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Tier I Annual Update. 2012-2013 CASBO Class SM401A. A.C.A. § 6-20-2204 Required Tier 1 Training. Superintendent, Education Service Cooperative Director, Open-enrollment Public C harter S chool D irector, General Business Manager. 12 hours of initial training.

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Tier I Annual Update

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Tier i annual update

Tier I Annual Update

2012-2013

CASBO Class SM401A


A c a 6 20 2204 required tier 1 training

A.C.A. §6-20-2204 Required Tier 1 Training

  • Superintendent, Education Service Cooperative Director, Open-enrollment Public Charter School Director, General Business Manager.

  • 12 hours of initial training.

  • 4 hours of annual update training.


A c a 6 20 2204 required tier 1 training cont d

A.C.A. §6-20-2204 Required Tier 1 Training (Cont’d)

  • ADE has approved the following AASBO courses for the 12 hours of initial training:

    • SF101A, Revenues

    • SF101B, Expenditures

    • SM102, Ethics and Audit Compliance

    • PS101, Introduction to Purchasing

    • SM401A, School Management Issues & Updates

    • SF401A, School Finance Issues & Updates


A c a 6 20 2204 required tier 1 training cont d1

A.C.A. §6-20-2204 Required Tier 1 Training (Cont’d)

  • If employed by July 1, Tier 1 training must be completed by December 31 of the same calendar year.

  • If employed after July 1, Tier 1 training must be completed by December 31 of the following calendar year.

  • Failure to complete the required training by December 31 shall constitute an accreditation citation.


A c a 6 20 2204 required tier 1 training cont d2

A.C.A. §6-20-2204 Required Tier 1 Training (Cont’d)

  • If a person fails to obtain the required training by December 31 and fails to cure the deficiency by March 1 of the following calendar year without filing a request for an extension as determined from the records of ADE, that person shall be unable to continue in his or her position.


A c a 6 20 2204 required tier 2 training

A.C.A. §6-20-2204 Required Tier 2 Training

  • Four hours of annual training for employees who are involved in the process of recording and/or reporting of financial transactions but:

    • Do not make decisions about selecting codes, or

    • Have a limited number of codes that they can use

  • School district trainers are required to attend Tier 1 training.

  • Training materials should be based on Tier 1 material and focused on the specific needs of school district employees.


A c a 6 20 2204 required tier 2 training cont d

A.C.A. §6-20-2204 Required Tier 2 Training (Cont’d)

  • Maintain annual files and records indicating all employees who are required to have Tier 2 Training and those who have completed Tier 2 training in the district office.

  • Provide ADE with assurance statement regarding the completion of Tier 2 training by the required individuals. (This is pulled in State Reporting Cycle 7 – June 15)


A c a 6 20 2204 6 20 2205 sanctions tier 1 2

A.C.A. §§ 6-20-2204 & 6-20-2205 Sanctions-Tier 1 & 2

  • Standards citation - Tier 1 only, school districts and open-enrollment charter schools

  • Admonishment - Tier 1 only, education service cooperatives

  • Fiscal distress - Tier 1&2, school districts and open-enrollment charter schools

  • Sanction - Tier 1 & 2, education service cooperatives


Purchasing

PURCHASING


State buying authority

State Buying Authority

  • Office of State Purchasing (OSP) has authority over the procurement practices of State Agencies only.

  • Public Schools are allowed by law to purchase off the Statewide contracts, but are not mandated to do so.

  • Utilizing state purchasing is a way for school districts, charters, and coops to make sure the cost is fair and reasonable.


Cooperative purchasing a c a 19 11 249

Cooperative Purchasing – A.C.A. §19-11-249

Any public procurement unit may either participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the acquisition of any commodities or services with one (1) or more public procurement units or external procurement activities in accordance with an agreement entered into between the participants. Such cooperative purchasing may include, but is not limited to, joint or multiparty contracts between public procurement units and open-ended state public procurement unit contracts which are made available to local public procurement units.


What does this mean

What does this mean?

That Arkansas governmental entities may utilize a purchasing agreement established by another governmental entity or established cooperative that has issued, reviewed and awarded a contract to a supplier where all the procurement laws of Arkansas were followed.

See Taps and TCPN; §19-11-249 controls over usual bid requirements of § 6-21-304, A.G. Op. 2006-042


Schools cooperatives

Schools & Cooperatives

  • If a school is approached by a vendor who has a contract with a Cooperative Entity (such as US Communities, TIPS/TAPS, NJPA, NIPA, etc.) their administration should review the contract to see if it meets their school district’s procurement requirements and is a good value purchase.

  • Must meet the state’s bid requirements for OSP to include as approved.

  • If it has been bid, then it meets threshold.


How do i know if a particular contract meets these requirements

How do I know if a particular contract meets these requirements?

If a cooperative agreement is on the Office of State Procurement Contract Website, it has been through that review.

http://www.arkansas.gov/dfa/procurement/pro_contracts.html#coop

If it is not on the OSP website, the buying entity must review the solicitation documentation used by the originating entity/cooperative to ensure compliance with Arkansas laws.


Benefits of using a cooperative c ontract

Benefits of using a Cooperative Contract

Convenience

Obtain advantages of volume purchases

Combines qualities so that each entity will obtain the best value

Reduces administrative costs of purchasing


School district buying authority

School District Buying Authority

  • School districts function under separate purchasing laws from State Agencies.

  • The laws are found in A.C.A. §§ 6-21-301 thru 6-21-306 and give authority to the respective school boards.


Procurement

Procurement

  • A.C.A. 6-21-303 requires the school board to develop policies to outline the method for soliciting bids and allows the board to adopt other rules governing procurement.

  • School boards may wish to develop rules that allow certain types of commodities and services to be bid for multiple years. (copiers, maintenance, custodial, substitutes, banking)

    • Include procedures for terminating and/or maybe an annual renewal process.

    • Include a clause that allows termination if future school board fails to budget funds to pay the contract.


Procurement cont d

Procurement (Cont’d)

  • Bid threshold for purchase of commodities is $10,000.

    • Per 6-21-301 Commodities means: “all supplies, goods, material, equipment, machinery, facilities, personal property, and services, other than personal and professional services, purchased for or on behalf of the school district.”

    • Per 19-11-801(b), “competitive bidding shall not be used for the procurement of legal, financial advisory, architectural, engineering, construction management, and land surveying professional consultant services.

    • Per 19-11-801(c) may elect to not use competitive bidding for other professional services not listed in (b) with a 2/3 vote of board.


Procurement cont d1

Procurement (Cont’d)

  • All bids may be rejected and a contract negotiated.

  • All bidders must have reasonable opportunity to negotiate

  • Items MUST NOT be split between purchase orders to make the purchase under $10,000.


Procurement cont d2

Procurement (Cont’d)

  • Bid Solicitation Exemptions (6-21-305):

    • Emergency

      • With written statement from superintendent

    • Commodities available only from federal government

    • Utility services regulated by state or federal agency

    • Used equipment and machinery (school buses +2 years to be considered used)

    • Single source

      • With written statement from purchasing official

        See Appendices for copy of FIN-09-071, April 28, 2009


Tier i annual update

BIDS

  • Do not write specifications to eliminate or restrict competition or include name or identity of any specific vendor.

  • Notify in writing all prospective bidders who have asked to be notified of bids

  • Provide an adequate time for a response

  • Include a response form to be notarized by the agent of the bidder

  • The wording for the form is found in A.C.A. §6-21-304(a)(4)(A)


School buses

School Buses

  • The school board has jurisdiction over the purchase of Types, A, B, C, and D school buses. (A.C.A. 6-21-304)

  • The Academic Facilities and Transportation Commission, with the assistance of an advisory committee, shall provide minimum specifications for buses.


School buses cont d

School Buses (Cont’d)

  • School Board may request the State Procurement Director to take bids on their behalf.

  • If the district solicits the bids they must provide the OSP:

  • A copy of the bid Specs

  • List of bidders

  • Any correspondence

  • Bid tabulation

  • Copy of bid award


School buses cont d1

School Buses (Cont’d)

  • A School bus is considered “used” 2 years after the date on the manufacturer’s certificate of origin.

    • If the body of the school bus is installed by other than the manufacturer of the chassis, the bus becomes used 2 years after the date of issuance on the certificate of origin issued by the entity that installed the body on the chassis.

  • Purchases of used school buses are not subject to approval by the OSP nor bidding procedures prescribed by law.


Ethics

ETHICS


Ethics school board members

Ethics-School Board Members

  • A.C.A. §6-24-105 states that: “it is a breach of the ethical standards of this chapter for a board member to contract with the public educational entity the member serves if the board member has knowledge that he or she is directly or indirectly interested in the contract.”

  • A public educational entity may not initially employ a board member’s family member during the member’s tenure of service for compensation in excess of $5,000 unless the Commissioner of Education issues a letter of exemption approving the contract based on unusual and limited circumstances.


Ethics school board members cont d

Ethics-School Board Members (Cont’d)

  • Any family member employed before the board member’s tenure may continue in employment but may not be promoted if compensation will increase more than $2,500.

  • Family members may be employed as a substitute teacher, cafeteria worker, or bus driver for no more than 30 days per fiscal year.

  • Non-employment contracts with a board member or family member of a board member are prohibited if the total transactions or contracts will total $5,000 or more during a fiscal year—unless the Commissioner of Education issues a letter of exemption based on unusual and limited circumstances.


Ethics administrators

Ethics-Administrators

  • A.C.A. §6-24-106 states: “it is a breach of ethical standards of this chapter for an administrator to contract with the public educational entity employing him or her if the administrator has knowledge that he or she is directly or indirectly interested in the contract.”

  • Family members of an administrator may be employed by the educational entity that the administrator serves without approval from the Commissioner of Education. (but cannot be initially employed as a disbursing officer without approval from the Commissioner)


Ethics administrators cont d

Ethics-Administrators (Cont’d)

  • To contract with other public educational entities, an administrator shall first get approval from the board employing the administrator and then shall get approval from the Commissioner.

  • Rules Governing Ethical Guidelines and Prohibitions for Educational Administrators, Employees, Board Members, and other Parties included in Appendices


Ethics employees

Ethics-Employees

  • A.C.A. §6-24-107 states: “it is a breach of the ethical standards of this chapter for an employee to contract with the public educational entity employing him or her if the employee has knowledge that he or she is directly interested in the contract.”

  • If the total transactions or contracts with an employee total $5,000 or more for a fiscal year, the contract(s) must be approved by the Commissioner.


Ethics school board approval

Ethics-School Board Approval

  • A school board’s approval of a contract under A.C.A. §6-24-101 et seq. must be documented by a written resolution adopted after discussion in an open meeting.

    • Must state the unusual and limited circumstances that make the contract necessary.


Ethics approval by commissioner

Ethics-Approval by Commissioner

  • To seek Commissioner’s approval of a contract, an educational entity must send the resolution, along with any other relevant data, to the Commissioner via certified mail.

  • The Commissioner, after reviewing the resolution and other data, will approve or disapprove the contract within 20 days of receipt of the resolution.


Ethics approval by commissioner cont d

Ethics-Approval by Commissioner (Cont’d)

  • If the Commissioner requests additional information in order to rule on a request, the Commissioner will approve or disapprove the contract within 20 days of receipt of the additional information.

  • If the Commissioner does not respond within the specified number of days, the request is deemed to have been approved by the Commissioner.

  • No approval may be granted for more than two consecutive fiscal years.


Ethics approval by commissioner cont d1

Ethics-Approval by Commissioner (Cont’d)

  • A.C.A. §6-24-105(b)(1)(ii) provides that the determination of “unusual and limited circumstances” shall be at the sole discretion of the Commissioner. Because of this, the Commissioner looks at each request on a case-by-case basis.

  • If you have questions or need assistance with a request for an exemption, please call the ADE Attorney’s Office at 501-682-4227.


Ethics for a rkansas educators

Ethics – for Arkansas Educators

  • Allegation – Any written and signed statement by any person with the Arkansas Department of Education local school board, Arkansas State Board of Education, or public school superintendent of this state and subsequently filed with the Professional Licensure Standards Board (PLSB) claiming that an educator has breached one or more of the Standards of Professional Conduct as set forth in Rule. An allegation may also include4 a finding made in an audit report forwarded to ADE by the Arkansas Legislative Joint Auditing Committee pursuant to A.C.A,. 6-117-426.


