonwealth of Massachusetts. Any price authorized pursuant to 808 CMR 1.06(2) shall be effective on the date of authorization by OSD, or the effective date as determined by the state in which the Program is located, whichever is later. Prices authorized by OSD under 808 CMR 1.06(2) shall remain in effect until superseded by OSD. (a) If an Approved Private School Program is located outside of the Commonwealth of Massachusetts in a state which has an established state rate or price setting mechanism, OSD will authorize as the price to be paid by Commonwealth Departments the price established, authorized or approved by the state in which the Program is located, provided that the price is the lowest charged by the Contractor for the Program. In order for OSD to authorize a price, the following must be submitted to OSD by the Contractor: 1. A UFR or certificate of exemption for the most recent reporting year, in accordance with the UFR instructions; 2. A certification from the Contractor that the price requested to be authorized is the lowest charged by the Contractor for the Program; and 3. A copy of the price authorization or approval by the state in which the Program is located, including the effective dates of the price. 4. If the requested price is not the lowest charged by the Contractor for the Program, the Contractor must identify the amount of the lowest price charged, which will then be authorized by OSD. (b) If an Approved Private School is located outside the Commonwealth of Massachusetts in a state where there is no established state rate or price setting mechanism, OSD will determine and authorize a Program price pursuant to the provisions of 808 CMR 1.06(1) or (3), as applicable. (3) Price Authorization For New or Reconstructed M.G.L. c. 71B Approved Private School Programs. (a) Upon the request and recommendation of ESE, OSD will review a proposed Program price for a new or reconstructed M.G.L. c. 71B Approved Private School Program. A new Program is one approved by ESE for the first time as such. A reconstructed Program is one currently approved by ESE but the service configuration of which has been altered and those alterations have been approved by ESE. OSD may require that information sufficient for its review, including format of the information, be submitted with the ESE request and recommendation. After review, OSD may authorize the proposed price, authorize an adjusted price, or suspend action pending the receipt of additional information. If the proposed price is for a reconstructed M.G.L. c. 71B Approved Private School Program, the school must notify all entities, including state departments and superintendents of Local Education Authorities, which currently purchase the Program, that it will be st requesting an increase, including the amount of the requested price, by October 1 . OSD will authorize an adjusted price no earlier than July 1st of the following fiscal year upon receipt of DOE approval and a completed application from the Approved Private School program. If the application process continues into a subsequent fiscal year(s) and the reconstruction includes changes which result in a price higher than the original requested tuition price, an st additional notification process to all entities named above must occur by October 1 for each subsequent year until the price is authorized by OSD. (b) A price authorized under the provisions of 808 CMR 1.06(3) for a new M.G.L. c. 71B Approved Private School Program is subject to review and adjustment after six months based upon a review and analysis of the Contractor’s actual expenditures. Within 60 days of the last day following the sixth month of the effective date of the price, or the date that the Program becomes operational, whichever is later, the Contractor must submit, in UFR format, actual expenditure and revenue reports according to the instructions in the UFR, including an accountant’s review report (AICPA Professional Standards Statement on Auditing Standards No. 71 (SAS No. 71)). Within 60 days of the receipt of the required materials, OSD shall notify the Contractor of any adjustments to be made to the Authorized Price. (4) Price Adjustment for M.G.L. c. 71B Approved Private School Programs - Extraordinary Relief. (a) Conditions for Consideration of Extraordinary Relief. Where an Approved Private School experiences additional expenses for its Program during the price year which are necessary for the provision of the mandated program of services and which it cannot absorb within its Authorized Price, the Contractor may apply to OSD for a price adjustment for the Program during the price year if the expenses are necessary to: 1. meet federal or state statutory, or local regulatory requirements, including ESE or EEC regulations and licensing requirements not currently included in the Authorized Price, or 2. account for unanticipated emergencies beyond the reasonable control of the Contractor. (b) To be eligible for consideration for extraordinary relief the conditions described in 808 CMR 1.06(4)(a) must have resulted from unforeseen events occurring after July 1st of the current Fiscal Year. (c) Required Documentation. To be eligible for consideration for extraordinary relief, the Contractor’s request must include the following: 1. a detailed description of the situation which has caused the Contractor to seek extraordinary relief; 2. price year income and expenses to date for the Approved Private School Program(s) for which extraordinary relief is being sought; 3. a copy of the Contractor’s most recently completed fiscal year UFR; 4. a copy of the Approved Private School Program budget(s) for the current fiscal year using the components contained in the UFR and instructions thereto; 5. a listing of the Approved Private School Program purchasers for the current Fiscal Year, including the number of students for each purchaser; 6. the average enrollment, by month, of the Approved Private School Program(s) for the most recently completed 12 month period; 7. substantial evidence that the Contractor’s resources are insufficient to cover the expenses for which extraordinary relief is sought, including substantial evidence that the Contractor has exhausted all programmatic and financial resources. For the purposes of 808 CMR 1.06(4)(c)7., “programmatic and financial resources” shall not include unrestricted funds or revenues as defined in the instructions to the UFR which have not been specifically designated for use by the Approved Private School Program by the Contractor, but shall include, and not be limited to, surplus revenues as determined by OSD under 808 CMR 1.03(7). 