34 CFR § 300.227 - Direct services by the SEA.
(1) An SEA must use the payments that would otherwise have been available to an LEA or to a State agency to provide special education and related services directly to children with disabilities residing in the area served by that LEA, or for whom that State agency is responsible, if the SEA determines that the LEA or State agency -
(ii) Is unable to establish and maintain programs of FAPE that meet the requirements of this part;
(iii) Is unable or unwilling to be consolidated with one or more LEAs in order to establish and maintain the programs; or
(iv) Has one or more children with disabilities who can best be served by a regional or State program or service delivery system designed to meet the needs of these children.
(2) SEA administrative procedures.
(i) In meeting the requirements in paragraph (a)(1) of this section, the SEA may provide special education and related services directly, by contract, or through other arrangements.
(ii) The excess cost requirements of § 300.202(b) do not apply to the SEA.
(b) Manner and location of education and services. The SEA may provide special education and related services under paragraph (a) of this section in the manner and at the locations (including regional or State centers) as the SEA considers appropriate. The education and services must be provided in accordance with this part.