spring finance workshop at the wasbo accounting conference march 20, 2013 dpi school finance team

SPRING FINANCE WORKSHOP At the WASBO Accounting Conference March 20, 2013 DPI School Finance Team http://sfs.dpi.wi.gov/

UPDATES: Budget Proposal Energy Efficiency Exemption OPEB Indirect Cost Combined Report Security System Update Updated Reports Transfer of Service, Transportation, & Foster/Group Home Odds and Ends Membership Audit of Summer School Fees, Common School Fund, Referendum Information

2013-15 Governors Biennial Budget Proposal School Finance Items

Governors Biennial Budget Overview This presentation will address the Governors proposal for the states 2013-15 Biennial Budget regarding: Revenue Limits General State Aids Expansion of the Independent Charter Program Expansion of the Parental Choice Program New Special Needs Scholarship Program Categorical Aids including Performance Based Funding Grants Other K-12 Education related items from a School Finance perspective 4

Budget Development Timeline The Governor introduced his Budget Proposal in February, and now The Joint Committee on Finance will review and can modify budget provisions (Spring) Then both houses of the Legislature will pass their own versions of a Budget Proposal Conference Committee will work out differences between the House & Senate versions and send to the Governor for approval (possibly with vetoes) likely in June or possibly July of 2013 5

Budget Development Timeline While there has already been news about proposed changes to the Governors proposal by legislators, we do not know what the Legislature will ultimately send to the Governor for his approval. So at this time, we will present information on the Governors Proposal. 6

Governors Biennial Budget Overview Summary of School Finance Related Proposals Provides no Per Pupil increase for Revenue Limits Increases state General/Equalization Aid by 1% annually No changes for most existing categorical aid programs. New School Performance Incentive categorical aid program. New Special Needs Scholarship Program. Increases per pupil funding for the Milwaukee and Private School Parental Choice programs; expands the Private School Parental Choice Program (currently just Racine is eligible) Increases per pupil funding and expands the Independent Charter Program (creates new Charter Oversight Board) No changes to the School Levy Tax Credit/First Dollar Credit 7

State Support for K-12 Education under the Governors 2013-15 Proposed Budget 8 Appropriations and Percent Change from the Prior Year: ($ in Millions) Category2012-132013-142014-15 General Equalization Aids$4,293.7$4,336.6 (1%)$4,380.0 (1%) High Poverty Aid$ 16.8$ 16.8 (0%) $ 16.8 (0%) Categorical Aids$ 653.9$ 612.0 (-6.4%*) $ 677.9 (10.8%) School Levy Tax Credit$ 897.4$ 897.4 (0%) $ 897.4 (0%) State Residential Schools$ 11.2$ 10.8 (-9.6%)$ 10.8 (0%) Statewide Totals$5873.0$5,873.6 (0%) $5,982.9 (1.9%) *Reflects removal of $42.5 M for one-time Per Pupil Adjustment Aid.

Revenue Limits The Governors Budget does not change current law with respect to Revenue Limits for the 2013-14 or 2014-15 school years: $0 per pupil adjustment in both years Low Revenue Ceiling threshold would increase from $9,000 to $9,100 for 2013-14 & 2014-15 The Base Hold Harmless exemption (line 7B) will revert to its original mechanism (next slide) No changes to any existing exemptions to the revenue limit 9

Revenue Limits Base Hold Harmless exemption review: Had been altered by the Legislature for 2011-12 & 2012-13 but will return to normal for 2013-14 Ensures that a districts revenue authority, after the Per-Pupil and Low Revenue Ceiling adjustments are made, but prior to any exemptions, is not less than the Line 1 Base Revenue on the worksheet. EXAMPLE calculation at the end of this presentation for your reference EXAMPLE 10

Revenue Limits Base Hold Harmless exemption review: Recall that the Base Hold Harmless exemption is a non-recurring exemption as such, it will be removed from the subsequent years base revenue Districts that qualify for the Base Hold Harmless exemption that also have declining enrollment will be able to utilize the Declining Enrollment Exemption (which is also a non-recurring exemption) 11

General State Aid The Governors Budget provides: Increases of 1% annually in the appropriation for General (Equalization) School Aids: $42.9 M in FY14 and $43.4 M in FY15 No changes to the Equalization Aid formula itself Increases in district-specific lapses for expanded Choice program and for the all-district lapse for Independent (2r) Charter program come out of this General Aid increase. Steady funding for the High Poverty Aid Program ($16.83 M) District allocations will change based on 2012 data for Free & Reduced Price Lunch eligibility and 2012-13 membership. High Poverty Aid will continue to be treated as General Aid, i.e., reduces the receiving districts levy. 12

Independent Charter Program Existing Independent Charter Program (MPS & Racine) : Per pupil payment increases to $7,852 for FY14 and $7,931 for FY15 (1% annual increases) Estimates enrollments at 8,600 FTE in FY14 and 9,600 FTE in FY15 Increases total cost estimate from $62.2 million in FY13 to $67.5 million in FY14 and $76.1 million in FY15, based on per pupil payment and estimated enrollments above Retains current law method of paying for Independent Charter Program costs by applying a proportionate reduction to all districts General Aid payment 13

