1. Special Education – Solving the Mystery Together 08/17/07 Lori Ames, School Finance Consultant

2. Agenda Special Education Funding Sources Special Education Expense Coding State Special Education Categorical Aid Adjustments to Aidable Expenses Special Education Fiscal Reporting

3. Special Education Funding Sources State Special Education Categorical Aid High Cost Categorical Aid Federal Special Education Aid Medicaid State Equalization Aid Local Property Tax

4. State Spec Ed Categorical Aid Aidable costs may include, but are not limited to: –Salary/Fringe Benefits for: Most Special Education Teachers and Assistants Speech/Physical/Occupational Therapists School Psychologists, Social Workers, Guidance Counselors, and Nurses Special Education Administrative Staff Special Transportation

5. High Cost Categorical Aid School districts are eligible for aid if the district incurred, in the previous school year, more than $30,000 of non-administrative costs for providing special education and related services to a child, and those costs are not eligible for reimbursement under the state special education categorical aid program, the federal Individuals with Disabilities Education Act, or the federal Medicaid program http://www.dpi.wi.gov/sfs/highcost.html

6. Federal Special Education Aid/Grants The Individuals with Disabilities Education Act (IDEA) originally authorized funding of 40% of average per-pupil expenditures to support special education services for children with disabilities. Most of the funding is distributed to local school districts in the form of flow-through aids or other discretionary grants. http://www.dpi.wi.gov/sped/fedgrant.html

7. Medicaid A fairly small source of revenue for school districts is insurance reimbursement provided through the combined federal/state Medicaid program. http://dpi.wi.gov/sfs/doc/medicaid.doc

8. State Equalization Aid Equalization is a state “cost sharing formula” which reduces local district reliance on local property taxes. The state shares in most costs incurred by Wisconsin school districts that are not reimbursed by other revenue sources. Eligible costs include special education and related services. http://www.dpi.wi.gov/sfs/equalaid.html

9. Local Property Tax Special Education and related services not reimbursed through one of the programs mentioned above are funded by local property taxes. The extent to which local property taxes are used to fund special education costs in a particular district varies greatly and depends largely on the amount of state equalization aids received by the district.

10. Spec Ed Expense Coding All special education expenses, regardless of funding source must be accounted for in fund 27 The function number and the project number are the most critical elements of the total account code

11. Special Education Expense Coding Function Number –Identifies the special education program 152000 – Early Childhood 158000 – Cross Categorical 156600 – Speech & Language 159200 – Substitutes

12. Spec Ed Expense Coding The Business Office and the Special Education Department will need to work closely together to ensure that staff members are being charged to the appropriate program or function. Appropriate staff licensure is important when assigning staff to various functions http://www.dpi.wi.gov/sfs/doc/valid_code_se.doc

13. Project Coding The key to identifying the correct project code is …… ……understanding that the project code identifies how the expense is to be ultimately funded.

14. Project Number – 011 Use this project on all original object 100 – 900 expenditures when: –the LEA is using only local dollars to fund the expenditure (no grant money reimbursement) –the expenditure is directly state special education categorically aidable

15. Project 011-Aidable Expense Example The school district incurs salary & benefit expenses for an appropriately licensed Early Childhood teacher, funded w/ local dollars. FundObjectFunctionProject 27100/200152000011

16. Project Number - 019 Use this project on all original object 100-900 expenditures when: –the LEA is using only local dollars to fund the expenditure (no grant money reimbursement) –the expenditure is NOT directly state special education categorically aidable

17. Project 019-Non-Aidable Expense Example The school district purchases supplies for an early childhood program w/local dollars. FundObjectFunctionProject 27410152000019

18. Project Number - 340 Use this appropriate IDEA grant project code of “341-349” on all original object 100-900 expenditures when: –This expenditure is charged directly to an IDEA (flow-through, entitlement, etc..) grant. –The LEA name on the grant is the same as this LEA.

19. Project 340 Grant Expense Example The LEA purchases supplies for an early childhood program that is reimbursed by grant dollars direct to this LEA. FundObjectFunctionProject 27410152000340

20. Project Number - 599 Use this project code on all original object 100-900 expenditures when: –This expenditure is charged directly to a grant such as AODA, Drug Free, etc…. –The LEA name on the grant is the same as this LEA.

