Richard Woods, Georgia s School Superintendent Educating Georgia s Future gadoe.org The Role of Budgeting in the Planning and Implementation Process

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1 The Role of Budgeting in the Planning and Implementation Process Chris Horton Amber McCollum Department of Special Education Services and Supports August, 2015

2 Learning Targets I can define what a pre-award risk assessment is and how it applies to me I can define MOE and can complete the required MOE compliance and eligibility worksheets I can define Excess Cost and explain its meaning to others I can name at least two (2) data sources that should be consulted prior to developing my budget I can explain the importance of planning a budget three years into the future or more.

3 Session Description This session will focus on fiduciary compliance with Federal and State requirements in conjunction with budgeting for program improvement and positive student outcomes on the selected measureable state indicator---the SIMR---- Graduation Rate.. New rules went into effect on Dec. 26, 2014 Affect only those grants initiated after this date Finance Officers will receive updated DOE training in early November stay in touch with them

4 Section One: Fiscal Responsibilities

5 UNIFORM GRANT GUIDANCE

6 Fiscal Risk Assessment: A Federal Mandate Prior to awarding Federal funds to a grantee, a pre award risk assessment is required 2 CFR DOE s Office of Finance and Business Operations risk assessment presented to the State Board for approval Our department own rubric for making annual risk determinations Current rubric to be updated in the new Director s Manual Previously done AFTER grants were awarded Takes into consideration a wide range of factors Examples of risk factors Failure to meet MOE Failure to adhere to Excess Cost requirements Disproportionality, etc.

7 IDEA Fiscal Monitoring Self- Assessment: In the Portal

8 Section Two: Budget Planning for Today and Tomorrow

9 Budget Planning: Increasingly Important for the future Issues to be aware of: State level factors such as the state economy and state budget Benefits costs (which you do not have control over) Cost of living increases (affecting Federally funded employees) State education funding levels Federal level factors Annual support for IDEA budget varies Reauthorization of IDEA is on the horizon Number of organizations receiving IDEA allocations is on the increase May reduce district allocations in some instances Student outcomes are increasingly important and expected Plan for sustainability of critical program components

10 Budget with the Future in Mind Questions to ask yourself about current and future budgets 1. What do I think will happen to my state and to my Federal allocations in the next 3 5 years? 2. If I do not expect increases in funding, what are the most critical program elements that lead to positive student outcomes? 3. If costs are going up in an area such as benefits, can I afford to sustain all of my programs and personnel costs? 4. Have I communicated these immediate and future forecasts to my supervisor and, if relevant, to the Superintendent?

11 Tools to Assist with Projecting Future Budget Needs

12 Grant Notification Award Letters Required for all Federal grants Provides essential information to district Finance personnel

13 Section Three: Budgeting, Data and Outcomees

14 Section Three Data informs PROGRAMMING Data impacts BUDGETING

15 Data to Guide Budgeting and Programmatic Decisions Typical Program Data Data Used to Inform and to Leverage Program Improvement District Assessment Information Internal CCRPI SLDS Observation Peer Report Other Sources of Data Expenditure Rates Carryover Amounts State & Federal Allocations SSIP Funding Monthly Drawdown History Timeliness of Reporting Parent Mentor Participation

16 What Does Your Data Tell You About Program Improvement? In your collaborative community, look at graduation rate information in your district: Are there areas of weakness or deficit in terms of students graduating with a general education diploma? Begin your examination with your Child Find services and prek programming Consider RtI or MTSS and disproportionality data Work your way through the data on student proficiency across subjects and grade levels Evaluate student access to general curriculum

17 If Data informs Programming and it impacts Budgeting What next? Prioritize your programmatic needs Shift existing resources where possible, including programs and personnel Think outside the box!! Old solutions don t fix old problems Develop a plan the SSIP for your district Budget for your areas of need and protect them in the budget Consider your full earned teacher allocation (state) Conserve Federal resources to maximize program improvement and impact for students

18 Section Four: Important Reminders

19 Federal Use of Funds--Allowable Costs LEAs are responsible for insuring that federally assisted program funds have been expended and accounted for and are consistent with program regulations and approved applications Allowable costs generally are categorized as either direct or indirect Direct Costs salaries, fringe benefits, purchased services, equipment and supplies Indirect Costs cost of doing business such as accounting payroll, audits, purchasing, utilities Georgia Department of Education Kathy Cox, State Superintendent of Schools

