TEA School Finance - ESC3 · 10/21/2016 13 2015–2016 Near Final Summary of Finances (SOF) The...
Transcript of TEA School Finance - ESC3 · 10/21/2016 13 2015–2016 Near Final Summary of Finances (SOF) The...
10/21/2016
1
TEA School Finance UpdateFall Superintendents’ Leadership ConferenceOctober 25, 2016LEO LOPEZ, RTSBA
ASSOCIATE COMMISSIONER /
CHIEF SCHOOL FINANCE OFFICER
TEXAS EDUCATION AGENCY
1
Agenda• TEA Organizational Changes
• Financial Compliance Update
• State Funding Update
• Questions
2
10/21/2016
2
3
Organization Chart
4
Organization Chart
Kara BelewDeputy Commissioner
of Finance
Chief School Finance Officer
(Leo Lopez)
Chief Financial Officer (Shirley Beaulieu)
Chief Investment Officer
(Holland Timmons)
Associate Commissioner for Grants and Federal Fiscal Compliance(Dr. Nora Hancock)
Director of Financial Compliance(David Marx)
Director of State Funding
(Al McKenzie)
10/21/2016
3
Department of School Finance
5
State Funding Financial Compliance
Foundation School Program (Chapter 42)
Financial Integrity Rating System of Texas (FIRST)
Wealth Equalization (Chapter 41) Financial Accountability System Resource Guide (FASRG)
EDA and IFA facilities funding (Chapter 46)
Student Attendance Accounting (SAAH)
Permanent School Fund (PSF) Bond Guarantee Program (BGP)
Annual Financial and Compliance Report (AFR)
Financial Compliance UpdateRECENT UPDATES, HOT TOPICS AND WHAT’S ON THE HORIZON FROM THE FINANCIAL COMPLIANCE DIVISION
6
10/21/2016
4
House Bill 2610 (the “minutes” bill)• A TAA letter went out on August 19, 2016
• Rules regarding student eligibility for half‐day and full‐day funding/attendance have not changed (i.e. the “120 / 240 classroom minute” requirements remain in place)
• In order to avoid a proportional reduction in FSP funding, districts must meet or exceed 75,600 minutes of operation on each campus (including any approved waiver minutes)
7
House Bill 2610 (the “minutes” bill)• An operational day with less than 420 minutes will not have
funding reduced, as long as the minimum 75,600 minutes of operation are met by the end of the year.
• Full‐day pre‐kindergarten have an automatic one‐year waiver in 2016‐2017 but will need to have at least 37,800 minutes of operation in 2017‐2018 in order to avoid a reduction in FSP.
• Dropout recovery programs and charters previously operating with less than 75,600 minutes will need to apply for a one‐year waiver in 2016‐2017 but will need to get up to the 75,600 minutes of operation in 2017‐2018 to avoid a reduction in FSP.
8
10/21/2016
5
2015–2016 School FIRST Final Ratings for school districts
9
Ratings Count % of Total Enrollment% of Total
Enrollment
A = Superior 1,003 98.1 % 4,857,380 97.4 %
B = Above Standard 16 1.6 % 67,188 1.4 %
F = Substandard Achievement 4 0.4 % 60,651 1.2 %
Total 1,023 100.0 % 4,985,219 100.0 %
2015–2016 School FIRST Final Ratings for charter schools
10
Ratings Count % of Total Enrollment% of Total
Enrollment
A = Superior 163 93.7 % 191,117 91.3 %
B = Above Standard 9 5.2 % 16,869 8.1 %
F = Substandard Achievement 2 1.2 % 1,301 0.6 %
Total 174 100.0 % 209,287 100.0 %
10/21/2016
6
School FIRST “rating scale” becomes more rigorous next year
11
Ratings 2015‐2016 Rating Scale 2016‐2017 Rating Scale
A = Superior 70 – 100 points 90 – 100 points
B = Above Standard 50 – 69 points 80 – 89 points
C = Meets Standard 31 – 49 points 60 – 79 points
F = Substandard Achievement (or automatic
failure on critical indicator)0 – 30 points 0 – 59 points
Charter Depository Contract Request• In order to ensure that the TEA has up‐to‐date records for
all charter schools, a TAA letter dated August 24, 2016 requested that all charter schools respond with a copy of the signed and completed depository contract.
