Charter School Finance School Business October 2012

Who is School Business? 28 employees who are responsible for the policy and data of student, personnel and financial of entities receiving public school state and federal funds.

What School Business Does Public school budget development Allocation of funds Collection of data Analysis of data Projections Monitor the compliance of laws and policy Report

Todays Topics Funding Sources Allotments Reporting and Reports Cash Management Monitoring and Compliance Non Compliance

Terms Allotment = Funding in a Program Report Code (PRC) = “Bucket of Money” Average Daily Membership (ADM) sum of the number of days in membership for all students in individual charter school, divided by the number of school days in the term.

Charter School Funding Sources  State  Federal  Local  County  Other

State Funds General Statute115C H Allocate to each charter school an amount equal to the average per pupil allocation for average daily membership from the local school administrative unit in which the charter school is located An additional amount for children with special needs and for children with limited English proficiency

Components of State Funding State base funding – based on dollars per Average Daily Membership Children with Disabilities (CWD EC) based on dollars per headcount. Child must be on the April 1 headcount to be eligible Limited English Proficiency (LEP) if the charter school has eligible LEP headcount. At least 20 students or 2.5% of ADM.

Federal Funding Sources Most common are Title I (PRC050) and IDEA VI-B (PRC060) Allotted as grant award documents are received from Washington Budget approval required before allotments are distributed Refer to the North Carolina Allotment Policy Manual at for a list of federal PRC’s, eligibility for funds, allotment formulas, and any special provisions. Unused funds revert at the end of the grant period.

Local Funds - LEA GS 115C H The LEA in which the student resides shall transfer to the charter school and amount equal to the per pupil local current expense fund. Plus a per pupil share of the penal fines and forfeitures and supplemental school tax, if any. DPI does not verify the calculation of these amounts and any dispute is between the LEA and the charter school.

Local Funds Shall be transferred to the charter school within 30 days that the LEA receives the monies. The LEA shall provide a (1) The total amount of monies the local school administrative unit has in each of the funds (2) The student membership numbers used to calculate the per pupil share of the local current expense fund. (3) How the per pupil share of the local current expense fund was calculated.

Local Funds-Other All other forms of revenue such as local grants, donations etc are considered local. Local funds do not revert

Critical Items when Building your Budget 1. Average Daily Membership Be realistic Know the breakeven number of students 2. State Base Allotment –Varies by LEA $4,383 to $10,452 –Average = $4,779 – support/ support/

Budget Considerations Local funds vary by LEA DPI will have a list for LEAs who currently transfer funds to charters. Or Ask existing charter schools. 6 LEAs have a charter school for the first time and may not have information available.

Budget Considerations Federal Funds are supplemental and not intended for base funding

New Charter School Checklist Obtain Tax Exempt Status Obtain a Certificate of Occupancy Establish a Bank Account

Vendors and Contractors Retirement - Teachers’ and State Employees’ Retirement System or other Health Insurance -the State Health Plan or other Accounting Services – Internal or contract Insurance provider – Liability insurance Independent auditor

Training and Manuals Cash Management training MSA training Allotment Policy Manual Charter School Finance Manual

Allotment calculations and Timeline

Reporting  GS 115C F(f) Schools shall comply with the Uniform Education Reporting System (UERS)  Monthly financial  Student Accounting  Ad hoc data collection

UERS  Required  Accountable  Basis for:  Federal Reporting  State Reporting  Media/General Public  General Assembly  We are only as good as the data you submit!

Chart of Accounts  Shows how the allotments were expended.  This is the main financial communication between the LEAs and DPI.  DPI uses this data to communicate to the State Legislature, the State Budget Office, media and the Federal Government.

Chart of Accounts  Data in the chart is used for:  Highly qualified teacher reporting for NCLB  Teacher certification requirement (50% rule)  Reporting to the General Assembly, Federal Government, media and general public on past and future education initiatives  Building the budget  Research and Statistics

Chart of Accounts  Uniform Accounting System for all LEAs  Information Gathering  Consistency amongst LEAs  Comparability between years  Decision making tool 

Account String  Fund-Purpose-PRC-Object  A-BBBB-CCC-DDD 

Reading an Account Code State - Regular Curricular - Charter Schools - Supplies and Materials State - LEP - Charter Schools - Salary - Teacher State – Transportation- Charter Schools - Salary Driver

Datafile  Payroll  Detail for every voucher  Accounts Payable  Software will create these files  Submit these files to us on a monthly basis  Review the files and reconcile  Provide you financial reports

Financial Reports Access these reports via WS_FTP PRO Software  ALTARPO1 - Budget Allotment Revision  ALTINRP1 - Planning Allotments  JHA Local Account Balance Reconciliation  JHA Budget Balance Reconciliation  JHA714 - Cash Balance Report  Monitor - Monthly Monitoring Report

Charter Financial Training May 24 th – Education Building (DPI) Required Topics Covered – Financial Personnel –Forms Needed for access to systems –Cash Management –MSA (DPI General Ledger) System –Required Software –Chart of Accounts –Zero Out Process

Cash Management  Establish a ACH bank account with the State Treasurer’s Office. Allow 2 weeks.  ACH Bank Account Authorization Form  Establish access to the Cash Management System (CMS).  CICS Application Maintenance Form

Cash Management  Know the cash calendar and funds requirement date (FRD)  Do not order more cash than needed to cover the current expenditures It is against state and federal law to hold their cash for more than 3 days. (GS ) Guidelines and forms