COMMONWEALTH OF VIRGINIA
DEPARTMENT OF EDUCATION
P.O. BOX 2120
RICHMOND, VIRGINIA 23218-2120
SUPTS. MEMO NO. 24
May 20, 2005
ADMINISTRATIVE
|
TO: |
Division
Superintendents |
|
FROM: |
Jo Lynne
DeMary Superintendent
of Public Instruction |
|
SUBJECT: |
State
Entitlements for Fiscal Year 2005 Based on Actual March 31, 2005, Average
Daily Membership (ADM), Adjustments to the Fiscal Year 2005 Basic Aid
Entitlement, and Preliminary Fiscal Year 2005 Prorated Basic Aid Entitlements |
Administrative Superintendents Memorandum Number
10, dated March 4, 2005, required school divisions to report average daily
membership (ADM) as of March 31, 2005, as part of the 2004-2005 Spring Student Record Collection. The data reported by divisions were used to
recalculate all ADM-based entitlements for fiscal year 2005. On a statewide basis, actual March 31, 2005,
adjusted ADM was 0.03 percent less than the projected March 31, 2005, ADM on
which the state budget was based.
Current appropriations in the Direct Aid to Public Education budget are
not sufficient to pay school divisions their full ADM entitlements for fiscal
year 2005. This appropriation shortfall
is attributable to the unfunded technical corrections contained in the current
appropriation act, Chapter 951, 2005 Acts of Assembly.
Detailed information on the unfunded technical
corrections in fiscal year 2005 has been provided to you through several
communications over the last year. Most
recently, this information was communicated through Regulatory Superintendents
Memorandum Number 1, dated March 4, 2005, and Informational Superintendents
Memorandum Number 97, dated May 6, 2005.
Currently, the total funding shortfall for fiscal
year 2005 is contained in the Basic Aid account. All other formula-based accounts are fully funded to support
payment of the full entitlement to each division. At the present time, Basic Aid is under funded by $11.7 million,
or 0.46 percent of the total Basic Aid entitlement. As the department identifies unspent balances in other accounts,
this shortfall will be reduced.
Pursuant to the appropriation act, the Department of Education is
authorized to prorate any remaining shortfall across all school divisions. The department will continue to seek
additional balances from other accounts that can be used to decrease the
shortfall and the resulting proration in Basic Aid. It is anticipated that divisions will be notified of the final
proration factor and prorated Basic Aid entitlement for fiscal year 2005 by
early June. Recurring Direct Aid
payments reflecting final March 31, 2005, ADM and any required prorations will
be made on the June 16th and June 30th, 2005, electronic
funds transfers (EFT).
The information in this memorandum contains the
final state entitlements due to school divisions in fiscal year 2005 for
ADM-based accounts. For the purpose of
showing the full final entitlement based on actual March 31, 2005, ADM, Basic
Aid has not been prorated in these calculations. This memorandum also provides information on the preliminary
prorated Basic Aid entitlement based on the
appropriations currently available for payment. In addition, where available, final
entitlement payments are shown for other Direct Aid accounts that are not 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 full state
entitlements (i.e., unprorated), the preliminary prorated Basic Aid
entitlement, required local effort for the Standards of Quality (SOQ) accounts,
and required local matches for incentive-based accounts based on actual March
31, 2005, ADM. Please note that, unlike
previous Excel calculation files for fiscal year 2005 provided by the
department, this file does not offer an option to change ADM for fiscal year
2005 since March 31, 2005, ADM is now final; however, the projected ADM used to
calculate fiscal year 2006 entitlements may be changed in this file to reflect
local projections of ADM.
Attachment A to this memorandum provides detailed instructions for accessing the Excel file from the departments website. The Excel file can be accessed from the departments website at:
http://www.doe.virginia.gov/VDOE/Finance/Budget/calctools.html
The Excel file allows you to view the preliminary
prorated Basic Aid entitlement or the unprorated Basic Aid entitlement amount
by using toggle buttons in the "State & Local Funds Worksheet" of
the file. The prorated Basic Aid
entitlement reflects the payment divisions can expect to receive for fiscal
year 2005 based on current appropriations with no additional adjustments to
account for the transfer of other unspent balances. The fiscal year 2005 Basic Aid entitlement shown for each
division is prorated based on a statewide proration factor of 0.46
percent. Please be aware that this
scenario likely represents the worst case for proration. As unspent balances are identified in other
accounts, they will be applied to the Basic Aid shortfall thus increasing the
final Basic Aid payment.
