Circuit Breaker Overview FAQ

Frequently Asked Questions about the Circuit Breaker program

1. What is the Circuit Breaker Program?

   The state special education reimbursement program, commonly known as the circuit breaker program, was started in FY04 to provide annual assistance to public school districts to offset the cost of providing high-cost special education services.

   The program operates in accordance with Massachusetts General Law Chapter 71B section 5A and School Finance Regulations 603 CMR 10.07.

2. What district expenses are reimbursable under the program?

   In general, the program reimburses districts for special education tuition and instructional expenses as outlined in a student's Individual Education Plan (IEP). Additionally, beginning with the implementation of the Student Opportunity Act, districts are reimbursed expenses associated with transporting students out-of-district to receive special education services. Examples of non-reimbursable expenses include administrative, overhead, evaluation, and service coordination.

   For specific language around qualified costs, please refer to 603 CMR 10.07.

3. How do districts claim for Circuit Breaker reimbursement?

   Districts are provided an excel-based claim file through the DESE secure portal, and complete worksheets within the file to provide a record of all special education expenses being claimed on a per-student basis. Completed files are returned to DESE through the secure portal.

   The DESE Circuit Breaker team reviews each district file to affirm the services and costs are eligible for reimbursement. Calculation of reimbursements are done statewide at the conclusion of the claim review period.

4. What is the annual claim cycle and timing for reimbursement?

   The circuit breaker program provides reimbursements to district through two annual cycles: Year-End claims and Extraordinary Relief claims.

   Year-End claims are filed by all districts annually in July, and reflect expenses incurred in the previous fiscal year. These claims are reviewed by DESE from July through September. Reimbursements amounts are published in September and paid to districts quarterly.

   For example, year-end claims submitted in July 2023 cover district expenditures during FY23, and reimbursements are provided quarterly during FY24.

   Additionally, Extraordinary Relief is available only to districts spending 125% or more on eligible circuit breaker tuition & instruction expenses the current year than the prior year. Transportation expenses are not considered during Extraordinary Relief.

   Districts that qualify for Extraordinary Relief submit claims in March and reflect expenses incurred in the current fiscal year. These claims are reviewed by DESE in April and relief reimbursements are provided in May.

   For example, Extraordinary Relief claims submitted in March 2023 cover expenditures made during FY23, and relief reimbursements are paid to districts in May 2023.

5. What are the most common types of claims?

   Generally, more than 85% of claims are for tuition at out-of-district programs. The next largest claim category is for transportation to get to those out-of-district programs. The smallest category of claims is for in-district services because for many districts it is unusual for in-district services for any single student to exceed the claiming threshold.

6. How are reimbursements calculated though the Circuit Breaker program?

   Reimbursement is calculated on a per-student basis when the total cost of services exceeds the annual circuit breaker eligibility threshold.

   Subject to annual legislative appropriation, the state pays 75% of the costs above the threshold through reimbursement to districts. Reimbursements are calculated statewide for instruction and tuition expenses prior to calculating and reimbursing for any transportation expenses.

   As an example, in FY23, the per-student threshold was $49,494. If special education services provided to a student cost a district $75,000, reimbursement for that student would be the cost of $75,000 minus the threshold of $49,494 times 0.75, or $19,129.50.

7. What is the annual reimbursement threshold and how is it calculated?

   Beginning with implementation of the Student Opportunity Act, the threshold increases annually by the Foundation Inflation Index and is capped at 4.5%. Per statute, the Foundation Inflation Index rate is defined as the ratio of the current year's third-quarter inflation index to the prior year's third-quarter index.

   A chart of historic threshold amounts can be found on the Circuit Breaker website.

8. Can more than one district be financially responsible and eligible for reimbursement for costs of educating a student?

   Yes. In some circumstances, such as shared custody between two parents living in different towns, multiple school districts could share financial responsibility for a student. In these cases, each district claims the full amount of expenses they incurred, and a "cost sharing" calculation considers the claiming threshold and reimbursement amounts proportionally.

9. Does the state provide for additional special education reimbursement for some categories of students?

   Yes. For children placed in a school district outside their home town by the Department of Transitional Assistance (DTA) or the Department of Children and Families (DCF), and for children who have no parents or guardians in the Commonwealth, the reimbursement is 100% above the threshold, rather than 75%.

10. Is there a timeline by which districts need to spend money received through Circuit Breaker reimbursement?

    Yes. Money received through quarterly reimbursement from year-end claiming cannot be carried forward more than one fiscal year. For example, FY23 reimbursements must be spent on circuit breaker eligible expenses in FY23 and/or FY24, and cannot be carried into FY25.

    Money received through Extraordinary Relief reimbursement must be spent on circuit breaker eligible expenses in the same fiscal year in which it was received. For example, extraordinary relief received by a district in May 2023 must be spent in FY23 and cannot be carried into FY24.

11. Are there any recommended best practices for handling circuit breaker reimbursement funds?

    As a best practice, circuit breaker reimbursements should be deposited into a special education reimbursement account. These funds may be expended for any circuit breaker eligible expense without further appropriation. As with all special revenues, the appropriating authority can and should consider the projected reimbursements for the following fiscal year when deliberating on the school district's general fund budget.

12. Are Circuit Breaker claims audited by DESE?

    Yes. The annual audit review period typically runs from October to January. For districts selected for an audit, a team of auditors will go onsite to verify expenditures that were submitted in the claim file, including reviewing invoices and IEPs where necessary to affirm costs. Additionally, auditors work to make sure district personnel has an accurate understanding of the claims process, what can and cannot be reimbursed, and the level of documentation required for claims. Audits generally take 1 day to complete.

    To lower the risk of hosting an audit, districts are encouraged to: (a) attend training to make sure there is an accurate understanding of the claims process, (b) follow the Best Practice document on the Circuit Breaker website, (c) doublecheck the claim file before submitting, and (d) respond as quickly as is practical to any requests for clarification during the July to September review process.

Last Updated: July 19, 2023