DPI UPDATE – SPRING FINANCE WORKSHOP

Updates:

Education Jobs FundFund Balance ChangesBudget Proposal Effects

Special EducationPI-1500 Contact ReportCommon School Fund

Membership IssuesAuditing Issues – Membership and

Financial Audits

DPI SCHOOL FINANCE TEAM

• Jerry Landmark, Director • Debbie Brown, Assistant Director• Brad Adams, Consultant• Bob Avery, Consultant• Marta Skwarczek, Consultant• Paul Dix, Ed Jobs Consultant• Gene Fornecker, Auditor• Kathryn Guralski, Auditor• Natalie Rew, Auditor• Michele Tessner, Special Ed.

Accountant

EDUCATION JOBS ACT

Paul Dix

Ed Jobs Consultant

ED. JOBS INFORMATION

$179 million to local districts to retain, recall, rehire and to hire new employees.

The current expenditure period ends March 31 and the claim deadline is April, 2011.

Can districts supplant funds? Yes! Supplanting is discouraged but there is not a prohibition.

DOA is accepting and processing the claims. Coding documentation will need to be available

for the independent auditor and a possible DOA audit.

Districts will need the project codes to be reflected in the general ledger and be able to run a report by project code for your auditor at year end. Code 595

FUND BALANCE CHANGES

Gene Fornecker

School Finance Auditor

NATURE OF THE CHANGE

GASB 54 shifted the way Fund Balances are being classified…

Old method focused on the ability of resources to be appropriated

GASB 54 identifies the constraints on how resources can be spent and the sources of those constraints

NEW FUND BALANCE CLASSIFICATIONS

Nonspendable

Spendable Restricted Committed Assigned Unassigned

CONVERSION AT A GLANCE

RESTATEMENT OF PRIOR YEAR BALANCES

GASB 54 requires the following:

Reclassify fund balance for all prior periods presented in financial statements

Changes to fund balance information in the statistical section may be made prospectively, although retroactive application is encouraged

Changes in fund structure should be reflected through restatement of beginning fund balance

Software vendors will be sending out updates to accounting software to accommodate the changes

WUFAR ACCOUNT CODES

935000 Nonspendable fund balance 936000 Restricted fund balance 937000 Committed fund balance 938000 Assigned fund balance 939000 Unassigned fund balance

For detailed account codes refer to WUFAR at:

http://www.dpi.state.wi.us/sfs/wufar.html

REVENUE LIMIT, CARRY-OVER, GENERAL AIDS, AND AID PAYMENT

Bob Avery & Marta Skwarczek

School Finance Consultants

CHANGES TO THE REVENUE LIMITTHE GOVERNOR’S 2011-2013 BIENNIAL BUDGET PROPOSAL Changed

Per Pupil Change (Line 5A) Low Revenue Floor (Line 5B) Hold Harmless (Line 7B) New Exemptions (Lines 10D-F)

Did Not Change Transfer of Service/Transfer of Territory (Lines 8B-C) Federal Impact Aid Loss (Line 8D) Recurring & Non-Recurring Referenda Lines 8E & 10A) Declining Enrollment (Line 10B) Energy Efficiency (Line 10C)

Uncertain Prior Year Carry-Over (Line 8A)

CHANGED

Per Pupil Amount 2008-2009: +$274.68 2009-2010: +$200.00 2010-2011: +$200.00 2011-2012 current law: +$275.00 2011-2012 Proposed: -5.5%

Actual dollar amount will vary by district

CHANGED

Low Revenue Floor 2010-2011: $9,000 2011-2012 (current law): $9,800 2011-2012 (proposed): $8,900

CHANGED

Hold Harmless Ensure that Line 7 was not less than Line 1 Gone for 2011-12

To ensure that the 5.5% reduction in the revenue limit applies, the hold harmless had to be repealed.

