SCHOOL ALLOCATION MEMORANDUM NO. 34, FY 2018

 

DATE:

May 26, 2017

 

TO:

Community Superintendents

 

High School Superintendents

 

Field Support Center Teams

 

School Principals

 

FROM:

Raymond J. Orlando, Chief Financial Officer

 

SUBJECT:

FY 2017 Deficit Rollover

 

Schools are responsible for rollover deficits where they did not pay back funds owed for register loss in the prior fiscal year.  Principals must work closely with Field Support Center (FSC) budget staff to ensure service levels and budget schedules are aligned with pupil need.  Schools must plan and take action to pay back their rollover deficit liability, while also right-sizing services scheduled in Galaxy to align with their school year 2017-2018 register projection. Principals and their designees should work closely with their FSC team to understand the implications of changing registers and student attendance on an on-going basis from now until registers are stabilized in the fall.

 

All schools must plan accordingly to manage any reductions due to register loss within the school year of the register loss. This is in accordance with the Compliance Checklist, question CL03:

 

Did your school set aside the appropriate level of funding in anticipation of mid-year adjustments, based upon the audited register, by March 7, 2017?

 

Schools should expect that this item will once again be part of the Compliance Checklist for FY 2018.

 

Pay Back Schedule

Schools will pay back rollover deficit liabilities based on the following payment schedule:

·         Schools with deficits less than $100K must pay back their entire debt in FY 2018.

·         Schools with deficits between $100K and $200K must pay back $100K in FY 2018, with the balance due in FY 2019.

·         Schools with deficits greater than $200K will have three years to pay back their debt. The first installment is due in FY 2018.

·         Where schools did not completely pay back amounts owed in prior fiscal years, outstanding balances have been added to amounts owed for FY 2017 deficits to be rolled into FY 2018, and pay back plans have been recalculated as per the criteria above.

 

Principals are strongly encouraged to right-size and take as much corrective action as possible in
FY 2018.  Where schools with multi-year payment plans are able to pay back rollover deficit liabilities early, the following credits will apply:

·         Schools with debt greater than $100K but less than $200K that pay back their entire liability in FY 2018 will have the portion of liability in excess of $100K reduced by 25%.

 

·         Schools with three year payment plans that pay back 50% of their debt in the first year will have their remaining debt reduced by 50%; effectively allowing the school to satisfy their debt in two years.

 

Where it has been determined that schools did not have the financial capacity to pay back debt due to reasons beyond the principal’s control, debt has been forgiven.  This is only done after thorough review of the school’s fiscal condition, and requires approval by the Office of Field Support and the Division of Finance.

 

Payment plans and potential credits appear on the tables attached.

 

Deficit Forgiveness for Renewal Schools

As part of the Chancellor’s commitment to help our struggling schools, any renewal school that had a rollover deficit into FY 2018 has been granted forgiveness of those funds owed.

 

Payback Process

Funds owed in FY 2018 based on the payment plan detailed above have been auto-scheduled in the title “Rollover Deficit Set Aside Schools” in the “Set Aside” section of the Galaxy Table of Organization (TO) in the following allocation categories as appropriate by type of school:

·         TL Fair Student Funding

·         TL Fair Student Funding HS

·         TL Instructional Programs

·         TL Instructional Programs HS

 

The set aside reduces the amount of funding available for scheduling.  Schools must work with their FSC team to align their budget schedules inclusive of this set aside with allocated funding by the school budget completion date: June 30, 2017.

 

Where schools experience severe financial hardship after paying back their rollover deficit, and cannot cover contractual class size and mandated staffing requirements, they should speak with their FSC budget director regarding possible relief.  Schools must pay back rollover deficit funds owed before relief funding will be considered. Relief will only be considered in extreme circumstances.

 

Schools can consider excessing staff as needed to downsize to meet their set aside target. Schools taking such action should notify staff being excessed before school closes.  All excess actions are subject to financial review and approval by the FSC.

 

Rollover deficit set asides will be removed from school budgets on September 1, 2017 and school allocations will be reduced concurrently.

 

Accountability

Principals of schools with register loss that do not set aside appropriate funding to cover their register loss may be asked to meet with staff from the Office of the Chief Financial Officer.

 

Reserve for Register Loss and Register Monitoring

Schools not able to pay back funds owed due to register loss in the two prior fiscal years will have a “Register Loss Reserve Set Aide” automatically scheduled on their Galaxy TO.  Refer to SAM No. 1 Fair Student Funding for details on reserves.

 

Schools should work with their FSC team to release reserved funds only when actual registers are stable, principals are confident in their schools’ student data and can provide documentation that registers have attained allocated levels.  Where schools are experiencing loss, the set aside should not be removed, and where additional loss is identified, schools should schedule additional funds for Register Loss Set Aside.

 

In late fall, a preliminary allocation adjustment for register gains and losses will take place in advance of the audited register data. Further information about the register adjustment process will be issued in the fall. At the end of September, weekly register monitoring reports are made available to schools in ATS.  Adjustments based on audited data will take place in February 2018.

 

Resources and information on register monitoring can be found here.

 

Other Rollover Liabilities

Schools are liable for unpaid school-funded copier costs and “O to Q” Teacher Grievances.  These costs have been auto-scheduled and locked in the titles “Copier Recoupment Set Side” and “O to Q Grievance Set Aside” respectively in the “Set Aside” section of the Galaxy Table of Organization (TO) in the following allocation categories as appropriate by type of school:

·         TL Fair Student Funding

·         TL Fair Student Funding HS

 

These liabilities will be reduced from affected schools’ Fair Student Funding allocations on June 30th.

 

Type of Rollover Liability

Payback Plan

School-Funded Copier Costs

Schools are liable for the full amount of the cost of the purchase order; information on balances owed provided by the Division of Financial Operations.

 “O to Q” Teacher Grievances

Schools are responsible for the full cost of grievances for teacher service in their schools.  Costs are applied to the rollover deficit where schools have not provided funding on their TO in Galaxy to cover the special jobs created for these payments in the prior fiscal year.

 

Where schools also rolled over Deferred Program Planning Initiative (DPPI) funds, liabilities were first reduced from DPPI funding.  Remaining copier and “O to Q” liabilities were deducted from the following allocation categories:

·         TL Fair Student Funding

·         TL Fair Student Funding HS

·         TL Instructional Programs

·         TL Instructional Programs HS

 

Download a copy of the School Allocation Memorandum No. 34, FY 2018

 

Attachment(s)

Table 1 – FY 2017 Deficit Roll – Payment Plan

Table 2 – FY 2017 Deficit Roll – Potential Credits

Table 3 – Copier and O to Q Grievance Costs

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