Charter School Finance

Fast Track and Virtual Charter School Pilots

School Business

March 2015

Who is School Business?

28 employees who are responsible for the policy and data of student, personnel and financial of entities receiving public school state and federal funds.

What School Business Does

• Public school budget development• Allocation of funds• Collection of data• Analysis of data• Projections • Monitor the compliance of laws and policy• Report

Todays Topics

• Funding Sources

• Allotments

• Reporting and Reports

• Cash Management

• Monitoring and Compliance

• Non Compliance

New Charter School Checklist

• Obtain Tax Exempt Status • Obtain a Certificate of Occupancy• Establish a Bank Account

Vendors and Contractors

• Retirement - Teachers’ and State Employees’ Retirement System or other

• Health Insurance -the State Health Plan or other

• Accounting Services – Internal or contract• Insurance provider – Liability insurance• Independent auditor

Systems to Subscribe to

• EDDIE• Allotments• Charter School ADM Projection• Cash Management• MSA

EDDIE

Educational Directory. It is the authoritative source for school address, grades served, grades approved, principal name and much more. It is used by all areas within DPI.

Keep this updated!!http://www.ncpublicschools.org/fbs/accounting/eddie/

Allotments System

Allows the school to view all allotment amounts and revisions

http://www.ncpublicschools.org/fbs/allotments/

Charter School ADM Projection

System that provides the maximum allowable funded ADM and collects ADM projections from Charter schools in the Fall and Spring

http://www.ncpublicschools.org/fbs/charterschools/

Training and Manuals

• Cash Management training• MSA training• Allotment Policy Manualhttp://www.ncpublicschools.org/fbs/allotments/general/

• Charter School Finance Manualhttp://www.ncpublicschools.org/fbs/charterschools

Terms

Allotment = Funding in a Program Report Code (PRC) = “Bucket of Money”

Average Daily Membership (ADM) sum of the number of days in membership for all students

individual charter school, divided by the number of school days in the term.

Charter School Funding Sources

State

Federal

Local

County

Other

State FundsTraditional

General Statute 115C 218.105Allocate to each charter school an amount equal to the average per pupil allocation for average daily membership from the local school administrative unit in which the charter school is located.

An additional amount for children with special needs and for children with limited English proficiency

Components of State FundingTraditional

State base funding based on dollars per Average Daily Membership

Children with Disabilities (CWD EC)based on dollars per headcount. Child must be on the April 1 headcount to be eligible

Limited English Proficiency (LEP) if the charter school has eligible LEP headcount. At least 20 students or 2.5% of ADM.

Virtual Charter Schools

Allocate to each charter school an amount equal to the average per pupil allocation for average daily membership from the local school administrative unit in which the charter school is located.

Excluding allocation for low wealth and small county supplemental funds.

Supplemental State FundsChildren with Disabilities (CWD EC)based on dollars per headcount. Child must be on the April 1 headcount to be eligible.Ie. If the school enrolls an student who was not in a public school last year, they are not on the April HC.

Limited English Proficiency (LEP) if the charter school has eligible LEP headcount. At least 20 students or 2.5% of ADM. an October 1 Headcount is needed for LEP students

Driver Training

STATE FUNDING ENDED JUNE 30, 2014• Services are still required. The LEA in

which the Charter School is located is responsible for offering driver’s training to all eligible students, but there is a fee.

Federal Funding SourcesMost common are Title I (PRC050) and IDEA VI-B (PRC060)Allotted as grant award documents are received from WashingtonBudget approval required before allotments are distributed Refer to the North Carolina Allotment Policy Manual at http://www.ncpublicschools.org/docs/fbs/allotments/general/ for a list of federal PRC’s, eligibility for funds, allotment formulas, and any special provisions.

Unused funds revert at the end of the grant period.

Local Funds – LEA

GS 115C 105(cThe LEA in which the student resides shall transfer to the charter school and amount equal to the per pupil local current expense fund. Plus a per pupil share of the penal fines and forfeitures and supplemental school tax, if any.

Virtual CS: the amount transferred shall not exceed $790

Local funds

115C-218.105(d)

LEA must transfer must be within 30 days of the receipt of the monies in to the local current expense fund.

(Best Information can be obtained from the County Finance Officer for $ per student funding.)

LEA shall provide

1. The total amount of monies the local school administrative unit has in each of the funds - State Public School Fund, local current expense and capital outlay.

2. The student membership numbers used to calculate the per pupil share of the local current expense fund.

3. How the per pupil share of the local current expense fund was calculated.

4. Any additional records requested by a charter school from the LEA in order for the charter school to audit and verify the calculation and transfer of the per pupil share of the local current expense fund.