CHANGED

New Exemptions Scheduled to be Included Starting in 2011-2012 Security Exemption Nurses Exemption Transportation Exemption

UNCHANGED

Transfer of Service/Transfer of Territory (Lines 8B-C) Can be either positive or negative (enter the “-” sign

if negative Federal Impact Aid Loss (Line 8D) Recurring & Non-Recurring Referenda Lines 8E &

10A) Be sure to report any new debt

Declining Enrollment (Line 10B) Stays at 100%

Energy Efficiency (Line 10C) Reminder – you must expend all that you are levying

for or face a penalty in the next year.

UNCERTAIN

Prior Year Carry-Over At this time, AB 40 and SB 26 include a provision

(§2597) to repeal the carry-over provision allowed in WI Stats. §121.91(4)(d).

The summary of the bills, as well as other published information related to the Governor’s proposal, does not include this provision.

After discussing this with the Department of Administration, DPI believes that this provision was included en errata (by mistake). As such, it is expected that it will be deleted from the bill before passage and the carry-over provision will remain in place.

However… it is possible that prior year carry-over will not be allowed in 2011-2012. Districts should be aware of the potential impact of this if it comes to be.

CHANGES TO THE GENERAL AIDTHE GOVERNOR’S 2011-2013 BIENNIAL BUDGET PROPOSAL

Changed General Aid Allocation Hold Harmless

Did Not Change Distribution Mechanism

Year Amount Pct Chg

05-06 $4.614B

06-07 $4.723B 2.36%

07-08 $4.732B 0.19%

08-09 $4.812B 1.69%

09-10 $4.671B -2.93%

10-11 $4.671B 0.00%

11-12* $4.279B -8.40%

12-13* $4.310B 0.74%

*Governor’s Budget Proposal

CHANGES TO THE GENERAL AID

2011-12 General School Aids Down $392M (8.4%) in 2011-2012 from 2010-

2011

CHANGES TO GENERAL AID

Hold Harmless 2010-2011 (current law) = 85% of previous year’s aid

amount

2011-2012 (proposed) = 90% of previous year

2012-13 (proposed) = 85% of previous year

DID NOT CHANGE

FINAL AID PAYMENTS

DELAYED AID PAYMENT

SPECIAL EDUCATION UPDATE

Michele Tessner, School Finance Accountant

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT

Due Date

The PI-1505-SE Special Education Annual Report will be due at the same time as the PI-1505 SAFR Full Annual.

The Special Ed Annual will still need to be completed before the SAFR Full Annual because of edits built into the SAFR Full Annual that will prevent submission until completed. Your overall expenditures in fund 27 in both reports must

match New edit for Act 221

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT

Grant Payments In and Out (GPI and GPO)

Communication is Key!!!

If payments are made using grant money related to special education, notify the other district, CESA or CCDEB that the funds are grant money.

All payments relating to special education activities that are paid with grant funds should be recorded as GPO and GPI. This includes items that may not be aidable.

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT

Grant Payments In and Out (GPI and GPO)

GPI and GPO should be recorded in the year the original expense was incurred. The entity will then be able to correctly identify the expense on the Grant Payment Received Expenditure Breakdown addendum.

WISCONSIN ACT 221WISCONSIN ACT 221For some functions, only a certain percentage of

SALARY and BENEFIT costs of professional level staff are eligible to be included as special education categorical aid (project 011). This calculation also takes grant money into consideration. If positions are also grant funded, the entire percentage may not be allowable.

Function PositionMaximu

m allowed

212000 Social Worker 59%

213000 Guidance Counselor 10%

214000 Nurse (RN) 29%

215000 Psychologist 84%

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT

Wisconsin Act 221

Salary and benefit amounts of those professional level staff are entered by each entity on the online Wisconsin Act 221 addendum.

Salary and benefits for all funds, not just fund 27. Do not include contracted services (including with

CESA’s), supplies, travel or para-professional expenses.

http://dpi.wi.gov/sfs/doc/WiscAct221_Districts.doc

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT

Wisconsin Act 221

New Error in the Special Education Annual: Project 011 vs Calculated Addendum Amount

Amount recorded in that function in project 011 exceeds the maximum allowable based on the numbers entered on the WI Act 221 addendum.

Will not be able to submit Special Ed Annual report with this error.