Expansion of Independent Charter Program New Provisions Independent (2r) Charter Program: Creates a Charter School oversight Board responsibility for approving new independent charter school authorizers Independent charter schools may be established only by contract and must be operated by a Charter School Governing Board* New independent charter schools would be eligible for the same per pupil payment as under the existing program The costs of new independent charter schools coming in under this expansion would be paid for in the same manner is the existing program a proportionate deduction to General Aid payment for all public school districts * Except for existing independent charter school authorizer, which may continue to operate a charter school that has already been established. 14

Expansion of Independent Charter Program New Provisions Independent (2r) Charter Program: Removes current law restrictions on who may attend an independent charter school (location/residence). Permits a public school district to prohibit a resident pupil from attending an independent charter school unless: 1.The districts (aid) membership is 4,000 FTE or greater, and 2.Two or more of the public schools in the district were placed, in the same year, a performance category of either fails to meet expectations or meets few expectations based on accountability report issued by DPI (i.e., the School Report Cards) 15

Expansion of Independent Charter Program New Provisions Independent (2r) Charter Program: The proposal specifies how charter schools may prioritize applications, testing requirements, as well as certain requirements for the DPI Non-fiscal, operational type questions regarding the expanded Choice program should be directed to the DPI School Management Services Team: http://sms.dpi.wi.gov/ 16

Parental Choice Program Existing Parental Choice Programs (MPS/Racine): Per pupil payment remains at $6,442 for FY14 and for FY15, increases to $7,050 for K-8, and $7,856 for high school pupils Estimates FY14/FY15 enrollments at 25,500/27,000 FTE for MPS and 750/1,000 FTE for Racine Increases total cost estimate from $154 million in FY13 to $169 million in FY14 and $201 million in FY15, based on per pupil payment and estimated enrollments above Retains current law district share requirement: 38.4% of estimated costs is deducted from districts general aid payment 17

Expansion of Parental Choice Program As of FY14, expand eligibility to districts in which : Membership of at least 4,000 FTE (i.e., aid membership) Two or more of the public schools in the district were placed, in the same year, a performance category of either fails to meet expectations or meets few expectations, based on an accountability report issued by DPI (i.e., the School Report Cards) At least 20 pupils in a district must have applied to attend a participating private school under the program 18

Expansion of Parental Choice Program As under the existing Parental Choice Program: Newly eligible private schools would receive a per pupil payment of $6,442 in FY14 & $7,050 (K-8)/$7,856 (HS) in FY15 Pupils participating in the Choice program would not be counted for purposes of general aid or revenue limit membership by the resident district New Choice districts would pay for 38.4% of the cost of the choice vouchers awarded to resident pupils via a deduction to the districts General Aid payment The deduction for the Parental Choice Program is applied to the October 15 th Aid Certification, thus Districts with a deduction from General Aid for Choice pupils would have the ability to levy for that aid deduction 19

Expansion of Parental Choice Program Other Provisions: Pupils family income =< 300% of the Federal Poverty Limit Participating private school must be accredited or pre- accredited by August 1st prior to begin of school year Statewide enrollment limits of 500 in FY14 and 1,000 in FY15 (does not provide specifics as to how DPI is to manage statewide enrollment limits) The proposal specifies how private schools may prioritize applications, testing requirements, as well as certain requirements for the DPI Non-fiscal, operational type questions regarding the expanded Choice program should be directed to the DPI School Management Services Team: http://sms.dpi.wi.gov/ 20

NEW: Special Needs Scholarship Program Beginning in FY14, a child with a disability may receive a scholarship to attend a school of their choice, including a: Public school outside the pupils district of residence Charter school Private school The following conditions must be met: 1.The school has notified DPI of intent to participate and has accepted the pupil 2.A private school must be approved by DPI or accredited 3.An IEP has been completed for the child 4.In the previous school year, the child attended a public school, a charter school, a private school under the Parental Choice Program, or did not attend school in WI 21

NEW: Special Needs Scholarship Program Under the Governors proposal: DPI is required to review the pupils IEP and determine the scholarship amount, based on formula established in the proposal (lesser of state average by formula, or actual cost to the school as with existing choice program). Scholarship pupils would be counted by the district of residence for purposes of revenue limits & aid membership. A reduction would be made to the General Aid payment of the resident district in an amount equal to the scholarships awarded to all the resident pupils of that district. This reduction in aid would lapse to the States General Fund. The scholarship would be paid directly to the school that the pupil attends from a separate appropriation in the States General Fund. In effect, the aid reduction to the resident district is used to offset the costs of the scholarships. When a pupil receives a scholarship, the pupils district of residence is directed to count the scholarship amount towards Federal Maintenance-of-Effort requirements 22

NEW: Special Needs Scholarship Program Under the Governors proposal: Pupils family is not required to meet an income test Number of scholarship recipients in a given school year may not exceed 5% of the number of children with disabilities residing in Wisconsin in the previous school year. Pupil would be entitled to receive the scholarship as long as the pupil attends an eligible school, until the pupils graduates from High School or through the end of the term in which the pupil turns 21 (whichever comes first). Transportation if pupil uses scholarship to attend: Private School resident district may be required to provide transportation (existing ss. 121.54 applies) Public School if transportation is specified in the pupils IEP, the district of attendance is required to provide transportation; if not, parent is responsible 23

