Accounting and Auditing
Guidelines For Student And Financial Reporting
IV REPORTING COSTS BY PROGRAM
This section describes the requirements for reporting direct financial costs to each education program. These costs are reported by program and where appropriate grade level and prototype. Specific areas of program reporting include: Regular Day, Special Education directly related to students with individual education plans, Bilingual Education, Expanded Program for Low Income, Adult Education and Other Programs, including Adult Civic Education, Regular Evening and Vacation Programs and Chapter 74 Evening.
General Program Reporting Requirements
2100 - Supervisory Services
The salary of a full-time program supervisor shall be reported in total. Included in this category would be administrator of special education, project director, administrator or teacher in charge of regular education, vocational education, bilingual education, expanded program for low income, adult education or other regular programs. The salaries of instructional personnel who have part-time supervisory responsibilities for a specific program area shall have a portion allocated to that area according to the following fraction:
time spent in specific program supervision
time spent in all programs The salary and related costs of a director of pupil personnel services (or other director) who performs the functions of a special education administrator in a school district without a special education administrator shall have a portion allocated to special education supervision according to either one of the following fractions:
special needs personnel in pupil personnel services
total personnel in pupil personnel services
OR
time spent in special education supervision
total time spent in pupil personnel services
The salaries and related costs of a special education curriculum director and other special education supervisory personnel shall have a portion allocated to special education supervision according to the following fraction:
time spent in special education supervision
total time spent in all functions 2300 - Teaching Services:
Approved Teachers shall include teachers who are certified in the specific program area, teachers who are not subject to approval by the Department of Elementary and Secondary Education and who are teaching academic subjects in an approved vocational education program and teachers who have a prior waiver or interim approval.
The salaries of approved teachers who are teaching full time in a specific program area shall be reported in total. Approved teachers who directly and exclusively serve students with individualized education plans shall be reported in total. Salaries of physical education teachers may be reported under special education only when special physical education services are specified in the individualized educational plan and the specialized services are not available to students in a regular education program. The physical education teacher's salary shall be allocated according to the following fraction. The salaries of part time approved teachers working in a specific program area shall have a portion allocated to the specific program area according to the following fraction:
time spent in specific program area
time spent in all programs
OR
number of students he/she teaches in specific program area
total number of his/her students The salaries of teacher aides working full time in a specific program under the supervision of a certified teacher in that program area shall be reported in total. The salaries of teacher aides working part time in a specific program under the supervision of a certified teacher in that program area shall have a portion allocated to the specific program area according to the following fraction
time spent in specific program area
time spent in all programs Expenditures for consultants retained specifically for program evaluation, curriculum development and other activities related to a specific program shall be reported in that program area. Reported expenditures shall be supported by written contracts or similar documentation. The salaries of approved teachers not reported under Section B 2. (e) shall be reported regardless of whether they are directly serving students or conferring with teachers who are providing service to students in special education programs. Remedial services may not be reported as a special education expenditure. Salaries of teachers for the time they are delivering services to students in prototype 502.7 shall be reported according to the following fraction:
time spent in home/hospital instruction
time spent in all programs 2400 - Textbooks and Instructional Equipment
All expenditures for textbooks and instructional equipment shall be reported by program area. Academic textbooks issued in an approved vocational education program in a comprehensive high school shall be reported as vocational. Expenditures for textbooks and instructional equipment used exclusively for expanded programs and not for regular education programs shall be reported as expanded program. Textbook expenditures shall be reported for textbooks related to the individualized educational plan of the special education student only when the textbooks differ from those available in the regular education program. 2700 - Guidance Services, including Certified School Adjustment Counselors and School Social Workers
The salaries of guidance personnel and related costs shall have a portion allocated to a specific program area according to the following fraction:
number of students in specific program area
total number of students
OR
time spent with students in specific program area