New Error in the SAFR Full Annual: Total on addendum exceeds total salaries and benefits in

SAFR The total amount recorded in that function on the WI Act

221 Addendum exceeds the total amount of salaries and benefits recorded in the SAFR full annual for that function.

Will not be able to submit SAFR Full Annual report with this error.

STATE SPEC ED ANNUAL REPORTSTATE SPEC ED ANNUAL REPORT Wisconsin Act 221

New Financial Data Report in Special Ed AnnualEach function is on a separate pageTop part show information that has been entered

into the Enter/Edit screen and the WI Act 221 Addendum

Bottom section is the WI Act 221 calculation If you are in a package program, your calculation

will not be accurate.On the pages following the Act 221 calculations,

there is a report that shows your total salary and benefits for each function in the SAFR Full Annual.

STATE SPEC ED CATEGORICAL STATE SPEC ED CATEGORICAL AIDAID

Open Enrollment

Grant money may not be used for flat rate open enrollment.

Grant money may be used for the additional tuition costs.

If grant money is used for the additional amount, it may be a deductible receipt if original expense in the serving district is charged to State Categorical aid (project 011).

FEDERAL MEDICAID REVENUE FROM FEDERAL MEDICAID REVENUE FROM CESASCESAS 2011-2012 Reporting

Source 581 – Medicaid Reimbursements from CESAUse this starting with the 2011-2012 SAFR budget

report.Source 780 should still be used if revenue is

received directly from the Department of Health Services.

PI-1500 CONTACTS REPORT

Brad Adams

School Finance Consultant

PI 1500

Purposes Provide finance team with district staff contacts

for information Provide finance team with specific district staff

authorized to file specific reports on behalf of the district

Security

http://www.dpi.state.wi.us/sfs/index.html

PI 1500

Steps to complete report

The authorized contact for the PI 1500 enters the report.

Names are entered to create users. Users are associated with various reports. Submit to DPI. Give ID/Password to new user.

PI 1500

PI 1500 will need to be amended when staff assignments and responsibilities change

Need your User ID and Password

Preparation – Have list of district staff with e-mail addresses and telephone numbers

Contact a school finance consultant should you need additional assistance

May 21, 2011

PI 1500 Contacts Report

From the finance team homepage: http://www.dpi.state.wi.us/sfs/index.html

You need authorization from the district – use ID/Password

Forgot password? No problem – have a new one emailed to your account.

After logging in – You can go directly into the Reporting Portal or – if authorized

- contacts list.

If properly logged in – ID will be shown.

You can change your existing password here.

Barb

Steve

Barb

Steve

Once in – if authorized - you can go directly into the contacts list.

Consider having at least 2 individuals with the authority to go into this report.

No need to go through each and every page – you can jump to a category in the Report Assignment link

In each category, every possible contact will be listed. Use the appropriate checkbox to give the individual the authority to do the report, or to list them as a contact for receiving information.

When staffing changes, the contacts Report must be amended to reflect the change.Delete contacts who are no longer expected to work with the district. Edit existing contacts if information changes, such as position, phone or email address.

Notice that the user id will not show up until the “Authorized Contact” checkbox is checked. A temporary password will be generated which the user can change at any time. Until it is changed, the password will be viewable on this screen. Give the id/password to any new users.

COMMON SCHOOL FUND

Brad Adams

School Finance Consultant

COMMON SCHOOL FUND - FINANCE TEAM TIMELINE

June 30 – Districts obtain census information which is used in following year for calculation of Library Aid. Census numbers are due in August.

January - The Board of Commissioners of Public Lands (BCPL) informs the Department of Public Instruction (DPI) of the estimated interest that will accumulated in the Common School Income Fund by April 15th. $27.29 per census. This is a fairly good estimate.

April – The BCPL informs the DPI of the actual total interest that has accumulated in the Common School Income Fund. Calculate actual aid available per census.

