CONCORD — New Hampshire school districts will share $10 million in unexpected federal money for special education, thanks to an agreement between state and federal education officials announced on Tuesday by Commissioner of Education Frank Edelblut.

The money consists of funds left unspent over the past 10 years in federal grants for special education made to local school districts but administered through the state Department of Education.

The unspent funds would have reverted to the federal treasury had the state failed to reach an agreement with the federal Office of Special Education and Rehabilitative Services.

“Special education costs put huge pressure on New Hampshire school district budgets, but districts have not always been able to use special education grants provided by the federal government,” Edelblut said. “This agreement to send more than $10 million back to New Hampshire schools will make a real difference for special education students across the Granite State.”

School districts will be apportioned their share of the money based on overall enrollment in public and private schools within district boundaries, with 15 percent of the $10 million focused on children living in poverty.

Manchester stands to be a big winner using that formula, with nearly $1 million targeted for the Queen City ($906,912 to be exact). Nashua is in line for $704,327, while a small school district like Marlow will see around $2,000. Full list attached

The terms of the agreement, laid out in an April 9 letter to Edelblut from the federal director of Special Education Programs, require the state to change the way it accounts for special education grants to comply with federal regulations.

The state will now have to include children enrolled in private elementary and secondary schools when calculating school populations for special education funding. That change would have caused some districts to lose some of their current funding, but Edelblut said the Department of Education would use state money to “hold all districts harmless.”

The federal government has also required the state to change the way it accounts for the special education grants it distributes to local school districts.

The April 9 letter criticizes the transfer practices used prior to 2016, in which charges that should have been applied to the newest grant were instead applied to the unused portion of an older grant.

“This transfer practice has been used by NHDOE for at least 12 years and resulted in the state reallocating funds to local school districts in a manner inconsistent with the Individual with Disabilities Education Act and its regulations,” the letter states.

It also points out that with so many different grants in play, not all school districts in the state were aware of the full amount of federal special education money available to them at any point in time.

The transfer practice was first identified in a 2016 audit by the federal Office of Special Education, and discontinued later that year, said Edelblut, who took over as commissioner in 2017.

The state has until early July to recalculate all special education grants for fiscal years 2017 and 2018. Also by that time, the state will have to prove to federal officials that it has “developed internal controls and no longer utilizes the transfer practice.”

The federal government is also requiring proof that the state notified its auditors of “this finding of noncompliance and the required corrective action.”

The state receives about $43 million a year from the federal government to support students with disabilities under the Individuals with Disabilities Act.

Edelblut stood by his earlier assertion that the large balance of unspent money was due mostly to the fact that some school districts did not make full use of the grants that were available, despite the state-level accounting practices criticized by federal officials.

“The districts had full access to the grants and they were not spending the funds,” he said, “but I’m less interested in who’s at fault than in getting the money back. When you get past all the accounting wonkiness, this is $10 million available to schools to support students.”

To ensure that school districts make the best use of all available special education grants, the DOE will be hosting a series of webinars over the next two weeks.