NEW: Special Needs Scholarship Program This presentation has touched on the issues pertaining to the financial implications of the proposed Special Needs Scholarship Program, however There are many other issues involved with this proposed program, including: Responsibilities of DPI, the district or charter/private school of attendance and the resident school district Rights of the pupil receiving the scholarship These issues are still under review by the Departments School Management Services Team and Special Education Team. 24

Existing Categorical Aid Programs With a few exceptions, funding for Categorical Aid programs remain at current levels for both years: Special Education, Transportation, SAGE, Sparsity, Bilingual- Bicultural programs, Nutrition programs, Gifted & Talented programs, 4K Start-up Grants no funding changes School Library Aid: reduced in FY14 then increased in FY15, based on estimate of available revenues: FY13: $37 million FY14: $32 million FY15: $34 million Transportation Reimbursement : increases the rate for pupils transported over 12 miles from $220 to $275 (funded w/in base) Per Pupil Adjustment Aid: received by districts for 2012-13 (up to $50/pupil, based on utilization of levy authority) is eliminated [had been created as a one-time aid program] 25

NEW: School Performance Incentive Program The Governor proposes to create a new categorical aid program that awards funds to school boards based on performance of individual schools in the district: At least one school in the district must be placed in the requisite performance category Specifies the basis of performance category to be the accountability report published for the school under s.115.385 [new] at the end of the immediately preceding school year- i.e., the Departments recently created School Report Card. Any awards made under this program are only for the year in which the award is made; schools may be determined eligible year after year, but awards do not build a districts base revenue. 26

NEW: School Performance Incentive Program Proposal includes three distinct aid programs: $24 million for High Performing Schools school(s) placed in either of the top two categories $30 million for Improving Schools school(s) that increased their numeric score on the accountability report by at least three points compared to prior year $10 million for Low Performing Schools school(s) placed in the lowest category if the school board submits a written school improvement plan for each school (for which award is sought) and the DPI determines the plan(s) meet criteria specified under the proposal 27

NEW: School Performance Incentive Program Award amounts would be awarded to School Boards, but determined on a school basis, as follows: High Performing Schools ($24 million) for each school: (state appropriation )/ (number of pupils enrolled in eligible schools statewide ) x number of pupils enrolled in a school Improving Schools ($30 million) for each school: (state appropriation) / sum of (pupils enrolled in eligible schools x point increase by school ) x number of pupils enrolled in a school *Note that for this aid, pupils are weighted to reflect magnitude of increase on the Report Card. Low Performing Schools ($10 million) No formula is specified in the proposal 28

NEW: School Performance Incentive Program To be eligible for an award a School Board must: Submit an intent to participate notice to DPI within 60 days after the accountability reports are published By September 1 st, 2014 establish a policy for the distribution of funding awarded under this program to a school(s) in the district: The Boards policy may not prescribe the manner in which funds are to be used by the school(s); however, The Boards policy may identify and prioritize goals and objectives towards which the funds may be applied. If both of the above requirements are met, a School Board must distribute the full award amount to the eligible school(s) [proposal does not specify a date by which the DPI must distribute the awards to a School Board of eligible school(s)] 29

Other School Finance Related Items Part Time Open Enrollment Course Options expansion of Part-Time Open Enrollment : Permits pupils at any grade level to participate Permits attendance at any UW institution, WI Technical College, non-profit institution of higher education, tribal college, charter school or other educational provider approved by the department School Boards are responsible for tuition payments (as established by DPI ) to the institution of higher education Permits a School Board to deny pupils request to enroll in a course under this program if the Board determines the course does not satisfy a HS graduation requirement or the course does not support the pupils Academic and Career Plan (newly created in the Governors Proposal) Allows for pupil whose request is denied to appeal to DPI [ss.118.52] 30

Other School Finance Related Items Part Time Open Enrollment Attendance by pupils enrolled in home-based private education: Permits home-based private education pupils to take up to two courses per semester at any public school, provided space is available at that school and pupil meets standards of admission to the course No longer restricted to just High School pupil or courses Allows the district of attendance to count a home-based private education pupil enrolled in courses at a school in the district for aid membership purposes, at 0.25 FTE per course taken (up to maximum of two courses allowed, or 0.50 FTE) These pupils could NOT be counted for purposes of revenue limit membership [ss. 118.53, new ] 31

Other School Finance Related Items Charter Schools Increases flexibilities for Instrumentality Charter Schools: Requires an instrumentality charter contract to specify a per pupil payment commensurate with the school districts average per pupil costs; Grants the school operator sole discretion over budget, curriculum, professional development and personnel (exceptions for health and safety) Prohibits a school board from imposing on a charter school any requirement from which a charter school would otherwise be exempt. 32

Other School Finance Related Items Charter Schools Permits a school board to grant a petition to convert all of a districts schools to charter schools, without the current law requirement that at least 50% of teachers in the district sign the petition and that the district provide a non-charter alternative to any resident pupil who so requests Creates a proficiency-based charter school teaching license, under which any person who has a bachelors degree and who can demonstrate proficiency in a subject may receive a license to teach that subject in a charter school 33