May 1st – Library Aid payment made to districts. Funds to be spent during current fiscal year. Not doing so could cause the district to lose this aid.

http://www.dpi.state.wi.us/sfs/comsch.html

TRANSFER OF SERVICE

Brad Adams

School Finance Consultant

TRANSFER OF SERVICE- FINANCE TEAM TIMELINE

Important TOS Due Dates for SpEd and LEP (On-Line Application):      Aug 19th - Part A Documentation      Aug 19th - Part B Verification      Aug 19th - Part C TOS Revenue Limit Request (Summary)This is a change from past practice – one due date.

Allow for adequate time to get verification when needed.Process is not complete until Part C is submitted.Cannot claim costs if Part B (when required) is not submitted. Part C is the actual request (Amendments can be made at any time up to the due date).

http://www2.dpi.state.wi.us/SFStos/transerv.aspx

Other Government Transfers are submitted as a narrative (Usually e-mail).

Increase in costs do not qualify. Municipal assessments do not qualify.

Contact Brad Adams (608-267-3752) for assistance or more information.

MEMBERSHIP ISSUES

Brad Adams

School Finance Consultant

A FEW CLARIFICATIONS FOR COUNTING KIDS

Counting students who are 20 & 21; Counting Homebound/Day Treatment Counting students who are in a jail,

detention center or hospital. Youth Challenge Academy

First a quick review

GENERAL COUNTING GUIDELINESPI 1563 SEPT/JAN

After the adjustments are made, you will get to count the student for aid and revenue limit membership if:

The student is a district resident or in some cases has recently moved away.

The District is financially responsible for the student’s educational program.

The student is present for instruction on the count date or is absent but meets the “before and after” rule.

Basic Membership Count RuleBasic Membership Count Rule

Count for membership those resident students in attendance for instruction on the count

date.

….OR….

if they were absent on the count date,count only if the “Before and After” rule is true:

Count the student if he/she was present for instruction at least one day before the count date and

at least one day after, and didn’t change residency during the period of absence.

PI-1563 PUPIL COUNT PROCESS

Initial Head CountIdentify

all students,

regardless of

residency, being

directly served by

the district.

Resident Reduction

sSubtract all resident students

being served by

the district that don’t meet the

count guidelines. (less than full time,

outside age eligibility)

-Non-Resident Reductions

Subtract all non-

resident students

being served by

the district.

-Resident Addition

s

Add all resident students who are receiving

educational services

from other districts or programs and for

which your district is paying the cost of full-

time tuition.

+Adjusted

Head

Count*Result is the

students that are

residents for which you are

financially responsible

for.

=

* Needs to be converted to fulltime equivalency.

ADJUSTED HEAD COUNT

The adjusted head count is converted to full-time equivalency (FTE) for both revenue limits and equalization aid.

Incorrect data in the internet-based report will cause the FTE for both revenue limits and equalization aid to be inaccurate. Data must be revised on-line.

20 VS. 21 CLARIFICATION

If a regular education student:

is 20 when he/she enrolls and receives instruction, the district must provide services and can count the student.

turns 21 prior to enrolling and receiving

instruction, the district is not required to provide services and cannot count the student.

enrolls prior to turning 21, but turns 21 before attending classes, the district is not required to provide services and cannot count the student.

20 VS. 21 CLARIFICATION If a special education student:

is 20 prior to the first day of classes according to the school calendar, the student can enroll any time during the year, even after turning 21, and the district must provide services and can count the student.

WHAT ABOUT HOMEBOUND?

Pupils receiving appropriate homebound instruction will be included in the final adjusted count.

Depending on the program, they may or may not require an IEP.

Most often, they will be on a “homebound” teacher’s log which will verify that they received instruction directly by the district.

In this case, the pupil would be on the initial headcount.

Use the basic membership “count” rules.

WHAT ABOUT DAY TREATMENT? Like Homebound - Pupils receiving appropriate

instruction will be included in the final adjusted count. Depending on the program, they may be

getting instruction at the treatment facility.

If the district is sending a teacher to the facility and providing the educational component of the program, treat like a homebound pupil.

If the facility is providing all or some of the education, treat like you would a private school pupil.

In this case, if they would meet the before/after rule, the pupil could be added when/if they return.

Use the basic membership “count” rules.

