1. Fiscal Regulations December 2004-June 2005 N.J.A.C. 6A:10A-7 & 8

2. 7.1 Discretionary Education Opportunity Aid Governance & Mid-year Awards Fiscal and Program Standards for DEOA Disbursements Fiscal and Program Standards for DEOA Disbursements Mid-year Award Application Procedures Mid-year Award Application Procedures No Significant Changes

3. 6A:10A-7.2 Cost Efficiency in 2005-2006 Budgets  Department Efficiency Study (DES)  Review of Administrative Cost Limits  Presumptive Budget Calculation  Incremental Cost of Opening a New School Facility  Education Opportunity Aid (EOA) in 2005-2006

4. Department Efficiency Study  Compares Median per Pupil Spending in 9 Cost Areas with Other School Districts  Compares Median per Pupil Spending in 6 Groups

5. DES – Cost Reductions Applied in Priority Order 1. Spending for more effective instruction 2. Spending for greater efficiency 3. Funding for inflation 4. Reductions in the school district’s request for DEOA.

6. Administrative Cost Limits Administrative costs may not increase by more than 2.5 % or the cost of living, whichever is greater.

7. Presumptive Budget Calculation The Department will calculate the presumptive budget as the 2004-2005 base budget (including DEOA) increased by 2.5% or CPI, whichever is greater, plus the incremental new school facility costs approved by the Department.

8. Base Budget Includes 2004-2005 statutory formula aids + 2004-2005 statutory formula aids + DEOA + DEOA + Education Opportunity Aid (EOA) + Education Opportunity Aid (EOA) + General fund tax levy + General fund tax levy + Budgeted general fund balance + Budgeted general fund balance + Miscellaneous unrestricted revenues Miscellaneous unrestricted revenues Less adjustments for capital outlay and capital reserve Less adjustments for capital outlay and capital reserve

9. Statutory Formula Aids Used in Base Budget Calculation Core curriculum standards aid Core curriculum standards aid Supplemental core curriculum standards aid Supplemental core curriculum standards aid School choice aid School choice aid Transportation aid Transportation aid Special education aid Special education aid Bilingual education aid Bilingual education aid Stabilization aid Stabilization aid Supplemental stabilization aid Supplemental stabilization aid Consolidated aid Consolidated aid ECPA ECPA DEPA DEPA

10. Miscellaneous Unrestricted Revenue Used in Base Budget Calculation  Transfers from other funds  Unrestricted revenues from other local governmental units  Non-resident tuition fees  Unrestricted miscellaneous revenues  Unrestricted revenues from intermediate sources.

11. Incremental Cost of Opening a New School Facility Requests were due to the Department by November 30, 2004. Requests were due to the Department by November 30, 2004. Requests will be reviewed by the Department and a determination will be made on the amount necessary to meet the incremental new facility cost. Requests will be reviewed by the Department and a determination will be made on the amount necessary to meet the incremental new facility cost.

12. Education Opportunity Aid (EOA) in 2005-2006 EOA will be calculated as the greater of:  EOA formula funding (parity) OR  EOA using the presumptive budget formula pursuant to N.J.A.C. 6A:10A-7.2(g).

13. 6A:10A-7.3 Application for DEOA in 2005-2006 Abbott School Districts May Apply for DEOA in 2005-2006 through the process outlined in the code (N.J.A.C. 6A:10A-7) and summarized here.

14. DEOA Eligibility Criteria School district must have met all the conditions for disbursement of DEOA in FY 05 and must continue to maintain minimal, customary and statutory standards for efficient financial management and business operations and continue to follow customary, basic and required instructional standards, policies and practices as set forth in N.J.A.C. 6A:10A-7.1. N.J.A.C. 6A:10A-7.1.

15. DEOA Eligibility Criteria Foundational education program Foundational education program Aligned preschool -12 curriculum Aligned preschool -12 curriculum Documented use of a student-level database to evaluate student performance and to adjust instruction Documented use of a student-level database to evaluate student performance and to adjust instruction A system of evaluation and assistance that is tied to the instructional priorities and curriculum and are reflected in the professional improvement plans A system of evaluation and assistance that is tied to the instructional priorities and curriculum and are reflected in the professional improvement plans Provide a safe and clean school environment and ensure timely service and delivery to schools of instructional supplies and materials and other goods and services required to operate an efficient school system. Provide a safe and clean school environment and ensure timely service and delivery to schools of instructional supplies and materials and other goods and services required to operate an efficient school system.