20 Appropriate Use of Federal Funds Remember: Unallowable IDEA Expenditures No legal fees only staff development. Use for student services after a decision is reached in mediation or due process hearing but not for lawyers No new construction only renovation to make facility accessible grab bars, ramps, carpet, acoustical tiles No buses but you can modify AC, lift, seat belts No food/drinks unless for student instruction or in services during normal meal time per agenda and no other opportunity is provided for lunch/dinner No awards/prizes for staff mugs, T shirts, bags, etc. No political activities or lobbying No alcoholic beverages Generally, not for special education director s salary/benefits use all of QBE earning first and then local funds or prorate the difference for federal fund usage.

DOE Website: Source for Info on Allowable Expenditures http://www.

21 DOE Website: Source for Info on Allowable Expenditures ulum Instruction and Assessment/Special Education Services/Documents/Budget% 20and%20Grant/2015%20docs /Allowable%20Expenditures. pdf

22 Budget Due Dates August 31, 2015 deadline for CLIP submission/ssip September 30, 2015 deadline for budget submissions for FY16 Reminder: If your district has not turned in the completion reports for the FY15 IDEA budgets, you will not be able to add carry over amounts until DOE receives the reports

23 Mr. Chris Horton, Program Manager Ms. Amber McCollum, Budget Specialist /11/

24 Section Five: Extra Reminders

25 Maximize State Preschool Funds Budget all State Preschool funds for certificated personnel first teachers, coordinator, etc. Report the State Preschool teachers on CPI as job code 141 with a secondary fund code: 00 for state or local funds including State PreK grant 50 for federal IDEA (no T & E earned if federal funds) 55 for federal Preschool grant (no T & E earned 9/11/

26 Proportionate Share Tab 2. Check 1.

27 Private/Home School Participation If attend meeting, have them sign and you keep. Must provide consultation process on child find process, how determine share amount and what services are being provided annually. How, where, and who will provide services. How and when decisions will be made discussed.

28 LEA Maintenance of Effort 9/11/

29 Notecards Ongoing Questions In an effort to cover a substantial amount of information in this presentation, we may not have time for additional questions. Please write down all questions including name/ on your notecards as we progress, and I will address all them at a later time either through individual responses or outgoing department communication. 9/11/

30 Purpose of MOE Help ensure FAPE Supplement not Supplant A local educational agency (LEA) may use IDEA funds only to supplement and not supplant federal, state and local funds. However, if the LEA meets the compliance standard of MOE, then IDEA funds are in fact, supplementing those state and local expenditures. Ensure there are sufficient funds to serve students with disabilities 9/11/

31 What is LEA Maintenance of Effort? LEAs must use expend (using state and local funds) at least as much as they did previous year on education of children with disabilities. Two standards: Eligibility: Must budget at least as much as they expended in last year for which information available. Compliance: Must actually expend at least as much as they expended in previous (comparison year) See Subsequent Years Rule 9/11/ Source: OSEP Leadership Conference 2015:

32 Meeting the Eligibility Standard LEAs must upload the MOE Compliance and Eligibility Worksheet annually before IDEA budgets are approved. This worksheet compares the previous two years of overall expenditures and per capita expenditures. LEAs must BUDGET appropriate state and local expenditures to Maintain Effort. (You may find all forms for MOE on our website using the following link: Instruction and Assessment/Special Education Services/Pages/Budget and Grant Applications.aspx ) 9/11/

33 Meeting the Compliance Standard An LEA must maintain state and local expenditures for students with disabilities in one of four ways: local funds only; the combination of State and local funds; local funds only on a per capita basis; or the combination of State and local funds on a per capita basis. 9/11/ Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28, 2015

34 Final Regulations issued April 28, 2015 This new guidance brings clarification and guidance to existing regulations. This does not represent new changes, but it did cause SEA s (us) to reevaluate procedures based on this guidance. 9/11/

35 Subsequent Years Rule Enacted into law in the 2014 and 2015 Appropriations Acts. Defines what level of effort an LEA must meet in order to maintain effort in the year after an MOE failure: Level of effort that would have been required in the absence of that failure, not the LEA s reduced level of expenditures. Source: OSEP Leadership Conference 2015: 9/11/