• The contracts should be current with the board president as the authorized bank officer.
• The contract submission is due electronically by December 1, 2016.
12
10/21/2016
7
Depository Contracts Update• Financial Compliance Division is undertaking an update to
the depository contract language and associated forms.
• The goal is to increase flexibility for school districts as well as banks.
• The changes must go before the State Board of Education (SBOE) so the changes will require three SBOE meetings.
13
Depository Contracts Update• Changes to the bid/proposal form
• The ability to change rates in contract extension years
• The ability to use other banking institutions that are insured or collateralized outside of the banking services bank
• The ability to change from a compensating basis to a fee basis or vice‐versa
• The ability to use a letter of credit but with a preference of pledged securities to insure public funds
• Update references of outdated technological changes
14
10/21/2016
8
Changes to financial reporting for districts with Chapter 313 Projects
• Refer to previous To The Administrator Addressed letter, dated January 13, 2015 (listed under 1/12/2016)
• Changes to procedures for the 2016–2017 school year apply to districts that have active agreements under Chapter 313 of the Texas Property Tax Code and that have companies subject to tax credits.
• This change in methodology is the result of a State Auditor’s report on the Chapter 313 agreements.
15
Changes to financial reporting for districts with Chapter 313 Projects
• Affected districts must net those credits against taxes paid (rather than requiring the company to pay full taxes and then issuing a reimbursement to the company in the amount of the tax credit).
• Because tax collections on the Schedule J‐1 of Delinquent Taxes Receivable will now be net of these credits, districts should budget estimates of state aid and recapture accordingly.
16
10/21/2016
9
Annual Financial Report• Per Texas Education Code (TEC) §44.008, a copy of the
annual financial report (approved by the board of trustees) is due to TEA by the 150th day after the end of the fiscal year.
• AFR is due by November 27 for districts whose fiscal years end on June 30
• AFR is due by January 28 for districts whose fiscal years end on August 30
• Statute does not provide for an extension due to holiday or weekends
17
Annual Financial Report• There are two components of the AFR submission:• PDF of the signed and approved report• Electronic data feed (or excel template for charters)
• In order for the AFR submission to be considered complete, both components must be submitted by the deadline.
• Common oversights include uploading the PDF without the proper signatures and failing to click “submit” on the electronic submission of the financial data.
18
10/21/2016
10
Special Allotment Expenditure Monitoring• Supplemental state allotment direct expenditure
requirements are as follows for each supplemental state allotment area.
• Special Education = 52%
• Compensatory Education= 52%
• Bilingual Education= 52%
• Career and Technology Education= 58%
• Gifted and Talented Education = 55%
• High School Education = 100%
19
Special Allotment Expenditure Monitoring Assessment & Analysis
• School districts, open enrollment charter schools and full‐time virtual schools are all subject to review.
• The monitoring program’s risk assessment process is based on three consecutive state fiscal years of the LEA financial data reported in the Foundation School Program (FSP) System and the Public Education Information Management System (PEIMS).
• The risk assessment is designed to analyze the LEA’s special allotment spending and reporting requirements for the purpose of identifying potential non‐compliance issues.
20
10/21/2016
11
Special Allotment Monitoring Flowchart
21
Step1
• Using a 3 year Average Calculation over a period of three fiscal years. The TEA identifies LEAs with underutilized supplemental state allotment program funds.
Step 2
• The TEA notifies LEAs by letter that they have underutilized funds and must come into compliance with mandated supplemental state allotment expenditure requirements.
Step 3
• Based on the level of underutilization, the TEA will provide corrective action plans or conduct further monitoring review activities to seek LEA statutory compliance.
Special Allotment Monitoring Source Data
• The TEA Special Allotment Variance Report. This report analyzes the LEA’s special allotment program expenditure totals averaged over three fiscal years
• The Summary of Finance Report: Near Final, September. This report identifies the state revenue for each of the allotted programs.
• The PEIMS EDIT PLUS +: PRF1D007, Midyear Collection Actual Compliance Report –General Fund Allocated. This report breaks down direct costs versus indirect costs within each program intent code (PIC) and Function code.
• The PEIMS EDIT PLUS +: PRF1D003, Midyear Collection Actual Allocated Expenditures by Program and Object code within Function – General Fund. This report identifies expenditures amounts within each PIC by Object code.