total time spent with all students In schools providing approved vocational education programs exclusively, all expenditures for guidance services shall be reported as vocational expenditures, except those reported as special education or transitional bilingual education expenditures consistent with 603 CMR 10.00. Guidance services may not be reported for Adult education and other regular programs. ( Regular evening or vacation, adult civic education or junior college) Salaries of guidance personnel may be reported under special education only when the services provided by such personnel meet the following conditions:
specified in the individualized educational plan; limited to those services and conditions listed under 603 CMR 28.503.1(h); delivered by a school adjustment counselor or school social worker; and delivered in a manner or setting unavailable to students in a regular education program. 2800 - Psychological Services
All expenditures for psychological services shall be reported by program area to the following fraction:
number of students in specific program area
total number of students
OR
time spent with students in specific program area
total time spent with all students In schools providing approved vocational education programs exclusively, all expenditures for psychological services shall be reported as vocational education expenditures, except those reported as special education or transitional bilingual education expenditures education consistent with 603 CMR 10.00. Psychological services shall not be reported for vocational evening, adult evening practical arts, apprenticeship programs, adult education, regular evening, regular vacation, adult civic education or junior college. Salaries of psychological personnel may be reported under special education only when the services provided by such personnel are specified in the individualized educational plan and are delivered to a special education student(s) in a manner or setting unavailable to students in a regular education program. The salaries of psychological personnel and related costs shall have a portion allocated to special education psychological services according to the following fraction:
time spent in special education
time spent in all programs The costs of contracted services for physicians, outside psychologist and other members of a TEAM evaluation or providers of services specified in an individualized educational plan shall be reported, provided that the expenditure is supported by a paid invoice and the cost is allocated to a particular TEAM evaluation or service. 6200 Civic Activities
Expenditures directly attributable to Parent Advisory Councils for a specific program area shall be reported in that program area. (e.g TBE Parent Advisory Councils, Adult Education Advisory Council) 9000 - Tuition
Expenditures by school districts for students tuitioned to full time regular day, special education or vocational education program shall be reported in total by program and where appropriate prototype. Actual costs of tuition for out of district placements of students in adult education or other regular education programs shall be reported as Adult Education. Tuition payment for students in approved TBE programs in other Massachusetts school districts or students tuitioned on a part time basis shall be reported according to the following fraction:
Time spent in specific program area
Time spent in all programs
B.Specific Program Reporting Requirements
Approved TBE Summer Program>
All staff equipment, materials, supplies and facility costs associated with an approved TBE summer program(s) shall be reported in total. Special Education - TEAM Evaluation Costs
Only those costs incurred after a referral for evaluation has been consented to by a parent and before the acceptance of an individualized educational plan, a finding of no need for special education services or the completion of a hearing, pursuant to 603 CMR 28.402 shall be reported as TEAM evaluation costs. The costs of all staff who participate in a TEAM evaluation, except regular education teachers, shall be reported for that portion of their time spent in TEAM evaluation activities. The costs of independent evaluations conducted in accordance with 603 CMR 28.00 shall be reported in total. Costs of substitute teachers incurred while the regular day classroom teacher is participating in the TEAM evaluation process may be reported in total. Salary expenditures for special education teachers and staff, other than regular education teachers, participating in the TEAM evaluation process as defined in 603 CMR 28.311.0, shall be:
- computed on an hourly basis; and
- deducted from that teacher's or staff's salary prior to reporting his/her salary or computing salary expenditures by prototype.
All TEAM evaluation costs shall be allocated to an identifiable TEAM evaluation. The total number of full and intermediate TEAM evaluations shall be reported. Personnel assigned full-time to the TEAM evaluation process shall document their time by keeping a written log of all students in whose TEAM evaluations they were involved. No expenditure reported under a TEAM evaluation shall be reported in any other cost category. Special Education - Annual Review Costs
Annual review costs are to be reported as special education instructional costs and allocated to the prototype in which the student is being served. The same principles that apply to allocation of time for TEAM evaluations shall be used to report expenditures for annual reviews. Special Education - Screening Costs
The costs of early childhood screening, kindergarten screening and special education screening of new students shall be reported separately and are not to be included in TEAM evaluation costs. The same principles that apply to allocation of time for TEAM evaluations shall be used to report expenditures for screening. Special Education - Tuition
Tuition in prototypes 502.5 and 502.6 are set by the Division of Purchased Services and cannot be exceeded. Retroactive rates approved by the Division of Purchased Services shall be reported in the year in which they are paid.
