PASBO-2012

Where do I report that?Coding Correctly to Maximize Funding

(and other important monitoring measures)

Matthew PrzywaraSchool District of LancasterChief Financial & Operations Officer

mrprzywara@lancaster.k12.pa.us

Laura CowburnColumbia Borough School DistrictAsst. to Superintendent Business Services

lcowburn@columbia.k12.pa.us

3/9/2012

PASBO-2012

Purpose of Seminar

• Maximizing revenues (limiting expenses) through:– Accurate records– Verifying data– Common errors

• The emphasis is on ACCURACY of data to obtain proper financial results

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PASBO-2012

Aid Ratio

• Personal Income Data– Department of Revenue Act 80 Report

• Market Value Data– Trend of the State Tax Equalization Board Data

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PASBO-2012

How important is it to check the Act 80 Revenue Report for a school district

Columbia disclaimed 5% of the individual that listed the district on their 2009 personal income tax.

Without knowing, for this example, the assumption is West Shore did not review the Act 80 Revenue Report.

Fictional White Rose S.D.

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PASBO-2012

Hypothetical – Personal Income ARWHITE ROSE SCHOOL DISTRICT

Actual Possible adjustedData Year (2009) (2009)Fiscal Aid Ratio Year 2011-12 2011-12Market Value $ 3,840,779,000 $ 3,840,779,000 Personal Income $ 1,565,407,363 $ 1,400,000,000 $ 165,407,363 WADM 9,102.576 9,102.576 MV per WADM $ 421,944.18 $ 421,944.18 PI per WADM $ 171,974.11 $ 153,802.62 State MV/WADM $ 347,646 $ 347,646 State PI/WADM $ 134,551 $ 134,551

MVAR 0.3931 0.3931 PI/AR 0.3609 0.4285 MV/PI AR 0.3803 0.4073

2000 Population Estimate 57,960.00 If disclaimed

Median Household income $ 57,500.00 5%

Disclaim 5% 2,877 might have qualified for

Act 1 Adjustment

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PASBO-2012

Market Value

• Market value has been defined by the Pennsylvania State Supreme Court:

“the price in a competitive market a purchaser, willing but not obligated to buy, would pay an owner, willing but not obligated to sell, taking into consideration all the legal uses to which the property can be adapted and might reasonably be applied.”

3/9/2012

PASBO-2012

Assessment Appeals

• Although the county board of assessment may not reassess an existing property because it has recently been sold, the sale of a property may alert a taxing district, such as a school district, to appeal the assessment based on the sales price. Taxing districts have the same right of appeal as property owners with regard to real property assessments.

• This right was upheld by the Commonwealth Court in In re Springfield School District 26 and Vees v. Carbon County Board of Assessment Appeals.27

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PASBO-2012

Market Value TrendAuditor General Jack Wagner Announces Audit of State Tax Equalization Board

HARRISBURG, Pa., July 23, 2010 - Auditor General Jack Wagner said today that the Department of the Auditor General will conduct a special performance audit of the State Tax Equalization Board. Wagner said he received requests from several legislators and taxpayers asking him to conduct an audit of the board because of concerns over inaccurate market values of taxable real property being calculated by the board, which could have resulted in taxpayers facing inaccurate and exorbitant property tax increases.

The State Tax Equalization Board was established as an independent board by the general assembly in 1947 to ensure equitable distribution of tax funds among the state’s school districts.

The board came under scrutiny recently after it was determined that the board provided miscalculated market values totaling over $300 million to at least four central Pennsylvania school districts. Wagner is also concerned that additional school districts across the state may have received incorrect calculations from the board.

If you are in a school district that equalizes taxes, bad data will immediately be noticed. But all schools should trend their market value.

3/9/2012

PASBO-2012

Trending Market ValueData Year (2006) (2007) (2008) (2009)Fiscal Aid Ratio Year 2008-09 2009-10 2010-11 2011-12

Market Value $ 298,528,100

$ 298,908,100

$ 323,714,200

$ 323,045,600

10.67% 0.13% 8.30% -0.21%

State MV/WADM $ 294,776

$ 302,578

$ 340,994

$ 347,646

13.66% 2.65% 12.70% 1.95%

This is Data for the Columbia Borough School District. The “base year” is 2005 – Lancaster County reassessment. Every other year is an “estimated” year or an “actual” year based on County submitted data as modified by other factors.

There should not be significant “swings” except in the even data years. But there should never be a significant “negative” swing amount in the even data years unless there was a total loss of some significant property.

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PASBO-2012

Actual Instructional Expense

• Data comes from the AFR• Detailed calculations are on the FAI under

Reports• AFR data is reduced by:– New capital outlay (710,720,750 objects)• Reporting non-capital items, such as supplies, in 750

rather than 610 will reduce the AIE

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PASBO-2012

Actual Instructional Expense (cont.)

• AFR data is reduced by:– Health Services• Reporting special needs nurses to 1000 rather than

2400 inflates the AIE

– Vocational Education• Reporting non-approved vocational courses in 1300

rather than 1100 reduces the AIE

TIP – USE APPROPRIATE ACCOUNT CODES – not District developed alternate codes in function/object combinations.