Ethics for arkansas educators cont d

Ethics for Arkansas Educators (Cont’d)

  • Standard of Professional Conduct:

    • Standard 1: An educator maintains a professional relationship with each student, both in and outside the classroom

    • Standard 2: An educator maintains competence regarding skills, knowledge, and dispositions relating to his/her organizational position, subject matter, and/or pedagogical practice.

    • Standard 3: An educator honestly fulfills reporting obligations associated with professional practices.

    • Standard 4: An educator entrusted with public funds and property honors that trust with honest, responsible stewardship.


Ethics for arkansas educators cont d1

Ethics for Arkansas Educators (Cont’d)

  • Standards of Professional Conduct – cont’d

    • Standard 5: An educator maintains integrity regarding the acceptance of any gratuity, gift, compensation or favor that might impair or appear to influence professional decisions or actions and shall refrain from using the educator’s position for personal gain.

    • Standard 6: An educator keeps in confidence secure standardized test material as well as information about students and colleagues obtained in the course of professional service unless disclosure serves a professional purpose or is allowed or required by law.


Ethics for arkansas educators cont d2

Ethics for Arkansas Educators (Cont’d)

  • Standards of Professional Conduct – cont’d:

    • Standard 7: An educator refrains from using, possessing and/or being under the influence of alcohol, tobacco, or unauthorized drugs while on school premises or at school sponsored activities involving students.

  • Ethical Violation is one involving acts or omissions on the part of an educator, when the educator knew, or reasonably should have known, that such acts or omissions were in violation of the Standards of Professional Conduct as set forth in Rule.

    • An ethical violation does not include a reasonable mistake made in good faith, or acts or omissions undertaken in reasonable reliance upon the advice of a supervisor.


Audits

AUDITS


Audit findings for 2010 2011

Audit Findings for 2010-2011

  • Findings based on 97% of audits having been reviewed by ADE (262 of 272).

    • 65 had no findings (25%)


Audit findings for 2010 2011 cont d

Audit Findings for 2010-2011 (Cont’d)

  • Findings in Rank Order:

    • Segregation of duties /Internal Control

    • Exceeded Budget /Unallowable Cost

    • Misstatements missed by internal controls

    • Davis-Bacon

    • Federal cost principals (time certifications)

    • Fixed assets not recorded in inventory


Audit findings for 2010 2011 cont d1

Audit Findings for 2010-2011 (Cont’d)

  • Findings in Rank Order-cont’d:

    • Buy American

    • Incorrect employee payroll

    • Bank Reconciliations (accuracy/timeliness)

    • Misappropriation of funds

    • Child Nutrition inaccurate record keeping

    • 40% Pullback Errors

    • Conflict of Interest

    • Failure to get bid or performance bond


Audit findings for 2010 2011 cont d2

Audit Findings for 2010-2011 (Cont’d)

  • Other findings included:

    • Failure to record Accounts Payable or Accounts Receivable

    • Failure to record interest earned on CD.

    • Salary schedules not reflecting actual pay practices.

    • Personnel contracts not handled properly and in a timely manner

    • Uninsured and uncollateralized bank balances


Audit findings for 2010 2011 cont d3

Audit Findings for 2010-2011 (Cont’d)

  • Other findings included:

    • District did not contact applicable private schools for possible participation in federal programs.

    • Failure to provide a performance bond on a construction contract

    • Failure to comply with debarment procedures for federal funds.

    • District had Activity Accounts with deficit balances


Budgets

BUDGETS


Common 2011 12 budget errors

Common 2011-12 Budget Errors

  • Not budgeting Property Tax Revenue to 11120 and 11125.

  • Improper accounting of debt including QZABs and QSCBs from proceeds to payoff.

    Districts are responsible for budgeting to the proper codes as listed in the Arkansas Financial Handbook


Tier i annual update

BUDGET MISCONCEPTIONS

  • Budgeting revenue to equal expenditures in the ACSIP plan when part of the revenue is already in the carryover balance.

    • Cash on-hand or Carry-forward balance is NOT Revenue in the current year.

    • If it cannot be receipted to CASH (increase to Cash (DR) and an increase to Revenue (CR) It is NOT Revenue.


Budget misconceptions

BUDGET MISCONCEPTIONS

  • YES, the budget can be adjusted in APSCN AFTER the cycle 1 budget submission.

    • The cycle 1 budget submission remains the “official budget” submitted to the ADE.

  • Isolated Funding cannot be used to meet the 9% Maintenance and Operation rule. Requirement is determined by using 9% of FOUNDATION FUNDING ONLY


2012 13 budget financial reviews

2012-13 BUDGET & FINANCIAL REVIEWS

  • GT Requirement

  • 9% M & O Requirement

  • Debt (proper coding)

  • Food Service

  • Revenues

  • Expenditures

  • Fund Balances

  • Categorical Funds

  • Capital Expenses

  • Taxes

  • Athletics


Tier i annual update

POSTINGS to WEB


Licensed salary schedules and personnel policies a c a 6 17 201

LICENSED SALARY SCHEDULES AND PERSONNEL POLICIES - A.C.A. §6-17-201

  • Licensed Salary Schedules and Personnel Policies shall be posted to the district’s website no later than September 15 (but as early as possible) and are to include:

  • Benefits

  • Compensation

  • Designation of workdays

  • Holidays & non-instructional Days

  • The annual calendar

  • Methods of evaluation

  • Extra duties

  • Leave

  • Grievance

  • Dismissal or non-renewal

  • Reduction in force

  • Assignment of teacher aides


Classified salary schedules and personnel policies a c a 6 17 2301

CLASSIFIED SALARY SCHEDULES AND PERSONNEL POLICIES – A.C.A. §6-17-2301

  • Classified Salary Schedules and Personnel Policies shall be posted to the district’s website no later than September 15 (but as early as possible) and are to include:

  • Salary schedule, fringe benefits and other compensation issues

  • Annual school calendar, incl. work days & holidays

  • Evaluation procedures

  • Leave

  • Grievance procedures

  • Termination, Non-renewal, or Suspension

  • Reduction in Force

  • Assignments


Notification to ade of compliance

NOTIFICATION TO ADE OF COMPLIANCE

  • The district is to notify the ADE of the website location of their posted licensed and classified salary schedules and personnel policies no later than September 15 (earlier, if possible).

  • Send website address, providing a direct link to the salary schedules and polices, by email to: [email protected] no later than September 15 (earlier, if possible)

  • If the district revises it’s salary schedule during the school year, email a copy of the revised schedule to: [email protected]


Required website postings a c a 6 11 129

REQUIRED WEBSITE POSTINGSA.C.A. § 6-11-129

Required Financial Reports to be posted to district website:

  • Local and state revenue sources

  • Administrator & teacher salary; and benefit expenditures

  • School district balances, including legal balances and building fund balance

  • Minutes of regular and special meetings of school board

  • District budgets for current year, posted by October 15.

  • Financial listing of monthly expenses

  • Salary schedules of all employees


Required website postings cont d

REQUIRED WEBSITE POSTINGS (Cont’d)

  • Current contract information for all district employees minus SS#, telephone, addresses, and signatures (may be in a list format instead of individual contracts)

  • The annual school district statistical report

    All this information and data shall be available and easily accessible on the district’s website for the previous two years and the projected budgeted information for the current school year.


More required website postings a c a 6 15 2202

MORE REQUIRED WEBSITE POSTINGS A.C.A. § 6-15-2202

  • ACSIP School Improvement Plan

  • Uses of NSLA funding – current and previous year

  • Annual District/School Report Card

  • School Improvement status of each school

  • Supplemental services available

  • District status on any type of distress

  • Distress Plans

  • Parent Involvement Plan and Policy

  • Teacher qualification for all schools

    Compliance is required for accreditation. Data must be easily accessible, in parent friendly language and shall be the actual data for two years.


Tier i annual update

Duplicate Enrollment Audits


Duplicate enrollment audits

DUPLICATE ENROLLMENT AUDITS

  • Duplicate enrollment audits begin after the data from cycles 3, 5, 6, & 7 are loaded into the data warehouse.

  • Notification that the website is open will be by Commissioner’s Memo and posting to the FMS and SMS listservs. Instructions will be attached to the Commissioner’s Memo.

  • The person entering the data must have a Triand ID, password, and security setting for “district access”

  • Contact Sarah Cox at 501-682-5660 or [email protected] for help with Triand ID and/or security settings.

  • Contact Danita Hyrkas for any other questions 501-682-5059 or email [email protected]


Tier i annual update

Reconfiguring or Changing LEA Numbers


Lea reconfigurations

LEA RECONFIGURATIONS

  • COMMITTEE REVIEWS:

    • Enrollment

    • Prior changes

    • Requested change


Lea reconfigurations1

LEA RECONFIGURATIONS

  • If it is determined that the school will change status or if enrollment increases 50% or more, the ADE may assign a new LEA number to the school.


Lea reconfigurations2

LEA RECONFIGURATIONS

  • Changes that must be made in District databases

    • SMS Changes

      • Update student demographics

      • Building table

      • Configurations

      • Scheduling students


Lea reconfigurations3

LEA RECONFIGURATIONS

  • FMS Changes

    • Shipping table

    • Location in the organization chart

    • Employee budget unit

    • Update Job Assignment screen for non-teaching personnel

      CHANGES MUST NOT BE MADE UNTIL AFTER FISCAL YEAR-END CLOSE


Special education

Special Education


Special education1

Special Education

  • FY 2012-13 Budget Data

    • Budget to provide only Special Ed (SPED) instruction and related services for students with disabilities.

    • Budget Data for each district’s MYSPED is pulled from Cycle 1 – September 30, 2012

    • SPED Budget Signature Sheets are due 10-1-12

    • Equipment, Bus, and/or Construction/Renovation Project Requests due 10-1-12

    • Budget Checklist must be completed by October 1, 2012


Special education2

Special Education

  • FY 2011-12 Annual Financial Report (AFR)

    • Expenditures must provide Special Ed (SPED) instruction and related services for students with disabilities

    • AFR Data for each district’s MYSPED is pulled from Cycle 9 – August 31, 2012

    • Report of Equipment, buses, and/or Construction/Renovation Project completed are due 10-1-12

    • AFR Checklists must be completed by October 1, 2012

      • Required to include Excess Cost calculation

      • Location codes must be used to separate expenditures by elementary and secondary levels.


Special education3

Special Education

  • To meet Maintenance of Effort:

  • The total expenditures for 2011-12 must equal or exceed the total expenditures for 2010-2011.

    • The exception is if the district qualified for federal exemptions to MOE as allowed by 34CFR 300.204.

  • NOTE: If the amount on the MySPED is positive, the district met MOE. If negative, the district must provide on the AFR checklist the allowable federal exception(s) and justify the negative amount.


Special education4

Special Education

  • To meet Maintenance of Effort (cont’d)

  • The Budget for 2012-13 must show a total budget that equals or exceeds total expenditures for 2011-12

    • Unless district qualifies for federal exemption

  • If amount on the 2012-13 State/Local Budget in MySPED is positive, the district met MOE. If negative, must provide on the Budget Checklist the allowable federal exception(s) and justify the negative amount.


Special education5

Special Education

  • Exemptions to Reduce MOE as allowed:

    • Departure of personnel

    • Decrease in enrollment of children with disabilities

    • Departure of an exceptionally costly child, or

    • Termination of costly expenditures

  • Budget 100% of Title VI-B funds

    • Reserves from previous year and

    • Total Allocation for current year.


Special education6

Special Education

10% Budget/Expenditure Variance

  • EDGAR 80.30 (c) allows budget changes up to 10% of the total approved budget (Title VI-B) without ADE approval.

  • Changes after Cycle 1 submission requires submitting an amendment and a Cognos Report Budget showing the revision to Special Ed Grants section to change the MySPED budget


Special education7

Special Education

  • Equipment Request Forms

    • Obtain prior approval to purchase equipment, buses or renovation/construction

    • Equipment on list must match amount shown in Capital Outlay object code 67000 column for each function code, and

    • The total amount of the object code 67000 column on the district’s budget.

    • Bus requests must include copy of specification and certify bus is for SPED students or students with IEPs that require specialized transportation.

    • Construction/Renovation - provide assurance the project does NOT create a Least Restrictive Environment

    • Building specifications and drawing must be provided.


Special education8

Special Education

CEIS – Coordinated Early Intervening Services

  • Allows districts to use Title VI-B funds for services to non-special education students that provides interventions to becoming special education students.

