SONOMA COUNTY OFFICE OF EDUCATION
SCOE BIZ
Business Services
Bulletin No. 15-15
April 2015
April 24, 2015
To:
From:
District/Charter Business Services
Judy Thomson, Director Fiscal Services
State of the State
Legislative Analysts Office (LAO) reports:
(Updated: April 15, 2015, at 12 pm California time, to reflect data in the new DOF Finance Bulletin)
Indirect Cost Rates
The 2015-16 indirect cost rates for district and charters are posted on the CDE Indirect Cost Rate (ICR) web page at
http://www.cde.ca.gov/fg/ac/ic/index.asp. The 2015–16 statewide average indirect cost rate is 5.11 percent.
California Education Code (EC) Section 38101(c) limits food service program indirect costs to amounts derived using the
lesser of a school district's approved indirect cost rate or the statewide average indirect cost rate. Each district should
compare this statewide average rate with its individual indirect cost rate to determine the lesser rate for use with this
program. Please see attached.
Reminders
Notice of Public Hearing for 2015-16 Budget ~ Please make sure to check the newspaper to ensure your LEA’sNotice
of Public Hearing has been correctly published. Copy and save for our auditors.
Common Core Expenditure Reporting
The California Department of Education (CDE) has opened the online Common Core State Implementation (CCSI) Funds
Expenditure Report for all local educational agencies who received CCSI funds in fiscal year 2013-14. Filing the
expenditure report before July 1, 2015 is a condition of receiving funds for CCSI. Failure to file the expenditure report
will result in an invoice for the entire entitlement amount. Failure to expend or encumber all funds will result in an
invoice for the remaining balance.
The expenditures are reported online via the Expenditure Report for Academic Content Standards (Common Core)
Implementation Funds web portal at http://www2.cde.ca.gov/erascif/logon.aspx.
Passwords to access the report will be emailed to the district superintendent, charter administrator, or the contact
person listed in the California School Directory within the next few days.
CalPERS Contribution Rates
CalPERS school employer contribution rate will increase from 11.771% in 2014-15 to 11.847% in 2015-16.
In March 2014, CalPERS issued estimates of the school employer contribution rates through 2020-21. The estimated
rate at that time for 2015-16 was 12.6%, so the 11.847% actual rate is welcomed news. There is more good news as
CalPERS estimates the school employer contribution rate for 2016-17 to be approximately 13.05%, rather than the
original estimate of 15%.
Fringe benefits for government agencies
Issue: Reimbursement to an employee at a per meal per diem rate and/or at actual verified cost incurred while
traveling out of town for business, but without overnight stay.
Ruling: Internal Revenue Code provides that when an employer pays an employee’s meals while on business travel that
does not meet the “overnight rule”, the payment is deemed to be a payment of an employee’s personal living expenses
and thus a taxable fringe benefit. Payment of a taxable fringe benefit is required to be included in the employee’s
wages for Federal employment tax purposes. Exceptions do exist. Please see attached.
The following is a link to the IRS guide on fringe benefits for government agencies which provides information about
reimbursement for travel expenses. http://www.irs.gov/pub/irs-pdf/p5137.pdf .
SACS 2015 Software
Although not yet released, the SACS 2015 software will request some additional information as well as include
changes. Of importance:
1. The certification now requires you to respond with an affirmative “x” to the following:
If the budget includes a combined assigned and unassigned ending fund balance above the minimum
recommended reserve for economic uncertainties, at its public hearing, the school district complied with the
requirements of subparagraph (B) and (C) of paragraph (2) of subdivision (a) of Education Code Section 42127.
2.
Form A now includes two charter ADA sections: (1) Section C, lines 1 – 4 for charter schools that are included in
the Form 01 of the SACS form and (2) Section C, lines 5 - 8 for charter schools that are included in Form 09 of
the SACS forms. Please note: Independent charter schools that are not included in any fund of the District will
not be reported on Form A of their sponsoring District. They will be reported on the independent Charter’s
Form A.
District Reserves
ELEMENT ONE ~ TRANSPARENCY – Applicable NOW and forward
The State establish a minimum recommended reserve for economic uncertainties based on the district’s average daily
attendance (ADA). Per EC Section 42127 (a)(2)(B) to require a district’s public hearing (note that this takes place at the
Public Hearing… not the day of adoption) for the 2015-16 budget adoption and forward to provide all of the following
for public review and discussion:
1) The minimum recommended reserve for economic uncertainties (REU) for each fiscal year identified in the budget.
UPDATE: The minimum REU calculation adopted by the State does not refer to the district’s Economic
Uncertainty policy and amounts.
