COMMONWEALTH of VIRGINIA
Department of Education
May 19, 2009
TO: Division Superintendents
FROM: Patricia I. Wright, Superintendent of Public Instruction
Pursuant to Chapter 781, 2009 Acts of Assembly, school divisions were required to report average daily membership (ADM) as of March 31, 2009, to the Department of Education (the Department). The data reported by divisions were used to recalculate all ADM-based state entitlements for fiscal year 2009. On a statewide basis, actual March 31, 2009, ADM was higher than the projected ADM on which the current state budget for fiscal year 2009 (Chapter 781, 2009 Acts of Assembly) is based. Consequently, current appropriations in the Direct Aid to Public Education budget are not sufficient to pay school divisions their full ADM entitlements for fiscal year 2009. As of the date of this memorandum, there is an estimated statewide funding shortfall of $1.6 million, based on available balances already identified in other accounts. In order to address this deficit, the payments for Basic Aid shown in this memorandum are prorated down to 99.95 percent of the full entitlement amount. The Department will continue to monitor program budgets to determine if any additional balances will be available to help reduce the proration. As a result, Basic Aid payments will continue to be adjusted through the end of the year as balances become available so divisions will need to monitor receipts carefully through June 30th.
The information in this memorandum contains the final state funding (as of the date of this memorandum, pending balances becoming available to make additional Basic Aid payments) due to school divisions in fiscal year 2009 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, incentive, and Lottery accounts calculated based on actual March 31, 2009, ADM. The accounts affected by actual March 31, 2009, ADM appear in the Excel file in bold italics and are shown as the estimated cash payment based on actual March 31, 2009, ADM and other adjustments made to date (see sheet titled “Adjustments to FY2009 Basic Aid” in Excel calculation file for details). Please note that, unlike previous Excel calculation files for fiscal year 2009 provided by the Department, this file does not offer an option to change ADM for fiscal year 2009 since ADM is now final. The calculation template can be downloaded from the Department of Education website at:
Attachment A to this memorandum provides detailed instructions for accessing the Excel entitlement file.
Attachment B to this memorandum shows the fiscal year 2009 entitlements for each school division for the Standards of Quality (SOQ), school facilities, incentive, and Lottery accounts that are based on actual March 31, 2009, ADM.
Attachment C to this memorandum shows the routine adjustments to the fiscal year 2009 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:
As of April 2009, actual sales tax receipts for fiscal year 2009 were trailing the estimate in Chapter 781. As a result, the Department is advising all school divisions to monitor their actual sales tax cash receipts very closely through the remainder of the fiscal year.
“…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.”
Adjustments to the Fiscal Year 2009 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 2009 state Basic Aid entitlements for certain school divisions beginning with the June 16, 2009, EFT. Where applicable, these adjustments will reduce the fiscal year 2009 Basic Aid entitlement paid to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the June 16, 2009, EFT) are shown in the sheet labeled “Adjustments to FY09 Basic Aid.” The Basic Aid adjustments for fiscal year 2009 shown in the Excel file are as follows:
Reporting Basic Aid Adjustments on the 2008-2009 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 2008-2009 Annual School Report. To balance this gross Basic Aid revenue on the 2008-2009 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 the Virginia School 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 Education funds in item two 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 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.
PIW / shd
a. Instructions for Accessing the Entitlement Calculation Template (PDF)
b. FY 2009 & FY 2010 Entitlement Sheets - Chapter 781 (PDF)
c. FY 2009 Adjustments to Basic Aid Entitlements (PDF)