Charter School Finance

School Business

October 2014

Who is School Business?

28 employees who are responsible for the policy and data of student, personnel and financial of entities receiving public school state and federal funds.

What School Business Does

• Public school budget development• Allocation of funds• Collection of data• Analysis of data• Projections • Monitor the compliance of laws and policy• Report

Todays Topics

• Funding Sources

• Allotments

• Reporting and Reports

• Cash Management

• Monitoring and Compliance

• Non Compliance

Terms

Allotment = Funding in a Program Report Code (PRC) = “Bucket of Money”

Average Daily Membership (ADM) sum of the number of days in membership for all students in

individual charter school, divided by the number of school days in the term.

Charter School Funding Sources

State

Federal

Local

County

Other

State Funds

General Statute 115C 238.29H

Allocate to each charter school an amount equal to the average per pupil allocation for average daily membership from the local school administrative unit in which the charter school is located

An additional amount for children with special needs and for children with limited English proficiency

Components of State Funding

State base funding – based on dollars per Average Daily MembershipChildren with Disabilities (CWD EC)based on dollars per headcount. Child must be on the April 1 headcount to be eligibleLimited English Proficiency (LEP) if the charter school has eligible LEP headcount. At least 20 students or 2.5% of ADM.

Federal Funding SourcesMost common are Title I (PRC050) and IDEA VI-B (PRC060)Allotted as grant award documents are received from WashingtonBudget approval required before allotments are distributed Refer to the North Carolina Allotment Policy Manual at http://www.ncpublicschools.org/docs/fbs/allotments/general/ for a list of federal PRC’s, eligibility for funds, allotment formulas, and any special provisions.

Unused funds revert at the end of the grant period.

Local Funds - LEA

GS 115C 238.29H The LEA in which the student resides shall transfer to the charter school and amount equal to the per pupil local current expense fund. Plus a per pupil share of the penal fines and forfeitures and supplemental school tax, if any.DPI does not verify the calculation of these amounts and any dispute is between the LEA and the charter school.

Local Funds

• Shall be transferred to the charter school within 30 days that the LEA receives the monies.

The LEA shall provide a

(1) The total amount of monies the local school administrative unit has in each of the funds

(2) The student membership numbers used to calculate the per pupil share of the local current expense fund.

(3) How the per pupil share of the local current expense

fund was calculated.

Local Funds-Other

All other forms of revenue such as local grants, donations etc are considered local.

Local funds do not revert

Example of Charter School Base Allotment

Position & Months of Employment Categories:Classroom Teachers 87,590,904 Instructional Support 9,374,298 School Building Administration 5,872,708 Career Technical Education - MOE 7,669,890 Total Position & Months of Employment 110,507,800

Other Categories:Teacher Assistants 12,409,927$ Central Office Administration 1,050,018Non-Instruction al Support 7,754,159Classroom Materials & Supplies 1,114,649 Exceptional Children 16,726,788 Textbooks 472,953 Limited English Proficient 2,322,238 At-Risk Supplemental Funding 5,631,689 Drivers Education 555,920 Academically & Intellectually Gifted 1,636,117Career Technical Education Support 415,092Dissadvantaged Student Supplemental Funding 1,892,558Low Wealth Supplemental Funding (if applicable)12,191,813Small County Supplemental Funding (if applicable) NAPrior Year Transportation 8,459,252Total Dollar and Categorical Allotments 53,028,227$

Total State Funds (Initial Allotment ) 163,536,027$

Total State Funds $163,536,027LEA Allotted ADM 33,175

Dollars per ADM $4,929.50

Plus: Un-allotted Dollars Per ADM $102.85 (Longevity, Annual Leave, Short Term Disability Worker’s Compensation & Unemployment)

TOTAL Adjusted State Base $5,032.35

Critical Items when Building your Budget

1. Average Daily Membership

Be realistic

Know the breakeven number of students

2. State Base Allotment– Varies by LEA $4,538to $10,443– Average = $4,915– http

://www.ncpublicschools.org/fbs/allotments/support/

Budget Considerations

Local funds vary by LEA

In 2013-14 range from $420 to $3,937

Some LEAs have a charter school for the first time and may not have information available.