Other School Finance Related Items Miscellaneous Provides for an alternative pupil count date if a school will be closed for a regularly scheduled holiday, or closed for a reason approved by the school board, on the statutorily dictated pupil count dates Extends the length of time during which a consolidated school district is eligible to receive additional equalization aid, from five to seven years after consolidation (gradual reduction of the rate of aid benefit the base guarantee in last two years) 34

Other K-12 Items District Operations Require all schools to provide academic /career planning services to pupils in grades 6 to 12 by the 2017-18 school year Provide funding to DPI to purchase & implement a software program to support academic/career planning and learning, and to implement training school district staff who provide advising services to pupils Prohibit DPI from requiring that an instructor must be physically present in a classroom during the delivery of instruction in a digital environment 35

Other K-12 Items Assessment and Accountability Provide funding to DPI to implement: ACT Suite and Next Generation Assessments SMARTER/Balance & Dynamic Learning Assessments in FY15 Provide the State Superintendent with authority to adopt/approve assessments for the 9 th and 11 th grades Require schools (including charter schools) to administer the assessments approved by the State Superintendent for the 9 th and 11 th grades for all pupils in public, charter and Parental Choice program schools Require DPI to annually publish school & district report cards and place each school into one five performance categories Provide funding for expansion of early reading assessment program to pupils in 4K, 1 st and 2 nd grades (currently 5K) 36

Other K-12 Items Educator Effectiveness / Teacher Licensing Provide funding to DPI to develop and implement the states new Educator Effectiveness (EE) system to evaluate principals and teachers (as mandated by ss. 115.45) Require DPI to count teaching experience gained under an emergency teaching license for specific assignments as experience for purposes of an equivalency teaching license or an administrator license Require an EE system rating of effective or highly effective for a person to receive a Master Educator Grant from DPI Provide additional funding for teachers who receive a Master Educator License from DPI or certification from the National Board for Professional Teaching Standards Eliminates the requirement that teachers of online courses fulfill an additional 20 hours of professional development in online learning; prohibit DPI from imposing such a requirement. 37

Energy Efficiency Exemption Performance Contract Requirement All projects (whether one year or funded by debt service) must be governed by a performance contract under s. 66.0133 DPI does not oversee this requirement, but we do require you to certify compliance in the portal. Please consult legal counsel to ensure project compliance DOA has information available for state agencies that may provide useful background information

Energy Efficiency Exemption Resolution adopted by school board by November 1 in the school year in which a tax is to be levied for the expenditure. Put the resolution into referendum portal with the type as Board resolution to exceed revenue cap for energy efficiency (even if debt service is being used)

Energy Efficiency Exemption Debt Service Bonds or notes may be issued for up to 20 years Does not change the requirements related to the $1 million limit on non-referendum debt Requires annual resolution by the board for the amount that will be levied using the energy exemption and expended that fiscal year

Energy Efficiency Exemption Debt Service Payments should be treated the same way as other non-recurring referenda Currently, there is a disconnect between the exemption amount (Line 10C) and the levy amount (Line 14B) The exemption amount is the payment being made during the fiscal year (whether a one-year or debt service project). The Fund 38 non- referendum debt service levy amount is based on the upcoming calendar year payment

Energy Efficiency Exemption There is a revenue limit penalty for any exemption amount not expended during the fiscal year District prepares an addendum to the following years budget summary reporting results of energy savings from the expenditure and copies that information into the referendum portal under that resolution More information is available at: http://sfs.dpi.wi.gov/sfs_enrgyrevlim http://sfs.dpi.wi.gov/sfs_enrgyrevlim

Fund 73 OPEB Trust Reminders PHYSICAL CASH TRANSACTIONS The contribution to the trust must have cash movement by July 30. The implicit rate subsidy must have cash movement from trust to district funds. NO BOOK ENTRIES, NO NETTING TRANSACTIONS

Fund 73 OPEB Trust Reminders Budget for Trust Activity Expenditure for contribution should be in the districts budget. If additional funds are contributed, budget should be amended. Implicit rate subsidy credit to object 241 should be in accounted for in budget.

Payment of Retiree Benefits Once a district elects to establish and fund an OPEB trust, the retiree benefits that were funded must be paid out of the trust. Exception may be termination benefits such as accumulated sick leave. Implicit rate subsidy for those benefits still applies if you use trust. No more pay as you go. Retiree benefits include both payments to insurance vendors and implicit rate subsidy. Fund 73 OPEB Trust Reminders

Allocation of district activity Contributions to the trust up to the ARC must be allocated to active employee plan members By FTE or Salary This changed from a suggestion to a requirement a few years ago. Implicit Rate Subsidy should be credited to the active employee plan members healthcare costs, Object 241. Allocated in the same manner as the Contribution Fund 73 OPEB Trust Reminders

Contributions over ARC If the contribution exceeds the ARC, it is not allocated to active employee functions. Amount in excess of the ARC is coded to Function 292000, Object 218. Amount in excess of ARC can all go to Fund 10 or can be allocated to current employee Funds, still 292000-218. Treatment must be consistent from year to year. Not eligible for special education categorical aid or current year federal grants. Fund 73 OPEB Trust Reminders

Implicit Rate Subsidy If a district has retirees on their health insurance plan, there will be an implicit rate subsidy. Exception: Some self funded plans may not have implicit rate subsidy payback if actual costs method is used. Implicit rate subsidy needs to be paid from the Fund 73 trust to the district in cash. This will be a credit to active employee plan member health care costs, object 241. It will lower a districts shared costs. Fund 73 OPEB Trust Reminders

