SONOMA COUNTY OFFICE OF EDUCATION
SCOE BIZ
Business Services
Bulletin No. 14-08
November 2013
November 22, 2013
To:
District/Charter Business Services
From:
Judy Thomson, Director Fiscal Services
State of the State
The Department of Finance (DOF) released its monthly Finance Bulletin for November 2013. The Bulletin indicated that
year-to-date State General Fund revenues are $485 million above the expected $26.1 billion for the first four months of
the fiscal year. The Bulletin indicated that personal income tax receipts are exceeding expectations, while there was a
slight shortfall in the sales tax, and continued weakness in the corporation tax.
The DOF indicated there is evidence of slowing economic conditions. The DOF noted a decline in residential housing
permits and home sales. Housing permits showed the first year-to-year drop since November 2012, down 23%. Home
sales declined for the second straight month from September, down 5.1%, and the median home price was down 2.8%
from August to $428,810. However, year-over-year, the median home price is still up 24.4%.
LCFF ~ Reminders and Updates
Please note the following:
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The LCFF calculator (Calculator) on the FCMAT website is pre-populated with 2012-13 P-2 data. Please be
reminded that P-2 revenue limit data is based on estimates and will vary from 2012-13 actual data. The
Calculator provides an “Adjustments” column (column G of the “2012-13 Awards” tab) that should be used to
update 2012-13 data to actual amounts.
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For those districts that sponsor charter schools or have charter schools located within their district, note
that the district must communicate its unduplicated count percentage to the charter(s) before the charter can
complete their LCFF calculation. A charter’s concentration grant percentage is limited to the percentage
associated with the school district where the charter school resides. If the charter is physically located in more
than one district, the charter percentage cannot exceed that of the school district with the highest percentage.
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Deferred Maintenance Hardship Funding ~ The Calculator includes both regular deferred maintenance and
deferred maintenance hardship awards on Line 86 of the “2012-13 Awards” tab. Column F is used to calculate
the LCFF Floor and Column G modifies 2012-13 categorical funding for use in the Economic Recovery Target
(ERT) funding calculation. ERT funding will not apply to most LEAs. If the Calculator does not show ERT for your
district, no deferred maintenance adjustment is necessary.
IF ERT applies to your district, please note: Column G excludes the Section 12.42 reductions of approximately
19.8% from applicable categorical programs and thus increases categorical awards. As deferred maintenance
hardship funding was never reduced by Section 12.42, Column G inappropriately increases the hardship portion
of the deferred maintenance funding by 19.8%. An adjustment must be made in Column G, Line 108 to reduce
categorical funding by 19.8% of a district’s 2012-13 deferred maintenance hardship funding.
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Under the Revenue Limit funding model, the County Office Funds Transfer reduced a LEAs resource 0000,
object 8011 for district students taught in County classes: Special Day classes, County NPS classes, County
NPS/CLI classes, and County Community Schools. Ultimately, the State passed along these funds to SELPA
which was then distributed back to LEAs in resource 6500, object 8792.
Under the LCFF funding model, there is no County Office Funds Transfer mechanism. However, LEA’s budget
must still account for the cost of educating the aforementioned students. For First Interim Reporting, until the
specific accounting have been determined, we are suggesting a LEA estimate and report an increase in
resource 6500 expense or a decrease in resource 6500 revenue for the cost of these students.
A separate communication will address how the transfer of funds for district students enrolled in LEA programs
will be accounted for.
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One final word…
LCFF and LCAP presentation
On October 26, 2013, Janelle Kubinec from West Ed presented information on LCFF funding and LCAP. This
presentation is now located on the following SCOE website:
http://www.scoe.org/pub/htdocs/news-archive.html?news_id=606
Additional videos on this subject are located on the WestEd LCFF Web page at http://lcff.wested.org/.
SACS Software Reminders
SACS2013ALL Software ~ The SACS first interim software update replaces the current version of the SACS2013ALL
software. Any data previously imported or keyed into the existing software is deleted upon installation of the update. It
is crucial to export data existing in the current version before installing the new version. It is not possible to recover
the deleted data once the new software is installed. The SACS2013ALL software update will not delete data that
resides in the SACS2013 budget software or any other prior year SACS software.
