G.A.I.N.S.

Financial ReviewMay 5, 2011

Items to be Covered

• FY 2011 Mid Term Budget• FY 2012 Budget• ARRA Funds• Commission Schools• HB 192• HB 186

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Items to be Covered

• Reporting to CVIOG• Indirect Cost• IRS 3% Withholding• PCGenesis• GASB 54

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FY 2011 Mid Term Budget

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QBE- 2011 MT• Convert Allotment Sheets back to HI of

18.534% to match funding• Spreadsheet took existing allotment sheet

with HI at 21.10% back to 18.534%• Mid Term will implemented with the May

payment to coincide with the decrease in health insurance payment

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Dual Enrollment - 2011

• Dual Enrollment grant $1.9M– Provides funding for the costs incurred when

students take course at post secondary school, (i.e.. counselors, student information…)

– Student currently reported with a “M” on FTE, which carries no QBE funding

– Tuition at post secondary school funded through lottery funds

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Dual Enrollment - 2011• FY 2011, Dual Enrollment funding at $161.44

per segment• Funding is intended to cover ancillary costs of

instruction of these students, such as counselors

• Program Code is 3042

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Health Insurance - 2011

• The Health Insurance rate for FY 2011 is 18.534%.

• The increased percentage for the majority of the year was to forward fund the SHBP, not to give more money for the year.

• The SHBP has been used to help balance the State’s budget during this economic downturn, depleting its’ reserves for paying claims. Thus the need to forward fund.

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Health Insurance - 2011

• Non-certified rate changes in May to $246.20 per month per covered employee.

• Certified percentage will drop to 1.429% for May and June payrolls

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Equalization - 2011

• Total funding limited to $436 million. No change at Mid term

• Three districts were appropriated more funds for errors and timing differences, $975,412

• Funding is at 2/3 of formula• Allocations were prorated based on the

funding level

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Transportation Funds - 2011• Pupil Transportation level of funding was

reduced by an additional 4.00% in FY 2011• No additional cuts were taken at Mid Term• The total appropriated is $133,083,261• No Bus Replacement funds appropriated in FY

2010 or FY 2011

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Transportation Funds - 2011

• Bonds for Buses– Funding for Bus Replacements funds to be

provided with Bonds in FY 2011– $50 million – Will have to submit copies of invoices to get

reimbursed– Funding $76,292 per bus.

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School Nurses - 2011

• In FY 2011 mid term, Funding level reduced by 4.00% ($436,500)

• This reduction implemented last fall.• No further reduction to be taken.• Total appropriations $26,399,520

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Math & Science Teacher Supplement - 2011

• Will be funded as a separate grant• Information was collected on October CPI data

collection.• Will fund teachers as they were reported at that

time.• Funding was received in the Supplemental

Budget, $12.6 million• Guidance can be found at the Policy Division web

site: http://www.gadoe.org/pea_policy.aspx

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Math & Science Teacher Supplement - 2011

• Listing of individual teachers will be sent to each district with amount per teacher, includes benefits

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FY 2012 Budget

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Health Insurance - 2012

• The FY 2012 Budget uses 18.534% for certified.

• Non-Certified will have the rate of $246.20 per month per employee covered.

• 10% increase in employee premiums or as near as possible ( Plan Year FY 2012).

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TRS Employer Rate - 2012

• No changes.• The employer matching rate is 10.28%.• The employee rate is 5.53%.

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QBE - 2012

• No change to formula weights• Change from mid term allotment sheet– Updated T&E based on October 2010 CPI– No Hold Harmless– Equalization and Local Fair Share updated

• No ARRA funds on the allotment sheet from FY 2011

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QBE - 2012• Increase in Austerity of approximately 1% of

net state funds, $60.9 Million increase– QBE Earnings less Local Fair Share less Austerity– Total Austerity at 15.79% Statewide

• Added $12.6 Million for Math and Science Supplements

• Provided for continuation funding for the 8 existing charter systems grant (3.785% of Base QBE), funded at 84.21%( a 15.79% reduction)

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QBE - 2012

• Training and Experience– Directly related to number of staff reporting on

fall CPI data collection– Even though statewide T&E increased, 50% of the

school districts had a decrease in T&E– Directly caused by reduction in number of staff

being reported on CPI because of budget reductions

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QBE - 2012

• Add $523K for Move On When Ready– Students going full time at post secondary schools– Tuition not funded through lottery funds– Year 1 participants, funds will be pulled from

systems allotment sheet (similar to Special Needs Voucher Program)

– Intended to cover year 2 participation in the program

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QBE - 2012

• Dual Enrollment grant $1.9M– Provides funding for the costs incurred when

students take course at post secondary school, (i.e.. counselors, student information…)

– Student currently reported with a “M” on FTE, which carries no QBE funding

– Tuition at post secondary school funded through lottery funds

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QBE - 2012

• Dual Enrollment– Provide forward funding to fully fund dual credit

courses at the appropriate weight for high school segment attended and true up funding using mid-year FTE counts

– See HB 186

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Transportation - 2012

• FY 2012 has a total of a 6% reduction taken from the original FY 2011.

• A 4% reduction was taken in the fall of FY 2011.

• Net effect is a 2% reduction from current funding.

