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IDEAS  STATE  AID  PAYMENTS    AND  REPORTS  –  THE  BASICS  

MASBO    May  1,  2013  Karen  Dykoski  

 

Topics  

•  Basics of IDEAS •  IDEAS Reports

•  Simple uses of IDEAS Reports  

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WHAT IS IDEAS?  

IDEAS is short for the INTEGRATED DEPARTMENT OF EDUCATION AIDS SYSTEM, a system that calculates payments of state education aids and tax credits to school districts and charter schools through metered aid formulas. The system is one of two primary systems through which payment is made to school districts and charter schools. The other, SERVS is used for federal payments and for state aids such as food and nutrition programs where reimbursement is invoice based.

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WHAT IS IDEAS?  

IDEAS is a formula-based “metered” system that calculates payment of state aids and state-paid tax credits based on M.S. 127A.45 to be sensitive to both local and state cash flow. •  State aid and credit entitlements for the current school year

plus local receipts (property taxes, county apportionment receipts, receipts of taconite funds) are used in the payment formula. The sum is called the “cumulative guarantee”.

•  Payment calculation assumes districts will spend local receipts prior to requiring state payment of aid/credit.

•  The payment cycle for a single school year may extend over 24 months.

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WHAT IS IDEAS?  

State aids and credits fall into three basic categories. •  Metered operating (the greatest share of aid) •  Nonmetered operating (statute requires payment on

specific dates, ie., integration, nonpublic) •  Nonoperating (Funds 7 and 47, paid at 1/12 on the 30th

of each month) Current year metered payments for school districts are calculated based on estimated state aid entitlements and paid on the 15th and 30th of each month, with the exception of June, when the midmonth payment is June 20, and no metered operating funds are paid on June 30.

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SCHOOL DISTRICT METERED FORMULA  For school districts, each of 23 payments is based on the following calculation. Cumulative Guarantee (current year amount payable plus property taxes attributable to the fiscal year plus taconite receipts plus county apportionment) Times Current meter percentage (in M.S. 127A.45) Less Local receipts through this period Less Gross Aid Year to Date Equals Gross Aid Payment this period

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CHARTER SCHOOL METERED FORMULA  Each  of  16  payments  July  15  through  February  28  is  calculated  as  the  amount  payable  for  the  current  year  Qmes  a  cumulaQve  measure  of  1/16,  reaching  16/16  for  the  February  28  period,  less  gross  aid  calculated  to  date.  Example  for  December  15  Payable  current  year  =  1,000,000  December  15  measure  =  11/16  Gross  aid  calculated  through  November  30  =  625,000  1,000,000  X  11/16  less  625,000  =  62,500  

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WHAT IS IDEAS?  Data from the “Final” year are not included in the metered calculation. Final payments for school districts are scheduled in M.S. 127A.45 to occur on

August 30 at 30% of final amount due September 30 at 40% of final amount due October 30 at 30% of final amount due

Final payments for charter schools are scheduled to occur on July 15 at 75% of final amount due October 30 at 25% of final amount due

Final payments are rarely complete at October 30, as neither student nor expenditure data are complete and final.

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WHAT IS IDEAS?  

KEY CONCEPT Cash is paid to district and charter school operating funds from an aid program or from several programs to pay current operating costs for any program. The district or charter school must manage cash to assure that obligations are paid in compliance with the prompt payment law. Cash is paid to districts for the Debt Service Funds for costs related to those funds.  

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IDEAS REPORTS

Produced to help district staff manage budget and cash flow. •  On MDE website at http://education.state.mn.us •  Click on “Data Center”, “Data Reports and

Analytics”, “School Finance Reports”, then, MFR.

•  There are several options for accessing reports… when loaded, by category and by year.

 

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IDEAS REPORTS  

IDEAS  REPORTS  The IDEAS reports on MFR include: •  IDEAS Combined Aids Payment Reports

(semimonthly) •  “Checkstub” (not accessible if choosing by

category) •  IDEAS Year-End Reports (if choosing by

category, otherwise 3 individual reports) •  Cash Simulations (usually annual)  

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IDEAS REPORTS  

IDEAS STATE AIDS COMBINED PAYMENT REPORT •  MEMO and Prorations •  Final Parts 1 and 2 (but only if a final payment is

made), with other adjustment detail, if adjustment to gross aid occurred.

•  Current Parts 1 and 2, with other adjustment detail, if adjustment to gross aid occurred.

•  State Aids Net Payment Schedule

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IDEAS REPORTS  

IDEAS Checkstub •  Inadequate for district management. •  Simple statement is intended for receipt of cash. •  Produced currently because SWIFT cannot

display vendor payment for state-paid tax credits at the school district fund level.

