Special Education - Student needs funding and services

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Washington follows federal and state criteria to identify students eligible for special education services. This multistep identification process helps school districts decide whether children should receive special education services. The process also includes deadlines that school districts must meet. The state is making some changes that will require districts to take a more proactive approach for identifying students for special education.

In the 2023-24 school year, Washington served more than 140,000 students needing special education services. Most school districts needed help paying for it.

In 2024, the Legislature passed a bill requiring the Office of the Washington State Auditor to compare the prevalence of disabilities in student populations to the funding available to evaluate students and provide them with needed services. It also directed the State Auditor to determine whether any populations are under evaluated or underserved. This audit examined whether any populations are under identified for special education and the funding available for related services.

Read a two-page summary of the report.

Report Number 1038251 Report Credits

Key results

This performance audit used innovative analytical methods to estimate the prevalence of disabilities in Washington’s student population. Auditors then compared that estimated prevalence to the funding available to assist school districts in educating these students. The results provide a new, more accurate understanding that can help the state better address the needs of all our students. 

We found Washington schools identified the number of special education students we would expect, based on a statistical model we built for this audit. Moreover, there were few indications of any race or ethnicity being under identified statewide. We noted very few differences in the outcomes of special education evaluations, and little evidence to suggest that any particular disability was underserved by school districts.

The audit did note several obstacles to identifying and serving special education students. They included unreliable referral data and tracking, as well as understaffing in key school district positions.

Background

Washington school districts have consistently spent more on special education than they received in state and federal funding.

During the 2023-24 school year, Washington school districts served more than 140,000 children who qualified for special education. The costs for providing those needed services are substantial. Historically, school districts had to supplement the state and federal funding they receive in order to serve the number of students needing special education. OSPI receives federal special education dollars through IDEA, and disburses that money and state revenue funds to Washington school districts using multiple complicated calculations.

Most significantly, and through the 2024-25 school year, the calculations for state funding had to account for a cap on special education funding that was held at 16% of a district’s total enrollment, even if the district’s population of special education students was greater. If special education expenses exceeded the amounts received, then the district had to find other revenue sources, such as local levies, grants or private donations, to cover its costs.

Research methods

The first essential consideration for this audit was to establish the prevalence of students who qualify for special education in the general population. However, the vast differences in access to health care and the highly individualized nature of special education evaluations make it impossible to determine a true rate of students who should qualify. This uncertainty is due in part to the unknown number of children with potential disabilities who lack an official diagnosis. Furthermore, even if the number were known, it is impossible to predict whether a student with a qualifying disability also experiences an adverse educational effect that would require specialized instruction.

Auditors developed two statistical models – a national model and a state model – to estimate the expected number of special education students in Washington school districts given certain factors like district demographics. The national model allowed us to compare Washington school districts with others across the country; the state model used more detailed data not available nationally that allowed closer evaluation of Washington school districts compared to each other.

Close to expected numbers of students

We estimate that Washington identified close to its expected number of special education students. Our statistical models estimated typical numbers of eligible students, even though the actual number is unknown. Our analysis showed Washington school district special education rates were slightly lower relative to districts in other states, though statistically similar to 18 states in the middle. Analysis of other special education data did not show any particular populations under identified for special education. There were few indications of any race or ethnicity being under identified statewide, with very few differences in the outcomes of special education evaluations and little evidence to suggest that any particular disability was underserved by school districts.

Some factors are associated with lower special education rates, but they are not unique to Washington. Misidentifying students for special education is a greater district and stakeholder concern than under identifying, and our selection of Washington school districts generally followed correct processes related to identifying students for special education.

Challenges remain

Unreliable referral data and tracking means Washington cannot ensure compliance with state law or accurately assess identification. In addition, a widely used special education data system compounded analytical challenges.

The Legislature required the Office of Superintendent of Public Instruction (OSPI) to develop a new system which could relieve this problem provided it is designed with user needs in mind. Staffing issues in key positions can limit effective identification. Several practices could help address challenges that districts face in conducting effective identification processes.

Potential for improved funding

Washington funds its school districts through a complex set of calculations that include an additional set of formulas expressly to pay special education expenses. Until recently, funding for special education was also limited by an enrollment cap. Districts that exceed that cap would not receive additional funding for these services unless they apply for and receive “safety-net” funds later. In the 2022-23 school year, districts spent at least 26% more for each student than they received.

However, legislation enacted in 2025 increased special education funding and removed the enrollment cap.

Recommendations

We made a series of recommendations to the Office of Superintendent of Public Instruction to address issues with referral definitions and the collection of referral data. We also made recommendations to help ensure the new statewide special education system meets school district needs. With more accurate data, the state can better ensure compliance with the law and better assess the identification of special education students.