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PASBO-2012

Tuition Rate

• Breakdown of elementary/secondary must be accurate– K – 6 is Elementary– 7 – 12 is Secondary

• Prorating a Middle School Grades 6-8– Is that accurate? – Could more actual expenses be tracked separately

for Grade 6? (especially if an enrollment bubble)

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PASBO-2012

Tuition Rate

• Tuition Rate – different from Actual Instructional Expense• 2010-2011 Columbia– Tuition Rates

• Elementary - $ 9,677.71• Secondary - $11,103.30

– Actual Instructional Expense• Per WADM $ 8,095.30• Per ADM $14,244.79

– Charter School tuition• Non-special student $ 9,779.75• Special Education student $22,939.67

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PASBO-2012

Vocational Education

• Reimbursement is provided for the following vocational programs: agriculture education, distributive education, health occupations education, home economics education (gainful), business education, technical education, trade and industrial education, or any other occupational-oriented program approved by the Secretary of Education.

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PASBO-2012

Nurse Services

• One school nurse for every 1500 students– Total of students INCLUDES non-public and private schools

served by the district• Full-day CTC students are NOT included in the

reimbursement count.• Half-day CTC students ARE included (count both home

and away time)• IU students housed in the District buildings ARE included

in the count.• All students FTE that a District nurse would tend to for

medical purposes are counted.3/9/2012

PASBO-2012

Charter Schools

• PDE-363 – “eliminating” Federal

“School Districts may include the federal portion of expenditure sub-functions that are not described in 24 PS 17-1725-A(a)(2) in the Deductions from Total Expenditures as provided for on the PDE-363.”

• What does this mean???

3/9/2012

PASBO-2012

Charter Schools

• Back of PDE-363 - Deductions– Most functions state “(Federal only)”– 1200 is eliminated entirely• But added back for Special Education on front

(May eliminate “Federal of Sub-function…”)

• Federal IDEA expenditures – eliminate• Other “federal”?

3/9/2012

PASBO-2012

Charter Schools (cont.)

• School District of Residence

• Taxpayers don’t know their school district of residence, so – what are parents indicating to Charter Schools?

• No verification process mandated– Need to obtain accurate address information to

verify

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PASBO-2012

Charter Schools

• FORM – “Based on budgeted expenditures”• INSTRUCTIONS – “Based on the most updated

version of the General Fund Budget or the most currently available expenditure data for the school year immediately preceding.”– Use AFR data– Important to finalize prior fiscal year

accruals/deferrals prior to August 31.

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PASBO-2012

Bonds and Plan Con

• Plan Con Part H – Project Financing– Establishes the base for the • Temporary Reimbursable Percentage

– 0.5% Reduction

• Plan Con Part J – Project Accounting Based on Final Costs– Must be filed within three years of final payments– Establishes the Permanent Reimbursable

Percentage• WHY WAIT THREE YEARS?

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PASBO-2012

Bonds and Plan Con (cont.)

• Plan Con Part K – Project Refinancing– Reimbursement stops until Plan Con Park K is

approved• Will be issued a NEW lease number and new %

• Have PDE -2071 Application for Reimbursement completed and ready to go.

3/9/2012

PASBO-2012

Bonds and Plan Con

• Delays in submission of PDE-2071– Remember – • MVAR/CARF of the YEAR OF THE PAYMENT or could

delay processing• Time forms to the bank – marked TIME SENSITIVE• Submit forms ASAP to improve cash flow

3/9/2012

PASBO-2012

Child Accounting

• Foster Children (Section 1305)– Parents in District + Foster Home in District =

Report as: Resident student (just like any other student)

– Parents out of District + Foster Home in District = Report as: Non-resident Foster Child

Result:State will pay the District Tuition Rate

(considerably higher).

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PASBO-2012

Child Accounting (cont.)

• Institutionalized Children (Section 1306)– Wards of State – PDE pays tuition rate• Must have appropriate supporting documentation

– Placed in your district – parents are out of district• Non-resident: Report home district to PDE

– PDE pays home district subsidy; home district pays your district tuition rate

– Use Form PDE 4605 to establish home district

– Placed in district – parents in district• Reported as a regular student – receive subsidy

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PASBO-2012

Child Accounting (cont.)

Institutionalized Children (Section 1306)Special Education supplemental services:

P/T, O/T, Speech, other significant services

Not part of child accounting reporting – so:Bill to the District of ResidencyBill to PDE if Ward of State

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PASBO-2012

Child Accounting (cont.)

• 990 Mandatory Hours of Instruction– Deduction for subsidy per day or per hour if not

met• ½ day CTC + ½ day SD– Total for instructional hours of both must reach

990 in order not to be penalized. Travel time does NOT count.

• Coordination with CTC instructional schedule is critical

3/9/2012

PASBO-2012

Child Accounting (cont.)

• Truant Students– Do not withdraw if actively pursuing truancy

action• Result: eligible for subsidy instead of withdrawing

them

– Policy of unexcused days – 10 and withdraw*

• Holding for more unexcused days can negatively affect the average daily attendance for things like NCLB

*CBSD Policy3/9/2012

PASBO-2012

Transportation

Factors Included in the Subsidy• Financial Driven– STEB Market Value– Market Value Aid Ratio

• Pupil Driven– Public Students Transported (Includes Charter)• Includes Hazardous

– Non-Public Students Transported

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PASBO-2012

Transportation

Factors Included in the Subsidy (cont’d)• Cost Driven– LEA Owned– Outside Contractor– Fare Based– Vocational Schools

• Depreciation

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PASBO-2012

Transportation

• Subsidy in question– SAEBG for 2012-13 Budget

• What does this mean for the future?– Can no longer hang our hats on estimating a CPI

increase– Transportation decisions will take a different

approach– Allocation of resources will be based on

educational needs

3/9/2012

PASBO-2012

Thank You&

Questions

3/9/2012