DEPARTMENT OF EDUCATION
SUPTS. MEMO NO. 101
May 15, 2007
Billy K. Cannaday, Jr.
Superintendent of Public Instruction
Final Fiscal Year 2007 State Entitlements Based on Actual March 31, 2007, ADM, Adjustments to the Fiscal Year 2007 Basic Aid Entitlement, and Estimated Fiscal Year 2008 School Nurse Support Cost Funded in Basic Aid
Administrative Superintendents Memorandum Number 006, dated February 9, 2007, required school divisions to report average daily membership (ADM) as of March 31, 2007. The data reported by divisions were used to recalculate all ADM-based state entitlements for fiscal year 2007. On a statewide basis, actual March 31, 2007, ADM was less than the projected ADM on which the current state budget for fiscal year 2007 (Chapter 847) is based. Consequently, school divisions will receive their full ADM-based state entitlement payments for fiscal year 2007 with no changes other than the routine adjustments that are made to the Basic Aid entitlements for some divisions each year as described later in this memorandum.
The information in this memorandum contains the final state funding due to school divisions in fiscal year 2007 for ADM-based accounts. Also, 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.
The Excel calculation file shows state entitlements, required local effort for the Standards of Quality (SOQ) accounts, and required local matches for school facilities and incentive accounts calculated based on actual March 31, 2007, ADM. The accounts affected by actual March 31, 2007, ADM appear in the Excel file in bold italics and are shown as the full entitlement with no adjustments. The calculation template can be downloaded from the Department of Education Web site at: http://www.doe.virginia.gov/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 2007 entitlements for each school division for the Standards of Quality (SOQ), school facilities, and incentive accounts that are based on actual March 31, 2007, ADM. Please note that, unlike previous Excel calculation files for fiscal year 2007 provided by the department, this file does not offer an option to change ADM for fiscal year 2007 since ADM is now final.
Attachment C to this memorandum shows the final, routine adjustments to the fiscal year 2007 state Basic Aid entitlement amounts, which are explained in further detail below.
Please note the following when reviewing the data contained in the Excel file:
1. Basic Aid: The fiscal year 2007 state Basic Aid entitlement amount contained in the State and Local Funds Worksheet in the Excel calculation file does not reflect any required adjustments 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 residential Governors School programs. The adjustments made to fiscal year 2007 Basic Aid entitlements are described below and are listed in the sheet labeled Adjustments to FY07 Basic Aid. The final amount to be paid to school divisions in fiscal year 2007 for Basic Aid is contained in this sheet.
2. Sales Tax: The fiscal year 2007 sales tax estimates contained in the Excel calculation file represent the Department of Taxations official forecast of sales tax included in the Chapter 847 budget. The sales tax estimates contained in Chapter 847 must be used to compute the Basic Aid entitlement for fiscal year 2007. Chapter 847 specifically states:
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 advised that, based upon the actual year-to-date sales tax receipts for fiscal year 2007 through May, the estimate of fiscal year 2007 sales tax revenue appropriated in Chapter 847, 2007 Acts of Assembly (amended 2006-2008 appropriation act), appears to be overestimated. The total amount of actual sales tax receipts for fiscal year 2007 will not be finalized until mid-June. The semi-monthly payments of sales tax in May and June will be based on the actual sales tax receipts for these two months, not the estimated sales tax distribution as provided in the Excel calculation template.
As required by language in Item 135, Chapter 847, the Basic Aid entitlement calculation for fiscal year 2007 is based on the distribution of the estimated amount of sales tax revenue for fiscal year 2007 and will not be adjusted for the actual sales tax revenue received for the year. Thus, the fiscal year 2007 state and local shares of Basic Aid based on actual March 31, 2007, ADM, as communicated in this memorandum, are final and will not change. School divisions are encouraged to take the appropriate steps now to plan for the anticipated decrease in the actual sales tax distribution for fiscal year 2007. Final information on actual sales tax receipts on a cash and an accrual basis will be posted on the departments website in July as part of the fiscal year 2007 Annual School Report information.
3. School Facilities, Incentive, and Categorical Accounts: School Facilities and Incentive accounts represent the full entitlement for actual participation in fiscal year 2007. For Categorical accounts other than fiscal year 2007 Foster Care, the entitlements do not reflect final participation or reimbursement levels for the year and are shown as estimated entitlements only.
4. 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 2007 issue may be made directly to regional programs from State Non-Arbitrage Program (SNAP) allocations if they are established separately in SNAP for the regional program.
5. Local Lottery Distribution: The distribution of local lottery revenue to school divisions is based on the per pupil amount of $222.31 listed in Chapter 847 for fiscal year 2007. The semi-monthly Lottery payments for fiscal year 2007 will be adjusted for actual ADM beginning with the May 31, 2007, electronic funds transfer (EFT).
