P.O. BOX 2120



June 17, 2005



Division Superintendents



Jo Lynne DeMary

Superintendent of Public Instruction



Supplemental Appropriation for Fiscal Year 2005 Basic Aid Payments


The purpose of this memorandum is to notify school divisions that fiscal year 2005 Basic Aid payments will be fully funded. As a result, the June 16th and June 30th electronic fund transfers will be based upon your full entitlement.


As in previous years, routine adjustments for normal business activities will be made against each divisions Basic Aid payment, where applicable, and as outlined for the current year in Administrative Superintendents Memorandum Number 24 dated May 20, 2005, which provided school divisions with final entitlement payments based upon your final average daily membership (ADM) as of March 31, 2005. In that memorandum, the department identified the potential for a prorated reduction to each school divisions Basic Aid entitlement.


The potential for a prorated reduction was identified at that time because the appropriations for Direct Aid to Public Education included in the current appropriation act (Chapter 951, 2005 Acts of Assembly) are not sufficient to pay school divisions their full ADM entitlements for fiscal year 2005. The potential need for proration resulting from the insufficient appropriations was identified and explained in several Superintendents Memoranda over the last year. As indicated in these memoranda, this appropriation shortfall is attributable to the unfunded technical corrections contained in the current appropriation act.


To avoid a prorated reduction in Basic Aid payments, Governor Warner has taken action to supplement the Basic Aid appropriation for the current fiscal year. As a result, there will be no prorated reduction in Basic Aid.


An Excel file is provided that shows final state payments based on full entitlements for fiscal year 2005, required local effort for the Standards of Quality (SOQ) accounts, and required local matches for incentive-based accounts calculated on March 31, 2005, ADM. The accounts affected by final March 31, 2005, ADM appear on the Excel file in bold italics and are shown as the full entitlement with no adjustments. The file also shows this same information for projected state entitlements in fiscal year 2006.


The Excel file can be accessed from the departments website at:


Attachment A to this memorandum provides detailed instructions for accessing the Excel entitlement file.


Attachment B to this memorandum shows the routine Basic Aid adjustments for each school division. 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 account. For example, the appropriation act directs that adjustments for students in mental health or mental retardation facilities be made against a school divisions Basic Aid payment. These and various similar adjustments will be made to the fiscal year 2005 state Basic Aid entitlements for certain school divisions beginning with the June 16, 2005, electronic funds transfer (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 Excel file in the sheet labeled Adjustments to FY05 Basic Aid. For additional information on the adjustments to fiscal year 2005 Basic Aid payments, please see Administrative Superintendents Memorandum Number 24 dated May 20, 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.