36 Subsequent Years Rule Impact To determine required level of effort, must look back to last year in which LEA maintained effort But must look back to the last year in which it maintained effort using the same method by which it is establishing compliance. 9/11/ Source: OSEP Leadership Conference 2015:

37 WHAT DOES THAT MEAN? In what year did you last meet in each method? 9/11/

38 Appendix E Table 4 (Federal Register April 28, 2015) Fiscal Year Actual Level of Effort Required Level of Effort Met MOE? $100 $100 YES $90 $100 NO $90 $100 NO $110 $100 YES $110 9/11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

39 Appendix E Table 5 (Federal Register April 28, 2015) Fiscal Year Local only State and local Local only per capita State and local per capita Child count 2016 $500 $950 $50 $ $400 $950 $40 $ $500 $900 $50 $ /11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

40 PRACTICE 9/11/

41 Changes for you: Use of exceptions and the eligibility standard: Prior regulations silent on applicability of exceptions and adjustments ( and 205) Based on comments, decision was made to explicitly allow LEAs to consider the exceptions: to the extent the information is available; exceptions taken in the intervening year; and exceptions that LEAs reasonably expect to take in the fiscal year for which the LEA is budgeting. 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

42 What does that mean? This is a really good thing because exceptions and adjustments reduce your maintenance of effort in subsequent years. You will now be able to use exceptions and adjustments for budgeting and planning purposes, as well as, for prevention of failure of MOE. We will begin processing exceptions and adjustments for FY16 during FY16, though you may still use exceptions as you normally do now. And the exceptions and adjustments are 9/11/

43 Exceptions and Adjustments Under IDEA, two categories allowing reduction of level of effort required to meet MOE: Exceptions ( ) Adjustment ( ) No Changes in Final Regulations. Under both, reduced level retained moving forward. 9/11/ Source: OSEP Leadership Conference 2015:

44 Exceptions: (a) (a) The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. Layoffs or Reduction in Force do not count LEA reduction in share of benefits do not count May look at differential salary one to one or overall May look at position by position basis May look at total salary of departing Special Education teachers and existing Special Education teachers who are replacing Special Education teachers 9/11/ Sources: OSEP Leadership Conference 2015: OSEP Letter to Gonzales 2012

45 Exceptions: (b) (b) A decrease in the enrollment of children with disabilities. We calculate this for you! There is nothing to do on your part. 9/11/

46 Exceptions: (c) The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child (1) Has left the jurisdiction of the agency; (2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or (3) No longer needs the program of special education. 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

47 What does No longer needs special education mean? Child no longer requires special education. Or new services and placement are less costly in accordance with IEP LRE parents are not disputing change in placement. 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

48 Exceptions: (d) The termination of costly expenditures for long term purchases, such as the acquisition of equipment or the construction of school facilities. Long term= more than one year Costly expenditure 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

49 Exceptions: (e) The assumption of cost by the high cost fund operated by the SEA under (c). Includes high cost funds financed through federal IDEA funds. We do this for you! 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

50 MOE Adjustment or Flexibility ( ) If the IDEA allocation increases, the LEA, if it meets certain conditions, may reduce its MOE level up to 50 percent of the increase in the allocation. Conditions Providing FAPE Meets Requirements Has not been identified with a Significant Disproportionality 9/11/ Sources: OSEP Leadership Conference 2015: Individuals with Disabilities Act

51 CEIS and LEA MOE Adjustment If you use CEIS funds, whether you use it optionally or not, it reduces the amount you may reduce using the 50% reduction. If you have questions regarding the 50% adjustment, please let me know. 9/11/

52 Documentation Requirement For exceptions: Exceptions form (located on our website) must be submitted and approved Supporting evidence must show true expenditures and must be approved All documentation must be uploaded in the Consolidated Application For adjustment: Reducing Local MOE form (on website) must be submitted and approved by established date (more to come) LEAs responsibility to MAINTAIN all documentation (You may find all forms for MOE on our website using the following link: Instruction and Assessment/Special Education Services/Pages/Budget and Grant Applications.aspx ) 9/11/