V. PRORATION METHODS
Students
Each school district shall report the total average membership in the following enrollment categories: regular day, special education, vocational education, transitional bilingual education, expanded program, adult education, evening and vacation programs. The full-time equivalency (FTE) shall be computed for each instructional program in which the student is enrolled. If a student is enrolled in a simultaneous program, as defined in Section I, his/her average membership shall be reported in only one enrollment category, as provided in G.L. c.70, s.2.
Full Time Equivalency (FTE) Calculation - General Reporting
Membership data for students enrolled in only one program or prototype (part or entire school year) shall be reported on a FTE basis according to the following general formula:
Regular Day FTE =
time scheduled for program per week
length of school week |
X |
days in membership
length of school year
|
Example 1
A student is enrolled in a regular education program in an elementary school in a school district for the entire school year. The student's program is 5 ¼ hours per day, which is the usual length of the school day for this school district's elementary students. The length of the elementary school year in this district is 182 days.
5 ¼ hours per day X 5 days
5 ¼ hours per day X 5 days |
X |
182 days
182 days |
= |
1.0 |
26 ¼ hours
26 ¼ hours |
X |
182 days
182 days |
= |
1.0 |
Example 2
A student is enrolled in a high school regular education program in a local school district for 64 school days. The length of the student's program is 30 hours per week, the usual length of the program week for this district's high school. The length of the high school year is 180 days. The student subsequently transfers to another town and attends a regular education program at the regional high school for 118 school days. The length of the student's program at this second high school is 32 hours per week, the usual length of the program week for this regional high school, and the length of the school year is 182 days.
Each school district shall report its appropriate regular day FTE for this student as follows:
For the Local School District:
Regular Day FTE =
30 hours per week
30 hours per week |
X |
64 days
180 days |
= |
0.35 |
For the Regional School District:
Regular DayFTE =
32 hours per week
32 hours per week |
X |
118 days
182 days |
= |
0.65 |
Length of individual student program per week will replace length of school week in the denominator of the fraction for the computation of students who are also enrolled in transitional bilingual and special education programs
Whenever the length of school year is in excess of 185 days, 180 days shall be used in the denominator of this fraction for the computation of full-time equivalency. Pre-School/Kindergarten
Membership data for students enrolled in regular day or transitional bilingual pre-school and kindergarten programs shall be reported on a FTE basis using the following formula:
FTE =
hours of program instruction per week
length of individual student program per week |
X |
days in membership
length of school year |
Each school district shall report regular day and transitional bilingual pre-school and kindergarten FTE membership separately from all other regular day and transitional bilingual education FTE membership. Each school district shall also report the average daily hours of instruction for regular day and transitional bilingual pre-school and kindergarten programs. Special Education
Membership data for special education programs shall be reported on a FTE basis according to the following formula unless otherwise noted below.
FTE =
*hours of direct special
education instruction per week
length of individual student program per week |
X |
days in membership
length of school year |
*Note: minutes may be used instead of hours
Students in special education programs may be enrolled for more than 185 days (exclusive of weekends, holidays and vacation days) if the student's evaluation TEAM has determined the need for an extended year special education program, as provided in 603 CMR 28.00.
Example 3
A special needs elementary student in program prototype 502.4 (substantially separate) receives all of his/her instruction in a special education classroom. This student's individualized educational plan specifies that the student only attend classes for 3 hours per day. The length of the normal elementary program is 5 hours per day. The student is enrolled for the entire school year of 180 days.