Plan Member Contributions If the retirees pay a portion of their healthcare costs, these should be deposited directly into the Fund 73 trust. If that is not an option, district should record them in a Due to Fund 73 liability account. They should never be revenue or expenditures in the district funds. Fund 73 OPEB Trust Reminders

Requirements to Establish OPEB trust for DPI purposes and funding trust All DPI requirements must be met by the fiscal year end, June 30 in order to qualify as an expenditure in that year. Physical cash contribution must be within 30 days of fiscal year end, or July 30, only for districts which have satisfied those requirements by June 30. Board Approval, Trust Agreement, Actuarial Study and Legal Opinion to DPI by June 30. Fund 73 OPEB Clarifications

Timing of payments to the trust For trust that meet the DPI requirements by June 30 and accrue a payment for that fiscal year ending, physical cash movement must happen by July 30. The amount of this accrual and payment can be an amount up to the unfunded liability. Amount up to unfunded liability eligible for shared costs. Amount up to ARC eligible for categorical aid and federal grants. Changed the restrictions for aid on the amounts made by June 30 vs July 30. Fund 73 OPEB Clarifications

Late Studies DPI guidance is to use the study you have at the time of the contribution for making the contribution. If new study is received after July 30: No additional contribution can be made. No adjustment to implicit rate subsidy is made. If a new study is due, GASB requires your auditor to have it by the completion of the audit. Fund 73 OPEB Clarifications

New or updated documents Send copies of the new actuarial studies or any trust amendments to [email protected] [email protected] ONLY send the actuarial studies to DPI if you use Fund 73 Your auditors need the valuations for OPEB for all entities for their audit purposes whether you have Fund 73 or not Fund 73 OPEB Clarifications

Indirect Cost Proposal Formal plan and methodology for calculating rates on a consistent basis Organizational review Tying costs to functions Submission of plan to Cognizant Agency Federal Review Negotiation Issuance of Rate Agreement

Indirect Cost Proposal What does this mean for WI schools? DPI establishes ICR plan for all districts DPI negotiates with Dept of ED Every 5 years the plan is resubmitted and new agreement is reached Available on DPI website: http://www.dpi.state.wi.us/sfs/indirect.html http://www.dpi.state.wi.us/sfs/indirect.html

Indirect Cost Proposal Why are rates delayed for 12-13? Dept of Ed visit in June 2012 Submission of new 5 year plan September 2012 January 31, 2013 Plan submitted for final approval at Dept of ED February 13, 2013 request for more information and changes to Plan February 20, 2013 submit revised Plan February 26, 2013 Request for more changes

Indirect Cost Proposal Why are rates delayed for 12-13? March 5, 2013 Amended Plan resubmitted to DOE March 6, 2013 Amended Plan resubmitted to DOE management for approval

Indirect Cost Rate Changes to Calculation Function 258000, Internal Services were moved from Indirect to Direct These costs should be identified with a particular cost objective and can be charged to a particular federal award Food costs in Fund 50 were moved from Direct to an Excluded cost Rationale is that these costs require very little administrative support Removal of these costs from the direct cost base should increase the indirect rates of the district

Combined Reports One budget report that combines the Full Budget (PI-1504) and Special Education Budget (PI-1504-SE) One annual report that combines the Full Annual (PI-1505) and the Special Education Annual (PI-1505-SE)

Combined Annual Reports Process Survey Timeline Go Live with the new combined report for the 2014 Budget report in October Some user testing between August and Go Live

Combined Annual Reports Goals and Benefits Overall Only need to complete one report Improved Navigation between screens ( Left Nav ) Convert features from the Full Reports into a manageable platform and DPI can make changes and enhancements easier Real time status on current issues and system downtime Challenges System Speed (Response Time) Combined Edits Level of Reporting/ Volume of Data (Project Code vs. Obj/Src)

Combined Annual Reports Goals Data Improved Simple Search Feature Improved Navigation Easier editing Working Journal Entry feature Errors By Category List with option to hyperlink to retrieve errors by fund

Combined Annual Reports Goals Addenda Fewer Addenda - tie certain edits directly to an account when possible Itemize amounts and complete text boxes on one screen List with option to hyperlink to retrieve addenda by fund

SECURITY SYSTEM UPDATE Simplify Easier to Maintain User Focused Organization Focused Report Focused Future Incorporation to Single Sign-on Enhancements

SECURITY SYSTEM UPDATE Easier to Maintain - User Focused Users will Create/Maintain Their Individual IDs

SECURITY SYSTEM UPDATE Easier to Maintain - User Focused Users Can Maintain Individual Profiles

SECURITY SYSTEM UPDATE Easier to Maintain - User Focused Lost Password

SECURITY SYSTEM UPDATE Districts Maintain LEA Access 2 Lists All Users and Users with Access

SECURITY SYSTEM UPDATE Districts Maintain Specific Report Access 2 Lists LEA User IDs and Report Security

SECURITY SYSTEM UPDATE To Do: Summary of 1500 with File Report Option. Retro Integration to existing Reports/Systems. Estimated Timeline is Under Consideration with other projects. Collect Feedback and Enhancements Integration with other systems as part of Single Sign-on Initiative.