Local Funds-Other

All other forms of revenue such as local grants, donations etc are considered local.

Local funds do not revert

Critical Items when Building your Budget

1. Average Daily Membership

Be realistic

Know the breakeven number of students

2. State Base Allotment– Varies by LEA $4,538 to $10,443– Average = $4,915– http

://www.ncpublicschools.org/fbs/allotments/support/

Budget Considerations

Local funds vary by LEA

In 2013-14 range from $420 to $3,937

Some LEAs have a charter school for the first time and may not have information available.

Budget Considerations

• Federal Funds are supplemental and not intended for base funding

Allotment calculations and Timeline

State Funding

• New Charter Schools are funded based on the $ per ADM of the LEA where the student previously attended.

• Kindergarten Students – $ per ADM of the LEA where the student would have attended.

• Other – Private Schools, Home Schools, etc.- $ per ADM where the new charter is located.

Example of Charter School Base Allotment

Position & Months of Employment Categories:Classroom Teachers 87,590,904 Instructional Support 9,374,298 School Building Administration 5,872,708 Career Technical Education - MOE 7,669,890 Total Position & Months of Employment 110,507,800

Other Categories:Teacher Assistants 12,409,927$ Central Office Administration 1,050,018Non-Instruction al Support 7,754,159Classroom Materials & Supplies 1,114,649 Exceptional Children 16,726,788 Textbooks 472,953 Limited English Proficient 2,322,238 At-Risk Supplemental Funding 5,631,689 Drivers Education 555,920 Academically & Intellectually Gifted 1,636,117Career Technical Education Support 415,092Dissadvantaged Student Supplemental Funding 1,892,558Low Wealth Supplemental Funding (if applicable)12,191,813Small County Supplemental Funding (if applicable) NAPrior Year Transportation 8,459,252Total Dollar and Categorical Allotments 53,028,227$

Total State Funds (Initial Allotment ) 163,536,027$

Total State Funds $163,536,027LEA Allotted ADM 33,175

Dollars per ADM $4,929.50

Plus: Un-allotted Dollars Per ADM $102.85 (Longevity, Annual Leave, Short Term Disability Worker’s Compensation & Unemployment)

TOTAL Adjusted State Base $5,032.35

Total State Funds $13,242,000

LEA Allotted ADM 2,100

Dollars per ADM $6,305.71

Plus: Un-allotted Dollars Per ADM $102.85 (Longevity, Annual Leave, Short Term Disability

Worker’s Compensation & Unemployment)

Less: LEA Adjustment ($0) (Mandatory reduction by legislation)

TOTAL Adjusted DOLLARS PER ADM $6.408.56

(see the Dollars Per ADM chart)

DOLLARS PER ADM CALCULATION

Collins Academy - located in Wake County.No.

StudentsLEA Previously

Attended$/Per ADM Funding

40 Wake $4,434.28 $177,371

20 Granville $5,046.75

20 Private $4,434.28 $88,686

TOTAL ADM

80 $366,992

$100,935

State Base Calculation

Data Elements

• Funded ADM (con’t.)– Initial ADM

• Updated Estimate of Average Daily Membership• Due Late June• Basis for 34% Initial State Allocation• Basis for Federal Allocations

– 1st Month ADM• Calculated from 1st month PMR Enrollment• Basis for Final Funded ADM• Basis for 68% of State Allocation

32%

34%

34%

Initial After 1st Mo. Final

August

when First Month ADM received –usually end of

October

By end of February

When Are The Charter School State Fund Allotments Made?

Data Elements

• Poverty Counts– Estimate of Free Lunch Eligibility December 1,

2013 –Due in June - July– Parents are Surveyed using Income Eligibility

Guidelines for the Child Nutrition Program– Used in Federal Allocations

• Certificate of Occupancy -June

Federal Funding

• New Charter School Data is added into the Federal Funding Formulas

• Eligibility Requirements for Charter Schools and LEAs are the Same.

• Funding Formulas are outlined in the Allotment Policy Manual – http://www.ncpublicschools.org/fbs/allotments/general/

• North Carolina – Federal Grants - $856 million

Data Elements

• Children with Disabilities Headcount (CWD)– Headcounts

• December 1, 2013 – Federal Allocations• April 1, 2014 – State Allocations

– Eligible Students for Funding must be on one of these headcounts

– Students Reported on CWD Headcount Transfer Form in June - July

– Funds Follow Students 1st 60 Days of School

Allotment Cycle

• State Allocations– Planning Allocations

• State Planning Report issued early June• Planning Allocations are subject to change

– Initial Allocations• Issued within 14 days after the General Assembly

Adjourns. Usually processed in Allotment Revision 1• Allotments are effective July 1, 2014

Allotment Cycle

• Federal Allocations– Planning Allocations

• Federal Planning Report issued in August• Planning Allocations are subject to change

– Initial Allocations• Calculations 1st of September• Allocations made in Allotment Revisions as

Applications and Budgets are approved.