    • Cannot exceed maximum amount posted on MySPED

    • Function codes 1297 and 2213 may be used for Voluntary CEIS and Program code 265 must be used

    • Voluntary EEIS funds may be carried over to the next year

      PSPS – Private School Proportionate Share

  • Proportionate share of Part B funds are required for PSPS

    • Service eligible private or home school students

    • Required amount on MySPED and must be budgeted to PSPS

    • Function codes 1218, 1228, 2158 and 2168 may be used – Code to Program 268. A write up from Special Ed which includes

      information from this section is in the

      Appendices


  • Tier i annual update

    Categorical and NSLA Funding


    Categorical funds

    Categorical Funds

    • Categorical Funds (NSLA, ALE, ELL, Prof Dev)

      • The required Source of Fund code must be used for all revenue and expenditures related to Categorical Funds.

      • Categorical Funds cannot end the year with a negative balance.

      • Transfers are allowed between categorical funds but only from Categorical Operating Fund (Fund 2) to Categorical Operating Fund (Fund 2). For example, a transfer should not be made from NSLA Operating Fund (Fund 2) to ALE Salary Fund (Fund 1).

      • All NSLA expenditures must include one of the required program codes

      • The planned and budgeted use of Categorical Funds shall be included in the ACSIP.

        The Rule on Special Needs (Categorical Funding)

        is in the Appendices


    Categorical funds a c a 6 20 2305

    CATEGORICAL FUNDS A.C.A. § 6-20-2305

    Funding for 2012-13

    ALE: $4,228 Multiplied by the number of identified ALE students enrolled in previous school year.

    PD: $ 52 (current estimated funding is $43.39)

    ELL: $ 305 For each identified ELL student

    NSLA:$1,549* free and reduced percentage of 90% or greater$1,033* free and reduced percentage of 70-89%

    $ 517* free and reduced percentage below 70% *These rates do not account for adjustments due to transition.


    Categorical funds balance requirements per act 1220 of 2011 commissioner s memo fin 12 095

    Categorical Funds Balance RequirementsPer Act 1220 of 2011Commissioner’s Memo FIN-12-095

    • A.C.A. §6-20-2305(e)(2) On June 30, 2012, and on June 30 of each school year thereafter, if the total aggregate balance of all state categorical fund sources exceeds twenty percent (20%) of the school district’s total aggregate annual state categorical fund allocations for the current school year, the school district shall reduce the total balance by at least ten percent (10%) each school year until the school district’s June 30 balance of aggregate annual categorical fund sources is twenty person (20%) or less of the total aggregate annual state categorical fund allocations for the current school year.

      Commissioner’s Memo

      FIN-12-095 included in Appendices


    Categorical funds balance requirements per act 1220 of 2011 commissioner s memo fin 12 0951

    Categorical Funds Balance RequirementsPer Act 1220 of 2011Commissioner’s Memo FIN-12-095

    • Total Aggregate Categorical Funding is the total of the current year funding for English Language Learners (ELL), Alternative Learning Environments (ALE), National School Lunch state funding (NSLA), including transitional and growth funds, and Professional Development (PD).


    Categorical funds balance requirements per act 1220 of 2011 commissioner s memo fin 12 0952

    Categorical Funds Balance RequirementsPer Act 1220 of 2011Commissioner’s Memo FIN-12-095

    Example:


    Categorical funds a c a 6 20 23051

    CATEGORICAL FUNDS A.C.A. § 6-20-2305

    ALE, ELL, PD, and NSLA:

    • As of June 30, 2012, if the total categorical fund balance exceeds 20% of current allocations, the school district shall reduce the total balance by 10% each year until the aggregate balance is at or less than 20% of current allocations.

    • Funds received from any categorical fund source may be transferred to another categorical fund source.

    • The ADE is required to monitor district compliance


    Nsla funding changes a c a 6 20 2305

    NSLA Funding ChangesA.C.A. § 6-20-2305

    NSLA Funds

    • By June 30 (starting in 2012), a school district shall spend a minimum of 85% of its annual NSLA allocation.

    • A district with an NSLA balance in excess of 15% of the current allotment shall reduce its total NSLA balance by at least 10% each year so that by June 30, 2022, a district has a balance of no more than 15% of current allocation.


    Nsla funding changes cont d a c a 6 20 2305

    NSLA Funding Changes (Cont’d) A.C.A. § 6-20-2305

    NSLA

    • Districts can ask for a one-year waiver from the ADE in "unusual and limited circumstances."

    • Sanctions exist for failure to comply (withhold from next year's allocation.)

    • The ADE may redistribute amounts withheld to other districts.


    Nsla balance requirements per act 1220 of 2011 and commissioner s memo fin 12 094

    NSLA Balance RequirementsPer Act 1220 of 2011and Commissioner’s Memo FIN-12-094

    • A.C.A. §6-20-2305(b)(4)(F)(ii): A school district that on June 30, 2012, has a national school lunch state categorical funding balance in excess of fifteen percent (15%) of the school district’s current year annual national school lunch state categorical funding allocation shall reduce its national school lunch state categorical funding balance by at least ten percent (10%) each school year so that by June 30, 2022, and by June 30 of each year thereafter, the school district has a balance of no more than fifteen percent (15%) of the school district’s current year annual national school lunch state categorical funding allocation.

      FIN-12-094 is included in the Appendices


    Nsla balance requirements per act 1220 of 2011

    NSLA Balance RequirementsPer Act 1220 of 2011

    Example:


    National school lunch categorical funding 2012 2013 changes compliments of mark white ade attorney

    National School LunchCategorical Funding:2012-2013 ChangesCompliments of Mark White, ADE Attorney


    Child nutrition

    Child Nutrition

    • Provision 2 Schools

    • Reduced-Price Students

    Photo Courtesy of ADE CNU


    Curriculum instruction

    Curriculum / Instruction

    • Early Intervention in 3-12

    • Ark. Advanced Initiative for Math & Science

    • Interim Building-Level Assessments


    Curriculum instruction1

    Curriculum / Instruction

    • Longer School Day /

      Longer School Year

    • Summer Programs

    • Teach for America

      Professional Development


    College and career

    College and Career

    • College and Career Coaches

    • ACT for 11th Grade

    • College Remediation

    • CCRPP

    Photo Courtesy of Brandon Rush


    Budget balances

    Budget & Balances

    • ACSIP and APSCN Must Agree

    • NSL Min. Expenditures (85%)

    • NSL Max. Fund Balance (15%)

    • Fund Transfers

    • Waiver


    Budget balances1

    Budget & Balances


    Budget balances2

    Budget & Balances


    Budget balances3

    Budget & Balances

    Combined Categorical Fund Balances

    • Max. Balance of 20%

    • No Minimum Expenditure

    • No Waiver Available


    Fiscal distress

    Fiscal Distress


    Fiscal distress1

    Fiscal Distress

    • Arkansas Code Annotated 6-20-1901 thru 6-20-1911

    • Indicators of Fiscal Distress

      • A declining balance determined to jeopardize the fiscal integrity of a school district.

        • However, capital outlay expenditures for academic facilities from a school district balance shall not be used to put the school district in fiscal distress.


    Fiscal distress2

    Fiscal Distress

    • Indicators of Fiscal Distress, cont’d:

      • Any act or violation determined to jeopardize the fiscal integrity of a school district, including but not limited to:

        • Material failure to properly maintain school facilities.

        • Material violation of local, state, or federal fire, health, or safety code provisions or law.

        • Material violation of local, state, or federal construction code provisions or law.


    Fiscal distress3

    Fiscal Distress

    • Indicators of Fiscal Distress, cont’d:

      • Material state or federal audit exceptions or violations.

      • Material failure to provide timely and accurate legally required financial reports to the department, the Division of Legislative Audit, the General Assembly, or the Internal Revenue Service.

      • Insufficient funds to cover payroll, salary, employment benefits, or legal tax obligations.


    Fiscal distress4

    Fiscal Distress

    • Indicators of Fiscal Distress, cont’d:

      • Material failure to meet legally binding minimum teacher salary schedule obligations.

      • Material failure to comply with state law governing purchasing or bid requirements.

      • Material default on any school district debt obligation.

      • Material discrepancies between budgeted and actual school district expenditures.


    Loans and bonds

    Loans and Bonds


    Types of debt

    Types of Debt

    • Short-term

    • State Revolving Loan Program

    • Commercial Bonds


    Applicable law

    Applicable Law

    • AR Code Ann. §§ 6-20-401 et seq.

      • Short-term

    • AR Code Ann. §§ 6-20-801 et seq.

      • State revolving loan program

    • AR Code Ann. §§ 6-20-1201 et seq.

      • Commercial bonds

        http://www.arkleg.state.ar.us


    Applicable rules

    Applicable Rules

    • Arkansas Department of Education Rules Governing Loan and Bond Applications – February 24, 2012

    • Arkansas Department of Education Rules and RegulationsGoverningthe Allocation of Qualified Zone Academy Bonds - November 2000

      http://www.arkansased.org/rules/rules.html


    Short term d ebt a c a 6 20 401 et seq

    Short-Term Debt A.C.A. § 6-20-401 et seq.

    Installment contracts, lease purchase agreements, and postdated warrants:

    • State Board approval not required but must be registered with ADE

    • No statutory maximum loan amount

    • The amount borrowed may include issuance costs

    • May be refinanced if it results in net savings and other requirements are met


    Short term d ebt a c a 6 20 401 et seq1

    Short-Term Debt A.C.A. § 6-20-401 et seq.

    Installment contracts, lease-purchase agreements, and postdated warrants:

    See A.C.A. § 6-20-402 for complete list of eligible purposes

    • Purchase of school buses, equipment, school sites

    • Energy conservation measures

    • Construction, repair, renovation of school facilities

    • Professional development and training of teachers under QZABs

      Maximum term 10 years from the date of issuance, except:

    • Energy conservation measures may be financed up to 20 years


    State revolving l oan p rogram a c a 6 20 801 et seq

    State Revolving Loan ProgramA.C.A. § 6-20-801 et seq.

    • State revolving loan program

      • State board approval of application required

      • The maximum amount of money a district may have outstanding is $500,000

      • Maximum term ten years

      • Current interest rate 4.95% - no other fees charged


    State revolving l oan p rogram a c a 6 20 801 et seq1

    State Revolving Loan Program A.C.A. § 6-20-801 et seq.

    • See § 6-20-802 for complete list of eligible purposes

      • Purchase of new or used school buses

      • Construction or renovation of school facilities

      • Purchase of buildings, school sites, or equipment

      • Energy conservation measures


    Bonds a c a 6 20 1201 et seq

    BondsA.C.A. § 6-20-1201 et seq.

    • State board approval required

      • Bonds issued for new construction

      • Bonds issued to restructure debt

      • Second lien bonds

    • State board approval not required

      • Rate reduction refunding bonds meeting required savings minimum with no extension of maturity date


    Bonds a c a 6 20 1201 et seq1

    Bonds – A.C.A. § 6-20-1201 et seq.

    • A school district may issue negotiable bonds to:

      • Build, add to, equip, or repair schools buildings

      • Purchase sites, school buses

      • Provide professional development and training of teachers under the QZAB program

      • Pay off outstanding postdated warrants, installment contracts, lease purchase agreements, revolving loans, and bonds as provided by law

    • School bonds are secured by debt service millage


    Bonds a c a 6 20 1201 et seq2

    Bonds – A.C.A. § 6-20-1201 et seq.

    Second-lien commercial bonds

    • Repaid with surplus revenue from existing debt service mills

      • Surplus revenue could be generated if assessment has increased to point that revenue from debt service mills exceeds the amount needed to make bond payments for existing debt.

    • The maturity of second lien bonds cannot extend beyond the maturity date of the debt issuance with the first lien

      • Example: 6 mills are pledged to a bond that matures in 2021. Assessment has increased so a surplus exists and second lien bonds may be issued. Second lien bonds must mature in 2021 or earlier.


    Bonds a c a 6 20 1201 et seq3

    Bonds – A.C.A. § 6-20-1201 et seq.

    Second-lien commercial bonds – Con’t

    • Voter Approval not required, but state board approval required

    • All second-lien bonds issued by school districts shall:

      • Have semiannual interest payments

        • First interest payment due within eight (8) months of the issuance of the second-lien bond.

        • Have repayment schedules that are either:

          • Equalized payments in which the annual payments are substantially equal in amount; or

          • Decelerated payments in which the annual payments decrease over the life of the schedule.


    Important issues to consider

    Important Issues to Consider

    • Post-issuance compliance as required by the IRS is growing in importance.

