COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 130

May 16, 2008

INFORMATIONAL

TO:

Division Superintendents

 

FROM:

Billy K. Cannaday, Jr.

Superintendent of Public Instruction

 

SUBJECT:

Final Fiscal Year 2008 State Entitlements Based on Actual March 31, 2008, ADM, and Adjustments to the Fiscal Year 2008 Basic Aid Entitlement

 

Pursuant to Chapter 847, 2008 Acts of Assembly, school divisions were required to report average daily membership (ADM) as of March 31, 2008, to the Department of Education. The data reported by divisions were used to recalculate all ADM-based state entitlements for fiscal year 2008. On a statewide basis, actual March 31, 2008, ADM was less than the projected ADM on which the current state budget for fiscal year 2008 (Chapter 847, 2008 Acts of Assembly) is based. Consequently, school divisions will receive their full ADM-based state entitlement payments for fiscal year 2008 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 2008 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 referenced in this memorandum 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, 2008, ADM. The accounts affected by actual March 31, 2008, ADM appear in the Excel file in bold italics and are shown as the full entitlement with no adjustments. Please note that, unlike previous Excel calculation files for fiscal year 2008 provided by the department, this file does not offer an option to change ADM for fiscal year 2008 since ADM is now final. The calculation template can be downloaded from the Department of Education website 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 2008 entitlements for each school division for the Standards of Quality (SOQ), school facilities, and incentive accounts that are based on actual March 31, 2008, ADM.

 

Attachment C to this memorandum shows the final, routine adjustments to the fiscal year 2008 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:

 

Basic Aid: The fiscal year 2008 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 Governor's School programs. The adjustments made to fiscal year 2008 Basic Aid entitlements are described below and are listed in the sheet labeled Adjustments to FY2008 Basic Aid. The final amount to be paid to school divisions in fiscal year 2008 for Basic Aid is contained in this sheet.

 

Sales Tax: The fiscal year 2008 sales tax estimates contained in the Excel calculation file represent the Department of Taxation's official forecast of sales tax included in the Chapter 847 budget (2008 Acts of Assembly). The sales tax estimates contained in Chapter 847 must be used to compute the Basic Aid entitlement for fiscal year 2008. 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.

School Facilities, Incentive, and Categorical Accounts: School Facilities and Incentive accounts represent the full entitlement for actual participation in fiscal year 2008. For Categorical accounts other than fiscal year 2008 Foster Care, the entitlements do not reflect final participation or reimbursement levels for the year and are shown as estimated entitlements only.

 

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 2008 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.

 

Local Lottery Distribution: The distribution of local lottery revenue to school divisions is based on the revised per pupil amount of $222.80 (up from the estimated amount of $222.71 included in Chapter 847), which reflects actual March 31, 2008, ADM. The semi-monthly Lottery payments for fiscal year 2008 will be adjusted for actual ADM beginning with the May 31, 2008, electronic funds transfer (EFT).

 

Adjustments to the Fiscal Year 2008 Basic Aid Entitlement for Certain School Divisions

 

As in past years, the department's 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 the local share of cost of educating students in mental health or mental retardation facilities be made against a school division's Basic Aid payment. Consequently, various adjustments will be made to the fiscal year 2008 state Basic Aid entitlements for certain school divisions beginning with the May 31, 2008, EFT. Where applicable, these adjustments will reduce the fiscal year 2008 Basic Aid entitlement paid to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the May 31, 2008, EFT) are shown in the sheet labeled Adjustments to FY08 Basic Aid. The Basic Aid adjustments for fiscal year 2008 shown in the Excel file are as follows:

 

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 2008.

 

Local Tuition for Summer Residential Governor's Schools Lists the local share of tuition for Summer Residential Governor's Schools paid by the department on behalf of school divisions and that is owed to the department in fiscal year 2008. This deduction reduces the Basic Aid entitlement paid to affected divisions.

 

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 2008. This deduction reduces the Basic Aid entitlement paid to affected divisions.

 

Mental Health Local Share of Cost This adjustment is for the school division's share of the cost of educating children in state mental health hospitals. The data used to calculate this adjustment are based on the 2006-2007 school year. This adjustment to the division Basic Aid entitlement is in accordance with Chapter 847, 2008 Acts of Assembly.

 

Mental Retardation Local Share of Cost This adjustment is for the school division's share of the cost of educating children in state mental retardation facilities. The data used to calculate this adjustment are based on the 2006-2007 school year. This adjustment to the division Basic Aid entitlement is in accordance with Chapter 847, 2008 Acts of Assembly.

 

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 VSDBMD-Hampton or VSDB-Staunton during fiscal year 2008, 22.1-348, Code of Virginia, and Virginia Board of Education regulation 8VAC20-80-130.H. require 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 the students. This adjustment is based on the December 1, 2007, enrollment for each school.

 


Reporting Basic Aid Adjustments on the 2007-2008

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 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 2007-2008 Annual School Report. To balance this gross Basic Aid revenue on the 2007-2008 Annual School Report, school divisions with adjustments to Basic Aid for Summer Residential Governor's 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 Driver's 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 Driver's Education funds.

 

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.

BKCJr/shd

 

Attachments

 

a. Entitlement Calculation Template Instructions (PDF)

b. Entitlement Sheets FY 2008 - Chapter 847 (PDF)

c. Final Adjustments to FY 2008 Basic Aid Entitlements (PDF)