16. DEOA – Consider All Available Resources, Reallocations & Potential Efficiencies Consider the following before submitting a request for DEOA (only changes are highlighted here) Consider the following before submitting a request for DEOA (only changes are highlighted here) Costs in excess of the efficiency measures established by the DES Costs in excess of the efficiency measures established by the DES All expenditures not evaluated by the DES shall be reviewed for efficiency All expenditures not evaluated by the DES shall be reviewed for efficiency Salary appropriations for vacant positions in excess of step one of the school district’s salary scale for position/title except for positions that are difficult to fill Salary appropriations for vacant positions in excess of step one of the school district’s salary scale for position/title except for positions that are difficult to fill

17. DEOA – Consider All Available Resources, Reallocations & Potential Efficiencies Consider the following before submitting a request for DEOA: Undesignated general fund balance in excess of 2% Undesignated general fund balance in excess of 2% Under-budgeted miscellaneous unrestricted revenues Under-budgeted miscellaneous unrestricted revenues ECPA and DEPA projected carryover balances ECPA and DEPA projected carryover balances Salary breakage for replacement of retiring staff Salary breakage for replacement of retiring staff

18. DEOA – Consider All Available Resources, Reallocations & Potential Efficiencies – (cont’d) Instructionally ineffective positions, programs and services Appropriations in excess of the documented needs Instructionally ineffective positions, programs and services Appropriations in excess of the documented needs Tuition reserves, capital reserves and all other reserves that are not required by the Department Tuition reserves, capital reserves and all other reserves that are not required by the Department Proper allocation of costs eligible for funding under the EFCFA Proper allocation of costs eligible for funding under the EFCFA

19. DEOA – Consider All Available Resources, Reallocations & Potential Efficiencies – (cont’d) Aides that are not mandated for preschool, kindergarten and special education Aides that are not mandated for preschool, kindergarten and special education Non-recurring costs Non-recurring costs Equipment Equipment Full integration of State, local and Federal funds at the classroom level and school staffing levels that meet the Department standards for effective and efficient delivery of instructional and Full integration of State, local and Federal funds at the classroom level and school staffing levels that meet the Department standards for effective and efficient delivery of instructional and supplemental services supplemental services

20. Requests for DEOA shall include: Evidence of student instructional needs Evidence of student instructional needs Evidence that proposed intervention to address documented needs can be expected to be effective in improving instruction Evidence that proposed intervention to address documented needs can be expected to be effective in improving instruction Documentation that the findings of the DES have been applied Documentation that the findings of the DES have been applied Demonstration that costs that exceed the midpoint average median in the DES are necessary and justifiable Demonstration that costs that exceed the midpoint average median in the DES are necessary and justifiable

21. Requests for DEOA shall include: Evidence that current programs, services, practices, materials or positions in the area funds for new programs, services, practices, materials or positions are requested are essential to student achievement or that they will be eliminated and the funds generated from their elimination will be available to support the new or expanded programs, services or positions Evidence that current programs, services, practices, materials or positions in the area funds for new programs, services, practices, materials or positions are requested are essential to student achievement or that they will be eliminated and the funds generated from their elimination will be available to support the new or expanded programs, services or positions Evidence that continued implementation of current programs or services can be justified as efficient and effective Evidence that continued implementation of current programs or services can be justified as efficient and effective

22. Requests for DEOA shall include: A detailed listing of all new or expanded programs, services, contracts and positions that are included in the 2005-2006 budget that were not part of the approved budget for 2004-2005, and the program or service it is designed to replace A detailed listing of all new or expanded programs, services, contracts and positions that are included in the 2005-2006 budget that were not part of the approved budget for 2004-2005, and the program or service it is designed to replace A listing by program and associated cost of all ineffective or inefficient programs, services and contracts and positions that were included in the 2004-2005 budget that are not part of the proposed budget for 2005-2006 to demonstrate the elimination of all ineffective and inefficient programs A listing by program and associated cost of all ineffective or inefficient programs, services and contracts and positions that were included in the 2004-2005 budget that are not part of the proposed budget for 2005-2006 to demonstrate the elimination of all ineffective and inefficient programs

23. Requests for DEOA shall include: The school district’s certified payroll records submitted electronically The school district’s certified payroll records submitted electronically Detailed analysis of salary information including substitutes, overtime and stipends Detailed analysis of salary information including substitutes, overtime and stipends All 2005-2006 school-based budgets All 2005-2006 school-based budgets

24. 6A:10A-8.2 District and school- level transfers during the budget year The Abbott regulations mirror the Finance regulations for district- level transfers except the requests for approval of Abbott district-level transfers shall be submitted to and approved by the Assistant Commissioner for Abbott Implementation.