T ransfer of Service A Few Reminders

What is Transfer of Service? The Transfer of Service Exemption (Wis. Stat. 121.91(4)(a)) provides that a school district which assumes responsibility for a program or service from another governmental unit may request and be granted an exemption to the district revenue limit equal to the increased cost due to that program or service. If the service transferred is a student that requires Special Education or ESL services, the exemption will be reduced by the amount of categorical aid the district will receive the following year, as determined by DPI.Wis. Stat. 121.91(4)(a) If the previous governmental unit was another Wisconsin school district, that district's revenue limit may be reduced by an amount equal to their reduction in cost as a result of that transfer out.

Transfer of Service Reminders On-line Report will open in April All parts required are due August 30. Part A and Part B is the supporting documentation for the request. Part C is the actual request. It is the requesting districts responsibility to make sure the Part B district completes the report

Transfer of Service If you expect this exemption to the revenue limit Part C must be completed There is a separate Part C for Special Education and Limited English Proficiency Other Government Transfers are still done as a narrative and requested via e-mail.

Transfer of Service Instructions can be found at: http://sfs.dpi.wi.gov/transfer-service

Transfer of Service Work in Progress We may see major changes to the on-line format but Reporting process is the same as last year. On-line reporting is the required method. Click here - Transfer of service test siteTransfer of service test site

Transfer of Service Part C Summary Sheet

Transfer of Service Part C Summary Sheet Once this sheet is submitted, the TOS request process is completed. It can be amended up to the due date. Estimate is Auto Filled Expected is Your Actual Request

Transfer of Service Summary Sheet There is a separate Part C Summary Sheet for Special Education and Limited English Proficiency. Both Part C Summary Sheets are due on or before August 30th (tentative). It can be amended at any time up to the due date. The Part C Summary Sheet is the actual Transfer of Service request and completes the process for the TOS request.

Transfer of Service For further information about Transfer of Service, go to: http://sfs.dpi.wi.gov/transfer-service Or contact: Brad Adams, School Finance Consultant [email protected] 608-267-3752

Pupil Transportation Aid Portal One of SFS original data entry portals An update will be completed for use in June of 2013 Security changes will included Functionality will be similar to other portals when an explanation is needed the portal will lead user to that field This years report will be due on June 28, 2013 Summer school transportation data for the 2012-2013 payment is from the summer of 2012.

Pupil Transportation Aid Audit Currently your auditor will review Pupil Transportation Aid at least every three years. Currently there are 40 districts with one or more Pupil Transportation finding being investigated Districts are responsible to provide reliable documentation and NOT undocumented assumptions or estimates to support the number of pupils reported as actually transported at least once during the school year.

Pupil Transportation Aid Audit An Audit finding can cost your district some serious staff time and even some aid revenue..2011 WI Act 105 - Residual Balance of Allocation: Effective with the 2011-12 school year, any balance remaining after paying all claims for pupil transportation aid shall be apportioned among districts. This apportionment shall be based on each district's share of the total claims. For example, if a district's claim equals 0.5% of the total claims, the district shall receive 0.5% of any residual balance. Residual balance payments shall be paid in June.

Pupil Transportation Aid Audit Guidelines for school auditors will be updated this spring. When was the last time your district reviewed your Unusually Hazardous Transportation (UHT) Plan? 20% of the mileages categories are governed by your UHT.

Foster/Group Home Report PI-1589 Prior to last year, this was a paper report that was faxed in to DPI. Last year, the report was converted to an online report. The format was not very user friendly, and we are hoping to keep the online report for this year but change the look and feel of it. The report should be similar to the Transfer of Service Report. The initial submission part will be due by the end of June. We will keep you updated on the status of the report.

Membership Audits Its one of the most important things you will do Used to determine revenue limits Used to establish state equalization aids Its also not as simple as it sounds. Put a very competent person in charge of this report! Check their work especially if they are new.

A district may be selected to have a membership audit. Criteria: Random Selection 25% District audited in the prior year having a net error rate in excess of 1% from the reported membership, for either count date. Pupil Count report was not received on time. During a membership audit, the district auditor will review the accuracy of the September, January, Summer, and Youth Challenge Count Reports. 87 Membership Audits

A membership audit requires the audit of the Summer School membership calculation as well as Summer School fees. Fees are probably the biggest issue regarding Summer School membership audits. Be prepared to be able to document all expenditures made for each individual Summer School class. 88 Membership Audits

Summer School - Fees If the district claims state aid under s.121.14, Wis. Stats There shall be no cost to the resident student beyond individual use supplies (towels, gym clothes, band instruments, notebooks, pencils), and textbooks or similar items (workbooks). Fees for equipment, admission to a facility or event, transportation, shuttling, and food and lodging for off-campus activities are prohibited if a district claims state aid. Items for which fees are charged must be legally permitted and actually purchased for summer school use.

Summer School - Fees Summer school fees may not be used to subsidize other classes or students. You must be able to document that expenditures were made to cover the fee charged to each individual student.