Windows 7 Update ~ The SACS software is not compatible with Windows 7. The current workaround for running the
SACS software with Windows 7 is to install it on Windows XP virtual PC. However, as of April 2014 Windows XP will no
longer be supported. Consequently, Windows XP virtual PC will no longer be supported.
The SACS2014 will be modified to fix the worst of its incompatibilities with Windows 7. However, preliminary testing
indicates that there will be problems printing forms directly to a printer. Users will need to first print to Adobe Acrobat
PDF files or Microsoft XPS Document Writer files and then print from those files. The CDE continues to search for a
solution to the printing problem, but the first priority is to get the SACS2014 software compatible with Windows 7, then
make the changes associated with LCFF, and then focus on the printing issue.
64 bit Computer Update ~ If you are having problems downloading SACS into a 64 bit computer, please contact IT for
instructions.
Proposition 39 ~ California Clean Energy Jobs Act (resource 6230, object 8590)
Proposition 39, the voter approved initiative at the November 2012 statewide general election, appropriated $381.0
million to K–12 local educational agencies (LEAs) for energy efficiency planning expenditures; 85 percent of the
appropriation will be allocated based on 2012–13 average daily attendance (ADA) and 15 percent based on 2012–13
eligibility for free and reduced-price meals.
Eligible LEAs have the option of requesting a portion of their fiscal year 2013–14 award for energy planning now,
without submitting an expenditure plan to the California Energy Commission (Energy Commission). This option is only
available for the fiscal year 2013–14 award of the Proposition 39 program and is intended to provide funds for planning
activities from fiscal year 2013–14 through 2017–18. The first application for Energy Planning Funds was due on
November 1, 2013. A second application period will be available in January 2014. The apportionment that is to be
received in December 2013 is based on the amount of Proposition 39 energy planning funds each LEA applied for by
November 1, 2013. These funds may be posted in the General Fund but may be transferred to Fund 40.
Proposition 39 funding may be used only to pay for energy planning activities occurring on or after July 1, 2013. If
energy planning activities took place before July 1, 2013, those energy planning activities are not eligible for retroactive
Proposition 39 funding.
Please see the CDE webpage http://www.cde.ca.gov/fg/fo/r14/prop39epfdraftguide.asp for greater detail.
Audit extensions
SCOE Biz Bulletin 14-07 was e-mailed to all business managers on November 20, 2013. The Bulletin discussed the
submission and review process for June 30, 2013 audit reports. Audit reports for the year ended June 30, 2013 must be
filed with SCO, CDE and SCOE by December 16, 2013. If your district cannot meet this filing deadline, a written request
for an audit report filing extension is due to SCOE before November 27, 2013. Charters requesting an extension
must contact their sponsoring district.
Charter School Alternative Form
Please note that CDE will update the 2013-14 Charter School Alternative Form to reflect the LCFF in time for the 201314 year-end reporting period, but that will not be until July.
CDE does not provide a version of the Alternative Form for budgets or interim reporting periods because law does not
require the SPI to prescribe the format in which charter schools must submit their budgets and interim reports to their
authorizing agencies.
Retroactive Pay Increases (Retros) in Escape
AB1200 documents should be sent to SCOE prior to any budget transfers or position control modifications are made in
Escape. In addition, please note that Escape’s Retro cannot accommodate multiple pay rates. Retros need to be
reviewed by IT or business payroll to ensure Escape coding and input have been done correctly. If you have any
questions, please contact Erin Graves or an IT analyst.
AB 1381 and CalSTRS
On October 4, 2013, Governor Brown signed AB 1381 into law. This bill makes various technical corrections and
conforming changes that align the Teachers’ Retirement Law (TRL) with the provisions of PEPRA (Public Employees’
Pension Reform Act of 2013). Some highlights of AB 1381 include:
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Defines PEPRA in the TRL using legal citations.
Defines public employee in the TRL for both Defined Benefit (DB) program and the Cash Balance
(CB) Benefit program by referencing the definition of public employer in PEPRA.
Defines a “member” and “participant” subject to PEPRA employed to perform creditable service as
a person who first becomes employed on or after January 1, 2013.
