COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 21

May 28, 2004

ADMINISTRATIVE

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

State Entitlements for Fiscal Year 2004 Based on Actual March 31, 2004, Average Daily Membership (ADM) and Adjustments to the Fiscal Year 2004 Basic Aid Entitlement

 

Administrative Superintendents Memorandum Number 6, dated March 5, 2004, required school divisions to report average daily membership (ADM) as of March 31, 2004. The data reported by divisions were used to recalculate all ADM-based entitlements for fiscal year 2004. On a statewide basis, actual ADM was less than the projected ADM on which the state budget was based. School divisions, therefore, will receive their full ADM entitlement payments for fiscal year 2004 with no changes other than the routine adjustments that are made to Basic Aid each year as described in this memorandum.

 

The information in this memorandum contains the final state funding due to school divisions in fiscal year 2004 for ADM-based accounts. In addition, where available, final entitlements are shown for other Direct Aid accounts that are not calculated based on ADM. Entitlements for some accounts that require school divisions to submit reimbursements have not been finalized for the year and the entitlements shown are estimates only.

 

An Excel file is provided that shows state entitlements, required local effort for the Standards of Quality (SOQ) accounts, and required local matches for incentive-based accounts calculated on March 31, 2004, ADM. The accounts affected by final March 31, 2004, ADM appear on the Excel file in bold italics and are shown as the full entitlement with no adjustments. 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. Attachment B to this memorandum shows the final fiscal year 2003 and fiscal year 2004 entitlements for each school division for the Standards of Quality (SOQ), incentive, and categorical accounts that are based on March 31, 2004, ADM. Please note that, unlike previous Excel calculation files for fiscal year 2004 provided by the department, this file does not offer an option to change ADM for fiscal year 2004 since ADM is now final.

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

 

1. Basic Aid: The fiscal year 2004 state payment for Basic Aid contained in the Excel calculation file sheet labeled State and Local Funds Worksheet does not reflect any required 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 adjustments made to fiscal year 2004 Basic Aid entitlements are described below and are listed in the sheet labeled Adjustments to FY04 Basic Aid. The final amount to be paid to school divisions in fiscal year 2004 for Basic Aid is contained in this sheet.

 

2. Sales Tax: The sales tax estimates contained in the Excel calculation file represent the amounts used to compute the Basic Aid entitlement for fiscal year 2004. As required by law, these estimates are based on those contained in the final appropriation act for fiscal year 2004 (Chapter 943, 2004 Acts of Assembly). As required by Chapter 943, in the event that the actual revenues from the state sales and use tax returned (on the basis of the latest triennial count of school age population) for sales in the fiscal year in which the school year begins are different from the number estimated as the basis for this appropriation, the estimated revenues shall not be adjusted. Please be aware, however, that payments to school divisions are based on actual revenues of the state sales and use tax dedicated to public education. These actual payments may differ from the estimates provided in this worksheet. Final information on actual sales tax receipts on a cash and accrual bases will be posted on the departments website in July as part of the fiscal year 2004 Annual School Report information.

 

3. Fringe Benefits: The fringe benefit amounts contained in the Excel calculation file are the actual amounts you will receive for fiscal year 2004 on a cash basis. Fringe benefit amounts shown on an accrual basis will be posted on the departments website in July as part of the fiscal year 2004 Annual School Report information.

 

4. Incentive and Categorical Accounts: Group II incentive accounts represent the full entitlement for actual participation in fiscal year 2004. For certain Group III categorical accounts, the entitlements do not reflect final participation or reimbursement levels for the year and are shown as estimated entitlements.

 

5.           VPSA Technology: VPSA Technology (i.e., SOL Web-based Technology Initiative) entitlements reflect the total entitlement that is allocated to the school division for the note issue offered in the designated year. They do not reflect actual reimbursement payments requested and paid to the school division. Please be aware that entitlements for regional programs are included in school division fiscal agent totals; however, actual reimbursements for the Spring 2004 issue may be made directly to regional programs from State Non-Arbitrage Program (SNAP) allocations if they are set-up separately for regional programs.

 

6.           Local Lottery Distribution: The distribution of local lottery revenue to school divisions is based on the per pupil amount of $224.25 listed in the final appropriation act for fiscal year 2004 (Chapter 943). The semi-monthly Lottery payments for fiscal year 2004 will be adjusted for actual ADM beginning with the June 16, 2004, electronic funds transfer (EFT).