8. evidence, for each cost for which extraordinary relief is sought, that the Contractor acted prudently, reasonably and in compliance with the law; 9. citations or notices of violations of federal, state or local statute or regulation supporting the request, or a statement from the appropriate authority that it requires the expense or item for which extraordinary relief is being sought; 10. documentation that the current operating expenses are in compliance with the reimbursable cost standards contained in 808 CMR 1.02 and 1.05; 11. the Contractor’s requested price; 12. documentation that the Contractor has notified all entities which currently purchase the Approved Private School Program that it has requested extraordinary relief, and the amount of the requested price; and 13. where a Contractor’s request includes expenses for additional Approved Private School Program staff, a staff listing, prepared using position titles contained in the instructions to the UFR and containing the number of proposed full time equivalents for each position title. Such a staff listing shall include a statement, signed by an authorized representative of ESE and/or EEC indicating that the agency’s regulation requires the listed staffing level and the number of students the staffing is intended to serve. (d) Submission. The Contractor shall Submit its request, together with all the required documentation under 808 CMR 1.06(4)(c)1. through 13. to OSD, with a copy to ESE. A request will be deemed incomplete until all of the required documentation is submitted, and no action will be taken by OSD on an incomplete application. OSD may request additional or clarifying information from the Contractor. Should these requests not be satisfied within 21 Days of the postmark of such request, extraordinary relief shall not be granted. (e) Adjusted Price. OSD will take action on a complete request within 60 Days of the receipt of materials required under 808 CMR 1.06(4)(d). Should OSD determine that the Contractor’s request meets the requirements of 808 CMR 1.06(4)(a) through (c) and that extraordinary relief should be granted, OSD will develop and authorize a price subject to the following conditions: 1. any requested expenses which do not qualify under 808 CMR 1.06(4)(a)1. or 2. will not be included; 2. any requested expenses which are deemed to be non-reimbursable by OSD using the criteria contained in 808 CMR 1.05 will not be included; 3. any requested adjustments to administrative expenses will not be included; 4. the additional amount included in any adjusted price for any given item will not exceed the amount of the difference between the Contractor’s expense for the item in the most recently completed Fiscal Year, and the current year’s anticipated expense, on a per student basis; and 5. no adjusted price will be effective prior to the date of authorization, and no price shall include expenses incurred prior to the date of authorization. (5) Administrative Review. (a) OSD may conduct a review of Approved Private School Programs and/or Authorized Prices for good cause, including but not limited to the following reasons: failure to incur costs for items included in the initial price authorization process or later adjustments, failure to provide the approved or required Program services, failure to implement approved or required programmatic or non-programmatic changes included in the price year Reimbursable Operating Costs, or use of Department funds on non-reimbursable costs as defined in 808 CMR 1.05, as determined by OSD. (b) OSD shall initiate administrative review by notifying the Contractor that it intends to conduct an administrative review and the reason(s) for the review. OSD may require the Contractor and/or Department(s) to Submit books, records and other information it deems necessary for its review. Such requests shall be in writing, and requested materials shall be submitted to OSD within 21 Days of the request. (c) OSD shall notify the Contractor and the Department(s) of the results of the administrative review. The review may result in an amendment to an Authorized Price. (6) Contractor Right to Appeal. (a) Any Contractor aggrieved by the action of OSD relative to action taken under 808 CMR 1.06(1), (2), (3), (4) or (5)(c), who desires a review thereof, may file an appeal with the Division of Administrative Law Appeals within 30 Days of notice of OSD’s action. The question on appeal shall be whether OSD, in taking the challenged action, has properly applied its regulations. (b) The pendency of an appeal under 808 CMR 1.06(6) does not limit OSD’s right to undertake an administrative review of any Authorized Price or to take any other corrective action. (7) Price Authorization in Special Cases. (a) Individual Prices. OSD will develop, issue, and amend, as necessary, instructions for the authorization of individual prices for services to students enrolled in Approved Private School Programs when that student has a need for additional or unique services which are not provided by the Approved Private School Program. (b) Specialized Placement Price Authorization. OSD will develop, issue and amend, as necessary, instructions for the development and authorization of prices for individual students who are placed, after approval by ESE pursuant to 603 CMR 28.00: Special Education, by a Department in a private school which has not been approved under M.G.L. c. 71B. These placements are also referred to as “sole source” placements. (c) Special Circumstances. With the consent of ESE and the Contractor, OSD may authorize a price determined in any manner consistent with St. 1993, c. 110, § 274, as amended, should OSD determine that price determination methods under 808 CMR 1.06 are inapplicable to the private school or produce a result which is inconsistent with St. 1993, c. 110, § 274. (d) Critical Direct Care Positions for M.G.L. c. 71B Approved Private School Programs. Upon application to OSD by an Approved Private School Program, OSD may adjust the current Authorized Price to accommodate compensation adjustments for the following direct care positions, as defined in the Fiscal Year 1999 UFR Audit and Preparation Manual: Direct Care/Program Staff I; Direct Care/Program Staff II; Direct Care/Program Staff Supervisor; Teacher; and Special Education Teacher. All Authorized Price adjustments will be governed by the OSD Critical Direct Care Staff Compensation Policy for M.G.L. c. 71B Approved Private School Programs. All requests for Authorized Price adjustments under 808 CMR 1.06(7)(d) will include a statement, signed by an authorized representative of ESE, indicating that the number of staff in each position for which an adjustment in compensation is sought is consistent with ESE approval. Any funds received pursuant to an adjustment in the Authorized Price made under 808 CMR 1.06(7)(d) will be used for the purpose requested. Any such funds not so used, as determined by OSD through the Administrative Review process set forth in 808 CMR 1.06(5), will be subject to recoupment.