The prorated Basic Aid entitlement shown for each
division on the State & Local Funds Worksheet does not reflect any of the
necessary adjustments to Basic Aid that affect the final Basic Aid
payment. The Basic Aid adjustments for
each division, where applicable, are shown in the Adjustments to FY05 Basic
Aid sheet and represent deductions from the final Basic Aid entitlement. The required local share shown for Basic Aid
is based on the full entitlement and is not reduced to reflect any proration. By law, school divisions are required to
match the unprorated Basic Aid entitlement amount in meeting required local
effort for fiscal year 2005. Amounts
shown for other accounts in this view of the file are the full entitlement
amounts. The accounts affected by March
31, 2005, ADM appear in the file in bold italics.
The Full Entitlements (Unprorated) button in the
"State & Local Funds Worksheet" should be selected to see the
unprorated Basic Aid entitlement for fiscal year 2005. The accounts affected by March 31, 2005, ADM
appear in this view of the file in bold italics and are shown as the full
entitlement. As stated above for the
prorated entitlement, the unprorated Basic Aid entitlement shown for each
division on the State and Local Funds worksheet does not reflect any of the
necessary adjustments to Basic Aid that affect the final Basic Aid
payment. The Basic Aid adjustments for
each division, where applicable, are shown in the Adjustments to FY05 Basic
Aid sheet and represent deductions from the final Basic Aid entitlement.
At this time, school divisions should use the
prorated Basic Aid entitlement amount (less adjustments) in projecting final
state revenues for fiscal year 2005.
The full Basic Aid entitlement amount is provided for your information
only. Detail on the calculation of the prorated
Basic Aid entitlements for all school divisions is shown in the "Proration
Amounts" worksheet of the Excel file.
This same data is provided in Attachment B to this memorandum.
Please also note the following when reviewing the
data contained in the Excel file:
1. Basic Aid: As stated above, the
fiscal year 2005 state payment for Basic Aid contained in the Excel calculation
file sheet labeled State and Local Funds Worksheet does not reflect any
required adjustments authorized by the appropriation act for circumstances 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 2005 Basic Aid entitlements are described below
and are listed in the sheet labeled Adjustments to FY05 Basic Aid. The amounts in the last column of this sheet
are the fiscal year 2005 prorated entitlements for Basic Aid for each division
that include the necessary adjustments for final payment.
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 2005. As required by law, these estimates are based on those contained
in the final appropriation act for fiscal year 2005 (Chapter 951, 2005 Acts of
Assembly). As required by Chapter 951,
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 sales tax 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 cash and accrual bases
will be posted on the departments website in July as part of the fiscal year
2005 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 2005 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 2005 Annual School
Report information.
4. Incentive
and Categorical Accounts: Group II incentive accounts represent the
full entitlement for actual participation in fiscal year 2005. For certain Group III categorical accounts,
the entitlements do not reflect final participation or reimbursement levels for
the year and should be considered only 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 fiscal year (e.g., the spring
2005 issue for fiscal year 2005). 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 2005 issue may be made
directly to regional programs from State Non-Arbitrage Program (SNAP)
allocations if SNAP accounts are set-up separately for each regional program.
6. Local
Lottery Distribution: The
distribution of local lottery revenue to school divisions is based on the per
pupil amount of $236.95 listed in the current appropriation act for fiscal year
2005 (Chapter 951). The semi-monthly
lottery payments for fiscal year 2005 will be adjusted for actual ADM beginning
with the June 16, 2005, electronic funds transfer (EFT).
Adjustments
to the Fiscal Year 2005 Basic Aid Entitlement for Certain School Divisions
The appropriation act directs that adjustments for
students in mental health or mental retardation facilities be made against a
school divisions Basic Aid payment.