Budget Considerations

• Federal Funds are supplemental and not intended for base funding

New Charter School Checklist

• Obtain Tax Exempt Status • Obtain a Certificate of Occupancy• Establish a Bank Account

Vendors and Contractors

• Retirement - Teachers’ and State Employees’ Retirement System or other

• Health Insurance -the State Health Plan or other

• Accounting Services – Internal or contract• Insurance provider – Liability insurance• Independent auditor

Training and Manuals

• Cash Management training• MSA training• Allotment Policy Manualhttp://www.ncpublicschools.org/fbs/allotments/general/

• Charter School Finance Manualhttp://www.ncpublicschools.org/fbs/charterschools

Allotment calculations and Timeline

Financial and Student Reporting

• GS 115C-238.29F(f)

Schools shall comply with the Uniform Education Reporting System (UERS)

• Monthly Financial• Student Accounting• Ad hoc data collection

UERS

• Required• Accountable• Basis for:

• Federal Reporting• State Reporting• Media/General Public• General Assembly

• We are only as good as the data you submit!

Chart of Accounts

• Shows how the allotments were expended.

• This is the only financial communication between the Charters and DPI.

• DPI uses this data to communicate to the State Legislature, the State Budget Office, media and the Federal Government.

Chart of Accounts

• Uniform Accounting System for all LEAs and Charters

• Information Gathering• Consistency amongst LEAs and Charters• Comparability between years• Decision making tool• www.ncpublicschools.org/fbs/finance/reporting

Chart of Accounts

• Data in the chart is used for:

– Highly qualified teacher reporting

– Teacher certification requirement (50% rule)

– Reporting to the General Assembly, Federal Government, media and general public on past and future education initiatives

– Building the budget

– Research and Statistics

Account String

• Fund-Purpose-PRC-Object

• A-BBBB-CCC-DDD

• 1-5110-036-121

Reading an Account Code• 1-5110-036-411

State - Regular Curricular - Charter Schools - Supplies and Materials

• 1-5270-036-121State - LEP - Charter Schools - Salary - Teacher

• 1-6550-036-171State – Transportation- Charter Schools - Salary Driver

Datafile

• Submit these files to us on a monthly basis• Payroll• Accounts Payable• Software will create these files• Schedule:

http://www.ncpublicschools.org/fbs/finance/reporting/

• Review the files and reconcile• Provide you financial reports

Financial Reports

Access these reports via WS_FTP PRO Software

• ALTARPO1 - Budget Allotment Revision• ALTINRP1 - Planning Allotments• JHA 305 - Local Account Balance

Reconciliation• JHA 705 - Budget Balance Reconciliation• JHA714 - Cash Balance Report• Monitor - Monthly Monitoring Report

Cash Management

• Establish a ACH bank account with the State Treasurer’s Office. Allow 2 weeks– ACH Bank Account Authorization Form– Voided Check or Original Deposit Slip (Cannot accept temporary checks)

• Establish access to the Cash Management System (CMS) – Complete Security Forms– CICS Application Maintenance Form– RACF02 Site Security Officer Form– RACF03 RACF User ID Maintenance Form

• Complete Bill Action Code Form – ITS Access

Cash Management

• Know the cash calendar and funds requirement date (FRD)

• Do not order more cash than needed to cover the current expenditures

It is against state and federal law to hold their cash for more than 3 days. (GS147-86.11)

Guidelines and formswww.ncpublicschools.org/fbs/finance/cash/

Charter Financial Training

• Spring 2015 Date TBD – Education Building (DPI)

• Required • Topics Covered – Financial Personnel

– Forms Needed for access to systems– Cash Management – MSA (DPI General Ledger) System – Required Software– Chart of Accounts– Zero Out Process

Student Accounting

• Principals Monthly Report (PMR)– Due Monthly– Submitted via PowerSchool– Source of Average Daily Membership (ADM)– Student Accounting Reports

• School Attendance and Student Accounting Manual: http://www.ncpublicschools.org/fbs/accounting/manuals/

Student Accounting

• School Activity Report (SAR)– Who, What, When and Where of the School– Accuracy of Data– Uses of Data

• SAR Manual: http://www.ncpublicschools.org/fbs/accounting/manuals/

Take Aways

• Data reporting is NOT optional (must be in our required format – on time)– Financial Datafile – UERS Transfer Schedule– PMR – PowerSchool– SAR – PowerSchool

• Board of Directors is responsible for data submitted

• Decisions made based on submitted data

• No access to funds until approximately 2 weeks after CO is submitted

• DPI Provides Cash Management Training (Required for all new schools)

Contacts

• Financial Related Questions– Roxane Bernard (919) 807- 3725

• PMR Questions– Ozella Wiggins (919) 807-3757

• SAR Questions– Sandra Johnson (919) 807-3737