      • Designate a responsible person as the authority on district bond issues – record-keeping and retention, proper and timely use of bond proceeds, investments and arbitrage compliance, etc.

        • Bond documents should be monitored closely by the designated responsible person.

        • The designated responsible person should report to the full board at least annually concerning the outstanding bond.


    Important issues to consider cont d

    Important Issues to Consider (Cont’d)

    • Post-issuance compliance as required by the IRS is growing in importance. (Cont’d)

      • IRS has increased efforts for auditing post-issuance compliance of tax-exempt obligations (school bonds).

      • Speak with fiscal agent prior to issuing bonds about post-issuance compliance requirements.


    Self insured fidelity bond program

    Self-Insured Fidelity Bond Program


    Authority and purpose

    Authority and Purpose

    • Arkansas Code Annotated § 21-2-701 et seq.

    • The Arkansas Fidelity Bond Trust Fund, administered by the Arkansas Governmental Bonding Board, shall provide coverage for actual losses sustained by the Participating Governmental Entities through fraudulent or dishonest act or acts committed by Employees or Officials of the Participating Governmental Entities during the Bond Period.

    • Arkansas school districts (this includes open-enrollment charter schools and education service cooperatives) are covered under this bond

    • LIMIT OF COVERAGE: $250,000 Per Occurrence

    • DEDUCTIBLE: $1,000 Per Occurrence


    Additional information

    Additional Information

    • The Self-Insured Fidelity Bond Program, administered by the Arkansas Governmental Bonding Board, has been renewed for the January 1 -December 31, 2012 policy year.

    • A Certificate of Coverage is your evidence of coverage. Present the certificate when asked for proof of Fidelity Bond coverage. A certificate and a copy of the bond policy may be obtained by contacting the Risk Management Division at (501) 371-2690 or via email (preferred method): [email protected]

    • All Proof of Loss notices must be submitted to the Arkansas Governmental Bonding Board by the Division of Legislative Audit.


    Contact information

    Contact Information

    Risk Management Division

    Arkansas Insurance Department

    1200 West Third Street

    Little Rock, AR 72201-1904

    Phone: 501-371-2690

    Fax: 501-371-2842

    Email: [email protected]

    Web Site: www.insurance.arkansas.gov/Risk/divpage

    ADE contact: Cindy Hollowell (501) 682-4484


    General business manager

    General Business Manager


    General business manager qualifications

    General Business Manager Qualifications

    • Applies to all school districts, open-enrollment charter schools, and education service cooperatives.

    • A Chief Financial Officer or Business Manager or however titled:

      • Operates under the direction of superintendent

      • Meets minimum qualifications in ADE rule

      • Responsible for fiscal operations of entire entity

      • Person other than superintendent or charter/co-op director


    General business manager qualifications cont d

    General Business Manager Qualifications (Cont’d)

    • Must meet qualifications of a Certified Arkansas School Business Official (CASBO) based on the requirements established by the Arkansas Association of School Business Officials (AASBO) or be enrolled in the CASBO required courses of study.

      • 10 required courses and five electives

      • See AAEA website under AASBO


    General business manager qualifications cont d1

    General Business Manager Qualifications (Cont’d)

    • Must complete at least 5 CASBO courses per year and must complete the 15 courses required within 3 years.

    • Must renew certificate by completing at least 2 upper level CASBO courses per year after the date of certification.

    • GBM failing to complete certification cannot function in that role until certification requirements are met. District/charter/co-op must appoint another person to the position and that person must meet qualifications.


    School district treasurer

    School District Treasurer


    School district treasurer1

    School District Treasurer

    • A.C.A. 6-13-701 authorizes a district or charter school to appoint a treasurer.

    • Must be appointed at a regular board meeting.

    • Must execute a Certificate of Appointment which must be filed with the County Clerk, the County Treasurer, and the Director of the Department of Finance and Administration.

    • Serves until board appoints a new treasurer and files a new Certification of Appointment.


    School district treasurer cont d

    School District Treasurer (Cont’d)

    • Duties are outlined in A.C.A. 6-13-701(e):

      • Receive and disburse funds. Issue receipts for funds received and maintain a duplicate.

      • Record all transactions in APSCN.

      • Provide monthly statement of financial condition to board.

      • Submit annual statement of finances to board in July each year.

      • Make required financial reports to ADE.


    School district treasurer cont d1

    School District Treasurer (Cont’d)

    • Duties are outlined in A.C.A. 6-13-701(e)-cont’d:

      • Must not have an interest, directly or indirectly, in any contract made by the district or charter school board.

      • Make financial records available for inspection by any district taxpayer.

      • Perform all duties imposed by law upon school district treasurers and be subject to all regulations.


    School district treasurer cont d2

    School District Treasurer (Cont’d)

    • Disbursement of funds shall be made by treasurer only upon:

      • Checks or warrants signed by disbursing officer of district or charter school board and superintendent or charter school director; or

      • Electronic transfer of funds if electronic transfer is:

        • Initiated by the district or charter school; and

        • Authorized in writing by both the board disbursing officer and superintendent or charter school director.


    School district treasurer cont d3

    School District Treasurer (Cont’d)

    • Treasurer shall have on hand as evidence of authority for disbursement approved:

      • Invoices;

      • Payrolls that conform with written contracts on file; and

      • Other appropriate documentation that indicates authority for disbursement.


    School district treasurer cont d4

    School District Treasurer (Cont’d)

    • Fraudulent use of district/charter school funds by a treasurer is a Class C felony.

    • Upon conviction, restitution to be made by treasurer is double the amount taken.

      Sample “Certificate of Appointment” is included in the Appendices


    Child nutrition1

    Child Nutrition


    Child nutrition charge polices

    Child Nutrition Charge Polices

    • Bad debts are a non-allowable expenditure in the National School Lunch Program and After School Snack and Breakfast Programs according to Cost Principles in OMB Circular A-87.

    • USDA regulations do not require districts to provide meal when students who are ineligible for free meals do not have money to pay for meal. (However not feeding a child because they can’t pay may not be an acceptable option for a district.)

      • Districts should adopt a written policy to address this problem.

      • Policy may differ depending on grade level.


    Child nutrition charge polices cont d

    Child Nutrition Charge Polices (Cont’d)

    • Policy must be communicated to both parents and students at the beginning of the year.

    • Policy should have special provisions for handling pre-primary, young primary, and disabled students.

  • Parent notification system regarding non-payment must be implemented in a way that does not embarrass the child.


  • Child nutrition charge polices cont d1

    Child Nutrition Charge Polices (Cont’d)

    • District decision whether to:

      • Extend credit to students

        • Food Service Fund cannot absorb loss for failure to pay.

        • With or without credit limit.

      • Provide an alternate meal

        • Not reimbursable so cost must be absorbed by district.

        • Not defined in federal regulations but regulations do state that schools must provide nutritious and well balanced meals to all the children they serve. (Title 7 CFR Part 210.10(a)(1))

      • Deny meal.


    Tier i annual update1

    Tier I Annual Update

    2012-2013

    CASBO Class SF401A


    Accounting and reporting

    Accounting and Reporting


    Concepts of the arkansas uniform accounting and reporting system

    Concepts of the Arkansas Uniform Accounting and Reporting System

    • Standard Chart of Accounts

      • Where do funds come from?

        • Fund Codes

        • Source of Fund Codes

        • Revenue Codes

      • Where do funds go?

        • Function Codes

        • Location Codes

        • Program Codes

        • Subject Codes

        • Object Codes


    What funds are on hand

    What Funds Are On Hand

    • Balance Sheet Accounts

      • Assets

        • Cash

        • Investments

        • Receivables

        • Inventory

      • Liabilities

        • Accounts Payable

        • Payroll Deductions and Withholding

        • Deferred Revenue

        • Notes Payable

        • Bonds Payable

      • Equity (Reserves & Fund Balances)


    Reasons for standard chart of accounts

    Reasons for “Standard” Chart of Accounts

    • Provides consistent method of reporting financial information across fiscal years

    • Aids with the budgeting process

    • Allows for valid comparison of financial information between entities

      • Schools

      • Districts

      • States

    • Improves the value of statewide financial information used by policy makers and other public education stakeholders


    Where is the standard chart of accounts located

    Where is the Standard Chart of Accounts Located?

    • Where is the Standard Chart of Accounts Located?

      • APSCN Web Page at www.k12.ar.us

        • FMS>Financial Management System>Accounting Documentation

        • Described as “Arkansas Financial Accounting Handbook 2011-2012”


    Financial coding decision process

    Financial Coding Decision Process

    • Funds Received

      • Which Fund?

        • Teacher Salary Fund (Fund 1)-No receipts are entered in this fund. Expenditures and Transfers-in only.

        • Operating Fund (Fund 2)-Receipts not belonging to one of the special purpose funds.

        • Building Fund (Fund 3)-Receipts pertaining to Specific building projects.


    Financial coding decision process cont d

    Financial Coding Decision Process (Cont’d)

    • Funds Received (Cont’d)

      • Which Fund? (Cont’d)

        • Debt Service Fund (Fund 4)-Tax receipts from debt service mills and state debt service funding supplement.(Recording revenue in Debt Service Fund is optional. Use of Operating Fund also allowed for these receipts.)

        • Capital Outlay/Dedicated Maintenance & Operation Fund (Fund 5)-Tax receipts from mills voted specifically for capital outlay and dedicated maintenance and operations purposes.


    Which fund cont d

    Which Fund? (Cont’d)

    • Federal Grants Fund (Fund 6)-Receipts directly from Federal Government or from Federal Government that pass through the state. Restricted to federally sponsored programs.

    • Activity Fund (Fund 7)-Receipts used to support co-curricular and extra-curricular student and district activities.

      • Co-curricular generally are school-related activities outside the regular classroom that directly add value to the formal or stated curriculum. Involve wide range of student clubs and organizations.

      • Extra-curricular activities encompass a wide variety of other district-directed activities such as organized sports and non-academic interscholastic competitions.


    Which fund cont d1

    Which Fund? (Cont’d)

    • Student Activity Funds - Students not only participate in the activities of the organization, but also are involved in managing and directing the organization’s activities:

      • Art Club

      • Drama Club

      • Student Council

    • District Activity Funds – Used to support district’s co-curricular and extra-curricular activities and are administered by the school district. District determines how district activity funds are spent and the district programs that receive support:

      • Athletics

      • School Plays

      • Music Concerts

      • Book Fair


    Which fund cont d2

    Which Fund? (Cont’d)

    • Food Service Fund (Fund 8)-Receipts pertaining to the school Food Service Program . Includes revenue from students and adults for the sale of breakfasts and lunches as well as Federal reimbursements from the United States Department of Agriculture.

    • Fixed Asset Fund (Fund 9)-No receipts should be entered to this fund. Can be used to record district’s fixed assetsor Long-Term Debt (Optional).


    Teacher salary expenditures fund 1

    Teacher Salary Expenditures – Fund 1

    • Salaries paid to personnel whose job requires a teacher license (certified personnel) must be paid from the Teacher Salary Fund.

      • Teachers

      • Counselors

      • Librarians

      • School Administrators

      • District Administrators

      • All other licensed personnel with a 4-digit job code

      • Substitutes for those paid from the Teacher Salary Fund


    Operating fund expenditures fund 2

    Operating Fund Expenditures – Fund 2

    • Used to record the receipts and expenditures for current operating expenses other than those that relate to the purposes set out for the other funds listed. Examples:

      • Personnel benefits not paid from Salary Fund (unless paid from Salary Fund as approved by majority of certified personnel).

      • Salaries and benefits of classified personnel not paid from the Building Fund, Federal Fund, the Activity Fund or the Food Service Fund.

      • All purchased services, supplies, capital outlay and other expenditures not paid from the Building Fund, Debt Service Fund, Capital Outlay Fund, Federal Fund, Activity Fund or Food Service Fund.


    Building fund expenditures fund 3

    Building Fund Expenditures – Fund 3

    • Used for major facilities construction and renovation projects.

    • Required for any project funded with state Academic Facilities Partnership Program funds.

    • If part of the legal fund balance is being retained for future construction/renovation projects, it should be transferred to the Building Fund.

    • School Board approval should be obtained whenever funds are transferred to or from the Building Fund.


    Debt service fund expenditures fund 4

    Debt Service Fund Expenditures – Fund 4

    • Interest paid on bonded debt

    • Principal paid on bonded debt

    • Fees pertaining to bonded debt


    Capital outlay fund expenditures fund 5

    Capital Outlay Fund Expenditures – Fund 5

    Dedicated Maintenance and Operations

    • Expenditures that conform to the reasons stated on the ballot when the Capital Outlay/Dedicated M&O millage was approved by voters.

