COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 29

May 24, 2002

ADMINISTRATIVE

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

State Entitlements for Fiscal Year 2002 Based on Actual March 31, 2002, Average Daily Membership (ADM) and Adjustments to the Fiscal Year 2002 Basic Aid Entitlement

 

Administrative Superintendents Memorandum Number 14, dated March 22, 2002, required school divisions to report average daily membership (ADM) as of March 31, 2002. The data reported by divisions were used to recalculate all ADM-based entitlements for fiscal year 2002. The information in this memorandum contains the final state funding due to school divisions in fiscal year 2002 for ADM-based accounts. An Excel file was created to calculate state entitlements, required local effort for the Standards of Quality (SOQ) accounts, and required local matches for incentive-based accounts calculated on March 31, 2002, ADM. The accounts affected by final March 31, 2002, ADM appear on the Excel file in bold italics and are shown as the full entitlement without proration. The Excel file can be accessed from the departments website at:

 

http://www.pen.k12.va.us/VDOE/Finance/Budget/calctools.html

 

Attachment A to this memorandum provides detailed instructions for accessing the Excel entitlement file. Please note that, unlike previous Excel calculation tools provided by the department, this file does not offer an option to change ADM for fiscal year 2002 since ADM is now final.

 

The state revenue projections for the 2002-2004 biennium using the departments projected ADM and shown in the Excel calculation tool provided with Regulatory Superintendent's Memorandum No. 1 have not been revised to account for the effects of this years actual ADM; however, these projections remain the latest information on state payments for 2002-2004. Revised revenue projections for 2002-2004 will be issued in fall 2002 after projected ADM is revised based on September 30, 2002, fall membership.

 

Please note the following when reviewing the data contained in the Excel file:

 

1. The fiscal year 2002 state payment for Basic Aid contained in the Excel calculation file does not reflect any adjustments such as overpayments or payments made on behalf of school divisions to the schools for the deaf and the blind, mental health/mental retardation facilities, or summer Governors School programs. The estimated adjustments made to fiscal year 2002 Basic Aid entitlements are described below and listed in an Excel file accessible at the following Web address:

 

http://www.pen.k12.va.us/VDOE/Finance/Budget/directaid.html

 

2. The sales tax estimates contained in the Excel calculation file represent the amounts used to compute the Basic Aid entitlement for fiscal year 2002. As required by the law, these estimates are based on those contained in the final appropriation act for fiscal year 2002 (Chapter 814, 2002 Acts of Assembly). It appears that actual fiscal year 2002 sales tax revenues may be less than the estimate contained in Chapter 814. Final information on actual sales tax receipts on a cash and accrual bases will be sent to school divisions in July as part of the fiscal year 2002 Annual School Report information.

 

3. The fringe benefit amounts contained in the Excel calculation file are the actual amounts you will receive for fiscal year 2002 on a cash basis. Fringe benefit amounts on an accrual basis will be sent to school divisions in July as part of the fiscal year 2002 Annual School Report information.

 

4. Please note that the entitlements shown for non-ADM Group II incentive and Group III categorical accounts represent the full formula-driven entitlement for fiscal year 2002. These entitlements do not reflect actual participation or reimbursement levels for the year.

 

5. VPSA Technology (i.e., SOL Web-based Technology Initiative) entitlements for regional centers are included in school division fiscal agent totals. However, actual reimbursements for the Spring 2002 issue will be made directly to regional centers from State Non-Arbitrage Program (SNAP) accounts set-up separately for regional centers.

 

Adjustments to the Fiscal Year 2002 Basic Aid Entitlement for Certain School Divisions

 

Various adjustments will be made to the fiscal year 2002 state Basic Aid entitlements for certain school divisions beginning with the June 16, 2002, electronic funds transfer (EFT). Where applicable, these adjustments will reduce the divisions fiscal year 2002 Basic Aid entitlement. An Excel file was created that lists the estimated adjustments to Basic Aid (as of May 16, 2002). The file can be accessed from the departments website at:

 

http://www.pen.k12.va.us/VDOE/Finance/Budget/directaid.html

 

The Basic Aid adjustments for fiscal year 2002 shown in the Excel file are as follows:

 

  1. Overpayment of Virginia Retirement System (VRS) Retirement Adjusts for overpayments of VRS retirement entitlements due to the combination of an instructional VRS rate reduction from 4.24% to 3.6% enacted in the final budget for fiscal year 2002 (Chapter 814), as well as changes from actual ADM.

 

  1. Overpayment of Social Security Adjusts for overpayments of Social Security entitlements due to changes from actual ADM.

 

  1. Overpayment of VRS Group Life - Adjusts for overpayments of VRS group life entitlements due to the combination of a three-month premium holiday (April through June) enacted in the final budget for fiscal year 2002 (Chapter 814) and by administrative action, as well as changes from actual ADM.