22
10/21/2016
12
TEA Special Allotment Variance Report
23
Program Intent Code (PIC) PIC 23, 33 PIC 24, 26, 28, 29, 30, 34 PIC 25, 35 PIC 22 PIC 21 PIC 31
Supplemental State Allotment Area
Special Education Compensatory Education Bilingual Education Career and Technology Education Gifted and Talented High School Education
Required Level of Spending 52% 52% 52% 58% 55% 100%
Make up the difference in the next year following the compliance review
In Compliance In Compliance In Compliance In Compliance In Compliance In Compliance
Summary of Finance 3 year average $ 52,078,287 $ 57,653,723 $ 10,561,978 $ 16,719,925 $ 2,438,024 $ 5,127,039
Actual Expenditures 3 year average $ 107,992,731 $ 47,077,146 $ 92,979,131 $ 11,730,138 $ 2,528,362 $ 5,122,318
Percent of funds Expended 3 year average 207% 82% 880% 70% 104% 100%
Fiscal Year (FY) 12
Summary of Finance $ 52,225,457 $ 57,035,746 $ 10,566,369 $ 16,332,931 $ 2,416,282 $ 5,057,232
PEIMS Report $ 105,242,023 $ 45,579,816 $ 115,367,553 $ 11,801,107 $ 2,443,877 $ 5,342,529
Actual Percent of funds Expended 202% 80% 1092% 72% 101% 106%
Fiscal Year (FY) 13
Summary of Finance $ 51,851,756 $ 57,470,710 $ 10,509,754 $ 16,475,647 $ 2,417,734 $ 5,149,291
PEIMS Report $ 108,481,524 $ 49,655,606 $ 135,436,557 $ 11,600,182 $ 2,129,832 $ 4,688,930
Actual Percent of funds Expended 209% 86% 1289% 70% 88% 91%
Fiscal Year (FY) 14
Summary of Finance $ 52,157,649 $ 58,454,713 $ 10,609,812 $ 17,351,197 $ 2,480,057 $ 5,174,595
PEIMS Report $ 110,254,646 $ 45,996,017 $ 28,133,284 $ 11,789,126 $ 3,011,376 $ 5,335,496
Actual Percent of funds Expended 211% 79% 265% 68% 121% 103%
State Funding UpdateRECENT UPDATES, HOT TOPICS AND WHAT’S ON THE HORIZON FROM THE STATE FUNDING DIVISION
24
10/21/2016
13
2015–2016 Near Final Summary of Finances (SOF)
The near final SOF was published in September and includes
•PEIMS Attendance (including Advanced CTE)
•Staff Salary data•Tax collection data•Transportation data•Updated debt information for EDA and IFA
25
2015–2016 Near Final Summary of Finances (SOF)
26
Legislative PaymentEstimate
District Planning Estimate
Difference
Average Daily Attendance
4,945,468 4,924,588 (20,888)
WADA 6,668,676 6,673,490 4,814
M&O Tax Collections $21,349,705,139 $21,982,630,859 $632,925,720
FSP (M&O) State Aid $19,672,773,347 $19,842,828,359 $170,055,012
Below are the statewide trends from the near final settle‐up
10/21/2016
14
2015–2016 Near Final Summary of Finances (SOF)• October 12, 2016 To The Administrator Addressed (TAA)
letter informs of correction to special education mainstream average daily attendance for some districts.
• If your district submitted data through the Texas Student Data System (TSDS) Summer Collection, it is likely your district is affected.