Summer School - Fees If the district does not claim summer school aid School boards may establish and collect reasonable fees for social, recreational or extracurricular summer classes and programs which are neither credited toward graduation nor eligible for state aid [s. 118.04 (4)]. School boards may also provide and charge for transportation for extracurricular activities such as school athletic contests, school games, after school practice, late activity, school outings or extracurricular school field trips [s. 121.54 (7)]. Such activities are not, however, eligible for state aid or categorical aid and may not be claimed for summer school membership.

Summer School - Fees So what do you do? During and after the Summer School program -Check expenditures for each class. -If there is a shortage of expenditures, return the under-spent portion of the fee. -Do this before or soon after the conclusion of summer school.

Summer School Fees How do auditors review summer school fees? NEW - Audit procedures available to auditors at: http://sfs.dpi.wi.gov/files/sfs/m_audit.html Sample of Summer School Fee Auditing

What will auditors ask for? PI-1804W-2 (Worksheet) Summer school list of classes and fees Should not be a flat fee Expenditures (by course) for the classes that charge fees Run a detailed report of the appropriate function and object and identify for auditor those used for summer school May be asked to pull some invoices Summer School Fees

What will auditors test for? Fees are not charged as a flat fee across all courses Costs identified by course are eligible costs Costs that are eligible do not exceed fees charged (by course) Summer School Fees

Fees should not be a flat fee across the board. If it is, each course must be supported by enough allowable cost to justify the fee. Example: FeePupils Total Elementary Gym Class$20.00 25 $ 500 Extended Year Mathematics $ 0.00 30 $ 0 Beginning Strings$50.00 20 $1,000 Drama Class $50.0020 $1,000 Auditor does not need to check expenditures for Math class. Summer School - Fees

Detail of the Elementary Gym Class Towels $ 225 Pens, pencils $ 75 Uniforms $ 750 Water bottles $ 75 Handouts $ 25 Total Spent: $ 1,150 Total Collected:$ 500 OK Summer School - Fees

Detail of the Beginning Strings Workbooks $ 200 Pens, pencils $ 50 Band instruments $ 250 Total Spent: $ 500 Total Collected: $ 1,000 Not OK Summer School - Fees

Detail of the Drama Class Wardrobe (made by pupils) $ 1,500 OK if kept by pupil Teacher $ 2,950 Not allowable Lighting $ 500 Not allowable Handouts $ 240 Total Spent: $ 5,190 $ (3,450) Allowable Spent: $ 1,740 Total Collected: $ 1,000 OK Summer School - Fees

Findings Elementary Gym Class OK Extended Year MathematicsOK Beginning StringsNot OK Drama Class OK Result: DPI will reduce pupil minutes for the Beginning Strings class. Depending on the FTE loss incurred, there could be a revenue limit penalty. Summer School - Fees

Frequently Asked Questions Fees See DPI's websites regarding fees: School Fees (http://sfs.dpi.wi.gov/files/sfs/fees.html )http://sfs.dpi.wi.gov/files/sfs/fees.html Membership Audits (http://sfs.dpi.wi.gov/files/sfs/auditorqanda.html)http://sfs.dpi.wi.gov/files/sfs/auditorqanda.html Summer School (http://sfs.dpi.wi.gov/files/sfs/summ_sch.html)http://sfs.dpi.wi.gov/files/sfs/summ_sch.html

Frequently Asked Questions How much can the district charge for allowable fees? Fees must be supported by the actual cost of the provided service. For example, a general fee of $30 per student to cover miscellaneous school supplies would probably not be legal. However, if it is supported by evidence that each child receives at least $30 worth of school supplies that would otherwise be provided by the parent, the fee is allowable. A school district may face challenges if it offers a discounted price or volume discount for families with more than one child in the district. If the district wants to provide such a discount, it should be based upon indigency or need rather than cost. Fees

Frequently Asked Questions Can a school district charge students for driver's education? If the student is given credit toward graduation, if the class is required for graduation, or if the class is aided under s. 121.14 (summer school), the district may not charge for instruction or for the use of any apparatus necessary to the instruction, such as vehicle cost or simulator cost. It may charge non-indigent students for the book and/or workbook required or any other personal/individual use item that is associated with the class. Fees

Frequently Asked Questions Can a school district charge students for summer school? There shall be no cost to the resident student or parent beyond incidental supplies, textbook or similar items (workbooks) if the district claims state aid under s. 121.14 [State Aid for Summer Classes]. Additionally, if the student is a resident of the district and the class is necessary for a grade promotion, high school graduation, or is given credit toward graduation, the district may not charge for the instruction, building costs or apparatus. If the class is not required, credited or aided, the fees must be based upon the actual cost of the class. Fees may not be used to subsidize other classes or students. Items for which fees are charged must be legally permitted and actually purchased for summer school use. Fees

Frequently Asked Questions Can a school district withhold records or grades if a fee has not been paid? No. The federal Family Education Rights and Privacy Act (FERPA), 20 U.S.C. 1232g and its implementing regulations 34 CFR 99), and state law, sec. 118.125(2)(a) and (b), mandate that pupils and their parents have access to and be given copies of their pupil records. In cases of transfer to another school, sec. 118.125(4), Stats., requires public schools to transfer records within 5 days of such a written request from the parent, adult student or the new school. There is no specific provision in either federal or state law that allows the public school district to withhold records, including a diploma, for failure to pay a fee or fine. While two new general provisions expanding school board powers were added to state law in 1995, and these arguably might support the view that now records could be withheld under state law for failure to pay fees, there was no such change under FERPA. Thus withholding records could still jeopardize any federal funding the district receives and could result in a court challenge to the practice. The approved method for recovery of unpaid fees is small claims court. Fees

