|DATE:||June 8, 2018|
|FROM:||James F. Lane, Superintendent of Public Instruction|
Final Fiscal Year 2018 State Payments Based on Actual March 31, 2018, ADM and Adjustments to the Fiscal Year 2018 Basic Aid State Payment
Pursuant to Chapter 1, 2018 Special Session I Acts of Assembly (i.e., 2018 Amendments to the 2017 Appropriation Act), school divisions were required to report average daily membership (ADM) as of March 31, 2018, to the Department of Education. The data reported by divisions were used to recalculate all ADM-based state payments for fiscal year 2018. School divisions will receive their full ADM-based general fund and Lottery state payments for fiscal year 2018 with no changes other than the routine adjustments that are made to the Basic Aid payment for some divisions each year as described later in this memorandum.
Payments for accounts supported by the Lottery Proceeds Fund are subject to the final deposit of actual Lottery proceeds for fiscal year 2018. In the event that actual Lottery revenue for fiscal year 2018 does not meet the estimate contained in Chapter 1, the Textbooks account in the SOQ Service Area will be prorated first to address any shortfall, with additional accounts to follow if the shortfall exceeds the remaining payment amount for Textbooks. For more information about this proration, if necessary for fiscal year 2018, please review the section titled “Incentive, Categorical, and Lottery-Funded Accounts” below. The semi-monthly Standards of Quality (SOQ) and Lottery account payments for fiscal year 2018 will be adjusted for actual March 31 ADM on the June 16, 2018, electronic funds transfer (EFT).
The information in this memorandum contains the final state funding due to school divisions (as of the date of this memorandum) in fiscal year 2018 for ADM-based accounts. Also, where available, final payments are shown for other Direct Aid to Public Education accounts that are not calculated based on ADM. Payments for some accounts that require school divisions to submit reimbursements have not been finalized for the year so the payment amounts shown are estimates only.
Due to the late adoption of the fiscal year 2018 “Caboose” budget, and that recurring payments made for most of fiscal year 2018 were based on projections in the previous Chapter 836 budget adopted at the 2017 General Assembly session, most divisions have received state payments in at least one program that exceed their final state entitlement. VDOE will make adjustments for any overpayments to the effected divisions in the Basic Aid payment on June 30, 2018. School divisions can see the impact of this adjustment in Attachment A-This is a XLS document. to this memorandum (see the “Adjustment for Overpayments Related to Final ADM” column).
The Excel calculation file referenced in this memorandum shows state payments, required local effort for the SOQ accounts, and required local matches for Lottery-funded accounts calculated based on actual March 31, 2018, ADM. The accounts affected by actual March 31, 2018, ADM appear in the Excel file in bold font. Please note that, unlike previous Excel calculation files for fiscal year 2018 provided by the Department, this file does not offer an option to change ADM for fiscal year 2018 since ADM is now final. The calculation template can be downloaded from the Department of Education website at:
For assistance downloading the Excel calculation template, please refer to the instructions available at the following link:
The “State & Local Funds Summary” tab on the Excel calculation template shows the final fiscal year 2018 payments for each school division for the SOQ and Lottery-funded accounts that are based on actual March 31, 2018, ADM. Also included in the calculation template are the routine adjustments to the fiscal year 2018 state Basic Aid payment amounts, which are explained in further detail below.
Please note the following when reviewing the data contained in the Excel file:
- Basic Aid: The fiscal year 2018 state Basic Aid payment amount contained in the “State & Local Funds Summary” sheet in the Excel calculation template reflects any required adjustments for circumstances such as overpayments or payments made on behalf of school divisions to the Virginia School for the Deaf and the Blind, state mental health facilities, and for driver’s education. The adjustments made to fiscal year 2018 Basic Aid payments for payments made on behalf of school divisions are described below and are listed in the sheet labeled “Adjustments to FY 2018 Basic Aid.” The total amount to be paid to school divisions in fiscal year 2018 for Basic Aid from state general funds is also provided in this sheet.
- Sales Tax: The fiscal year 2018 sales tax estimates contained in the Excel calculation file represent the Department of Taxation’s official forecast of sales tax included in the Chapter 1 budget. The sales tax estimates contained in Chapter 1 must be used to compute the Basic Aid payment for fiscal year 2018. Chapter 1 specifically states:
“…In the event that the actual revenues from the state sales and use tax dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund and appropriated in this Item (both of which are returned on the basis of the latest yearly estimate of school age population provided by the Weldon Cooper Center for Public Service) for sales in the fiscal year in which the school year begins are different from the number estimated as the basis for this appropriation, the estimated state sales and use tax revenues shall not be adjusted.”
- Incentive, Categorical and Lottery-Funded Accounts: Incentive accounts represent the full state payment, assuming actual participation in fiscal year 2018. The state payments listed for certain Lottery and Categorical accounts do not reflect final participation or reimbursement levels for the year and are shown as estimated payments only.