Special Education FTE =
3 hours per day X 5 days
3 hours per day X 5 days |
X |
180 days
180 days |
= |
1.0 |
15 hours
15 hours |
X |
180 days
180 days |
= |
1.0 |
502.1 Regular day program with modifications
| FTE |
= |
0.1 |
x |
days in membership
length of school year |
502.Day school program
502.6 Residential school program, including pre-school residential program
| FTE |
= |
days in membership
length of school year(school district) |
Example 4
A special needs student in program prototype 502.6 (residential) is enrolled in an approved private school for an entire calendar year (365 days). In the determination of the "days in membership," weekend days, holidays and vacation days are excluded. In this example, 104 weekend days, 13 holidays and 25 vacation days are subtracted from 365 days to determine the "days in membership" of 213 days. The length of the school year of the sending school district is 180 days. 502.7 Home, hospital and regional adolescent program :Students attending private school completely at private expense, when special education is being provided by the school district in accordance with 603 CMR 28.00.
| FTE |
= |
hours of direct SPED instruction per week
length of school week |
x |
days in membership
length of school year |
Example 5
An elementary school student is enrolled in a school district for the entire school year of 180 days. The length of this student's regular program is 5 hours per day, the usual length of the school day for elementary students in this district. The student was enrolled in a regular education program for 140 school days prior to an injury which resulted in 2 months of hospitalization. Five school days after the injury occurred, this student was enrolled in special education program prototype 502.7 (home and hospital). The student received one hour of instruction per school day for the remainder of the school year from a regular education teacher.
For the first 145 school days (140 days prior to injury plus 5 days prior to commencement of services under special education program prototype 502.7):
Regular Day FTE =
time scheduled for program per week
length of school week |
X |
days in membership
length of school year |
5 hours per day X 5 days (25 hours)
5 hours per day X 5 days (25 hours) |
X |
145 dyas
180 dyas |
= |
0.81 |
For the remaining 35 school days (after commencement of services under special education program prototype 502.7):
Special Education FTE =
hours of direct special education instruction per week
length of individual student program per week |
X |
days in membership
length of school year |
1 hour per day X 5 days (5 hours)
5 hours per day X 5 days (25 hours) |
X |
35 days
180 days |
= |
0.04 |
Special Education FTE =
days in membership
length of school year |
= |
213 days
180 days |
= |
1.18 |
No regular day FTE shall be reported for a student while enrolled in prototype 502.7. 502.8 Program for children ages 3 and 4
Each school district shall report special education pre-school and kindergarten FTE membership separately from all other special education program FTE membership. Each school district shall also report the average daily hours of instruction for special education pre-school and kindergarten programs.
The Department of Elementary and Secondary Education will convert the reported full-time equivalency membership data for pre-school and kindergarten consistent with G.L. c.70, §2.
For each student enrolled in a program for 12.5 hours or less each week:
| FTE |
= |
0.5 |
x |
days in membership
length of school year |
Example 6
A special needs four-year-old student is enrolled in program prototype 502.8 (pre-school program for children ages 3 and 4) for 90 school days, one-half of the length of the 180-day school year. The length of this student's program as specified in the individualized educational plan is 3 days a week for 3 hours each day.