21. Project 599 Grant Expense Example The LEA purchases supplies for an early childhood program that is reimbursed by non-IDEA grant dollars direct to this LEA. FundObjectFunctionProject 27410152000599

22. Project Number – 315/317 Use these projects, 315 (State) or 317 (Federal) on all original object 100-900 expenditures when: –The expenditure is then charged to a state/federal grant of another LEA –The LEA name on the state/federal grant is another school district (NOT this LEA)

23. Project 315/317Grant Expense Example The LEA purchases supplies for an early childhood program that is reimbursed by another school district using federal grant dollars FundObjectFunctionProject 27410152000317

24. Project Number – 515/517 Use these projects, 515 (State) or 517 (Federal) on all original object 100-900 expenditures when: –The expenditure is then charged to a state/federal grant. –The LEA name on the state/federal grant is a “CESA” or a “CCDEB”, NOT this LEA

25. Project 515/517Grant Expense Example The LEA purchases supplies for an early childhood program that is reimbursed by a CESA or CCDEB using federal grant dollars FundObjectFunctionProject 27410152000517

26. Project Number - 091 Use this project on all original object 100- 900 expenditures when: –The LEA is using only local dollars to fund the expenditure (no grant money reimbursement) –The expenditure is directly reimbursed by a payment from CESA (using CESA local dollars – no grant money)

27. Project 091 CESA Package Program Example The host district of a CESA package program purchases supplies for an early childhood program that is reimbursed w/local dollars by CESA. FundObjectFunctionProject 27410152000091

28. Project Number – 092 Use this project on all original object 100- 900 expenditures when: –The LEA is using only local dollars to fund the expenditure (no grant money reimbursement) –The expenditure is directly reimbursed by a payment from a CCDEB (using CCDEB local dollars – no grant money)

29. Project 092 CCDEB Package Program Example The host district of a CCDEB package program purchases supplies for an early childhood program that is reimbursed w/local dollars by a CCDEB. FundObjectFunctionProject 27410152000092

30. Why is Coding Important? DPI uses the account codes to determine aidable expenses and ultimately calculate your district’s state special education categorical aid

31. How Do I Know If An Expense is Aidable? Refer to the “Special Education Categorical Aid Claim Directions” document for definitions of aidable expenses. http://dpi.wi.gov/sfs/xls/se_claim_directions.xls

32. Special Education Categorical Aid Entities eligible to receive state special education categorical aid: –School Districts –CESAs –CCDEBs –2R Charter Schools

33. Special Education Categorical Aid Based on the information reported in the special education annual report, the district’s special education categorical aid is calculated the aid is paid based on prior year aidable expenditures (aid paid in 2007-08 is based on expenditures from 2006-07)

34. Special Education Categorical Aid Categorical aid may be received either directly or indirectly: –Direct: Your district receives aid directly from DPI as a result of an expense coded to an 011 project –Indirect: Your district reimburses another entity with local funds for expenses that the other entity coded to an 011 project. The other entity transits your share of the aid to our district.

35. Special Education Categorical Aid Due to the high amount of eligible expenses, the amount of aid paid is prorated to approximately 29%. Aid is paid in multiple payments (Nov 15%, Dec 15%, Jan 15%, Feb 15%, March 15%, and June 25%)

36. Special Education Fiscal Reporting Districts are required to submit both a special education budget and annual report that is currently separate from the full SAFR budget and annual report The special education budget/annual program is located on either a staff member’s individual hard drive or on a network drive within the district.

37. Spec Ed Fiscal Reporting District data is entered in the resident program. Since the report is not web-based, the district must create a text file containing the data. (part of the program) The text file is emailed to: DPIsfsreports@dpi.state.wi.us

38. Adjustments to Aid Eligible Expenses No Valid License – staff members are not appropriately licensed for the program. Additional Questioned Cost - Inappropriate allocation of salaries/benefits - social workers, psychologists, nursing, and guidance

39. No Valid License PI 1202 –Report filed by district with DPI in fall –List by staff, FTE, and teaching position –No updates during the year

40. No Valid License “No Valid License” listing on June 30 th –Identifies staff not properly licensed for the teaching assignment listed on the PI 1202 –Auditor required to report to DPI salaries, benefits, and account structure (even in funds other than 27) for all individuals on “no valid license” listing.

41. No Valid License “No Valid License” listing on June 30 th –Available in reporting portal

42. No Valid License “No Valid License” listing on June 30 th –When teaching position of an individual was incorrectly reported on PI-1202 Obtain, for auditor, a written representation from the Special Education Director or other appropriate person stating that the reported assignment (PI- 1202) was incorrect. Include previously reported teaching assignment and correct teaching assignment for individual.