    • Cannot end the year with a negative balance in this fund.

      • Tax receipts should be allocated to this fund when received.

      • Pullback applies to this fund (36% 2011-2012; 32% 2012-2013)

      • Balances carryover each year.

      • Except for interest earnings, no other funds should be transferred to or deposited into this fund.


    Federal fund expenditures fund 6

    Federal Fund Expenditures – Fund 6

    • Restricted Aid Direct from Federal Government

      • Elementary/Secondary Education Programs (revenue codes 43110-43192)

      • Indian Education Programs (revenue code 43610)

      • Desegregation Programs (revenue codes 43710 & 43720)

      • Other (revenue codes 43910-43976)

    • Restricted Aid from the Federal Government through the State

      • Elementary/Secondary Education Act (ESEA) (revenue codes 45110-45326)

      • Adult Education (revenue codes 45410-45590)

      • Special Education (revenue codes 45612-45670)

      • Other (revenue codes 45910-45999)


    Activity fund expenditures fund 7

    Activity Fund Expenditures – Fund 7

    • Student Activity Fund

      • Expenditures from revenue other than local taxes, state, and federal government.

        • Fund raising activities

      • Expenditures approved by Student Organization and its sponsor.

        • Supplies and equipment used by organization

        • Travel/Transportation expenses for organization

        • Items purchased for resale/fund-raising activities

        • Cash donations or purchases to benefit school or program

    • District Activity Fund

      • Expenditures from revenue other than local taxes, state and federal government:

        • Gate Receipts --Vending Machines --Fees

      • Expenditures approved by school board or in compliance with board policy:

        • Field Trips --Athletics --Band Uniforms --Book Fairs


    Food service fund expenditures fund 8

    Food Service Fund Expenditures – Fund 8

    • Direct cost of operating food service program

      • Food purchases

      • Kitchen/Cafeteria labor

      • Administrative personnel who supervise food service staff

      • Supplies and equipment


    Required source of funds

    Required Source of Funds

    • Examples:

      • Isolated Funding (212)

      • Student Growth Funding (217)

      • Declining Enrollment Funding (218)

      • Supplemental Transportation (222)

      • Professional Development (223)

      • Alternative Learning Environment (275)

      • English Language Learners (276)

      • National School Lunch Act-State (281)


    Sof source of funds

    SOF – Source of Funds

    • Allows matching of expenditures to specific revenue sources.

    • A three-digit number that when attached to the one-digit fund number, establishes a unique sub-fund containing separate balance sheet accounts (assets, liabilities, equity)

    • Allows expenditures from specific revenue sources to be tracked (growth funding, declining enrollment funding, etc.).

    • Required for all restricted funds (federal, categorical/special needs, state facilities funding, etc.).

    • Allows fund balances pertaining to specific revenue sources to carry forward to next fiscal year


    Sof source of funds cont d

    SOF – Source of Funds - (Cont’d)

    • Table II of the Accounting Manual provides a listing of all Source of Fund codes.

    • Source of Fund codes marked with an asterisk (*) must be used for the specified revenue as well as the expenditures from that revenue (no transfers in or out).

    • Source of Fund codes 002-099 are reserved for district/co-op use and are therefore defined by the district or co-op


    Function

    Function

    • Four-digit code that describes the activity being performed when a good or service is received.

      • Function codes are grouped into five broad categories:

        • Instruction (1000-1999)

        • Support Services (2000-2999)

        • Operation of Non-Instructional Services (3000-3999)

        • Facilities Acquisition and Construction (4000-4999)

        • Other Uses (5000-5999)

          • Debt Service

          • Fund Transfers

          • Indirect Costs


    Location

    Location

    • The three-digit number that identifies the campus or other cost center where the goods and services are being used. The number for school campuses matches the ADE assigned LEA number.


    Program

    Program

    • A three-digit number pertaining to a plan of activities and procedures designed to accomplish a predetermined objective or set of objectives.

    • Required Program Codes include:

      • All NSLA Expenditures -- Special Education

      • Pre-School-- Gifted & Talented

      • Extracurricular/Athletics-- Alternative Ed

      • Recruitment/Retention -- State Academic Facilities

        Incentives Projects

      • Teachers in Special Settings


    Subject area

    Subject Area

    • Final two-digits of Budget Unit

    • Not currently required by state

    • Can be used to identify:

      • Courses (math, science, social studies, etc.)

      • Sports (football, basketball, track, etc.)

      • Person responsible for budget


    Expenditure budget unit

    Expenditure Budget Unit

    • Fund2

    • Source of Fund275

    • Function1140

    • Location041

    • Program438

    • Subject Area00

    • Example: 2275114004143800


    Object

    Object

    • A five-digit number that describes the type of expenditure-Examples:

      • Salary

      • Employee Benefit

      • Purchased Service

      • Supplies and Materials

      • Capital Outlay


    Coding for foundation funding

    Coding for Foundation Funding

    • Commissioner’s Memo FIN-09-047, January 29, 2009, and FIN-10-008, July 22, 2011, contained financial coding requirements for 2009-2010 for revenues and expenditures specific to foundation funding.

      • Required all revenue pertaining to foundation funding, and all expenditures paid with that revenue to be coded to funds 1000, 1100-1199, 2000 and 2100-2199.

      • In response to a motion passed by the House and Senate Joint Education Committee on December 24, 2008, to determine and implement coding changes required in order to better compare school district expenditures with the components of the Adequacy Funding Matrix.

        FIN-09-047 and FIN-10-008 are included in

        the Appendices


    Coding for foundation funding cont d

    Coding for Foundation Funding (Cont’d)

    • The coding requirement for 2012-2013 (same as FY 12)

      • All property tax, state foundation funding and miscellaneous funds will be receipted in Fund 2001.

      • An amount exactly equal to the foundation funding amount will be transferred from Fund 2001 to Fund 2000.

      • No revenue will be posted in Funds 1000, 1100-1199, 2000 and 2100-2199.


    Coding for foundation funding cont d1

    Coding for Foundation Funding (Cont’d)

    • The amount to be transferred from Fund 2001 to Fund 2000 for next year will be $6,267 times the 2011-2012 3QTR ADM.

      A copy of the Adequacy Funding Matrix is included in the Appendices

      Refer to FIN-11-080 for example Journal Entry recording transfer included in the Appendices


    9 maintenance operation

    9% Maintenance & Operation

    • A.C.A §6-21-808(d)(1)(A) requires districts to expend 9% of foundation funding exclusively to payment of utilities, and costs of custodial, maintenance, repair, and renovation activities, including related personnel costs.

    • 9 percent of foundation funding multiplied by the prior year 3 Quarter ADM

    • Code as follows: Fund = 2000 or 2100-2199

      Function = 2600 through 2699

      Objects = 61000 – 65199 and 65300 – 69999

    • If the 9% Requirement is not met, an amount equal to the variance must be moved to SOF 391 in the same fiscal year.

      FIN-12-022 on 9% Requirement

      included in Appendices


    Gifted and talented

    Gifted and Talented

    • A.C.A §6-20-2208(c)(6) requires districts to expend state and local revenues on gifted and talented programs in an amount equal to 15% of the foundation funding amount multiplied by 5% of the district’s prior year 3 quarter ADM.

    • The District’s budget for GT should have an amount equal to this requirement.

    • A Commissioner’s memo is posted each year with the required amounts listed in an spreadsheet for each district

    • Classroom expenditures must be coded to Function 1910 and Program Code 270. The GT Coordinator, Function 2291 should also be coded to Program Code 270.

      FIN-12-054 is the latest CM and is included in the Appendices


    Student growth funding declining enrollment funding

    Student Growth Funding/Declining Enrollment Funding


    Overview

    Overview

    • A.C.A. §§ 6-20-2303 (22) and 6-20-2305 (c) (2)

    • ADE Rules Governing the Calculation Methods for Declining Enrollment and Student Growth Funding for Public School Districts

    • One-fourth of current year per student foundation funding x any increase in each of:

      • CY Qtr 1 ADM over PY 3-Qtr ADM

      • CY Qtr 2 ADM over PY 3-Qtr ADM

      • CY Qtr 3 ADM over PY 3-Qtr ADM

      • CY Qtr 4 ADM over PY 3-Qtr ADM


    Timeline

    Timeline

    • By January 31

      • Estimated SGF is calculated using actual CY Qtr 1 ADM & estimates of CY Qtrs 2, 3, & 4 ADM

      • 60% of estimated SGF is disbursed

    • By April 30

      • Remaining 40% of estimated SGF is disbursed

    • By June 30

      • Districts should calculate actual SGF and make appropriate journal entries for accrual of the adjustment to actual SGF funding

    • By July 31

      • Actual SGF is calculated by ADE using actual ADM from cycle 7 for all 4 quarters

    • By August 31

      • Any SGF plus ISN or DEF due to districts is distributed and any over-funded SGF plus ISN or DEF paid to districts is recouped by ADE


    Considerations

    Considerations

    • An eligible district cannot receive both DEF and SGF

    • An eligible district cannot receive both DEF and ISN

    • An eligible district can receive both SGF and ISN

    SGF + ISN

    DEF

    If DEF > (SGF + ISN), district receives DEF

    If (SGF + ISN) > DEF, district receives SGF + ISN


    Important notes

    Important Notes

    • SGF is initially disbursed based on an estimate of current year quarterly ADM (see Rules for details on calculating estimate)

    • Estimated current year quarterly ADM is provided on the second and third state aid notices

    • SGF is unrestricted funding

    • Revenue & expenditures from SGF revenue sources are tracked


    Important notes1

    Important Notes

    • Districts may be required to repay an entire amount received for an affected funding category (SGF, DEF, or ISN) due to the difference between actual SGF calculated and estimated SGF disbursed

    • Actual SGF is not calculated by ADE until July 31 and the adjustment from estimated to actual is not disbursed by ADE until August 31 – after the fiscal year has ended

    • Districts are required to calculate actual SGF and make appropriate journal entries to record actual SGF by June 30 of the current fiscal year – including any effect on DEF or ISN – and the appropriate journal entries to record adjustment to actual by August 31


    Coding instructions

    Coding Instructions

    • Repaying SGF to ADE


    Coding instructions1

    Coding Instructions

    • Repaying DEF to ADE


    Coding instructions2

    Coding Instructions

    • Receiving SGF from ADE


    Coding instructions3

    Coding Instructions

    • Receiving DEF from ADE


    Supplemental transportation

    Supplemental Transportation


    Legal authority

    Legal Authority

    • Act 1075 of 2011 – See CM FIN-12-086 in Appendices

      • Section 1, Item No. 53

        • Appropriation $500,000

      • Section 32

        • Special Language

    • ADE Rules Governing the Distribution of Supplemental Transportation Funds included in Appendices


    Details

    Details

    • Commissioner’s Memo # FIN-12-086 (dated March 16, 2012)

      • Data

      • Calculations

      • Funding amounts per each eligible district

    • 44 eligible districts

    • Source of Fund Code 222

    • Revenue Code 31400

    • Restricted revenue

      • To be used for transportation needs of the district


    Miscellaneous funds

    Miscellaneous Funds


    Definition and calculation

    Definition and Calculation

    • A.C.A. § 6-20-2303 (11)

    • A.C.A. § 6-20-2503 (a)(3)

    • ADE Rules Governing the Calculation of Miscellaneous Funds (Included in Appendices)

    • Details of calculation of Miscellaneous Funds published under “Other Reports” section at bottom of page: http://arkansased.org/about/reports.html


    Tier i annual update

    Data

    • Miscellaneous Funds categoriesand revenue codes:

    * Not currently received by any AR districts

    ** Revenue code 12100 was changed to 12800 in FY07.

    *** Sales and use taxes for capital improvements dedicated to education only.


    Calculation

    Calculation

    • Calculated pursuant to statutory definition.

    • Same calculation of Miscellaneous Funds used in State Foundation/Foundation Funding and Bonded Debt Assistance.

    • Calculation begins with average of Miscellaneous Funds collected in the five school years immediately preceding the previous school year

      (ex: FY12 funding uses five-year average of Miscellaneous Funds received in FY06 – FY10)


    Calculation cont d

    Calculation (Cont’d)

    • If a district did not receive a category of Miscellaneous Funds during the most recent school year used in the five-year average, then previous collections from that category of Miscellaneous Funds shall not be included in the five-year average.

