Archived Information

Accounting and Auditing

2003-2004 End of Year Pupil and Financial Report

FY'03 50/50 and Circuit Breaker reporting issues

Some questions have been raised regarding the accounting treatment of FY'03 Final 50/50 reimbursements. As you may recall, we did not have sufficient funds in FY'03 to pay all residential private school tuitions. We stopped paying private schools directly as of March 31, 2003. For the fourth quarter we informed districts that we would reimburse them for the state share of their residential tuitions.

The reimbursement was sent to districts in two payments. The first payment was for approximately 60% of the fourth quarter. This was done with federal grant funds. At that time and at the End of Year Report (EOYR) Workshops, districts were instructed to account for the first 60% payment as a federal grant (administered by DOE). The second payment was from Circuit Breaker funds and was sent out in late September.

DOR had issued guidance (2003-01B) entitled FY'03 Special Education Costs. Districts were allowed to accrue the final payment as a receivable, in essence, allowing them to spend an amount over and above their School Committee Appropriation.

It was always our impression that, due to the timing of the payments, districts may have funds that would carry forward to FY'04. Districts were informed that these funds could only be used for Special Education expenses. Consequently, these funds could be used for either FY'03 or FY'04 Special Education expenses. Both options are discussed below.

• If your district used the funds to pay FY'03 tuitions, those tuitions charged to the federal grant should be reported as a 9000 series expenditure on line 3070 - Column 1, and the tuitions paid from the second payment (40%) should be reported on line 3070 Column 3 in the FY'03 EOYR.

• If there were funds remaining in the account and they were used to pay FY'04 tuitions, those tuitions should be reported on lines 3072-3078 Column - 3 of the FY'04 EOYR.

All expenditures from FY'04 Circuit Breaker reimbursements should be accounted for and reported in the appropriate Circuit Breaker column (Col 5) on Schedule 1 and Schedule 3 of the FY'04 End of Year Pupil & Financial Report. In addition, no FY'05 prepaid tuition should be reported in the FY'04 End of Year Pupil & Financial Report.