• Approximately 560 districts were affected, with the correction totaling about 2,650 mainstream ADA
27
2015–2016 Near Final Summary of Finances (SOF)• The statewide dollar amounts total:• $452 million in payments made to school districts and
charters in September
• $318 million in balances owed back to the state have been transferred to 2016–2017 for repayment
• Balances owed due to the mainstream correction will be transferred to 2016–2017 for repayment in October
28
10/21/2016
15
2016–2017 Summary of Finances (SOF)•Basic allotment and equalized wealth level stay the same as 2015–2016 ($5,140 and $514,000)
•The guaranteed yield for the golden pennies increases from $74.28 to $77.53
•Revised Available School Fund rate ($390)
•Attendance projections used in LPE submitted by districts in the Fall of 2014
29
2016–2017 Summary of Finances (SOF)•LPE property values used to calculate state share of FSP are the greater of the tax year 2015 T2 value from the comptroller or the 2014 T2 value increased by 4.56%
•M&O Tax Collections for LPE are the greater of the 2015 collections * 4.56% * 6.18% or 2016 PEIMS budgeted * 6.18%
•TEC 42.253 (b) requires TEA to make payments based on the estimates used at the time of the appropriation
30
10/21/2016
16
2016–2017 Summary of Finances (SOF)•The latest SOF now incorporates compressed tax rate conversions, IFA and EDA allotments and payment classes
•Updates to come later on in the fiscal year include New Instructional Facility Allotments (NIFA), M&O tax rates, state compensatory education (SCE) and Chapter 41 data
•Payments for IFA and EDA are currently on track for November 2016
31
Fast‐growth charters / payment schedule•Charter schools with more than 10 percent growth in enrollment when compared with the prior year may request an accelerated payment schedule
•Once approved, the accelerated schedule is automatic for three years
•Requests for accelerated payment schedules must be submitted via the charter school module in TEASE
32
10/21/2016
17
2016‐2017 IFA and EDA• Instructional Facilities Allotment amounts have been calculated for 2016‐2017, including $55.5 million for the latest round (Round 11)
•Facilities funding payments will exceed $500 million and are close to an even split (IFA = $241 million, and EDA = $264 million)
•Payments are on track for a November 2016 distribution.
33
TEA State Aid Template – Version 7•The state aid template has been revised with updated information for 2016‐2017.
• It auto‐populates with LPE data from the Summary of Finances
•The excel template does not create a funding entitlement, only the SOF is the official source for generating a state aid payment
34
10/21/2016
18
TEA State Aid Template – Version 7: Where can I find it?
35
TEA State Aid Template – Version 7
36
10/21/2016
19
Attendance Projections•Attendance projections module opened October 15th
• Initial projections are made using a four‐year average growth rate.
•Districts can accept projections or make changes. If making revisions, final submissions are due December 15th
•These projections will impact cash flow (LPE) for the next biennium
37
Attendance Projections – Don’t leave them in “Submitted to Superintendent” status
38
10/21/2016
20
Additional State Aid for Tax Reduction (ASATR)•Statutory provisions for ASATR expire September 1, 2017
•Unless the Legislature takes action, there will be no ASATR funds beginning with the 2017–2018 school year.
•ASATR is estimated to deliver $220 million in state aid to 180 districts in the 2016–2017 school year
39
The State will have paid over $22 billion in ASATR by the end of the 2017 fiscal year
2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18
Total ASATR $2,248.1 $5,675.2 $5,388.4 $2,175.5 $2,481.7 $2,110.9 $609.9 $439.1 $234.9 $339.9 $220.3 $0.0
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
(IN M
ILLIONS)
Increases to the Basic Allotment coupled with local property value growth has led to a shift from “hold harmless” to “formula funding” for most school districts.
40
10/21/2016
21
Funding for Reimbursement of Disaster Remediation Costs•19 TAC §61.1013 (Foundation School Program Funding) and 19 TAC §61.1014 (Credit Against Chapter 41 Recapture)
•Reimbursement for Chapter 42 districts requires a surplus in the FSP while reimbursement for Chapter 41 districts does not.
•Application form will be available on the state funding website in November 2016
41
Property Value Decline•Many districts have recently experienced a loss of property value due to the decline in the price of crude oil.
•Although there is a provision in the TEC 42.2521(a) that provides for assistance for rapid property value decline, this provision requires an appropriation and a projected surplus in the FSP is also required.
• In the 2016‐2017 biennium, there was no appropriation for this provision in the General Appropriations Act.
42
10/21/2016
22
Property value decline, a statewide perspective:
1.Districts marked in Blue have declining property values
2.Districts in red and orange still have rapidly increasing values and include the major urban areas of the state
3.Overall the state still has increasing value
43
QuestionsLeo Lopez, RTSBAChief School Finance [email protected](512) 463‐9179
David Marx, CPADirector of Financial [email protected](512) 463‐2945
Al McKenzieDirector of State [email protected](512) 463‐9186
44