25. Line-Item Transfers Line-item transfers from any general fund appropriation account >10%, on a cumulative basis, require approval of the Assistant Commissioner of Abbott Implementation Line-item transfers from any general fund appropriation account >10%, on a cumulative basis, require approval of the Assistant Commissioner of Abbott Implementation Appropriation of surplus or other unbudgeted or underbudgeted revenue is restricted to April 1 thru June 30 and requires Commissioner approval Appropriation of surplus or other unbudgeted or underbudgeted revenue is restricted to April 1 thru June 30 and requires Commissioner approval All require 2/3rds vote of authorized membership of the board All require 2/3rds vote of authorized membership of the board

26. Line-Item Transfers – General Fund Appropriation Account General fund appropriation account means the required advertised appropriation accounts* pursuant to N.J.S.A. 18A:22, except where consolidated as follows: 1. Basic skills, bilingual and special education instruction, including other related and extraordinary services; 2. Student activities, student athletics and other student instructional services; 3. Student support services, including, attendance, health, guidance, child study team, and media; 4. Improvement of instruction and staff training; and 5. Special programs (fund 13). * Includes rollover of prior year encumbrances.

27. Line-Item Transfers (From) 10 Department working day approval deadline or automatically approved 10 Department working day approval deadline or automatically approved Districts need to keep documentation of Department receipt of transfer request if approved under “automatic” provision Districts need to keep documentation of Department receipt of transfer request if approved under “automatic” provision

28. Line-Item Transfers (To) Transfers “TO” Administration over 10% require approval Transfers “TO” Administration over 10% require approval Transfers “TO” Capital Outlay are restricted pursuant to EFCFA Transfers “TO” Capital Outlay are restricted pursuant to EFCFA

29. Appropriation of Unbudgeted/ Underbudgeted Revenue Regulations identify revenue sources that do not require Commissioner approval to increase spending above approved budget. (N.J.A.C. 6A:10A-8.2(c)) Regulations identify revenue sources that do not require Commissioner approval to increase spending above approved budget. (N.J.A.C. 6A:10A-8.2(c)) 1. Additional state aid when approval is granted in the award letter (extraordinary aid, DEOA, EOA adjustments); 1. Additional state aid when approval is granted in the award letter (extraordinary aid, DEOA, EOA adjustments); 2. Tuition revenue generated from a district-specific program, which is not part of a formal sending- receiving relationship pursuant to N.J.S.A. 18A:38- 19 and 18A:46-21; 2. Tuition revenue generated from a district-specific program, which is not part of a formal sending- receiving relationship pursuant to N.J.S.A. 18A:38- 19 and 18A:46-21; 3. Unrestricted federal revenue (Impact aid, SEMI); and 3. Unrestricted federal revenue (Impact aid, SEMI); and 4. Surplus generated from revenue allowed to be excluded from the excess surplus calculation in the pre-budget year (extraordinary aid). 4. Surplus generated from revenue allowed to be excluded from the excess surplus calculation in the pre-budget year (extraordinary aid).

30. Appropriation of Unbudgeted/Underbudgeted Revenue – April 1 – June 30 Requests allowed between April 1 and June 30 and approval authority delegated to the Assistant Commissioner for Abbott Implementation (8.2(a)) Requests allowed between April 1 and June 30 and approval authority delegated to the Assistant Commissioner for Abbott Implementation (8.2(a)) Documentation of approval of 2/3s affirmative vote of the authorized membership of the board Documentation of approval of 2/3s affirmative vote of the authorized membership of the board Transfers to be approved for items necessary to achieve the efficiency and effectiveness standards for the current year Transfers to be approved for items necessary to achieve the efficiency and effectiveness standards for the current year All districts must first transfer from available balances prior to requesting an increase in spending above approved budget. All districts must first transfer from available balances prior to requesting an increase in spending above approved budget. Requests submitted to the Assistant Commissioner for Abbott Implementation must include the latest board secretary report as documentation that appropriation balances are or will be expended/appropriated. Requests submitted to the Assistant Commissioner for Abbott Implementation must include the latest board secretary report as documentation that appropriation balances are or will be expended/appropriated.

31. Appropriation of Unbudgeted/Underbudgeted Revenue – Prior to April 1 Districts may petition the Commissioner prior to April 1 for an increase in spending for an “emergent circumstance” and include in such submission(8.2(b)) Districts may petition the Commissioner prior to April 1 for an increase in spending for an “emergent circumstance” and include in such submission(8.2(b)) Board certification necessary for “emergent circumstance” Board certification necessary for “emergent circumstance” Document additional revenue is necessary or circumstance will “render peril to health and safety to students and staff” or force the district into an “operating deficit as a result of the required implementation of the CCCS and the Abbott rules Document additional revenue is necessary or circumstance will “render peril to health and safety to students and staff” or force the district into an “operating deficit as a result of the required implementation of the CCCS and the Abbott rules Latest board secretary report as documentation no other line item balances are or will be available Latest board secretary report as documentation no other line item balances are or will be available

32. 6A:10A-8.2 District and school- level transfers during the budget year  Transfer the full amount on “Local Contribution – Transfer to Special Revenue” in the 2004-2005 approved budget to the special revenue fund  Any amount included in the approved 2004-2005 budget on that line that is not transferred to the special revenue fund as of December 31, 2004 will result in a direct reduction of the 2004-2005 DEOA

33. Questions ??????