 

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IDEAS REPORTS  

IDEAS Year-end Reports •  IDEAS Net Aid Payment Summary •  IDEAS Adjustment Activity Report •  Tax Shift Reconciliation  

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IDEAS REPORTS  

IDEAS Cash Simulation •  Produced to assist district and charter school staff

only in planning cash flow for the next year prior to the first payment of the fiscal year

•  Based on estimated tax receipts, state aid entitlements, and current year payment percent as of State February Forecast.

•  Is only an estimate and should be evaluated as to accuracy of entitlements.

•  May be produced prior to end of legislative session and not include legislative changes.

•  Unlikely to be produced for FY 2014 estimates.

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IDEAS REPORTS  

Combined Aids Payment Report Part 1 Column Definitions •  Col. 1 Aid Program •  Col. 2 Annual Aid Entitlement – Amount of state aid earned for

a year based on a statutory formula •  Col. 3 Prorated Aid Entitlement – Amount of state prorated to

equal the state appropriation set by the legislature, OR, for general education and special education, the annual aid entitlement adjusted for formula components such as open enrollment or tuition billing.

•  Col. 4 General Reduction – Currently used for reductions related to historic reductions in employer TRA and PERA contribution rates.

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IDEAS REPORTS  

Combined Aids Payment Report –cont. •  Col. 5 Annual UFARS Revenue – Prorated aid plus the

general reduction. •  Col. 6 Reduction Adjustment – Used infrequently – Currently,

a reduction to amount of gross aid the district is eligible to receive when entitlement of another program plus the General Reduction in that program is less than zero.

•  Col. 7 Current Report Amount Payable Current Account – Amount of cash the district or school is eligible to receive in the current year. Currently calculated as Prorated Aid Entitlement X .643 less the General Reduction.

•  Col. 7 Final Report Cumulative Amount Due – Amount eligible to be released including gross aid calculated in the current year.

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Part  1  State  Aids  Payment  Report  

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IDEAS REPORTS  Combined Aids Payment Report –cont. Part 2 Column Definitions Col. 1 Aid Program – Aid program name Col. 2 UFARS Code – UFARS Source or Finance code used to receipt cash or record adjustments. Col. 3 Final Report Gross Aid Year-to-Date - The sum of Gross Aid This Payment for all previous payment periods including amounts in the previous fiscal year. Col. 3 Current Report Cumulative Amount Due – A function of the metered formula determining release of aid from specific aid programs. Col. 4 Final Report Gross Aid this Payment – The amount paid this period base on total percentage payable less Gross Aid Year-to-Date.

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IDEAS REPORTS  Combined Aids Payment Report –cont. Part 2 Column Definitions Col. 4 Current Report Gross Aid Year-to-Date The sum of Gross Aid This Payment for all previous payment periods including amounts in the previous fiscal year. Col. 5 Current Report Gross Aid this Payment – For metered state aids, the amount calculated per metered formula as due this period, plus amounts for nonmetered operating aid or nonmetered-nonoperating aids due this period. Col. 6 Current Report (Col. 5 Final Report) Tax Shift Adjustment This Payment – Amount by which the gross aid payment is reduced due to the tax shift adjustment to aid. Col. 7 Current Report (Col. 6 Final Report) Other Adjustments This Payment – Amount equal to the net of positive and negative adjustments added to or subtracted from the gross payment due to overpayments for the current or prior year, or other factors.

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IDEAS REPORTS  

Combined Aids Payment Report –cont. Part 2 Column Definitions Col. 8 Current Report (Col. 7 Final Report) Net Aid This Payment – Amount equal to Gross Aid This Payment plus adjustments made. Cash receipted plus results of recording adjustments will equal Gross Aid this Payment in most cases. Col. 8 Final Report Overpayment A negative amount calculated when an aid is paid to 100% of UFARS Revenue and Gross Aid Year-to-Date is greater than 100% of UFARS revenue. This negative amount assumes recovery from other aids and resets Gross Aid Year-to-Date to equal UFARS revenue.

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Part  2  State  Aids  Payment  Report  

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IDEAS REPORTS  Combined Aids Payment Report –cont. OTHER ADJUSTMENT DETAIL REPORT Provides information necessary to complete accounting transaction of record adjustments to gross aid. •  The first program listed is the aid program where gross

aid was reduced or increased. •  The middle section shows the year to which the cause of

the adjustment is related, the reason for the adjustment, and the program for which the adjustment was implemented (e.g. overpayment for special education).

•  Last, the amount of the adjustment is provided.

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Other  Adjustment  Detail  Report  

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IDEAS REPORTS  

OTHER ADJUSTMENT DETAIL REPORT On Part 2 of the current year payment report, a district has gross aid of $1,000 for special education, and an adjustment of $(90) with net aid payment of $910. Col. 2 of the Other Adjustment Detail Report show the adjustment is due to 10-11 general education aid. What entries will the district make for these transactions?