• No Bus Replacement funds• Buses = $25 million in Bond Funds

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Equalization - 2012• Total funding limited to $436 million. • Formula calculation decreased by 3.14%• Reflects the decrease in value in digests• Funding is at 2/3 of formula• Allocations were prorated based on the funding

level• With proration, significant changes between

districts effects everyone since the amount of funds are capped

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Local Fair Share - 2012

• Total capped at $1.697 billion, same as FY 11 and FY 2010

• Formula calculation decrease by 1.98%• Also reflects the decrease in the value of the

digests (2009 Digest)• Reduction is at 87% of formula compared to

85% in FY 2011

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School Nurses - 2012

• In FY 2012, Funding level the same as FY 2011 Mid Term

• Total appropriations $26,399,520• Recalculation based on updated FTEs

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RESAs - 2012

• Reduce base grant by 8% from FY 2011 original– 4% decrease from current FY 2011

• Reduce ETC funds by $120K, 8% reduction– 4% decrease from current FY 2011

• Reduce Math Mentors $142K, 8% reduction– 4% decrease from current FY 2011

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ARRA Funds

• All ARRA funds expire 9/30/2011– Except Race to the Top and SIG ARRA

• No Stabilization Funds• No Education Jobs Funds

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Commission Charter Schools• Currently 8 Commission Schools– 6 new schools in FY 2011– Enrollment 2,400 students

• In FY 2012, 8 new schools• 3 of the new schools will be virtual schools with

statewide enrollment• Total Projected Enrollment: 15,800 students– Traditional School: 5,500 students – Virtual School: 10,300 students

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Commission Charter Schools• Commission Schools are entitled to

“an amount … equal to a proportional share of local revenue from the local school system in which the student attending the commission charter school resides;”(20-2-2090(3)(A))

• Funds (in lieu of local funds) from one district are shared with the commission school

• With the virtual schools, this would effect almost every school district in the state

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HB 192

• State Education Finance Study Commission• Evaluate the cost and resources needed to

educate a child• Basically everything is on the table to be

reviewed

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HB 192

• Timeline– September 30, 2011. Interim recommendations– December 31, 2011. Proposed legislation for

interim recommendations– September 30, 2012. Final recommendations

completed– December 31, 2012. Proposed legislation for final

recommendations completed

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HB 192

• Extended decision making time of the flexibility contracts for IE2 to June 30, 2015

• Extended class size waiver through FY 2015• Extended expenditure controls for QBE and

Twenty additional days waiver through FY 2015.

• Extended Teacher contracts being offered by May 15 through FY 2015

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HB 186

• Dual enrollment– “A student who is enrolled in dual credit course

pursuant to 20-2-159.5 shall be counted for the high school program or other appropriate program for each segment in which the student is attending such dual credit course.”

– The Department will be issuing guidelines, which will include reporting of FTE.

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Reporting to CVIOG

• For fiscal years beginning on or after January 1, 2011– Submit copy of approved budget in pdf format– Must be submitted within 30 days– Unless told otherwise, submit a copy of one page

advertise budget. Can submit your entire budget package.

– https://www.itos.uga.edu/ted/

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Reporting to CVIOG

• Submit an electronic copy of audit report. • DOAA creates an electronic copy that can be

used for this purpose.

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IRS 3% Withholding

• Withhold 3% tax on certain vendor payments made by government entities after December 31, 2011– Regulations proposed, not final– A single payment of $10,000 or more– Remit tax withholdings using current IRS deposit

rules– Requires reporting of withholding to vendors/IRS

on Form 1099-MISC

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IRS 3% Withholding

• Exception for governments making less than $100 Million of payments for property or services annually.

• Total payments excluding qualifying exceptions– Payments subject to withholding (Wages)– Payments for retirement benefits– Real property, Interest,…

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IRS 3% Withholding

• Determine if your accounting system can handle a withholding tax on vendor payments (accounts payable system)– PCGenesis can not, but currently none meet the

$100 Million threshold

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Indirect Cost Rates for FY 2012• The FY 2012 Indirect Cost rates have

been finalized and are available in the Financial Review application in the portal.

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PCGenesis

• We are still supporting PCG, no intention to stop supporting

• Looking at things we can do to work with outside vendors for services we do not offer

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GASB 54

• Reorganization of Fund Balances for financial reporting purposes

• Nonspendable – Inventories, prepaids, long term loans and receivables

• Restricted - Legally restricted: grants• Committed – Board action to set aside funds

for a particular purpose

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GASB 54

• Assigned – Gov’t action to constrain funds. Does not have to be Board action. Can be assigned to CFO, for example

• Unassigned – Everything else not classified elsewhere. General Fund should be the only fund to report a positive unassigned fund balance.

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GASB 54

• Chart of accounts will be modified to reflect these changes

• You will not change how you keep your accounting records

• These changes will be made in the creation of the financial statements

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GASB 54

• 15% limit on fund balance calculation– Unassigned + Assigned + Committed– Less Assigned Reserve for unanticipated

expenditures or deficiencies in revenue– Less Assigned Reserve for capital expenditures

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Contact Information

• John Dunn• johndunn@doe.k12.ga.us• Georgia Department of Education• 1652 Twin Towers East• 205 Jesse Hill Jr. Drive, SE• Atlanta, GA 30334• 404-656-2447

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