    • The five-year average is multiplied by the ratio of the uniform rate of tax (URT) to the district’s total millage rate in effect as of January 1 of the fiscal year prior to the current funding year.


    Calculation cont d1

    Calculation (Cont’d)

    • For the purpose of calculation the amount of Miscellaneous Funds of a school district, a school year is the period beginning on July 1 of a calendar year and ending on June 30 of the next calendar year.


    Additional information1

    Additional Information

    • In FY12, out of 239 school districts in the state, 50 school districts had an amount of calculated Miscellaneous Funds of $0 and the remaining 189 districts ranged from a low of $6 to a high of nearly $970K.

    • State Foundation/Foundation Funding:

      Total foundation funding per district = calculated Miscellaneous Funds + net revenues + State Foundation Funding aid + URT adjustment


    Important notes2

    Important Notes

    • The calculated Miscellaneous Funds amount used in funding calculations may be higher or lower than the actual Miscellaneous Funds received in a single year.

    • The actual Miscellaneous Funds received will always be higher than the calculated Miscellaneous Funds amount used in funding calculations when comparing the same five-year period.


    Important notes cont d

    Important Notes (Cont’d)

    • It is important to review Miscellaneous Funds to ensure that accurate data is used to calculate funding. Common errors:

      • Ad valorem taxes miscoded as miscellaneous funds or miscellaneous funds miscoded as ad valorem taxes

      • Revenue erroneously coded to local sales and use tax dedicated to education (11200) or grazing rights (42400-42499)

      • One category of miscellaneous funds erroneously coded to another (forest reserve coded as flood control)


    Important notes cont d1

    Important Notes (Cont’d)

    • As Miscellaneous Funds are not always received by school districts in a level dollar amount or frequency, look for large variances between actual Miscellaneous Funds received and the calculated amount used for the funding year in preparation for impact on the Foundation Funding and Bonded Debt Assistance formulas.


    Indirect cost rate

    Indirect Cost Rate


    Indirect cost rates

    Indirect Cost Rates

    • Commissioner’s Memo FIN-12-060, April 24, 2012, provided Indirect Cost rates and information for 2011-2012.

    • Indirect cost rate is a device for determining in a reasonable manner the proportion of indirect cost each program should bear.

    • Indirect costs are those costs that are not readily identified with the activities funded by the federal grant or contract but are nevertheless incurred for the joint benefit of those activities and other activities and programs of the organization.

    • Direct costs are those that can be identified specifically with a particular cost objective.

      FIN-12-060 is included in Appendices


    Indirect cost rates cont d

    Indirect Cost Rates (Cont’d)

    • The Indirect Cost rate is calculated by dividing Indirect Costs, plus carry forward adjustment, by Direct Costs. All funding sources are used.

    • Excluded costs are those that generally are one-time in nature or tend to distort normal annual operating expenses.

    • Unallowable costs are those costs that are unacceptable as applied to federal grants and contracts whether applied directly to a grant or indirectly through the indirect cost rate.


    Indirect cost rate cont d

    Indirect Cost Rate- (Cont’d)

    • Expenditures from the second preceding fiscal year are to be used for the indirect cost allocation plan. For example, expenditures for fiscal year 2009-2010 must be used to compute the indirect cost rate for fiscal year 2011-2012.

    • Carry forward adjusts the calculated indirect cost rate to be applied in the current fiscal year by the difference between the anticipated indirect cost totals in the second preceding fiscal year and the actual indirect cost totals realized in the second preceding fiscal year.


    Indirect cost rate cont d1

    Indirect Cost Rate (Cont’d)

    • If a district can identify and isolate the first $25,000 of a purchased service contract then it can include the first $25,000 of that contract in total expenditures before applying the indirect cost rate. If a district is unable to identify and isolate the first $25,000 of a purchased service contract, then that contract must be excluded from total expenditures before applying the indirect cost rate. The indirect cost rate can only be applied to the first $25,000 of each purchased service contract.


    Basic formula

    Basic Formula

    • Indirect Cost Rate =


    Carry forward

    Carry-forward

    • A fixed rate with carry-forward provision is an indirect cost rate computed and fixed for a specified future school year based on an estimate of that school year’s level of operations. However, when the actual costs of that school year are known, the difference between the estimated costs and the actual costs is “carried forward” as an adjustment to the rate established in a future school year.

    • Carry-forward =

      Actual indirect costs – indirect costs used in calculation 2 years ago

    • Positive carry-forward adjusts for an under-recovery of expenses

    • Negative carry-forward adjusts for an over-recovery of expenses


    Data cycle

    Data Cycle

    • FY08 actual expenditures - FY10 calculated rates

    • FY09 actual expenditures + FY07 carry-forward -FY11 calculated rates

    • FY10 actual expenditures + FY08 carry-forward -FY12 calculated rates

    • FY11 actual expenditures + FY09 carry-forward -FY13 calculated rates


    Data used in rates

    Data Used in Rates


    Other sources

    Other Sources

    • Cost Allocation Guide for State and Local Governments

      http://www2.ed.gov/about/offices/list/ocfo/fipao/guideigcwebsite.pdf

    • Office of Management and Budget (OMB) Circular A-87http://www.whitehouse.gov/omb/circulars_a087_2004/

    • Arkansas Financial Accounting Handbookhttp://www.apscn.org/fms/fms.htm


    Pullback

    Pullback


    Pullback optional

    Pullback (Optional)

    • Beginning with 2011-2012 school year:

      • 40% will be reduced to 36% and another 4% per year until it is completely eliminated.

      • FY 2011-2012 percentage is 36%. ADE Assessment 36% PullBack Report for 2011 Total valuations for Taxes Payable in 2012 is in the Appendices

      • Property tax revenue collected January through June 30 shall be recorded as revenue to code 11120 – Property Taxes or 11125 – Property Tax Relief in the year collected (no deferral).

      • If actual collections by June 30 are less than the calculated Pullback amount, the difference MAY be accrued at June 30 (accrual allowed, but not required).


    Pullback cash basis optional

    Pullback - Cash Basis (Optional)

    • 2011-2012 school year (Con’t)

      • Any district may convert to cash basis for recognizing revenue from property taxes beginning with the 2011-2012 school year.

      • Cash basis will include funds on hand at the County Treasurer’s Office at June 30 that are apportioned for the school district (or that are in transit).

      • Once converted to cash basis the district cannot choose to accrue Pullback in subsequent years.


    Pullback accrual basis optional

    Pullback - Accrual Basis (Optional)

    • 2011-2012 School Year:

      • Multiply the 2011 assessments (for taxes payable in 2012) times the greater of voted mills, other than debt service, or the 25 mills uniform rate of tax.

      • Multiply above result by 36% to determine the “Calculated 36% Pullback”. (ADE includes calculated amount in a Commissioner’s Memo.)

      • In Period 1 of 2012-2013 the district should post a journal entry that reverses the amount accrued in 2011-2012. (No Deferral Allowed)


    2012 2013 pullback a c a 6 20 401

    2012-2013 PULLBACK (A.C.A. §6-20-401)

    Beginning with 2012-2013 school year:

    Pullback is reduced to 32% and another 4% per

    year until it is completely eliminated.

    If actual collections by June 30 are less than the calculated Pullback amount, and the district accrued in the previous year, the difference may be accrued at June 30.

    Property tax revenue collected by June 30 shall be recorded as revenue in the year collected.

    (No Deferral Allowed)


    Property taxes account codes

    Property Taxes Account Codes

    10000 Revenue from Local Sources

    11000 Taxes. Compulsory charges levied by a governmental entity for the purpose of financing services for the common benefit.

    11100 Property Taxes. Taxes levied as a result of a vote by the electorate of a millage rate on personal property, real estate and utilities.

    11110Property Taxes - Taxes received from the general levy July through December

    11115Property Tax Relief – Relief Taxes received July through December. (May be receipted to 11110 Property)

    11120Property Taxes – Taxes received from the general levy January through June

    11125Property Tax Relief - Relief Taxes received January through June. (May be receipted to 11120 Property)


    Property taxes account codes con t d

    Property Taxes Account Codes (Cont’d)

    11140 Property Taxes - Delinquent. Taxes received during the current year from the general levy for prior years.

    11150 Excess Commission. Amounts received from commissions in excess of the treasurer’s salary for the cost of operating the treasurer’s office.

    11160 Land Redemption (Include State Land Sales). Amounts received from the sale of land on which delinquent taxes have not been paid.


    How to help ensure accurate coding

    How – To Help Ensure Accurate Coding

    • Typically, taxes collected by the County during a month are distributed to school districts the following month. Therefore, to reconcile school district receipts for a calendar year to county collections for the same year, the month of January needs to be considered.

    • Other than Property Tax Relief, the school district receipts from February 2011 through January 2012 should compare with County Collections for the 2011 calendar year.

    • School district receipts of Property Tax Relief January – December, 2011 should agree, or come close to agreeing with what the County received for 2011.


    Ad valorem tax revenue data

    Ad Valorem Tax Revenue Data


    What data is reported

    What – Data is Reported

    • A.C.A. § 6-20-2303 (17)

    • Total ad valorem tax revenue collected and disbursed at the county level to each school district during the preceding calendar year

    • Includes current taxes, delinquent taxes (including penalties and interest), homestead tax credit, excess commissions, interest earned on tax funds held in trust, and state land redemptions

    • Costs and commissions authorized by law relating to the collection of ad valorem taxes are subtracted


    Who reports the data

    Who – Reports the Data

    • Pursuant to Act 633 of 2011, beginning with 2011-12 school year

      • Ad valorem data is reported by the county treasurers

      • This treasurer’s report replaces the “template” previously used by the designated county “preparer of the tax books”


    When data is due

    When – Data is Due

    • Revenue data is reported to ADE by the county treasurers on or before January 31 each year

      • A.C.A. § 26-80-101 (b)(4)(A)(ii)

    • Penalty imposed for failure to report revenue data

      • County reappraisal funding withheld

      • A.C.A. § 26-80-101 (b)(4)(A)(iii) – (vi)

    • ADE provides time period for district review of reported data and accepts revisions from county treasurers


    Where data goes

    Where - Data Goes

    • County treasurer reports revenue to:

      (see A.C.A. § 26-80-101 (b)(4)(A)(ii))

      • ADE

      • State Treasurer

      • School District Superintendent

    • ADE publishes county reported data to http://arkansased.org/about/reports.html under “Other Reports” section

    • ADE publishes URT funding adjustment calculations as attachment to a Commissioner’s Memo

      Commissioner’s Memo FIN-12-082 is included in the Appendices


    Why accurate data is important

    Why – Accurate Data is Important

    • District Foundation Funding amount

      • A.C.A. § 6-20-2305 (a)(2)

      • Equals per student foundation funding times district prior year 3-Qtr ADM

    • District Foundation Funding sources:

      • Net Revenues from ad valorem taxes

        • A.C.A. § 6-20-2303 (13)

      • Calculated Miscellaneous Funds

        • A.C.A. § 6-20-2303 (11)

      • State Foundation Funding Aid

        • A.C.A. § 6-20-2303 (21)

      • URT Adjustment

        • A.C.A. § 6-20-2305 (a)(4)


    Why accurate data is important1

    Why – Accurate Data is Important

    • Net Revenues

      • Initially estimated as 98% * URT * assessment

      • Finally calculated using county reported actual revenues from the URT

    • URT Adjustment

      • Funding adjustment to bring district up or down to statutory foundation funding total


    How to help ensure accurate funding

    How – To Help Ensure Accurate Funding

    • County reports vs. District records

      • Resolve discrepancies with county treasurer

      • County treasurer may submit revised report to ADE by indicated deadline

    • ADE reports vs. District records

      • May be helpful to compare state aid notice to district records

      • Compare current state aid notice, noting unusual changes

        • To prior year state aid notice of same date (July 2011 to July 2010)

        • To current year state aid notice last received (February 2012 to July 2011)


    Tier i annual update

    Athletics


    Athletics

    ATHLETICS

    • Commissioner’s Memo FIN-12-073 (See Appendices), provides a copy of the amended and approved new Rules Governing Athletic Revenue & Expenditures.

    • Changes method for allocating a portion of the cost of facilities, facilities maintenance, property insurance, utilities, and salary and benefits for employees providing janitorial or maintenance services to athletics (program code 115).