Summer School For further information about Summer School, go to: http://sfs.dpi.state.wi.us/files/sfs/summ_sch.html Direct questions concerning financial issues to Brad Adams: (608) 267-3752 Email: [email protected]@dpi.wi.gov

Common School Fund - Finance Team Timeline June 30 Districts obtain census information which is used in following year for calculation of Library Aid. Census numbers are due in August. January - The Board of Commissioners of Public Lands (BCPL) informs the Department of Public Instruction (DPI) of the estimated interest that will accumulated in the Common School Income Fund by April 15 th. $24.70 per census. This is a good estimate. April The BCPL informs the DPI of the actual total interest that has accumulated in the Common School Income Fund. Calculate actual aid available per census. May 1 st Library Aid payment made to districts. Funds to be spent during current fiscal year. Not doing so could cause the district to lose this aid. http://sfs.dpi.state.wi.us/files/sfs/comsch.html

Common School Fund - History This Fund is as old as Wisconsin. The framers of our state Constitution established this permanent school fund and required that its income be applied exclusively to the support and maintenance of common [public K-12] schools and the purchase of suitable libraries and apparatus therefor. http://sfs.dpi.state.wi.us/files/sfs/comsch.html

Common School Fund - History The Fund was established with proceeds from the sale of the 16th Section of each townshipnearly 1 million acres of land granted by the federal government to Wisconsin when it became a state. Wisconsin received another grant from Congress of 500,000 acres of land for the purpose of making internal improvements. Wisconsins early leaders petitioned Congress for permission to dedicate all these lands for public education. Most of this land was sold to establish the Fund. http://sfs.dpi.state.wi.us/files/sfs/comsch.html

Common School Fund - History http://sfs.dpi.state.wi.us/files/sfs/comsch.html Money is loaned to municipalities and school districts for public purpose projects. Interest generated from these loans and other investments provides the revenue for school library aid. Interest rates and earnings have dropped, so the money available for library aid is down this year.

Common School Fund - History The principal continues to grow because the states constitution provides that the Fund receives clear proceeds of all fees, fines and forfeitures (including unclaimed and escheated property) that accrue to the state. In many cases, clear proceeds is redefined and governing bodies impose surcharges in lieu of fines. Today, for example, the Common School Fund receives less than 10% of the revenue from a typical speeding ticket. http://sfs.dpi.state.wi.us/files/sfs/comsch.html

If you have any questions regarding school library purchases that meet the requirements of the Common School Fund contact Nancy Anderson, School Library Media Consultant, [email protected], or by telephone at: (608) [email protected] If you have any questions regarding school library aid contact Brad Adams, School Finance Consultant, [email protected], or by telephone at: (608) 267-3752. [email protected] Common School Fund web site: http://sfs.dpi.wi.gov/files/sfs/comsch.html Wisconsin Board of Commissioners of Public Lands: http://bcpl.wisconsin.gov/ N EED MORE INFORMATION ABOUT THE C OMMON SCHOOL FUND ?

Within 10 days of the board adopting a resolution, the district must notify DPI. Entry on the School Finance Reporting portal Instructions on SFS website Copy of initial board resolution sent to [email protected] [email protected] http://sfs.dpi.wi.gov/sfs_referendum http://sfs.dpi.wi.gov/sfs_referendum Referenda Reminders

After elections Submit preliminary results to DPI E-mail to [email protected] [email protected] Update portal the morning following election Results are compiled the morning following the election and forwarded to the State Superintendent. Submit Board of Canvassers within 10 days following election. Referenda Reminders

Base Hold Harmless Exemption EXAMPLE: Line 1: District Base Revenue = $5,000,000 Line 2: District Base 3-Year Ave Membership = 500 Line 3: District Base Revenue per Pupil = $10,000 (Line 1 / Line 2) Line 4: Per Pupil Adjustment = $0 per pupil (District would not be eligible for Low Revenue Ceiling Adjustment) Line 5: 2013-14 Maximum Revenue per Pupil = $10,000 (Line 3 + Line 4) Line 6: Current 3-Year Average Membership = 495 Line 7a: 2013-14 Revenue = $4,950,000 (Line 5 x Line 6) Line 7b: Base Hold Harmless Exemption = $50,000 (Line 1 Line 7a) Line 7: 2013-14 Revenue prior to Exemptions = $5,000,000 115 Return to PresentationPresentation

DPI SCHOOL FINANCE TEAM Please contact one of us if you have any questions: Jerry Landmark, Director608-266-6968 Debbie Brown, Asst Director608-267-9209 Brad Adams, Consultant608-267-3752 Bruce Anderson, Consultant608-267-9707 Erin Fath, Consultant608-266-3464 Gene Fornecker, Auditor608-267-7882 Brian Kahl, Auditor608-266-3862 Michele Tessner, Auditor608-267-9218 Dan Bush, Consultant (Special Ed.)608-267-9212

spring finance workshop at the wasbo accounting conference march 20, 2013 dpi school finance team

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