School District Accounting Manual Addendum Items and Other Hot Topics for 2007–08 August 2007

Agenda Why are the changes necessary? What are the changes? 1.“To-and-from school” transportation. 2.Capital projects fund transfers to the general fund. 3.State forest revenue transfers from the debt service fund to the capital projects fund. 4.Revised excess cost accounting method. 5.New revenue and expenditure codes.

Schedule TopicScheduled Minutes 1“To-and-from school” transportation.20 2Capital projects fund transfers to the general fund. 10 3State forest revenue transfers from the debt service fund to the capital projects fund. 5 4Revised excess cost accounting method.20 5New revenue and expenditure codes.10 Total Time65

Why Are the Changes Necessary? The Accounting Manual for Public School Districts in the State of Washington (Accounting Manual) for the 2007–08 school year was published May A number of new legislative items affecting 2007–08 accounting had not been finalized as of that date. When the legislative items were finalized, additional guidance was needed. An addendum to the 2007–08 Accounting Manual was prepared covering these items.

To-and-From School Transportation Attachment 1: 2SSB 5114 requires school districts to account for “to-and-from school” transportation costs separately from other transportation spending. Attachment 1, To-and-From School Transportation Guidance, includes guidance on: –Accounting for non-to-and-from-school (non- state-funded) transportation. –Calculating to-and-from school (state-funded) and non-to-and-from-school (non-state-funded) transportation. –Miscellaneous issues, including how to account for fuel, bus aides, and transportation- related utilities.

To-and-From School Transportation Attachment 2: Program 99 Transportation Matrix by Activity and Object: –shows each activity-object combination in program 99 and –defines the costs in each combination as core, incremental, or direct costs. –These definitions drive the calculation of non-state-funded transportation.

Transportation Models: –2 models to split costs between state- and non-state-funded transportation. Short Method: –Optional one-step method. –Applied at year-end. –Uses current year mileage and expenditures. –Available only for class 2 districts. To-and-From School Transportation Attachment 3:

Long Method: –Default two-step method. Per mile calculation. Per hour calculation. –Applied throughout the year. –Per mile calculation uses prior year: Mileage from Bus Mileage Report. Expenditures inflated by Per Pupil Inflator of 5.7% for 2007–08. –Cost per driver (for per hour) may be calculated 3 ways. To-and-From School Transportation

To-and-From School Transportation Attachment 4: Transportation Frequently Asked Questions: Two sections: –How to define to-and-from school transportation. –How to apply the to-and-from school transportation accounting guidelines.

CPF Transfers to the GF 2SHB 1280 created a new section and amended RCW 28A and RCW The amended language in RCW 28A states that certain technology expenditures may be made from CPF revenue but must be expended from the general fund, requiring that CPF revenue be transferred to the general fund.

CPF Transfers to the GF Attachment 5 Technology Expenditures and CPF Transfer Guidance, guidance on: –Which technology expenditures qualify for direct expenditure from the CPF. –Which technology expenditures qualify for expenditure from CPF revenue but must be made from the general fund. –How a transfer from the CPF to the general fund is authorized. –How transfers are accounted for in the district accounting records.

State Forest Revenue Transfers HB 2357 allows districts to transfer state forest land revenue that is in the DSF to the CPF to the extent the state forest revenue is not necessary for payment of debt service on school district bonds. Districts may transfer past, present, or future state forest land revenue that meets the requirements. If a district is in doubt about these requirements, consult legal counsel.

State Forest Revenue Transfers Transfers are authorized by the adoption of a resolution of the board of directors. The district’s board-adopted budget, if it accurately reflects the desired transfer, may serve as the required resolution for the transfer. Budget and actual interfund transfers use: –Other Financing Source account codes in the CPF. –Other Financing Use account codes in the DSF.

The New Excess Costs Attachment 6: The Methodology proposed by the Ad Hoc Committee and adopted by the Legislature: –Is defined as the “Washington State Excess Costs Methodology” (WSECM). –Eliminates split coding of staff and creates a full costs accounting program 21. –Requires unenhanced general apportionment revenues to be split. OPSI will calculate the split. –ALL students reported on the LRE reporting will be included to the extent that they generate general apportionment funding.

Calculation of General Apportionment Revenue Split Total unenhanced general apportionment revenue generated by K-21 aged special education students served will be calculated. An allowance for district indirect will be taken “Off the Top” using the state recovery rate. The remaining funding will be split using a calculation based upon all the student LRE reporting.

Calculation of General Apportionment Revenue Split Districts will account for special education program costs, in full, in program 21. OSPI will calculate unenhanced general apportionment revenue split and report monthly on the 1220 report. This revenue will be paid/received under a new revenue code 3121.

Excess Costs - Work In Process Revising the K-4 calculation to mitigate unintended consequences of implementing this method. Developing a training module to ensure that districts appropriately place students on the 1077 tables. Reviewing and possibly revise rules or worksheets for: Special Education carryover and recovery, and safety net.

Excess Costs K-4 and K-12 Ratio Proposal The proposal is reliant upon school districts’ grade coding the CIS staff assigned to Program 21. Districts’ would receive credit for Special education staff times the 1077 spilt percentage. Proposed K-4 Ratio Example: –The district reports 12.4 CIS staff FTE in program 21 for K-4. –1077 Percentage split is 30%. –12.4 X 0.30 = 3.72 FTE included in district’s K-4 ratio.

Excess Costs - Federal MOE This methodology will adjust the program 21 expenditures from excess costs to a higher level of expenditures showing special education full costs. The calculation for will compare the expenditures to the expenditures less the 3121 revenues.

Excess Costs - Follow-up Reconvene the Excess Costs Ad Hoc Committee in and to review and evaluate school district implementation of WSECM and report to legislature any potential changes or modifications.

Materials On Our Web-site Under the committee links on SAFS website: A projection of the method in –24Jan 1220 reporting.xls –This projection will be updated shortly after WASBO. Terry Bergeson’s transmittal letter to JLARC and the Legislature –Final JLARC Transmittal Letter docFinal JLARC Transmittal Letter doc Coming: –Proposed Rule Changes for K-4/K-12 Ratio Calculation.

New Revenue and Expenditure Codes - Attachment 7 Legislative changes from the 2007 session require additional revenue and expenditure codes and the assignment of existing codes to new revenue streams. Attachment 7, Additional Revenue and Expenditure Guidance, contains: –New revenue and expenditure codes. –Related information: Whether included in the F-203, F-195, F-196. Whether included in the levy base. Whether indirects are allowed. Website address for additional information.