Note: Section 10B of the Criteria and Standards determines this percentage (3%, 4% or 5%) and
amount. Percentages are based on the number of District ADA. Thus, it is essential that ADA be
input properly on newly revised SACS 2015 Form A. Districts with internal charters which are
included in the general fund for SACS reporting MUST report the applicable charter ADA on Form
A, section C, lines 1 thru 4, as applicable.
2) The combined assigned and unassigned ending fund balances that are in excess of minimum recommended reserve
for economic uncertainties for each fiscal year identified in the budget. The fund balances include the General Fund
and Fund 17, Special Reserve Fund for Other than Capital Outlay. UPDATE: It is uncertain as to whether only
Fund 01 and Fund 17 are applicable. There has been discussion that all assigned and unassigned ending
fund balances in any fund could be considered as being part of the reserves subject to these
minimum reserve limits.
3) A statement of reasons that substantiate the need for assigned and unassigned fund balance in excess of the
minimum recommended reserve for economic uncertainties for each fiscal year.
NOTE: Per EC Section 452127 (d) the County cannot approve a District’s budget unless the aforementioned has
taken place.
ELEMENT TWO – RESERVE CAPS – Not Applicable for 2015-16 Adopted Budget
SB 858, the education budget trailer bill, also includes reserve caps or limits if certain State revenue conditions are met. The
limit only applies in a fiscal year immediately following a fiscal year in which the state makes a deposit of any amount into
the state’s Public School System Stabilization Account (the Proposition 98 reserve that was created by Proposition 2). A
district with an ADA of 400,000 or less would be limited to two times the minimum recommended reserve.
A county superintendent of schools may grant an exemption of this requirement for up to two consecutive fiscal years
within a three-year period to any district that documents extraordinary fiscal circumstances that substantiate the need for
a reserve in excess of the limit.
What should be done between NOW and your PUBLIC HEARING….
1)
2)
3)
4)
Determine the applicable District ADA.
Calculate minimum REU as determined by the State board. Please discuss with your accountant.
Commit reserves as you deem applicable, discuss with auditors if you have concerns.
Identify the assigned and unassigned (includes REU) fund balance amounts. Yes… you read that
correctly, REU is considered “unassigned”.
5) Determine/create a statement of reason for amount of assigned and unassigned fund balances in
excess of State minimum REU, which is supported by your governing board.
6) Be able to articulate why the reasons are relevant and necessary.
7) Be ready to present at your public hearing date, which is earlier than your budget adoption date.
LCAP Unspent 2014-15 Supplemental and Concentration (S/C) funds ~ Considerations
The 2015-16 LCAP will include an annual update which will capture the progress toward each goal from the prior year
LCAP. Please consider the following:
When an LEA’s LCAP reflects the plan for spending S/C dollars, but the LEA is unable to do so during the plan year,
it should be disclosed in the LCAP Annual Update (estimated actuals), discussed with stakeholders, and included in
the new LCAP if appropriate. The funding is not restricted, so there is no “carryover” or requirement to spend it.
This will be a common, normal part of the process.
When LEAs want to track the S/C expenditures, consider using a management code. A locally defined unrestricted
resource code may generate ending resources balances and unspent balances would appear to be subject to
carryover, which may not be the intent since the dollars are unrestricted.
Knowing the amount of S/C expenditures and communicating that to stakeholders can be useful in negotiations. If
expenditures are different than expected in one year, it can affect the minimum proportionality percentage (MPP)
in the subsequent years. Running scenarios for LEAs can be helpful for planning purposes.
Reminder: Public Hearings on Proposed Budgets and LCAPs … at least two board meetings!
The LCAP public hearing shall be held at the same meeting as the Proposed Adopted Budget public hearing. However,
the LCAP adoption shall take place in a public meeting, but may not be the same day as the public hearing. This LCAP
adoption meeting shall be the same meeting during which the governing board of the school district adopts a budget.
Please note that Budget adoption cannot be used to commit funds, per GAAP, because budgets expire at the end of the
fiscal period and commitments do not expire. The Board should take a separate action to commit funds. Once a Board
commits funds, those funds stay committed until spent or until the Board takes an action to uncommit them.
Fund balance definitions – please see two attachments for greater detail.
There are the following types of fund balances classifications:
Nonspendable
Restricted
Committed
Assigned
Unassigned (includes REU)
If you are unsure or have questions regarding committed fund balance amounts and reasons, please contact your
auditor.
Dates to Remember:
04/28/2015
05/12/2015
05/15/2015
05/25/2015
05/29/2015
05/29/2015
Payroll Concepts Workshop
Escape Finance Group Meeting
Next Fiscal Year Workshop
Holiday
Year End Close Workshop
DBUG
NOTE: Documents that are presented at DBUG may be found at dp.scoe.org website under the
"DBUG/SCOE Bulletins" tab.