In addition, if actual Lottery proceeds for fiscal year 2018 do not meet the estimate contained in the Chapter 1 budget, the Textbooks per pupil amount will be reduced to prevent payments for Lottery-funded accounts from exceeding available Lottery proceeds. In the event this situation occurs, Textbooks account payments will continue to be adjusted through the end of the fiscal year as balances become available and final remaining deposits from the Lottery Department are received. The final deposit of Lottery proceeds for fiscal year 2018 will not be received by the Department of Education until on or around June 22, so school divisions can only be notified by email about final Lottery payments prior to the June 30 Electronic Funds Transfer (EFT). Therefore, divisions will need to monitor receipts carefully through June 30 for Lottery-funded accounts.
- VPSA Educational Technology Grant Payments: VPSA Educational Technology Grant (i.e., SOL Web-based Technology Initiative and e-Learning Backpack Initiative) payments reflect the total amount that is allocated to the school division for the note issue offered in the designated fiscal year. They do not reflect actual reimbursement payments requested and paid to the school division. Please be aware that payments for regional programs are included in school division fiscal agent totals; however, actual reimbursements from the spring 2018 VPSA notes issue may be made directly to regional programs from State Non-Arbitrage Program (SNAP) accounts if SNAP accounts are established separately for the regional program.
Adjustments to the Fiscal Year 2018 Basic Aid State Payment for Certain School Divisions
As in past years, the Department’s normal practice for making certain types of adjustments to school division payments is to adjust Basic Aid since it is the largest Direct Aid account. The appropriation act directs that adjustments for the local share of cost of educating students in mental health facilities, and adjustments for divisions ineligible to receive Driver Education funds be made against a school division’s Basic Aid payment. Similar adjustments to Basic Aid are made for local tuition for students attending the Virginia School for the Deaf and the Blind. Consequently, various adjustments will be made to the fiscal year 2018 state Basic Aid payments for certain school divisions on the June 30, 2018, EFT. Where applicable, these adjustments will reduce the fiscal year 2018 Basic Aid state payment made to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the June 30, 2018, EFT) are shown in the sheet labeled “Adjustments to FY 2018 Basic Aid.” Pursuant to Chapter 1, 2018 Special Session I Acts of Assembly, the Basic Aid adjustments for fiscal year 2018 shown in the Excel file are as follows:
- Driver Education Funds Portion of Basic Aid – This adjustment reduces the Basic Aid state payment for school divisions that are not eligible to receive state Driver Education funds in fiscal year 2018.
- Mental Health Local Share of Cost – This adjustment is for the school division’s share of the cost of educating children in state mental health hospitals. The data used to calculate this adjustment are based on the 2016-2017 school year. A similar reduction for the local share of cost of educating children with intellectual disabilities in state training centers is no longer made since these services are no longer provided by the state to school divisions.
- Local Tuition for the Virginia School for the Deaf and the Blind – This adjustment is for the local tuition payments for students enrolled at the Virginia School for the Deaf and the Blind (VSDB). If your division has students enrolled at VSDB during the 2017-2018 school year (fiscal year 2018), §22.1-348, Code of Virginia, and Virginia Board of Education regulation 8VAC20-81-270.H. require the Department of Education to adjust your state Basic Aid payment to capture the local share of the cost of educating these students. These funds are then transferred to the VSDB to offset the cost of educating the students. This adjustment is based on the December 1, 2017, student enrollment at VSDB.
Reporting Basic Aid Adjustments on the 2017-2018 Annual School Report
In order to maintain proper accounting for adjustments made to Basic Aid state payments for payments made on behalf of school divisions (adjustments two and three above), it is necessary for each school division to report the full state payment or gross revenue of Basic Aid funds under revenue source code 240202 (Basic School Aid) on the 2017-2018 Annual School Report. To balance this gross Basic Aid revenue on the 2017-2018 Annual School Report, school divisions with adjustments for mental health facilities or the Virginia School for the Deaf and the Blind should report these adjustment amounts as expenditures in the Instruction Function (61000) and Object Code 3000 (Purchased Services), using the appropriate Program Codes.
For those divisions where the final Basic Aid payment was adjusted for non-eligibility for Driver Education funds as indicated in item one above, the amount of the overpayment will be deducted from your unadjusted or full Basic Aid state payment as shown in the Annual School Report. The reduced Basic Aid state payment amount will be shown on the “Revenues” worksheet under revenue source code 240202 on your Annual School Report. No further reporting action is required, since the adjusted Basic Aid state payment will show the reduction, but school divisions should make note of this adjustment and can reference Attachment A-This is a XLS document. to this memorandum for further detail on the three adjustments to the fiscal year 2018 Basic Aid state payment.
If you have any questions concerning the information in this memorandum, please contact Kent Dickey, Deputy Superintendent for Finance and Operations, or budget office staff at (804) 225-2025 or by email at firstname.lastname@example.org: Email link. .