Adjustments to the Fiscal Year 2007 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 Direct Aid 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 2007 state Basic Aid entitlements for certain school divisions beginning with the May 31, 2007, EFT. Where applicable, these adjustments will reduce the fiscal year 2007 Basic Aid entitlement paid to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the May 31, 2007, EFT) are shown in the sheet labeled Adjustments to FY07 Basic Aid. The Basic Aid adjustments for fiscal year 2007 shown in the Excel file are as follows:
1. Driver Education Funds Portion of Basic Aid As required by Chapter 847, this adjustment reduces the Basic Aid entitlement for school divisions that are not eligible to receive Driver Education funds in fiscal year 2007.
2. 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 2007. This deduction reduces the Basic Aid entitlement paid to affected divisions.
3. 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 2007. This deduction reduces the Basic Aid entitlement paid to affected divisions.
4. 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 2005-2006 school year. This adjustment to the division Basic Aid entitlement is in accordance with Chapter 847, 2007 Appropriation Act.
5. 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 2005-2006 school year. This adjustment to the division Basic Aid entitlement is in accordance with Chapter 847, 2007 Appropriation Act.
Tuition for Schools for the Deaf and the Blind This
adjustment is for the local tuition payment for students enrolled at the
In order to maintain proper accounting for adjustments made to Basic Aid entitlements for payments made on behalf of school divisions (adjustments two through six 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 2006-2007 Annual School Report. To balance this gross Basic Aid revenue on the 2006-2007 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 the final Basic Aid payment was adjusted for non-eligibility for Drivers Education funds in item one above, the amount of the overpayment will be deducted from your unadjusted or full Basic Aid entitlement as shown in the Annual School Report. The reduced Basic Aid entitlement will be shown on the Revenues worksheet under revenue source code 240202 on your Annual School Report. No further reporting action is required, since the adjusted Basic Aid entitlement will show the reduction, but school divisions should make note of this adjustment, and can reference Attachment C to this memorandum for further detail on adjustments for overpayment and non-eligibility for Drivers Education funds.
Special Reminder on Carry-Forward Provision Language in
Chapter 847 (Fiscal Year 2007 to Fiscal Year 2008)
As described in Informational Superintendents Memorandum No. 89, Chapter 847 permits unexpended state funds as of June 30, 2007, to be carried forward by school divisions to fiscal year 2008 for the following Direct Aid accounts only:
1. School Construction Grants Program (revenue source code 240306)
2. Lottery (revenue source code 240233)
3. Additional Lottery (revenue source code 240237)
4. Competitive Leadership Grant (revenue source code 240294)
5. Textbooks (revenue source code 240214).
State funds received by school divisions in fiscal year 2007 for the School Construction Grants Program and Lottery/Additional 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.
School divisions that received a Competitive Leadership Grant in fiscal year 2006 are allowed to retain any unspent balances and are permitted to spend any remaining balances for the intended purposes during the ensuing two fiscal years (during fiscal years 2007 and 2008). School divisions that received a Competitive Leadership Grant in fiscal year 2007 are allowed to retain any unspent balances and are permitted to spend any remaining balances for the intended purposes during the ensuing two fiscal years (during fiscal years 2008 and 2009).
Please note that the carry forward provision for SOL Algebra Readiness program funds has been eliminated for fiscal years 2007 and 2008 based on language changes adopted in the Chapter 847 budget. Consequently, any state funds received by school divisions for the SOL Algebra Readiness program in fiscal year 2007 or fiscal year 2008 must be spent by June 30, 2007, or June 30, 2008, respectively, or these unspent state funds must be returned to the department.
Except for the five accounts listed above, all other state Direct Aid to Public Education funds received by school divisions in fiscal year 2007 must be expended by June 30, 2007; otherwise, any state funds received in fiscal year 2007 that have unexpended balances as of June 30, 2007, are subject to the reversion requirement of Section 22.1-100, Code of Virginia, and must be returned to the department.
Estimated Fiscal Year 2008 School Nurse Support Cost
Funded in Basic Aid
Item 135, Paragraph A.3.b of Chapter 847, 2007 Appropriation Act, requires the Department of Education to report annually to school divisions the school nurse support cost funded as part of Basic Aid:
The amount resulting from the support cost calculation for school nurses shall be specifically identified as such and reported to school divisions annually. School divisions will allocate these funds for school nurse positions or for contracted services of health professionals providing health services.
This memorandum and Attachment D provide the required information on the fiscal year 2008 support cost calculation for school nurses funded as part of Basic Aid.
Attachment D to this memorandum contains division-level detail on the estimated fiscal year 2008 school nurse support cost funded in Basic Aid. This Excel file is provided to school divisions on a projected basis only. The data in the file is based on projected March 31, 2008, adjusted average daily membership (ADM). Actual school nurse costs funded in Basic Aid will be based on actual March 31, 2008, ADM and the final school nurse cost contained in Basic Aid.
If you have any questions concerning the information in this memorandum, please contact Kent Dickey, assistant superintendent for finance, or budget office staff at (804) 225-2025.