REPORTING

Financial and Student Reporting

• GS 115C-218.30 – Schools shall comply with the Uniform

Education Reporting System (UERS)– Subject to Audits

• Monthly Financial• Student Accounting• Ad hoc data collection

UERS

• Required• Accountable• Basis for:

• Federal Reporting• State Reporting• Media/General Public• General Assembly

• We are only as good as the data you submit!

Chart of Accounts

• Shows how the allotments were expended.

• This is the only financial communication between the Charters and DPI.

• DPI uses this data to communicate to the State Legislature, the State Budget Office, media and the Federal Government.

Chart of Accounts

• Uniform Accounting System for all LEAs and Charters

• Information Gathering• Consistency amongst LEAs and Charters• Comparability between years• Decision making tool• www.ncpublicschools.org/fbs/finance/reporting

Chart of Accounts

• Data in the chart is used for:

– Highly qualified teacher reporting

– Teacher certification requirement (50% rule – brick and mortar; 100% Virtual Charters)

– Reporting to the General Assembly, Federal Government, media and general public on past and future education initiatives

– Building the budget

– Research and Statistics

Account String

• Fund-Purpose-PRC-Object

• A-BBBB-CCC-DDD

• 1-5110-036-121

Reading an Account Code• 1-5110-036-411

State - Regular Curricular - Charter Schools - Supplies and Materials

• 1-5270-036-121State - LEP - Charter Schools - Salary - Teacher

• 1-6550-036-171State – Transportation- Charter Schools - Salary Driver

Datafile

• Submit these files to us on a monthly basis• Payroll• Accounts Payable• Software will create these files• Schedule:

http://www.ncpublicschools.org/fbs/finance/reporting/

• Review the files and reconcile• Provide you financial reports

Financial Reports

Access these reports via WS_FTP PRO Software

• ALTARPO1 - Budget Allotment Revision• ALTINRP1 - Planning Allotments• JHA 305 - Local Account Balance

Reconciliation• JHA 705 - Budget Balance Reconciliation• JHA714 - Cash Balance Report• Monitor - Monthly Monitoring Report

Certificate of Occupancy

• PLEASE READ!!!!!!!!!!!!!!!!!

– Brick & Mortar – School Building– Virtual – Local Administrative Office

• Following Forms NOT Processed Without CO

Cash Management

• Establish a ACH bank account with the State Treasurer’s Office. Allow 2 weeks– ACH Bank Account Authorization Form– Voided Check or Original Deposit Slip (Cannot accept temporary checks)

• Establish access to the Cash Management System (CMS) – Complete Security Forms– CICS Application Maintenance Form– RACF02 Site Security Officer Form– RACF03 RACF User ID Maintenance Form

• Complete Bill Action Code Form – ITS Access

Cash Management

• Know the cash calendar and funds requirement date (FRD)

• Do not order more cash than needed to cover the current expenditures

It is against state and federal law to hold their cash for more than 3 days. (GS147-86.11)

Guidelines and formswww.ncpublicschools.org/fbs/finance/cash/

Charter Financial Training

• Spring 2015 Date TBD – Education Building (DPI)

• Required • Topics Covered – Financial Personnel

– Forms Needed for access to systems– Cash Management – MSA (DPI General Ledger) System – Required Software– Chart of Accounts– Zero Out Process

Student Accounting

• Principals Monthly Report (PMR)– Due Monthly– Submitted via PowerSchool– Source of Average Daily Membership (ADM)– Student Accounting Reports

• School Attendance and Student Accounting Manual: http://www.ncpublicschools.org/fbs/accounting/manuals/

Student Accounting

• School Activity Report (SAR)– Who, What, When and Where of the School– Accuracy of Data– Uses of Data

• SAR Manual: http://www.ncpublicschools.org/fbs/accounting/manuals/

Take Aways

• Data reporting is NOT optional (must be in our required format – on time)– Financial Datafile – UERS Transfer Schedule– PMR – PowerSchool– SAR – PowerSchool

• Board of Directors is responsible for data submitted

• Decisions made based on submitted data

• No access to funds until approximately 2 weeks after CO is submitted

• DPI Provides Cash Management Training (Required for all new schools)

Contacts

• Financial Related Questions– Roxane Bernard (919) 807- 3725

• PMR Questions– Ozella Wiggins (919) 807-3757

• SAR Questions– Sandra Johnson (919) 807-3737