Special Education FTE =
| 0.5 |
x |
90 days (days in membership)
180 days (length of school year) |
= |
0.25 |
For each student enrolled in a program for more than 12.5 hours each week:
| FTE |
= |
1.0 |
x |
days in membership
length of school year |
Vocational Day Reporting Requirements
The following formula shall be used in computing FTE for each student, including post-graduates and post secondary students, enrolled in an approved vocational day education program:
| FTE |
= |
days in membership
length of school year |
Example 7
A student is enrolled in a full-time approved vocational program in a regional vocational technical high school for 160 days. The length of the school year in this district is 187 days. Prior to being enrolled in this program, the student was enrolled in a local school district high school regular day program for 24 days. The length of this school's school year is 181 days. The student's program in the local school district high school was 5 3/4 hours each day, the usual length of the program. Each school district shall report its appropriate FTE for this student as follows:
For the Local School District:
Regular Day FTE =
time scheduled for program per week
length of school week |
x |
days in membership
length of school year |
5 ¾ hours per day X 5 days (28 3/4 hours)
¾ hours per day X 5 days (28 3/4 hours) |
x |
24 days
180 days |
= |
0.13 |
For the Regional Vocational District:
Vocational Day FTE =
days in membership
length of school year |
x |
160 days
180 days |
= |
0.89 |
The following formula shall be used in computing vocational education FTE for each student enrolled full-time in a regular day program and also enrolled in an approved vocational education program in either the same or a separate school district after the close of the regular school day (shop courses only) or for each student enrolled half-time in an approved vocational education program regardless of whether or not the student is also enrolled half-time in a regular day program in either the same or a separate school district:
| Full-time equivalency |
= |
0.5 |
x |
days in membership
length of school year |
Transitional Bilingual Education (TBE)Program Reporting Requirements
Membership data for approved transitional bilingual education programs shall be reported on a FTE basis, which shall be computed using the following formula:
| FTE |
= |
hours of direct TBE instruction per week
length of individual student program per week |
x |
days in membership
length of school year |
All Other Program Reporting Requirements
Membership data for approved vocational evening, adult evening practical arts, and apprenticeship programs, bilingual summer, adult education, regular evening, adult civic education, regular vacation and junior college programs shall be reported on a FTE basis, which shall be computed using the following formula:
| FTE |
= |
days in membership
length of school year |
Financial - Apportionment of Costs
Whenever an expenditure occurs, it is always necessary to determine the function under which it should be recorded. As long as an expenditure is for a single purpose the problem is not so great. For example, a salary paid to a full-time elementary school teacher presents no difficult problem of classification. It is recorded under instruction, teaching (2300). However, the situation is different when a person who performs custodial work also drives a school bus. Here, a single expenditure , the salary of this individual, is made for two purposes, operation of plant and pupil transportation. The problem here is to determine what part of the salary is properly an expense of operation of plant and what part is properly an expense of the pupil transportation program.
Necessity for Proration
While the alternative to prorating is simple, unfortunately, it does not, for local district purposes, present accurate information concerning the services and the benefits that are being obtained for the money being spent. Most school districts have many services which are performed by individuals serving more than one function, and different activities which share the same facilities as those used by the regular day schools. Because of these conditions, it is highly probable that without proration the accounts of such districts would show no money being spent for services that are actually being provided and paid for, while showing excessive sums of money being spent on certain activities for the amount of services being provided. Thus, there is the necessity for prorating individual expenditures made for more than one purpose - a necessity for determining the proportionate parts of such expenditures that are properly chargeable to different accounts. Undoubtedly, there will at times be expenditures to which these methods will not apply. In such cases, some method adjusted to particular local conditions, or modifications in the methods presented here, may be necessary Methods for Prorating Expenditures
There are many methods used for prorating expenditures. The most common of these are described below:
Time Method consists of allocating a part of an expenditure to a given activity in proportion to the time spent in the activity. Average Daily Membership Method consists of allocating a part of an expenditure to a given activity in proportion to the average daily membership of the pupils engaged in the activity. The Time-floor-area Method consists of allocating a part of an expenditure to a given activity in proportion to the gross floor area used by the activity, and the length of time the floor area is used. The Hour-consumption Method consists of allocating a part of an expenditure to a given activity in proportion to the length of time the activity uses facilities, and the hourly rate at which the utility is consumed in the use of such facilities. Number of pupils Method consists of allocating a part of an expenditure to a given activity in proportion to the actual number (not Average Daily Membership or Average Daily Attendance) of pupils involved. Mileage Method consists of allocating a part of an expenditure to a given activity in proportion to the mileage traveled for the activity. Quantity consumed Method consists of allocating a part of an expenditure to a given activity in proportion to the actual consumption of supplies or other commodities. Considerations in selecting a Method for Prorating Expenditures
One of the most important considerations in selecting a method for prorating expenditures is that it have a direct relationship to the activity for which the expenditure is being prorated. To illustrate, floor area has little, if any, direct bearing on determining the workload of a teacher. Consequently, it could not qualify as a desirable basis for prorating teachers' salaries. Yet, floor area is a very significant factor in determining the workload of a janitor, and would be a desirable element in prorating janitors' salaries.