    • Refer to “Athletic Coding Basic Steps” by Kathy Hanlon, which is included in the Appendices


    Athletics cont d

    ATHLETICS (Cont’d)

    • The new method is based on adjusted square footage of athletic buildings as a percentage of total square footage of all buildings

      • Required PE Square Footage: obtain from the School Facility Manual – Facilities website – after entering the prior three-quarter average (ADM) for each building by grade (http://arkansasfacilities.arkansas.gov

      • Adjusted Square Footage: The total square footage of all athletic buildings (from the most current property insurance statement) , minus the square footage for PE.

      • )


    Athletics cont d1

    ATHLETICS (Cont’d)

    • The adjusted athletic square footage is divided by the total square footage of all buildings to determine the athletic expenditure allocation percentage.

    • Carry the percentage to five decimal places.

    • Apply percentage to total cost of property insurance, utilities, and all other maintenance costs to determine the amount applicable to athletics.

    • Record amount by journal entry prior to year-end final close using program code 115.

      IF the adjusted athletic square footage should calculate negative, do not make ‘negative’ athletic expenditure allocation.


    Athletics cont d2

    ATHLETICS (Cont’d)

    COMMENT: Since this is a new procedure, there are going to be “gray” areas related to athletic square footage in a multi-purpose building. The district should use sound judgment in determining the amount of athletic square footage and document the calculations used.

    Example: An old gym that is used only two periods a day for high school basketball practice. If the district is on a seven-period day, 2/7ths of the square footage should be counted as athletic square footage.

    3.01.2 of the Rule: “If only a portion of a multi-function building is used for an interschool athletic program, only the square footage of the portion of the building used for or by an interschool athletic program shall be included in the calcu-lation of adjusted square Footage of athletic buildings.”


    Athletics cont d3

    ATHLETICS (Cont’d)

    • Charge construction or renovations of athletic building to athletics program code 115, MINUS construction and renovation costs of square footage required for physical education courses.

      • Program Requirements are published by the Division of Public School Academic Facilities & Transportation

    • Coaching stipends and related benefits must be charged to athletics.

    • Prep periods in excess of one-period must be allocated to athletics unless the additional prep time is clearly documented to pertain to non-athletic duties.


    Athletics cont d4

    ATHLETICS (Cont’d)

    • Annual Athletic Report to ADE – A.C.A. §6-20-2003

    • District must obtain approval of the report of prior year athletic expenditures by the local school board at a legally held meeting prior to submitting to the ADE by September 15 each year.

      • The content is from Cycle 1 for current year budget and Cycle 9 for the prior year actual expenditures and consists of state funds only.

    • The report must be posted on the district’s website for a minimum of three years.

    • Gate receipts MUST be posted in the Activity Fund (Fund 7).


    Allocation of property insurance

    Allocation of Property Insurance

    Total District Cost of Property Insurance X

    Allocation Percentage = Property Insurance to Charge to Athletics AT THIS TIME DISTRICTS ARE NOT REQUIRED TO CHARGE THIS TO THE CAMPUS LEVEL. Example Journal Entry: DR 2000 26XX 000 115 00 65210 $ x.xx (Property Insurance) CR 2000 26XX 000 000 00 65210 $ x.xx (Property Insurance)


    Allocation of utilities

    Allocation of Utilities

    Total District Cost of Utilities x Allocation Percentage =Utilities to Charge to Athletics AT THIS TIME DISTRICTS ARE NOT REQUIRED TO CHARGE THIS TO THE CAMPUS LEVEL. Example Journal Entry: DR 2000 26XX 000 115 00 64110 $ x.xx (Water & Sewer) 66210 $ x.xx (Natural Gas) 66220 $ x.xx (Electricity) CR 2000 26XX 000 000 00 64110 $ x.xx (Water & Sewer) 66210 $ x.xx (Natural Gas) .66220 $ x.xx (Electricity)


    Allocation of all other maintenance

    Allocation of All Other Maintenance

    Total District Charges to Operating Fund Function 26* Less Property Insurance and Utilities x Allocation Percentage = Maintenance to Charge to Athletics AT THIS TIME DISTRICTS ARE NOT REQUIRED TO CHARGE THIS TO THE CAMPUS LEVEL. Example Journal Entry: DR 2000 26XX 000 115 00 68999 $ x.xx (Allocated Charges) CR 2000 26XX 000 000 00 68999 $ x.xx (Allocated Charges) Account number 68999 “Allocated Charges” is recommended. The other option is to debit and credit each separate account in function 26*. Caution: This calculation should result in the TOTAL athletic portion of maintenance expenditures (other than property insurance and utilities). If other maintenance expenditures have been charged directly to athletics, subtract those amounts before entering journal entry.


    Allocation of student transportation

    Allocation of Student Transportation

    • Transportation Rate for 2011-2012 is $3.45

    • or $1.92 if there is no cost for the driver, e.g.:

      • Volunteer Driver

      • Coaches drive and compensated by a coaching stipend

      • If Bus Driver Salaries/Benefits are charged directly to athletics on a per trip basis, use the $1.92

      • Documentation required whenever the $1.92 rate is used

      • Commissioner’s Memo: FIN-12-077 Included in Appendices


    Allocation of student transportation cont d

    Allocation of Student Transportation (Cont’d)

    • For allocating 2011-2012 athletic bus transportation costs, the statewide transportation cost per mile for 2010-2011 is used. Expenditures charged to functions 2700-2798 were divided by annual transportation route miles per Cycle 6 of 2010-2011. The daily route miles reported by districts in Cycle 6 were multiplied by 178 days to determine annual miles. If a district failed to report any route miles in Cycle 6, that district's expenditures were not included in calculating the state's average cost per mile. The average statewide transportation cost per mile for 2011-2012 is $3.45 (or $1.92 if there is no cost for the driver).

    • In order to record the allocation of student transportation costs to athletics, it is recommended that object code 68999 be used and defined as “Allocated Charges.” The journal entry would be: DEBIT 2000 2700 000 115 00..........68999 CREDIT 2000 2700 000 000 00..........68999


    Athletic problem areas cont d

    Athletic Problem Areas (Cont’d)

    • Facilities Construction/Renovation

      • Facility used exclusively for athletics

        • Charge 100% of the cost to a budget unit containing program code 115

      • Multi-purpose buildings

        • Determine total cost of building or renovation based on information from:

        • Architect

        • General Contractor

        • Construction Manager


    Athletic problem areas cont d1

    Athletic Problem Areas – (Cont’d)

    • Multi-purpose buildings (Con’t)

      • Construction Manager

      • Estimate total hours the building will be used during a complete school year.

      • Estimate total hours the building will be used for athletics during a complete school year.

      • Divide total athletic hours by total hours and multiply the result times the total cost to arrive at the amount pertaining to athletics.

      • The amount pertaining to athletics must be charged to a budget unit containing program code 115.


    Athletic problem areas cont d2

    Athletic Problem Areas (Cont’d)

    • Salaries and benefits of coaches

      • 100% of any stipend paid exclusively for athletics must be charged to a budget unit containing program code 115.

      • 100% of the pay for days above the base teacher contract must be charged to a budget unit containing program code 115.


    Athletic problem areas cont d3

    Athletic Problem Areas (Cont’d)

    • Salaries and benefits of coaches (Con’t)

      • If the coach is assigned to classes that are especially for students participating in athletics, part of the base teacher contract pay (per teacher salary schedule) must be charged to athletics:

        • Divide total class periods pertaining to athletics, including any preparation period(s) in excess of one, by total class periods during the school day.

        • The factor obtained above should be multiplied by the teacher contract amount to obtain the amount pertaining to athletics.


    Athletic problem areas cont d4

    Athletic Problem Areas (Cont’d)

    • Salaries and benefits of coaches (Cont'd)

    • If the coach is assigned to classes that are especially for students participating in athletics, part of the base teacher contract pay (per teacher salary schedule) must be charged to athletics: (Cont'd)

      • This amount must be charged to a budget unit containing program code 115.

      • APSCN has an Excel spreadsheet that can be saved to your computer to assist in calculations www.apscn.org > FMS > FMS Training documentation > Forms > Salary Allocation Form


    Athletic audits

    Athletic Audits

    • Act 255 of 2007 requires Legislative audit to conduct annual reviews of the Athletic expenditures reported to ADE at least once every five years.

    • Legislative Audit identifies districts with 10% or more variance.

    • Non-compliance can result in being identified as a district in fiscal distress in accordance with ACA § 6-20-1901 et seq.

    • See appendix for the Rules Governing Athletic Revenues and Expenditures for Public School Districts, Section 9.00


    Athletic audit 2010 2011

    Athletic Audit 2010-2011

    • 46 districts selected for testing in Western and Southwestern Arkansas

    • Review adjustments total  - $1.6 million

    • Athletic expenditures for 20 districts with adjustments greater than 10% ranging from $9,553 to $777,916

    • 12 districts improperly allocated salary and benefits

    • 37 districts improperly allocated maintenance expenditures

    • 10 district improperly allocated travel related expenditures

    • 9 districts did not code athletic related construction properly


    Athletic audit 2009 2010

    Athletic Audit 2009-2010

    • 45 districts selected for testing in Northeastern Arkansas

    • Review adjustments total  - $0.3 million

    • Athletic expenditures for 15 districts with adjustments greater than 10% ranging from $9,443 to $292,591

    • 11 districts improperly allocated salary and benefits

    • 15 districts improperly allocated maintenance expenditures

    • 17 district improperly allocated travel related expenditures

    • 8 districts did not code athletic related construction properly


    Athletic audit 2008 2009

    Athletic Audit 2008-2009

    • 48 districts selected for testing in Southeastern Arkansas

    • Review adjustments total  - $3.4 million

    • Athletic expenditures for 23 districts with adjustments greater than 10% ranging from $7,759 to $2.0 million

    • 27 districts improperly allocated salary and benefits

    • 38 districts improperly allocated maintenance expenditures

    • 26 district improperly allocated travel related expenditures

    • 9 districts did not code athletic related construction properly


    Athletic audit 2007 2008

    Athletic Audit 2007-2008

    • 51 districts selected for testing in Northwestern Arkansas

    • Review adjustments total  - $3.3 million

    • Athletic expenditures for 14 districts with adjustments greater than 10% ranging from $11,694 to $457,191

    • 16 districts improperly allocated salary and benefits

    • 18 districts improperly allocated maintenance expenditures

    • 15 district improperly allocated travel related expenditures

    • 4 districts did not code athletic related construction properly (the commissioner’s memo on construction did not come out until late FY 2008)


    Tier i annual update

    Rules on Accounting and Reporting


    Rules governing the arkansas financial accounting and reporting system

    Rules Governing the Arkansas Financial Accounting and Reporting System

    8.0 Department Review of LEA Financial Records 

    8.01 By February 15 of each year, the Financial Accountability Unit of the Department shall review the LEAs’ most currently submitted AFR, AFB, FTEs, and Average Salaries to determine if the financial records are deficient. Any error related to the coding and reporting of financial information that causes a material misstatement of financial information will be cause for determining a deficiency. A material misstatement occurs whenever the submitted data has more than a ten percent variance or when the Department has sent written notification to an LEA regarding specific errors discovered in the financial records.

    Rules on Ark. Financial Accounting and Reporting System & Annual Training Requirements

    included in Appendices


    Rules governing the arkansas financial accounting and reporting system1

    Rules Governing the Arkansas Financial Accounting and Reporting System

    8.03 The Department shall notify in writing, via certified mail, the superintendent or director of the LEA whose financial records are found to be deficient.

    8.07 The SBE may require the superintendent or director and board members to explain and/or appear before the SBE to explain why the district is not complying with state laws or rules.


    Rules governing the arkansas financial accounting and reporting system2

    Rules Governing the Arkansas Financial Accounting and Reporting System

    • 11.01Any school district that does not comply with and meet the requirements of these rules, shall, after receiving notice as required by law, be identified by the Department as being in fiscal distress.


    Fiscal distress5

    Fiscal Distress

    • Indicators of Fiscal Distress, cont’d:

      • Material failure to comply with audit requirements.

      • Material failure to comply with any provision of the Arkansas Code that specifically places a school district in fiscal distress based on non-compliance.

    • Any other fiscal condition of a school district deemed to have a detrimental negative impact on the continuation of educational services by that school district.


    Federal programs

    Federal Programs


    Federal education jobs fund

    Federal Education Jobs Fund

    • Commissioner’s Memo FIN-11-032, December 1, 2010, provides information and allocation amounts.