43. No Valid License “No Valid License” listing on June 30 th –DPI special education licensing follows up on the licensing status May result in phone call to district –Aid is withheld until DPI special education licensing approves the individual

44. Additional Questioned Cost “Valid License” listing on June 30 th –Available in Reporting Portal Auditor performs a payroll test and determines if salary and related benefits are properly reported for staff on the list

45. Additional Questioned Cost Any individual not reported in proper account coding for their teaching assignment (per PI- 1202 and valid license list) is: –Reviewed by Auditor for correct teaching assignment (through inquiry) If teaching assignment is in agreement with license – salaries and benefits are moved to appropriate WUFAR accounts (no filing with DPI) If teaching assignment is not in agreement with license – salaries and benefits are reported to DPI as questioned cost

46. Additional Questioned Cost DPI special education licensing follows up on the licensing status –May result in phone call to District Aid is withheld until DPI special education licensing approves the individuals

47. Allocation of Salaries and Benefits to Fund 27 Salaries and benefits of professionals working in both the regular education and special education areas must be allocated between fund 10 and fund 27 based on time and costs –School Social Worker –School Psychologist –School Nurses (Registered Nurses, licensed by WI Department of Regulation and Licensing) –School Counselors

48. Allocation of Salaries and Benefits to Fund 27 January 12, 2006 Letter –http://www.dpi.wi.gov/sfs/ltrjan12_06.htmlhttp://www.dpi.wi.gov/sfs/ltrjan12_06.html –Types of activities that would be eligible for special education aid –Methodologies in determining time and cost Must be done for each individual staff member claimed Documentation must be maintained Must be rational and defensible method of allocation

49. Allocation of Salaries and Benefits to fund 27 Special Education General LedgerClaim Form Social WorkerFunction 212000 Project 011 PsychologistFunction 215000 Project 011 NurseFunction 214000Function 299999 Project 019 Guidance Counselor Function 213000Function 299999 Project 019

50. Allocation of Salaries and Benefits to Fund 27 Identify these costs in the cover e-mail with the upload file attachments as follows: –For (LEA Name), the “011-state aidable” guidance counselor and school nurse salary/fringe costs reported in function 299 999 under project “019” on the PI 1505SE are: School Guidance Counselor –Object 100 – Salary: (Amount) –Object 200 – Fringes: (Amount) School Nurse –Object 100 – Salary: (Amount) –Object 200 – Fringes: (Amount)

51. Allocation of Salaries and Benefits to Fund 27 Included in Auditor payroll test will be individuals from the categories of psychologist, social worker, guidance counselor, and nurse Supply auditor with instructions to staff on how to determine what time is aidable Provide auditor with documentation of methodology used

52. Allocation of Salaries and Benefits to fund 27 Auditor reports to DPI as questioned cost the salaries and benefits of individual in question DPI special education licensing follows up on the licensing status –May result in phone call to District Aid is withheld until DPI special education licensing approves the individual

53. Spec Ed Fiscal Report Common Errors in the Special Education Annual Report: –Spec Ed Annual = SAFR Annual Report –Grant payments and expenses between entities do not equal. –Deductible receipts are not identified

54. Spec Ed Annual = SAFR Annual Spec EdSAFR 218200.10021,000 218200.200 4,200 218200.300 3,000 2,500 218200.400 800 218200.500 1,000 Total30,00029,500 Function total out of balance

55. Spec Ed Annual = SAFR Annual Spec EdSAFR 218200.10021,000 218200.200 4,200 218200.300 3,000 3,800 218200.400 800 0 218200.500 1,000 Total30,000 Object Total out of Balance

56. Grant Payments Between Entities Example Assumptions: –3 rd party grant scenario –District A incurs the original expense to be reimbursed –District B is the grant holder –Federal flow-thru grant

57. Grant Payments Between Entities DPI District A – Incurs Original Vendor Expense - Project 317 VENDOR District B – Reimburses District A using Federal Flow-Thru Funds – Project 340 District B files DPI Grant Claim & Receives Reimbursement – Source 730 District A – Receipts Reimbursement-Source 317

58. Grant Payments Between Entities On the special education report: –District A enters nothing but the expense in the appropriate account number, project 317 –District B answers “yes” to paying another LEA for services from a grant, identifies District A, and the amount paid District A Project 317 = District A Source 317 = District B Object 340

59. Grant Payments Between Entities Example Assumptions: –3 rd party grant scenario –District A incurs the original expense to be reimbursed –CESA is the grant holder –Federal flow-thru grant