Also important in selecting a method of prorating are the practical considerations involved. The method must be as simple as conditions will allow, and it must be feasible to apply. Application of the Methods for Prorating
There are three basis prorating problems:
Prorating between basic functional classifications, for example, prorating between operation of plant and maintenance of plant accounts, the salary of a person who performs both custodial and maintenance work; Prorating between program areas or organization units (elementary schools, secondary schools, summer schools etc.) For example, prorating between the elementary school and the secondary school accounts, the salary of a teacher who serves both an elementary and a secondary school; and Prorating expenditures to community services accounts for example, prorating the expenditures for heat, light, etc., for community social activities, forums, plays, etc., which are held in school buildings. Establishing Standards for Prorating
In order to obtain the benefits which prorating offers, and to minimize the work involved, school districts may find it expedient, at the beginning of the year or other appropriate time, to determine the general classes of expenditures which are to be prorated and establish standard ratios for the proration of each class. Once set up, the standard ratios could then be applied to the particular classes of expenditures whiout the necessity for involved claculations every time an expenditure is made. These ratios should be established in view of local conditions.
To illustrate the establishment of standards for prorating, a school district might determine to prorate heating expenditures between elementary and secondary school accounts in a situation where both schools share the same building. The recommended basis for prorating expenditures for heat is the time-floor area method. Since both the elementary and secondary schools are in session approximately the same amount of time, the time factor here can be ignored and the ratio set up on the basis of floor area. In this case, suppose the total floor area of the building was 25,000 square feet, of which the elementary school used 10,000 square feet and the secondary school used 15,000 square feet. The ratio for prorating to elementary school accounts in this case would be 10,000 to 25,000 or two-fifths and for prorating to secondary school accounts, it would be 15,000 to 25,000 or three-fifths. Once the ratio was determined, any heating expenditures during the year could be prorated two-fifths to elementary, and three-fifths to secondary school accounts. In like manner, standard ratios could be established for other classes of expenditures.
It should be emphasized that proration is not being recommended as a substitute for the recording of actual expenditues for different activities when such is feasible. Through the use of adequate coding, it may be possible to record many expenditures without prorating. However, when it is necessary, the methods recomended will provide guidance in establishing a satisfactory and consistent system of prorating.
VI. REPORTING BY MUNICIPAL AGENCIES
In accordance with CMR 10.04, a municipality that operates its own school district may report expenditures on the End of Year Financial Report when there is a cost to the town only where there is an agreement between municipal and school officials. This section describes how to allocate, report and document expenditures on behalf of school districts and the procedures to follow where alternative allocation methods are allowed or when school and municipal officials disagree on the correct allocation and reporting of expenditures. All expenditures must be classified according to Section III of these Guidelines.
A Type of Expenditures
Only the following expenditures from local appropriations by a municipal agency other than the local school district which result in services directly related to the local school district shall be reported. A school district may request approval of the Commissioner of Education to use an alternative method where allocation methods are offered.