WHAT ABOUT INCARCERATED STUDENTS?

A district that provides education services to a child placed in a children’s home such as a jail, detention, or hospital within the district and who has been or could have been counted as a resident pupil by a different district in the pupil count report under sec. 121.05, may request state tuition under sec. 121.79(1)(a).

These children should not be counted by the district claiming state tuition as a resident pupil under sec. 121.05 on PI-1563 Pupil Count Report.

IN OTHER WORDS:

If you have a jail in your district and are required to provide services to a student from another district:

Apply for state tuition reimbursement

Don’t count the student

INCARCERATED STUDENTS A district that provides education

services to a pupil placed in a children’s home in the district in which he/she has been or could have been counted as a resident pupil may request state tuition as well as count the pupil as a resident pupil under sec. 121.05 on the PI 1563 Pupil Count Report.

But:

INCARCERATED STUDENTS State tuition under sec. 121.79(1)(a) is

paid based on actual costs. The state equalization aid paid to the district will be deducted from the state tuition claim. If the statewide amount of state tuition claims made during the fiscal year exceeds the legislature’s appropriation, all claims are prorated.

INCARCERATED STUDENTS If you have a jail in your district and are

providing services to a student from your own district: Count the student or Apply for state tuition

If you apply for state tuition, any aid received will be deducted from the claim.

WHAT ABOUT THE YOUTH CHALLENGE ACADEMY? Wisconsin National Guard Challenge Academy is

a residential program committed to improving the quality of life for 16 to 18 year old at-risk teens.

School districts with cadets must contribute a portion of the costs of students enrolled in the Challenge Academy from their district.

History of cost on the internet.

YOUTH CHALLENGE ACADEMY

State statute allows the school district to count the student, for revenue limit and equalization aid purposes. The Youth Challenge Academy on-line report will assure that proper membership credit is given to each district.

Districts report Youth Challenge Academy students in both September and January In some cases, the district will get the count in January and the

following September.

Resources:http://www.dpi.wi.gov/sfs/doc/challfunding.doc

WHAT ABOUT 4K? OR PRESCHOOL?

If your district operates a 4 year old kindergarten

Pupil must be at least 4 years old by Sept 1st.

4-Year-Old Kindergarten must be universal and open to all age eligible children in the district.

If pupils are enrolled in both 4K and Preschool Special Education, count in 4K. Do not count in more than one category/program.

DO DISTRICTS NEED TO GET “APPROVAL” TO RECEIVE STATE FUNDING FOR A NEW 4K PROGRAM?

The district must first submit to the DPI the enrollment report (PI 1203) due July 1.

The DPI will contact the district about its 4K program

to ensure that it meets the requirements of state statutes.

Districts will then be permitted to report 4K students on the PI 1563 Pupil Count Report to determine eligibility for revenue limit/equalization aid purposes.

Web page: http://dpi.wi.gov/ec/ec4yrpag.html Contact Jill Haglund E mail: jill.haglund@dpi.wi.gov Phone: (608) 267-9625

WHAT ABOUT PRESCHOOL?

Preschool by itself is not an eligible category.

Only pupils enrolled as preschool special education are eligible to be counted.

Pupil must be at least 3 years old by the count date. The district must be fulfilling the needs identified in the

IEP. There is no minimum or maximum time requirement. If pupils are enrolled in both 4K and Preschool Special

Education, count in 4K. Do not count in more than one category/program.

MEMBERSHIP AUDIT ISSUES

Gene Fornecker

School Finance Auditor

MEMBERSHIP AUDIT GOALS

Regular School year—Reported pupil count is accurate

Summer School—FTE is calculated correctly AND fees charged were allowable

SUMMER SCHOOL - FEES

If the district claims state aid under s.121.14, Wis. Stats

There shall be no cost to the resident student beyond individual use supplies (towels, gym clothes, band instruments, notebooks, pencils), and textbooks or similar items (workbooks). Fees for equipment, admission to a facility or event, transportation, shuttling, and food and lodging for off-campus activities are prohibited if a district claims state aid.

