COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 37
June 21, 2002

ADMINISTRATIVE

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

Additional Information on Final Entitlements and Adjustments to the Basic Aid Entitlement for Fiscal Year 2002

 

Administrative Superintendents Memorandum Number 29, dated May 24, 2002, provided information on fiscal year 2002 state entitlements based on actual March 31, 2002, average daily membership (ADM) and preliminary adjustments to the final fiscal year 2002 Basic Aid entitlement. This memorandum provides updated information affecting final entitlements and adjustments to Basic Aid for fiscal year 2002.

 

1. Lottery and Additional Lottery Proration

Administrative Superintendents Memorandum Number 29 indicated that the final fiscal year 2002 Direct Aid entitlements based on actual ADM are not prorated. While the final entitlement amounts for Lottery and Additional Lottery shown in Administrative Superintendents Memorandum Number 29 are correct, they are prorated at 99.91972 percent for Lottery and 99.9197 percent for Additional Lottery funds. Lottery and Additional Lottery entitlements calculated based on actual ADM and the full budgeted per pupil amounts exceed the available Lottery and Additional Lottery appropriations in Chapter 814 (final 2000-2002 appropriation act). The difference on a statewide basis between the prorated payments and full entitlements is $99,730 for Lottery and $16,397 for Additional Lottery funds.

 

Proration of the fiscal year 2002 Lottery and Additional Lottery entitlements is necessary because actual March 31, 2002, ADM exceeded the projected ADM on which the Lottery and Additional Lottery per pupil amounts were calculated. When the actual ADM exceeds the ADM used to determine the per pupil amounts for Lottery and Additional Lottery, the actual payments must be prorated in order to stay within the Lottery and Additional Lottery appropriations.

 

2. Additional Lottery Overpayment

Payments for Additional Lottery funds were completed on the May 16, 2002, electronic payment based on projected ADM. As a result, some divisions were overpaid because their projected ADM exceeded their actual ADM; $41,637 in Additional Lottery overpayments occurred statewide. These overpayments will be recovered as a reduction to Basic Aid on the June 30th electronic payment. Note: This adjustment applies to actual payments; the amounts shown in the final entitlements contained in Administrative Superintendents Memorandum Number 29, dated May 24, 2002, are correct.

 

3. Additional VRS Retirement and Group Life Overpayments Certain divisions require additional reductions to Basic Aid to correct overpayments made for VRS Retirement and Group Life as of the March 31, 2002, electronic payments. On a statewide basis, an additional $117,862 in VRS Retirement and Group Life overpayments must be recovered for certain divisions. These overpayments will be recovered as a reduction to Basic Aid on the June 30th electronic payment.

 

4. English as a Second Language Overpayment

Payments for English as a Second Language were completed on the April 16, 2002, electronic payment based on a two-month (May and June 2002) premium holiday for VRS Group Life benefits. Subsequent to the final payment for this account, an additional month (April 2002) was added to the Group Life premium holiday through administrative budget action. As a result, some divisions were overpaid because the April premium holiday for Group Life was not reflected in the final payment of English as a Second Language funds; $1,944 in English as a Second Language overpayments occurred statewide. These overpayments will be recovered through a reduction to Basic Aid on the June 30th electronic payment for the affected school divisions.

 

5. June 16th Fringe Benefit Payments

Payments for fringe benefits are made on an eleven-month basis (July through May with the June payment made in July); however, some divisions received fringe benefit payments on the June 16, 2002, electronic payments. These payments represent additional amounts due to the affected school divisions because their actual ADM exceeded the projected ADM used during the first 11 months of the year and full payment has not yet been made.

 

The final adjustments to the fiscal year 2002 Basic Aid entitlements are reflected on the June 30, 2002, electronic payments. An Excel file was created that lists the final adjustments to Basic Aid for fiscal year 2002. The file can be accessed from the departments website at:

 

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

 

For those divisions where Basic Aid was adjusted for any overpayment as shown in the Excel file, the amount of any overpayment must be deducted from your fiscal year 2002 unadjusted Basic Aid entitlement. Please note that this adjusted Basic Aid entitlement figure (labeled Final FY 2002 Adjusted Basic Aid Entitlement in the Excel file) will be pre-loaded 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