Following this precedent and because Basic Aid is the largest Direct Aid
account, the departments normal practice is to adjust Basic Aid for other
types of routine adjustments to school division payments. Consequently, various adjustments will be
made to the fiscal year 2005 state Basic Aid entitlements for certain school
divisions beginning with the June 16, 2005, EFT. Where applicable, these adjustments will reduce the fiscal year
2005 Basic Aid entitlement paid to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the
June 16, 2005, EFT) are shown in the sheet labeled Adjustments to FY05 Basic
Aid in the Excel file. The Basic Aid
adjustments for fiscal year 2005 are as follows:
1. Overpayment of At-risk Account For
some divisions, an adjustment for overpayment of At-risk funding is necessary
where actual ADM is lower than the projected ADM on which payments were based
during the year and also due to a correction in the funding formula that
reduced final entitlements. This
adjustment reduces the affected divisions Basic Aid entitlement that will be
reported the 2004-2005 Annual School Report.
2. Driver Education Funds Portion of Basic
Aid As required by the appropriation act in Item 146 C.2.e.1) of Chapter 951,
2005 Acts of Assembly, this adjustment reduces the Basic Aid entitlement for
school divisions that are not eligible to receive Driver Education funds in
fiscal year 2005 due to non-compliance with the requirements of Section
22.1-205 C., Code of Virginia. The
reduced Basic Aid entitlement should be reported in Revenue Source Code 240202
on your 2004-2005 Annual School Report.
This adjustment reduces the affected divisions Basic Aid entitlement
that will be reported the 2004-2005 Annual School Report.
3. 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 2005. This deduction reduces the affected divisions Basic Aid payment,
but not the Basic Aid entitlement.
4. 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 2005. This
deduction reduces the affected divisions Basic Aid payment, but not the Basic
Aid entitlement.
5. 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 2003-2004
school year. This adjustment to the
division Basic Aid entitlement is in accordance with Item 146 C.2.d. paragraphs
1) and 2) of Chapter 951, 2005 Acts of Assembly. This deduction reduces the affected divisions Basic Aid payment,
but not the Basic Aid entitlement.
6. 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
2003-2004 school year. This adjustment
to the division Basic Aid entitlement is in accordance with Item 146 C.2.d.
paragraphs 1) and 2) of Chapter 951, 2005 Acts of Assembly. This deduction reduces the affected divisions
Basic Aid payment, but not the Basic Aid entitlement.
7. 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
2005, 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, 2004, enrollment for each school. This deduction reduces the affected
divisions Basic Aid payment, but not the Basic Aid entitlement.
Reporting Adjustments to Basic Aid on the Annual
School Report
In order to maintain proper accounting for adjustments
made to Basic Aid entitlements for payments made on behalf of school divisions
(adjustments 3 through 7 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 2004-2005 Annual School
Report. To balance this gross Basic Aid
revenue on the 2004-2005 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 the At-risk account (item 1 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 2004-2005 Annual School Report. A deduction to Basic Aid for non-eligibility
of Driver Education funds (item 2 above) should be treated in the same manner.
Special Reminder on Carry-Over Provision Language in
Chapter 951, 2005 Acts of Assembly (Fiscal Year 2005 to Fiscal Year 2006)
As communicated in Informational
Superintendents Memorandum No. 109, dated May 20, 2005, Chapter
951 permits unexpended state funds as of June 30, 2005, to be carried forward
by school divisions to fiscal year 2006 for the following Direct Aid to Public
Education accounts only:
1.
SOL Algebra Readiness (revenue source code 240405)
2.
School Construction Grants Program (revenue source
code 240306)
3.
Lottery (revenue source code 240233)
4.
Competitive Leadership Grant (revenue source code
240294)
5.
Textbooks (revenue source code 240214)
To
carry forward fiscal year 2005 state funds to fiscal year 2006 for the five
accounts listed above, the school division must have actually received the
state funds in fiscal year 2005. State
funds received by school divisions in fiscal year 2005 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 five accounts listed above, all other state Direct Aid funds received
by school divisions in fiscal year 2005 should be expended by June 30, 2005;
otherwise, any unexpended fiscal year 2005 state funds are subject to the reversion
requirement of Section 22.1-100, Code of Virginia.
In
the event additional fund sources are identified that may be used to support
additional Basic Aid payments, you will be notified in another memorandum of
any changes to the required proration of Basic Aid payments for fiscal year
2005. 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.
Attachments
http://www.doe.virginia.gov/administrators/superintendents_memos/2005/adm024a.pdf
http://www.doe.virginia.gov/administrators/superintendents_memos/2005/adm024b.pdf