    • For school-level employee compensation and benefits and other expenses, such as support services necessary to:

      • Retain existing employees

      • Recall or rehire former employees

      • Hire new employees

      • Implement salary increases and/or bonuses


    Federal education jobs fund cont d

    Federal Education Jobs Fund (Cont’d)

    • Cannot be used for:

      • General administrative expenses (including operation of superintendent’s office)

      • LEAs board of education

      • Salaries and benefits of district-level administrative employees

    • Must be coded to Fund/Source of Fund 6519 and Program Code 056.


    Arra jobs funds

    ARRA JOBS Funds

    • $92,464,608 Total Funds Allocated

      • $5,813,718 Funds Remaining

      • Funds must be obligated by September 30, 2012

      • When notified that plans are open, spend the funds.

      • No reimbursement of expenditures unless the Plan is entered into the ARRA Cognos program.


    Arra state fiscal stabilization fund

    ARRA State Fiscal Stabilization Fund

    • This ARRA Fund is Closed

      • $341,091,157 in total awarded funds

      • $630,680 remaining funds

      • Less than 1/10 of 1% unspent - (.18%)

      • If district has any activity remaining in SFSF, contact Patty Martin at 501-682-1114.


    Arra idea funds

    ARRA IDEA Funds

    • $112,177,929 Total Funds Allocated

      • $610,906 Funds Remaining

      • Most expenditures have been moved from school bus purchases to other allowable expenditures

      • Plans will be opened for these districts to change the program code

      • The opening of the plans will be announced via the FMS and SMS listservs.


    Arra title i funds

    ARRA Title I Funds

    • $106,471,468 Total Funds Allocated

      • $550,932 Funds Remaining

      • That is about ½ of 1%


    Clarification of changes to federal grants budgets and program

    Clarification of Changes to Federal Grants Budgets and Program

    • Education Department General Administrative Regulations (EDGAR) 34 CFR Part 80:30

    • District’s may re-budget within the approved direct cost budget to meet unanticipated requirements.

    • District’s may make limited program changes to the approved project.

    • However, these changes may require prior written approval of the ADE.


    Federal grants budgets

    Federal Grants Budgets

    • District shall obtain prior written approval of the ADE whenever any of the following changes are anticipated under a non-construction award:

      • Any revision which would result in the need for additional funding

      • Unless waived by the ADE, cumulative transfers among the cost categories, or among separately budgeted programs, projects, functions, or activities which exceed ten percent of the current TOTAL APPROVED budget.

        This means budget changes ARE ALLOWED up to 10% of the total approved budget WITHOUT ADE approvalSee Commissioner’s Memo FIN-12-107 included in the Appendices

      • Transfer of funds allotted for training allowances


    Federal grants budgets cont d

    Federal Grants Budgets (Cont’d)

    • District shall obtain prior approval of the ADE whenever any of the following changes is anticipated under construction projects:

      • Any revision which would result in the need for additional funding

      • Before making any fund or budget transfers from non-construction to construction or vice versa when the funding is for both construction and non-construction activities.


    Federal grants programs

    Federal Grants Programs

    • District shall obtain prior approval of the ADE whenever any of the following changes to the Program is anticipated:

      • Revision to scope or objectives (regardless of whether there is an associated budget).

      • Need to extend the period of availability of funds

      • Any changes in key persons in cases where specified in the application or grant award.

      • Under non-construction projects, contracting out, subgranting or otherwise obtaining services of 3rd party to perform the activities central to the purpose of the award.


    Other federal grants approval requirements

    Other Federal Grants Approval Requirements

    • Requests for budget revisions must be in writing, in the same format the district used in its application and include a narrative of justification.


    Maintenance of effort

    Maintenance of Effort


    Maintenance of effort moe

    Maintenance of Effort (MOE)

    • Commissioner’s Memo FIN-12-078, February 8, 2012, provides information regarding the MOE requirement of programs authorized by the Federal Elementary and Secondary Education Act.

      • Purpose is to ensure that federal funds are not used to replace state and local funds.

      • Requires LEAs to maintain at least 90% of their level of expenditures for programs from state and local funds from one year to the next.

        FIN-12-078 is included in the Appendices


    Maintenance of effort moe cont d

    Maintenance of Effort (MOE) (Cont’d)

    • Special Education (IDEA) has a 100% requirement on MOE. Exceptions include:

      • Voluntary departure, by retirement or otherwise, or departure for just cause, of special education personnel.

      • A decrease in the enrollment of identified children with disabilities.

      • The termination of the obligation to provide special education program to a particular child because the child has left the district, reached the age at which the LEA obligation has ended, or no longer needs special education services.

      • Termination of long-term costly expenditures, such as construction.


    Maintenance of effort moe cont d1

    Maintenance of Effort (MOE) (Cont’d)

    • Expenditures do not include:

      • Community Services

      • Capital Outlay

      • Debt Service

      • Expenses incurred as a result of a presidentially declared disaster

      • Expenditures from funds provided by federal government


    Maintenance of effort moe cont d2

    Maintenance of Effort (MOE)-(Cont’d)

    • MOE can be met based on either aggregate or per student expenditures.

    • ARRA SFSF and Federal Jobs Funds may be counted as state and local funds for purposes of meeting MOE.

      • But when ARRA SFSF and Jobs Funds are gone, state and local funds must replace them.


    Maintenance of effort moe cont d3

    Maintenance of Effort (MOE)-(Cont’d)

    • Failure to meet MOE requires loss of federal funds of an amount equal to the decline in MOE.

      • May seek waiver by demonstrating that the decline was the result of:

        • Exceptional or uncontrollable event; or

        • Drastic decline in financial resources.


    Non recurring bonuses

    Non-Recurring Bonuses


    Nonrecurring bonuses

    Nonrecurring Bonuses

    • Ark. Code Ann. §6-20-412 provides information related to nonrecurring salaries paid to licensed personnel From revenues “not considered to be recurring sources of revenue.”

      • Federal Jobs Fund

      • Fund balances

      • Proceeds from sale of property


    Nonrecurring bonuses cont d

    Nonrecurring Bonuses (Cont’d)

    • Divided equally among licensed personnel employed by the school district at the time approved by the board of directors of the school district unless:

      • The school board and a majority of teachers agree to a different distribution.

    • “Equal” means an equal dollar amount.

      • Not equal percentage

      • Not prorated based on days contracted or worked

      • Not prorated based on full-time or part-time status


    Nonrecurring bonuses cont d1

    Nonrecurring Bonuses (Cont’d)

    • Act 989 of 2011 amended §6-20-412

      • Changed requirement that it be paid to licensed personnel employed by the school district at the “time of payment” to employed by the school district at the time “approved by the board of directors of the school district.”

      • Removed requirement that a report be submitted to ADE and Legislative Audit.


    Sales tax exemptions

    Sales Tax Exemptions


    Sales tax exemptions1

    Sales Tax Exemptions

    • School buses sold to Arkansas school districts. (A.C.A. 26-52-410(b)

    • Sale of school buses that will be used exclusively by purchaser to provide school bus service for an Arkansas school district. (A.C.A. 26-52-410(c).

    • Sales of motor vehicles to public school districts in Arkansas. (A.C.A. 26-52-410(a))

    • Sales of food in public school cafeteria and lunchrooms. (A.C.A. 26-52-410(3))


    Sales tax exemptions cont d

    Sales Tax Exemptions (Cont’d)

    • Sales of textbooks, library books, or other items purchased by the State of Arkansas to be distributed free of any charge to public schools of Arkansas. (A.C.A. 6-21-411)

    • Sales of tickets for admissions to athletic events and interscholastic activities at public and private schools in Arkansas.(A.C.A. 26-52-412(a))

    • Sales of sheet music, electronic software, maps, globes, charts, videotapes, DVDs, films and cassettes for use as instructional materials. (A.C.A. 26-52-437)


    Sales tax exemptions cont d1

    Sales Tax Exemptions (Cont’d)

    • Sales of digital resources when purchased as instructional materials for Arkansas public schools. (Act 288 of 2011)

      “Digital resources” yet to be defined. (As of April 26, 2012, Arkansas Department of Finance & Administration considered I-Pads as computer hardware, and therefore taxable. However, they are reviewing this issue)SEE GR-35-69 Exemptions from Tax – Schools included in Appendices from the Dept. of Finance & Administration


    Resources

    Resources

    • ADE Web Site - http://arkansased.org

      • Commissioner Memos

      • Rules

      • Publications and Reports

    • APSCN Web Site – http://www.apscn.org

      • FMS Listserv – http://list.k12.ar.us/mailman/listinfo/fms SMS Listserv – http://list.k12.ar.us/mailman/listinfo/sms

    • APSCN Field Support

      • On-site, phone, email support M-F, 8:00 a.m.-4:30 p.m. or 7:30 a.m.-4:00 p.m. – APSCN Main Number – 501-682-4887

      • Emergency after-hours support -DIS Call Center (800-435-7989)


    Other resources

    Other Resources

    • ADE Data Center - http://adedata.arkansas.gov

    • Special Education - http://arksped.k12.ar.us/

    • Child Nutrition - http://cnn.k12.ar.us

    • Academic Facilities and Transportation

      • http://www.arkansasfacilities.com/

    • Arkansas Division of Legislative Audit

      • http://www.legaudit.state.ar.us/


    Ade contacts

    ADE Contacts

    • Question regarding Financial Coding

      • Kathleen Crain – 501-682-1297

      • [email protected]

    • Questions regarding Transportation expenditure of funds

      • Mike Simmons - 501-682-4261

      • [email protected]

    • Questions regarding Funding and Loans and Bonds

      • Cindy Hedrick Hollowell - 501-682-4484

      • [email protected]

    • Questions regarding Fiscal Distress

      • Hazel Burnett - 501-683-5288

      • [email protected]


    Ade contacts1

    ADE Contacts

    • Questions regarding Financial Audits, Budgets, Duplicate Enrollments, Property Assessments and Millage:

      • Danita Hyrkas – 501-682-5059

      • [email protected]

    • Questions Regarding Federal Program

      • Annette Pearson or Kim Bajorek

      • 501-683-1243, 501-683-6530, [email protected]

      • [email protected]


    Appendices list

    APPENDICES LIST

    • Commissioner’s Memo FIN-09-071- Purchasing & Bidding Requirements

    • Rules and Regs Governing Ethical Guidelines and Prohibitions for Educational, Administrators, Employees, Board Members, and Other Parties

    • Special Education Information –Special Ed. Information in this presentation was based on this document by Donald Watkins, ADE Special Education

    • Rules Governing Distribution of Student Special Needs Funding and the Determination of Allowable Expenditures of Those Funds

    • Commissioner’s Memo FIN-12-095 – Aggregate Categorical Funds Balance

    • Commissioner’s Memo FIN-12-094 - NSLA Fund Balances , Per Act 220

    • Commissioner’s Memo FIN-09-047 – Coding Requirements

    • Commissioner’s Memo FIN-10-008 – Title I Allocations

    • Adequacy Funding Matrix


    Appendices list cont d

    APPENDICES LIST (cont’d)

    • Commissioner’s Memo FIN-11-080 – Coding Requirements for 2011-12

    • Commissioner’s Memo FIN-12-022 – 9% M & O Requirement

    • Commissioner’s Memo FIN-12-054 – 2011-2012 Expenditure Requirement for Gifted and Talented Programs

    • Commissioner’s Memo FIN-12-086 – Re: Supplemental Trans. Funds

    • Rules Governing the Distribution of Supplemental Transportation Funds

    • Rules Governing Calculation of Miscellaneous Funds

    • Commissioner’s Memo FIN-12-060– Indirect Cost Rates for 2011-2012

    • Assessment and 36% Pullback Report Calendar Year 2011 Total Valuations for Taxes Payable in 2012

    • Commissioner’s Memo FiN-12-082 – URT Calculations for FY2011-2012


    Appendices list cont d1

    APPENDICES LIST (cont’d)

    • Commissioner’s Memo FIN-12-073 - Re Amended Athletic Expenditure Rules

    • Athletic Coding Basic Steps – By: Kathy Hanlon, Rogers School District

    • Commissioner’s Memo FIN-12-077 – FY12 transportation Rates for Athletics

    • Rules Governing Athletic Revenues and Expenditures for Public Schools

    • Rules Governing the Arkansas Financial Accounting and Reporting System and Annual Training Requirements

    • Commissioner’s Memo FIN-12-107 – 10% Variance on Federal Funds

    • Commissioner’s Memo FIN-12-078 – Maintenance of Effort

    • School District Sales Tax Exemptions from the Dept. of Finance & Administration

    • Certificate of Appointment as District Treasurer Form


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