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IDEAS REPORTS  

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910 91090

90

Cash FY 12 Spec Ed SOU 360

FY 11 Gen Ed SOU 211

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IDEAS REPORTS  Combined Aids Payment Report –cont.

State Aids Payment Schedule •  Schedule of cash payments to the date (actual),

payment this period (current), and projected amounts (estimate) based on information in the IDEAS database at the current period.

•  School districts have columns for operating funds, debt service funds, and the total for these two elements.

•  Charter schools have columns for current year payments, prior year final payments, and the total for these two elements.

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State  Aids  Payment  Schedule  

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IDEAS REPORTS  Combined Aids Payment Report –cont. Projection of prior year final payment amounts are based on IDEAS receivables (UFARS revenue (Column 5, Part 1, less GAYTD) , which will not be an accurate reflection if IDEAS entitlements are understated or overstated. CAUTION – The schedule is subject to change without notice for:

•  Changes in annual aid entitlement •  Local receipt assumptions •  Aid adjustments to be recovered or paid •  Scheduled final payments (date and/or amount)

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USING  THE  IDEAS  REPORTS  

Primary users of the reports are those district staff responsible for budgeting, accounting and cash planning. Use the reports for

•  Monitoring the district revenue budget •  Receipting state aid payments •  Managing district cash flow •  Recording adjustment to aid •  Estimating year-end receivables •  Closing district books and audit preparation

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USING  THE  IDEAS  REPORTS  IDEAS State Aids Combined Payment Report used in conjunction with the following will allow management through the year. •  current knowledge of district ADM and special education

approved budget estimates or actuals •  district current year aid revenue budget •  district prior year actual budget for state aid revenue •  various state aid program entitlement reports and/or

“whatifs” provided by department staff •  IDEAS Combined Payment report for the previous

period

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SIMPLE  USES  OF  IDEAS  REPORTS  

Each  period  •  Review  current  (and  final,  if  available)  for  changes  in  enQtlement.  

•  If  enQtlement  changes,  review,  print  and  file  the  state  aid  enQtlement  report  that  shows  the  basis  for  calculaQon.  

•  Review  cash  projecQon  for  changes  in  projected  cash  resulQng  from  significant  changes.  

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SIMPLE  USES  OF  IDEAS  REPORTS  •  State  aid  enQtlements  on  IDEAS    

–  Reflect  formulaic  calculaQon  on  state  aid  enQtlement  reports  –  The  enQtlement  reports  should  be  reflecQve  of  data  reported  by  the  district  –  ADM  (average  daily  membership,  see  ADM/LEP  data  or  MARSS),  esQmated  or  actual  expenditures)    

–  should  Qe  closely  to  the  district  or  charter  school  revenue  budget  for  state  aid  

•  Contact  the  MDE  staff  person  responsible  for  calculaQon  of  aid  if  further  explanaQon  of  enQtlement  is  needed.  

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SIMPLE  USES  OF  IDEAS  REPORTS  

•  Determine  percentage  of  aid  received  and  remainder  to  be  received  – During  the  current  year,  Amount  Payable  Current  less  Gross  Aid  Year-­‐to-­‐Date  less  Gross  Aid  this  Payment  

– During  the  final  year,  Annual  UFARS  Revenue  less  ReducQon  Adjustment  less  Gross  Aid  Year-­‐to-­‐Date  less  Gross  Aid  this  Payment  

–  If  amount  is  either  calculaQon  is  negaQve,  the  district  or  school  is  overpaid.  

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SIMPLE  USES  OF  IDEAS  REPORTS  YEAR-­‐END  

At Year-End State Aids Payment Schedule •  Totals at June 30 should equal total cash

receipted for aids paid through IDEAS for the fiscal year.

Current Year Payment Report •  For each aid program cash payment plus

adjustments booked should equal Amount Payable Current Account.

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SIMPLE  USES  OF  IDEAS  REPORTS  RECEIVABLES USING CURRENT YEAR PAYMENT REPORT •  Calculate receivables for the next year by

using district estimates of entitlements based on preliminary final ADM or UFARS expenditures less Gross Aid Year-to-Date.

•  Calculate receivables using June 30 IDEAS entitlements less Gross Aid Year-to-Date. These amounts will be used in cash projections in the next year until better data are available.

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SIMPLE  USES  OF  IDEAS  REPORTS  

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Calculating a ReceivableIDEAS v District Information

Reduced Final

Payment

No Final Payment / Overpaid

IDEAS entitlement 100,000 100,000 IDEAS GAYTD 7/1 64,300 64,300 Receivable 35,700 35,700

District Recalc entitlement 79,333 59,800 IDEAS GAYTD 64,300 64,300 Receivable 15,033 (4,500)

Difference/Cash Change (20,667) (40,200)

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QUESTIONS?

Ann Van Diest 651-582- 8745 ann.vandiest@state.mn.us

Audrey Bomstad 651-582-8793 audrey.bomstad@state.mn.us