60. Grant Payments Between Entities DPI CESA District A – Incurs Original Vendor Expense - Project 517 VENDOR CESA – Reimburses District A using Federal Flow-Thru Funds – Project 340 CESA files DPI Grant Claim & Receives Reimbursement – Source 730 District A – Receipts Reimbursement-Source 517

61. Grant Payments Between Entities On the special education report: –District A enters nothing but the expense in the appropriate account number, project 517 –CESA answers “yes” to paying another LEA for services from a grant, identifies District A, and the amount paid District A Project 517 = District A Source 517 = CESA Object 340

62. 27.000.211.152000.01127.000.386.436000.019 27.000.110.152000.011 27.000.550.218100.517 27.000.410.221300.599 27.000.310.221300.340 27.000.410.156600.317 27.000.212.152000.011 27.000.220.152000.011 27.000.310.156600.515 Special Education Report But what happens if another entity reimburses your district for an expense coded to 011 using grant funds? Not Aidable Aidable

63. Deductible Receipt What is a deductible receipt? –A deductible receipt is created when an entity incurs an aidable expense (coded to project 011) that is ultimately reimbursed by another entity with grant funds.

64. Deductible Receipt Why does DPI care about deductible receipts? –DPI should not pay special education categorical aid on an aidable expense (coded to project 011) that has been reimbursed with state or federal grant funds.

65. Deductible Receipt Example District A provides Early Childhood services to multiple districts. District B’s share of the program include salary ($400), benefits ($200), and materials ($100). District B reimburses District A using federal grant money. District A Expense: 27E.xxx.110.152000.011 $400 District A Expense: 27E.xxx.2xx.152000.011 $200 District A Expense: 27E.xxx.410.152000.019 $100 District A Revenue: 27R.317 $700

66. Deductible Receipt Example On the Special Education Report: –District A: Answers “yes” to “did your district receive deductible receipts” Identifies District “B” and the amount of the deductible receipt $600 Enters $600 in 27D152000 000 011 –District B: Answers “yes” to paying another LEA for services from a grant, identifies District “A”, and the amount paid ($700)

67. Deductible Receipt-Open Enrollment District A serves the student and bills District B. –District B pays with local funds only Flat Rate – no deductible receipt Additional Cost – no deductible receipt

68. Deductible Receipt-Open Enrollment District A serves the student and bills District B. –District B pays with grant funds Flat Rate – no deductible receipt Additional Cost – deductible receipt for the portion of the additional cost originally charged by District A to an 011 project number.

69. Spec Ed Reporting Changes Ahead! The finance team is currently in the design phase of creating a new special education fiscal report. The goal is to integrate the fund 27 detail with the full SAFR Budget/Annual Report beginning with the 2008-09 Budget Report.

70. Resources WUFAR (full document & expense matrix) http://www.dpi.wi.gov/sfs/wufar.html http://www.dpi.wi.gov/sfs/wufar.html Special Education Transaction Coding http://www.dpi.wi.gov/sfs/doc/sped.doc Special Education Claim Directions http://www.dpi.wi.gov/sfs/xls/se_claim_dire ctions.xls

71. Resources Valid Teacher Licenses & Reporting Codes http://www.dpi.wi.gov/sfs/pdf/valid_code_se.pdf “Special Education” Pupil Transportation http://dpi.wi.gov/sfs/xls/setrpl00.xls Special Education Media-Site Presentations http://media2.wi.gov/DPI/Catalog/Front.aspx?cid=23 52cf23-e130-4a9c-b83f-8f8e90b15f41

72. Resources Open Enrollment http://www.dpi.wi.gov/sfs/doc/open_enroll ment_wufar.doc Function 430000 http://www.dpi.wi.gov/sfs/doc/funct_430.doc Coop Agreement – 66.0301 http://www.dpi.wi.gov/sfs/coop_agree.html

73. Resources Fiscal Agent Requirements http://www.dpi.wi.gov/sfs/doc/fisagnt.doc Fiscal Agent Agreement Account Coding http://www.dpi.wi.gov/sfs/xls/fisagagree.xls Fiscal Agent-Example of Level 3 Documentation http://www.dpi.wi.gov/sfs/doc/fisagnt_exa mple.doc

74. Contacts Lori Ames 608-266-3464 lori.ames@dpi.state.wi.us Kathy Guralski 608-266-3862 kathryn.guralski@dpi.state.wi.us Janette Gosdeck 608-267-9218 janette.gosdeck@dpi.state.wi.us