COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 008

October 6, 2006

REGULATORY

TO:

Division Superintendents

 

FROM:

Billy K. Cannaday, Jr.

Superintendent of Public Instruction

 

SUBJECT:

Certification of Adequate Funds Budgeted to Meet Required Local Effort for the Standards of Quality and Local Match Requirements for Certain State Funds in Fiscal Year 2007

 

Due: November 1, 2006

 

Please note: This data collection is based on House Bill (HB) 5032, which was adopted by the House and by the Senate on September 28, 2006. HB 5032 amends the existing 2006-2008 budget (Chapter 3) to correct the sales tax estimates for fiscal year 2007 and fiscal year 2008, and provides a supplemental state payment to divisions in fiscal year 2007 only. HB 5032 has been sent to Governor Kaine for action and will not be enacted into law until he signs it.

 

Section 22.1-94, Code of Virginia, requires local governing bodies to appropriate funds to school divisions that are sufficient to maintain an educational program that meets the Standards of Quality (SOQ). Section 22.1-97, Code of Virginia, sets forth the procedure that the Department of Education must follow if a county, city, or town fails to appropriate sufficient local funding to support the SOQ. The Appropriation Act also directs the department to follow certain procedures for calculating required local effort as well as procedures to follow if a school division does not spend the required state and local shares for the SOQ.

 

In addition to procedures for calculating required local effort, Item 135 of HB 5032, 2006 Acts of Assembly, Special Session I (General Assembly adopted amendments to the 2006-2008 Appropriation Act), requires the Department of Education to ensure that school divisions have appropriated sufficient local funds to meet required local matches for optional School Facilities and Incentive programs in which they have elected to participate. The Appropriation Act requires local school divisions to certify to the department their intent to participate in School Facilities and Incentive programs by November 1 in fiscal year 2007, and October 1 in fiscal year 2008, pursuant to HB 5032; and requires that the department ensure that sufficient local funds have been appropriated before releasing state funds for such programs. Attachment A to this memorandum provides complete language for the referenced code and Appropriation Act sections.

 

In past years, the department collected certification of required local effort for the SOQ and certifications for participation in School Facilities and Incentive programs separately. Beginning in fiscal year 2007, the department has combined these data collections to streamline these processes and to meet the requirements contained in HB 5032.

Each school division must complete and return a Budgeted Required Local Effort and Required Local Match certification file, provided as an Excel template, which will calculate required local effort for SOQ programs and required local matches for the School Facilities and Incentive programs. The template is located on the departments website and can be downloaded from the following address: http://www.doe.virginia.gov/VDOE/Finance/Budget/cdc/index.html

 

Please note that each jointly-operated school division (Bedford County and Bedford City, Fairfax County and Fairfax City, Greensville County and Emporia City, and James City County and Williamsburg) must submit separate certifications for each participating locality.

 

The new Excel template contains several spreadsheets that will calculate required local effort for mandatory SOQ programs (Basic Aid, Gifted Education, Vocational Education, Special Education, Prevention, Intervention and Remediation, English as a Second Language, Fringe Benefits, and Textbooks) and required local matches for optional School Facilities programs (Lottery, Additional Lottery, and School Construction Grants Program) and Incentive programs (At-Risk, At-Risk Four-Year-Olds, Compensation Supplement, Early Reading Intervention, K-3 Primary Class Size Reduction, and SOL Algebra Readiness) for fiscal year 2007. Instructions for completing the Excel template are included in Attachment B to this memorandum. Attachment C to this memorandum provides the account code structure for the Annual School Report Financial Section (ASRFIN) that is referenced within the data collection template. School divisions should consult the account code structure when completing this data collection.

 

The Excel template provides a summary of required local effort for the SOQ and the required local match for each program listed in the previous paragraph based on fiscal year 2007 funding levels adopted by the House and by the Senate in HB 5032. Please note that the data contained in this spreadsheet are projections based on HB 5032, the General Assembly adopted amendments to the Chapter 3 budget, and are subject to final action by Governor Kaine. Information contained in this file should not be considered final until HB 5032 amending the 2006-2008 Appropriation Act is signed into law by the Governor.