Makes several changes to provisions governing age factors and normal retirement ages.
Excludes 2% at 62 members from one-year final compensation based on having 25 or more years of
service credit or based on a collective bargaining agreement. Ends this benefit for 2% at 60
members for contracts entered into, extended, renewed or amended on or after January 1, 2014.
Makes various changes to provisions governing the limits on amount and types of compensation.
Prohibits 2% at 62 members from receiving any benefits from CalSTRS in excess of the federal limit
by excluding them from the Replacement Benefits Program.
Adds clarification that 2% at 62 members are excluded from receiving employer-paid member
contributions unless a labor agreement would be impaired, as specified, and ends employer-paid
member contributions for 2% at 60 members for labor agreements entered into, extended or
renewed on or after January 2014.
Requires the Teachers’ Retirement Board to adopt the normal cost rate that is used to determine
the 2% at 62 member contribution rate and excludes that contribution rate from the collective
bargaining process since CalSTRS member contribution rates are set in statute and have never
been subject to collective bargaining.
Restricts the purchase of nonqualified service in the TRL.
Makes various changes to provisions governing postretirement employment.
Governmental Accounting Standards Board (GASB) ~ GASB 68
GASB 68, Accounting and Financial Reporting of Pensions ~ The primary objective of this Statement is to improve
accounting and financial reporting by state and local governments for pensions. GASB 68 creates new employer
pension financial reporting requirements effective 2014-15. The new requirements include reporting a pension liability,
expense, and/or deferred inflow of resources or deferred outflow of resources. In addition, more extensive note
disclosures and required supplementary information will need to be provided in the annual financial statements.
The California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System
(CalSTRS) are primarily responsible for implementing the provisions of GASB 68 and providing the necessary reporting
information to LEAs. The CDE will provide accounting guidance and SACS coding and software changes necessary for
implementing GASB 68.
Governmental Accounting Standards Board (GASB) ~ GASB 63 and GASB 65
GASB 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position
The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2011.
Thus, it is effective for the fiscal year ended June 30, 2013. It establishes guidance for reporting deferred outflows of
resources, deferred inflows of resources, and net position in a statement of financial position.
GASB 65, Items Previously Reported as Assets and Liabilities ~ The provisions of this Statement are effective for
financial statements for periods beginning after December 15, 2012. Thus, it is effective for the fiscal year ended June
30, 2014. It clarifies the appropriate reporting of deferred outflows of resources and deferred inflows of resources.
Deferred outflows of resources (consumption of net assets that is applicable to a future reporting period) and
Deferred inflows of resources (acquisition of net assets that is applicable to a future reporting period) were added as
separate sections/lines in the balance sheet/net assets sections of the fund forms.
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The title of Object 9650 is changed from Deferred Revenue to Unearned Revenue. GASB 65 requires that the
term “deferred” be used in account classification titles only in the context of deferred outflows and inflows of
resources.
There is no change in recognizing a liability for unearned revenue for amounts received but unspent in
conjunction with an expenditure-driven grant.
Amounts received in advance of the allowable period of expenditure will now be reported as a deferred
inflow of resources, not a liability for unearned revenue. CDE expects this will be a rare occurrence because
LEAs only rarely receive grant funds in advance of the allowable period of expenditure
The CDE is still in the process of developing guidance for LEAs to implement the provisions of GASB 63 and GASB 65.
GASB 54 Update
Amounts of LCFF revenue that LEAs have formally committed to the purposes of Fund 11 (education for adults) or Fund
14 (deferred maintenance) will now be reported as an LCFF (formerly revenue limit) transfer using Object 8091. Object
8099 may be used for transfers associated with prior year adjustments.
Dates to Remember:
11/28/2013
11/29/2013
12/13/2013
12/18/2013
12/24/2013
12/25/2013
12/31/2013
01/01/2013
SCOE Holiday
SCOE Holiday
W-2 Workshop
1099 Workshop
SCOE Holiday
SCOE Holiday
SCOE Holiday
SCOE Holiday
NOTE: Documents that are presented at DBUG may be found at dp.scoe.org website under the "DBUG/SCOE Bulletins" tab.