53 How do I know when I need to use exceptions or adjustments? 9/11/

54 Appendix E Table 6 (Federal Register April 28, 2015) Fiscal Year Original Required Level of Effort Exceptions & Adjustments Required Level of Effort Actual Level of Effort 2016 $500 $500 $ $500 $500 $ $500 $50 $450 $ $450 $10 + $10 $430 $405 9/11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

55 Appendix E Table 6 (Federal Register April 28, 2015) Fiscal Year Child Count Original Required Level of Effort Exceptions & Adjust. Required Level of Effort Actual Level of Effort $50 $50 $ $50 $50 $ $50 $50/10 $45 $ $45 $20/10 $43 $45 9/11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

56 Appendix E Table 8 (Federal Register April 28, 2015) Fiscal Year Local only State and local Local only per capita State and local per capita Child Count 2015 $500 $1,000 $50 $ $450 $1,000 $45 $ Required in 2018 $500 $1,000 $50 $100 9/11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

57 Appendix E Table 9 (Federal Register April 28, 2015) Local only State and local Local only per capita State and local per capita Child Count Actual 2015 $500 $1,000 $50 $ Exc. & Adj. taken in 2016 $50 $50 $5 $5 Expected Exc. & Adj. for 2017 $25 $25 $2.50 $2.50 Eligibility standard requirement in 2017 $425 $925 $42.50 $ /11/2015 Sources: OSEP Leadership Conference 2015: Also see Federal Register: April 28,

58 Consequence for Failure of MOE Requires repayment to SEA using Non Federal funds an amount equal to the amount by which the LEA failed to maintain its level of expenditures in accordance with paragraph (b) of this section in that fiscal year, or the amount of the LEA s Part B subgrant in that fiscal year, whichever is lower (d) SEA repays to Federal Government LEA MOE reverts to the previous year met using all four methods 9/11/

59 What is next for MOE? Changes go into effect immediately with this year continuing documentation collection from FY14 MOE reconciliation and accepting submission for consideration of exceptions for FY16 MOE will be calculated earlier this year for FY15, around January MOE will be an automated system in the Consolidated Application for next year 9/11/

60 Excess Cost 9/11/

61 Excess Cost Definition (IDEA funds) must be used only to pay the excess costs of providing special education and related services for children with disabilities Must be used to supplement state, local, and other Federal funds and not to supplant those funds. 9/11/2015 Source: 34 CFR (a)(2 3) 61

62 Excess Cost Calculation Excess costs are those costs for the education of an elementary school or secondary school student with a disability that are in excess of the average annual per student expenditure in an LEA during the preceding school year for an elementary school or secondary school student, as may be appropriate. An LEA must spend at least the average annual per student expenditure on the education of an elementary school or secondary school child with a disability before funds under Part B of the Act are used to pay the excess costs of providing special education and related services. 9/11/2015 Source: 34 CFR

63 Excess Cost Calculation To accurately determine that an LEA is spending the average annual per pupil expenditure (APPE), we must obtain an annual count from the local level. The LEA must first determine elementary and secondary expenditures separately. Central Office costs must be attributed to elementary and secondary costs this is not something we can do. Then the LEA must subtract the amount of capital outlay and debt expenditures. Finally, the LEA must subtract from the total expenditures, the amount spent in the preceding year. 9/11/

64 Good News We are building an automated system that performs this calculation for you! It will explain exactly where to pull each expenditure. It will be a stand alone component of the portal NOT located in the Consolidated Application and not tied to IDEA budget submission. We hope to have this in place by November. 9/11/

65 Your Part Special Education Directors will need to partner with Finance personnel to complete this calculation and submit the data. We will be meeting with your finance personnel in November and will provide greater detail about the calculation. There will be a base calculation and final calculation annually and they will both be completed in October of each year after completion reports are completed. This year, the deadline for completing the calculation will be determined after our automated system is ready. 9/11/

66 Failure to Meet Excess Cost The Excess Cost Calculation will be monitored for completion annually at the state level. Excess Cost will be incorporated into our fiscal monitoring procedures in two ways: to determine LEAs who are high risk and need to be monitored verifying that the standard is met during a monitoring visit Failure to meet this standard could result in a finding and the need for corrective action 9/11/

67 Consolidated Application Updates Assurances Fiscal Self Assessment Budget Approval Checklist 9/11/

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