Rate calculations 9/23/2014. IPCRB Rates Behind the Scenes. are based on IPCRB Rules (89 Illinois Administrative Code, Chapter V, Part 900)
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1 IPCRB Rates Behind the Scenes Satu Allen & Larry Smith November 2014 Rate calculations are based on IPCRB Rules (89 Illinois Administrative Code, Chapter V, Part 900) How is the rate calculated? do I know that my rate is right? do I proceed if I think I need to appeal? 1
2 Why did the rate increase or decrease? is the census different from the enrollment days on the CFR? Where are my rates? is my rate letter? (and when) do I find inflation factors and medians? IPCRB Cost- Based Formula: Census 2
3 Census CFR costs - Non-allowable costs - Costs over 125% median caps - Revenue off-sets + Inflation add-on = Total Allowable Costs Non-allowable costs List of non-allowable costs can be found in the Rules (Section ) and on page 2 of the CFR Supplemental Schedule List on both the Cost Schedule (line 47) and the Supplemental Schedule for each program If the cost center is not clearly identified, non-allowable costs will be subtracted from Program costs Common non-allowable costs Membership dues Medical expenses Non-straight-line depreciation Bad debt Fund raising In-kind expenses Clothing and allowances Cost of advertising and public relations (See IPCRB Rules or Supplemental Schedule for other nonallowable expenses) 3
4 Revenue offset examples Lunch revenue Transportation revenue Rental revenue Revenues from unrestricted investments must be offset against interest costs Revenues from local educational agencies for diagnostic services Revenues from workshop programs must be offset against the cost of those programs A gain on a sale of an asset in which the State has any monetary interest Revenue over IPCRB rate 125% median caps for support, administration, and occupancy have a ceiling of 125% of the median Medians are calculated from the CFR data received each year for rate calculations Inflation add-on Reported costs are updated for inflation experienced and projected for the time between the period covered on the cost report and the middle of the current school year. 4
5 The cost centers Program Support Admin Dietary and housekeeping Occupancy Capital Administrative Census Census Census is not necessarily the same as the CFR enrollment days: Census = CFR enrollment days current # days CFR school days * School calendar days as approved by ISBE for current school year 5
6 Census differences If the school districts report a higher number of enrollment days than what is on the CFR, we must use the number reported by the school districts (IPCRB Rules, (g)(2)). What causes the rate to increase or decrease? (Avg. enrollment) * (# of school days) are for FY reported Average enrollment is for FY reported Number of school days for rate school year Example change in cost Census Prior year $1,000,000 (30) * (200) = $ Current year $900,000 (30) * (200) = $
7 Example change in enrollment Avg. enrollment * (# of sch. days) Prior year $1,000,000 (30) * (200) = $ Current year $1,000,000 (35) * (200) = $ Calendar change Calendar Census Rate Change Change Change For example: Initial calendar has 200 school days for average of 50 students. Total allowable costs are $1,500,000. $1,500,000/(50*200) = $ Calendar days are amended to 195: $1,500,000/(50*195) = $ How do I know my rate is right? Understand the rate calculations Ask questions Why did you move my clerical salaries, and why doesn t it match what I have on line 2 of the cost schedule? 7
8 Can a rate decision be appealed? Appeal Read IPCRB Rules. Make sure you meet the requirements. What is your requested rate and how is it calculated? NOTE: 125% caps cannot be exceeded, even for appeals. What do I need to submit for the rate calculations each year? Web-based CFR (with the Supplemental Schedule) Use rounded numbers on the CFR Audit send us a copy via or a paper copy via mail or delivery service. Include a Crosswalk and other supporting documentation with the audit Crosswalk Crosswalk is important Helps rate setters understand how costs were categorized and adjustments already made by the provider Speeds up the rate setting process (you get your rate faster) 8
9 Hours Please report the hours on the Program Personnel and Program Consultant Schedules Web-based CFR Electronic notices are typically sent in October to all providers who submitted prior year CFRs Link to online CFR: New providers - contact us for temporary administrative ID and password Web-based CFR Don t forget to complete your Supplemental Schedule to CFR for each ISBE program Need ISBE program numbers (only way to see supplemental schedule) 9
10 Supplemental Schedule Required for all calculated rates For non-allowable costs, detail the specific line number on the Cost Schedule where costs are located. Do not use line 47. Make sure total of non-allowable costs equals Line 47 on the Cost Schedule. COST SCHEDULE LINE 47 = SUPPLEMENTAL SCHEDULE PAGE 2 What are the for-profit requirements? For-profit organizations need to provide more detail in their audit in order for us to calculate the 115% profit as per Rules. Reminders were sent out to the for-profit providers Where are my rates??? Web-CFR is due January 15 th or 90 days after the end of your fiscal year (whichever is later) As soon as IPCRB staff have an approved calendar, rates are calculated using the FIFO method. Both the audit and the CFR must be submitted before a provider is placed on the list. First rates for a new school year are usually introduced at the June Board meeting prior to the beginning of the school year Use prior year s rate until current school year rate is approved 10
11 What if my schedule needs to be different? Make sure you meet any extension request deadlines New programs must have program approval and budget CFR submitted at least two weeks prior to the IPCRB meeting Where is my rate letter and who is SQL6? Letters are no longer sent through the mail SQL6 is the server sending the automated letters Computation sheets need to be requested separately X When are the inflation factors and medians available? Inflation factors will be calculated after April 15 Medians are calculated using data received by April 15 after inflation factors are determined 11
12 Our web page Available information includes: Medians and Inflation Factors Medians are published as per diem medians and are inflated. IPCRB Rules IPCRB Meeting Dates CFR Instructions Certification forms Extension Request forms Satu Allen Larry Smith Phone Fax Division of Funding and Disbursement Services (E320) Illinois State Board of Education 100 North First Street Springfield, IL
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