 

  1. Overpayment of School Health Incentive Fund Program Adjusts for overpayments of School Health Incentive Fund program entitlements due to changes from actual ADM.

 

  1. Driver Education Funds for Basic Aid As required by the appropriation act, this adjustment reduces Basic Aid entitlements for school divisions that are not eligible to receive Driver Education funds in fiscal year 2002.

 

  1. Local Tuition for Summer Residential Governors Schools Lists the local tuition for Summer Residential Governors Schools due to the department for fiscal year 2002. This deduction reduces the Basic Aid entitlement paid to divisions.

 

  1. Local Tuition for Foreign Language Academies Lists the local tuition for Foreign Language Academies due to the department for fiscal year 2002, which reduces the Basic Aid entitlement paid to divisions.

 

  1. Mental Health Local Share of Cost This adjustment is for the school divisions share of the cost of educating children in state mental health hospitals. The data used to calculate this adjustment are based on enrollment for the 2000-2001 school year. This adjustment to the division Basic Aid entitlement is in accordance with language contained in Item 143.C.2.d.1) and 2) of Chapter 814, 2002 Acts of Assembly (2000-2002 appropriation act).

 

  1. Mental Retardation Local Share of Cost This adjustment is for the school divisions share of the cost of educating children in state mental retardation facilities. The data used to calculate this adjustment are based on enrollment data for the 2000-2001 school year. This adjustment to the division Basic Aid entitlement is in accordance with language contained in Item 143.C.2.d.1) and 2) of Chapter 814, 2002 Acts of Assembly (2000-2002 appropriation act).

 

10.Local Tuition for Schools for the Deaf and the Blind This adjustment is for the local tuition payment for students enrolled at the Virginia Schools for the Deaf and the Blind (VSDB). If you have students from your school division enrolled at VSDB and MD-Hampton or VSDB-Staunton during fiscal year 2002, Virginia Board of Education regulation 8VAC20-80-130.H. requires the Department of Education to adjust your state Basic Aid payment to capture the local share of the cost of educating these students. These funds are then transferred to the two schools to offset the cost of educating those students. This adjustment is based on the December 1, 2001, enrollment for each school.

 

In order to maintain proper accounting for adjustments made to Basic Aid entitlements for payments made on behalf of school divisions (adjustments 6 through 10 above), it is necessary for each school division to report the gross receipt of Basic Aid funds under revenue source code 240202 (Basic School Aid) on the 2001-2002 Annual School Report. To balance this gross Basic Aid revenue on the 2001-2002 Annual School Report, school divisions with adjustments to Basic Aid for Summer Residential Governors Schools, Foreign Language Academies, Mental Health/Mental Retardation facilities, or Schools for the Deaf and the Blind should report these adjustment amounts as expenditures in the Instruction Function (61000) and Object Code 3000 (Purchased Services), using the appropriate program(s).

 

For those divisions where Basic Aid was adjusted for overpayments in items 1 through 5 above, the amount of the overpayment must be deducted from your unadjusted Basic Aid entitlement. Report this reduced Basic Aid entitlement in revenue source code 240202 on your 2001-2002 Annual School Report.

 

Special Reminder on the One-Time Carry-Over Provision Language (Fiscal Year 2002 to Fiscal Year 2003)

 

As communicated in Regulatory Superintendent's Memorandum No. 1, budget language was added to specify that any unexpended balances of state funds on June 30, 2002, that are not required to be spent for the state share of Standards of Quality (SOQ) programs may be carried forward to be appropriated to school divisions in fiscal year 2003 for any school purpose and these funds will continue to be counted as state funds. Please note that this carry-over provision remains in the final fiscal year 2002 budget adopted by the General Assembly and signed by the Governor (Chapter 814).

This budget language has the effect of allowing school divisions to carry-over, for appropriation in fiscal year 2003, state fund balances for any Direct Aid to Public Education account with the exception of the SOL Algebra Readiness program and those required to meet the Standards of Quality (i.e., Basic Aid, Textbooks, Vocational EducationSOQ, Gifted Education, Special EducationSOQ, Remedial EducationSOQ, VRS Retirement, Social Security, and VRS Group Life). Please note that the SOL Algebra Readiness program has a separate carry-over provision that requires carried-over funds to be appropriated to the school division in fiscal year 2003 for use in the SOL Algebra Readiness program only.

 

If you have any questions concerning the information in this memorandum, please contact Daniel S. Timberlake, assistant superintendent for finance, or budget office staff at (804) 225-2025.

JLD/kcd

 

Attachment

 

/administrators/superintendents_memos/2002/adm029a.pdf