 

The Excel template includes the revised projections for the Sales Tax, Basic Aid, Supplemental Basic Aid, and Enrollment Loss accounts based on the General Assembly adopted amendment to the 2006-2008 budget to correct the sales tax estimate for both years of the biennium.

 

HB 5032 also proposes that additional funds be appropriated in fiscal year 2007 to supplement the difference between what a school division would have received in state funds if the higher sales tax estimate had been realized and the amount that each school division will receive as a result of the adjustments from lowering the sales tax estimate and increasing Basic Aid and Enrollment Loss. This supplemental state payment is being proposed only for fiscal year 2007 since most, if not all, local budgets for the current fiscal year have already been approved.

 

Normally, a reduction in the sales tax estimate would result in an increase in both the state and local shares of the cost of Basic Aid. Correcting the sales tax estimate provides the increase in the state share of Basic Aid cost. The supplemental payment should satisfy the majority of the need to increase the local share of Basic Aid cost resulting from the reduced sales tax estimate. As provided in HB 5032, this supplemental payment, as well as increases in Enrollment Loss and Supplemental Basic Aid, also will be treated as a credit toward each school divisions required local effort for meeting the SOQ in fiscal year 2007. The credit toward meeting each school divisions required local effort for meeting the SOQ in fiscal year 2007 based on the General Assemblys adopted amendment has been included in this template.

Divisions are given the option to calculate required local effort and required local matches for programs where the funding is based on March 31 average daily membership (ADM) using either the departments latest ADM projections or locally developed ADM projections. The first step in the data collection will determine whether sufficient local funds have been appropriated to maintain required local effort for the SOQ based on division-provided data regarding planned operating expenditures and specific adjustments for certain state, federal, and local funds for fiscal year 2007.

 

Superintendents of school divisions whose local appropriations for fiscal year 2007 are only slightly in excess of the amount required to maintain local effort for the SOQ are requested to review their ADM totals monthly. These superintendents must request additional local funding from the local governing body whenever changes in ADM increase the amount of required local effort beyond what has been provided by the local governing body. Documentation of all supplemental appropriations for fiscal year 2007 should be furnished to the department.

 

The template will then calculate the amount of local capital funds that are available to meet local match requirements for School Facilities programs, and the remaining amount of local operating funds available to meet local match requirements for School Facilities and Incentive programs (i.e., operating funds available after required local effort for the SOQ has been met.)

 

Divisions are allowed to select the School Facilities and Incentive programs in which they elect to participate and the template will track the effect of each programs local match requirement on available funds. Divisions are encouraged to identify all of the programs in which they want to participate. If there are not enough local funds available to cover all of the chosen programs, the division will be directed to request additional local funds from the local governing body, and will be directed to a certification form to certify the request for additional funds. Please note, however, that the department will not be able to release state funds for these programs until the division has obtained additional local appropriation to meet the required local matches.

After the worksheets within the template are complete and have passed all error checks successfully, the appropriate certification forms for required local effort for SOQ and required local matches for School Facilities and Incentive programs will be available for the division superintendent and program contact to sign. Please note that some of the certification sheets require information in addition to the superintendents signature. Specific instructions for each of the certification forms are provided in Attachment B to this memorandum.

 

Attachment B to this memorandum also provides detailed instructions for accessing the Excel template through the departments Web site; for completing the template to calculate projected required local effort and required local matches; and for submitting the signed certification forms and final Excel file to the department.

 

Please complete the Excel template and e-mail it to the department at k12budget@doe.virginia.gov. A hard copy of each certification form, signed by the division superintendent, must be mailed to:

 

Virginia Department of Education

Attention: Budget Office

P.O. Box 2120

Richmond, Virginia 23218-2120

 

The Excel template and the signed certification forms are due to the department no later than November 1, 2006.

 

If you have questions regarding the Excel template or the accompanying instructions, please contact the budget office at (804) 225-2025.

 

In the event the Governor proposes changes to HB 5032 that would affect the requirements of this data submission, you will be notified in a separate communication.

 

BKCJr/kmr

 

Attachments

 

http://www.doe.virginia.gov/administrators/superintendents_memos/2006/reg008a.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2006/reg008b.doc

http://www.doe.virginia.gov/administrators/superintendents_memos/2006/reg008c.doc