Items for which fees are charged must be legally permitted and actually purchased for summer school use.

SUMMER SCHOOL - FEES

 If the class is not aided, required, or credited, fees may be charged but must be based upon the actual cost of the class. (this can include other costs in addition to consumables)

Summer school fees may not be used to subsidize other classes or students.

SUMMER SCHOOL FEES

What will auditors test for?

Fees are not charged as a flat fee across all courses Costs identified by course are eligible costs Costs that are eligible do not exceed fees charged (by

course)

REGULAR SCHOOL YEAR Recent focus on Risk-Based auditing has changed

the way ALL audits are performed Study of internal controls over processes

Are there written policies for counting students? Who is ultimately responsible for process?

What could go wrong? Students reported in wrong categories Students reported more than once

What is the potential impact of incorrect data? Impact on revenue limit and equalization aid calculations

MAIN AUDIT OBJECTIVES

1. District’s written policies, procedures, processes—Documenting the system in place

2. Testing of the control system3. Testing of reported counts4. Issuance of report on findings

COMMON ERRORS

Adjustments to the Head Count YCA, Tuition Waivers, Open Enrollment, Incarcerated,

CESA programs, Late enrollments, early withdrawals September to January Reconciliation

If not prepared prior to audit most likely and automatic audit again next year

4 Year Old Kindergarten category includes outreach activities which are allowable and there is documented teacher log

REMEMBER…

Once the list of districts required to have a membership audit has been announced all changes to reported membership after that point in time is considered an audit adjustment

Any adjustments to summer school FTE is adjusted by DPI and districts are notified of the change

FINANCIAL AND SINGLE AUDIT ISSUES

Bob Avery

School Finance Consultant

Kathy Guralski

School Finance Auditor

Debbie Brown

School Finance Asst. Dir.

SOME COMMON AUDIT ISSUES

Time and Effort Reporting – Remember you need to keep this documentation on file for federally funded employees. General information on this requirement is available at the following link: http://dpi.wi.gov/sped/pdf/time-effort-TA.pdf

If you are not sure of the requirements, you should contact Shelly Babler (Title I) at (608)267-1067 or shelly.babler@dpi.wi.gov or Rachel Zellmer (Special Ed) at (608)266-1787 or rachel.zellmer@dpi.wi.gov

PERIOD OF AVAILABILITYMake sure you follow cut off requirements for obligations and disbursements. You cannot have expenditures prior to the start of a grant year or after the cut off date

DAVIS BACONMake sure you follow federal Davis Bacon requirements for prevailing wage rates and payroll certifications

STATE REQUIREMENTS FOR PUBLIC PROJECTS: §§66.0903 AND 103.49

TRANSPORTATION CONCERNS

Make sure the district has a procedure in place to verify ridership and retains the supporting documentation

Make sure the district is using the proper procedure to calculate distance – residence to school using most common direct route

Make sure you are recording special ed. students’ transportation correctly

Make sure you are not counting students in the 0-2 miles unless they are in Unusually Hazardous Transportation Plan

DISTRICT RESPONSIBILITIES

Maintenance of Effort – The district is responsible for meeting MOE even if contracting with a third party

Financial Statements – The district is responsible for preparing the financial statements and the information contained within

Reconciling Cash – The district is responsible for reconciling cash during its fiscal year

Segregation of Duties – The district is responsible for segregation of duties but many districts have a finding on this because fiscal staff is small so it is difficult to achieve

OR CALL (ALL 608 AREA CODES):• Jerry Landmark, Director …………………….266-6968 • Debbie Brown, Assistant Dir …………………267-9209• Brad Adams, Consultant …………………….267-3752 • Bob Avery, Consultant ………………………..267-9707• Marta Skwarczek, Consultant ……………….266-3464• Gene Fornecker, Auditor …………………….267-7882• Kathryn Guralski, Auditor …………………….266-3862• Natalie Rew, Auditor ………………………….267-9212• Michele Tessner, Special Ed. Acct…………..267-9218

Visit our web site: http://dpi.wi.gov/sfs/index.html

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CONTACT US