 

Adjustments to the Fiscal Year 2004 Basic Aid Entitlement for Certain School Divisions

 

As in past years, the departments normal practice for making certain types of adjustments to school division payments is to adjust Basic Aid since it is the largest account. The appropriation act directs that adjustments for students in mental health or mental retardation facilities be made against a school divisions Basic Aid payment. Consequently, various adjustments will be made to the fiscal year 2004 state Basic Aid entitlements for certain school divisions beginning with the June 16, 2004, electronic funds transfer (EFT). Where applicable, these adjustments will reduce the fiscal year 2004 Basic Aid entitlement paid to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the June 16, 2004, EFT) are shown in the sheet labeled Adjustments to FY04 Basic Aid. The Basic Aid adjustments for fiscal year 2004 shown in the Excel file are as follows:

 

1.  Overpayment of Instructional VRS and Instructional Social Security Since these payments are fully paid for the fiscal year by the last May payment, an adjustment for overpayments of instructional VRS and Social Security entitlements is necessary where actual ADM is lower than the projected ADM on which payments were based during the year. For those divisions whose actual ADM was higher than projected, the department will make one additional payment in June for the balance of the fringe benefit entitlements.

 

2.  Overpayment of English as a Second Language - Adjusts for overpayments of English as a Second Language entitlements.

 

3.  Driver Education Funds Portion of Basic Aid As required by the appropriation act in Item 147 C.2.e.1) of Chapter 943, 2004 Acts of Assembly, this adjustment reduces Basic Aid entitlements for school divisions that are not eligible to receive Driver Education funds in fiscal year 2004.

 

4.  Local Tuition for Summer Residential Governors Schools Lists the local share of tuition for Summer Residential Governors Schools paid by the department on behalf of school divisions and that is owed to the department in fiscal year 2004. This deduction reduces the Basic Aid entitlement paid to affected divisions.

 

5.  Local Tuition for Foreign Language Academies Lists the local share of tuition for Foreign Language Academies paid by the department on behalf of school divisions and that is owed to the department in fiscal year 2004. This deduction reduces the Basic Aid entitlement paid to affected divisions.

 

6.  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 the 2002-2003 school year. This adjustment to the division Basic Aid entitlement is in accordance with Item 147.C.2.d.1) and 2) of Chapter 943, 2004 Acts of Assembly.

 

7.  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 the 2002-2003 school year. This adjustment to the division Basic Aid entitlement is in accordance with Item 147.C.2.d.1) and 2) of Chapter 943, 2004 Acts of Assembly.

 

8.  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 2004, 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, 2003, enrollment for each school.

 

Reporting Adjustments

 

In order to maintain proper accounting for adjustments made to Basic Aid entitlements for payments made on behalf of school divisions (adjustments 4 through 8 above), it is necessary for each school division to report the full entitlement or gross revenue of Basic Aid funds under revenue source code 240202 (Basic School Aid) on the 2003-2004 Annual School Report. To balance this gross Basic Aid revenue on the 2003-2004 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 item 1 or item 2 above, the amount of the overpayment must be deducted from your unadjusted or full Basic Aid entitlement. Report this reduced Basic Aid entitlement in revenue source code 240202 on your 2003-2004 Annual School Report. A deduction to Basic Aid for non-eligibility of Driver Education funds (item 3 above) should be treated in the same manner.

 

Special Reminder on Carry-Over Provision Language in Chapter 943, 2004 Acts of Assembly (Fiscal Year 2004 to Fiscal Year 2005)

 

As communicated in Informational Superintendent's Memorandum No. 96, dated May 7, 2004, Chapter 943 permits unexpended state funds as of June 30, 2004, to be carried forward by school divisions to fiscal year 2005 for the following Direct Aid accounts only:

 

1.     SOL Remediation (revenue source code 240274)

2.     SOL Algebra Readiness (revenue source code 240405)

3.     School Construction Grants Program (revenue source code 240306)

4.     Lottery (revenue source code 240233)

 

To carry forward fiscal year 2004 state funds to fiscal year 2005 for the four accounts listed above, the school division must have actually received the state funds in fiscal year 2004. State funds received by school divisions in fiscal year 2004 for the School Construction Grants Program and Lottery may also be paid into escrow accounts pursuant to Sections 22.1-175.5 and 22.1-100.1, Code of Virginia, respectively, and carried forward indefinitely.

 

Except for the four accounts listed above, all other state Direct Aid funds received by school divisions in fiscal year 2004 should be expended by June 30, 2004; otherwise, any unexpended fiscal year 2004 state funds are subject to the reversion requirement of Section 22.1-100, Code of Virginia.

 

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/mmv

 

Attachments

 

/administrators/superintendents_memos/2004/adm021a.pdf

/administrators/superintendents_memos/2004/adm021b.pdf