1000 - Administrative Services: The cost of the municipal accounting, auditing, central data processing and central purchasing and financial services if they are provided by the municipality. The cost shall be computed by multiplying (1) the total school committee appropriation divided by the total amount to be raised as determined by the Department of Revenue on the tax rate recapitulation sheet, which is the total amount the municipality must spend for all services, by (2) the total cost of administrative services; OR by multiplying the number of students enrolled in the school district by the state-wide average cost per student of such services. The state-wide average cost shall be estimated by the Department of Elementary and Secondary Education and reported to school and municipal officials by March 1 of the fiscal year preceding the fiscal year for which it is estimated. 1500 Employees Benefits Administration: The indirect costs of administering employee retirement programs shall be computed by multiplying (1) the costs of salaries and supplies for such administration by (2) the number of school department employees covered by the retirement system divided by the total number of municipal employees covered by the retirement system.
The indirect costs of administering employee and non-employee insurance programs shall be computed by multiplying (1) the costs of salaries and supplies for such administration by (2) the number of school department employees covered by insurance divided by the total number of municipal employees covered by insurance. Bonded Instruction: Expenditures for textbooks and instructional equipment and technology made at the request of the school district from capital leases or funds raised through the issuance of municipal bonds should be reported by the school committee in the appropriate category of spending as defined in the Directions to the End of Year Pupil and Financial Report and these Guidelines. 2500 - Educational Media Services - Library Services - Exclusive of Capital Outlay: The activities of librarians and catalogers, and the costs associated with cataloguing books, pamphlets, periodicals and other materials for use by school district students where there is an agreement between the school committee and the library board for specific services to be provided to students.
School and municipal officials shall include the method of allocation of costs in the agreement between the school committee and the library board for the provision of specific library services to district students. 3200 - Health Services: The salaries of health personnel who provide direct services or instruction to public school students or school department employees where there is an agreement between the school committee and the municipality for the provision of these services; related costs for supplies, materials and other direct expenditures in support of these services; and the salaries of public safety officers, on an hourly basis, who provide direct classroom instruction on alcohol and substance abuse and violence prevention where there is an agreement between the school committee and the municipality for the provision of these services. Costs associated with these services to non-public schools must be reported separately. 3300 - Student Transportation Services: All costs incurred as a result of programs transporting students once daily to and from school. These costs must be reported separately from all expenditures relative to services to non-public schools. 4000 - Operation and Maintenance of Plant: The direct costs of salaries, supplies, materials and contractual expenses for the ordinary and extraordinary maintenance of school buildings, grounds and equipment. School maintenance expenditures shall be reported for services within a school building or on school grounds. The costs of maintaining other public property, such as property directly adjacent to school property, shall not be reported unless there is a specific agreement between the school committee and the municipality for the provision of these services. Contractual expenditures classified as a 4300 functional category must not exceed the per school, per project dollar limit of $50,000 for extraordinary maintenance. 5100 - Employee Retirement Programs: The actual costs of pensions paid to school department retirees or the actual costs of assessments paid to state, county or municipal retirement systems on account of school department employees or retirees, including any special assessments for early retirement incentive programs for school department employees. 5200 - Insurance Programs: The direct insurance premiums for school employees, after deducting all employee contributions and contributions to self-insurance trust funds from the municipality's general fund. 5250 - Insurance for Retired School Employees:The health insurance premiums for retired school department employees after deducting any retiree contributions and assessments for retired school department employees under G.L. c.32A. Although all retiree insurance costs should be reported, only those costs that have been reported consistently since 1993 will be counted toward meeting the Net School Spending Requirement established each each year by the Education Reform Law. 5260 - Non Employee Insurance: The direct insurance premiums for school buildings, grounds, equipment and liability coverage and contributions to non-employee self-insurance trust funds from the municipality's general fund. 5300 - Rental/Lease of Local Buildings and Equipment: Expenditures made under the terms of a lease or rental contract at the request of the school district for buildings or non-instructional equipment in accordance with G.L. c. 40. Such expenditures shall not include any capital leases or lease/purchase agreements which provides for the municipality's acquisition of the leased building or non-instructional equipment at the conclusion of the lease term. Starting in FY'98, the fourth year of a long term lease contract must be reported as a capital costs in the 7000 function. Municipalities will be asked to document costs associated with educational leases. (See Appendix A) 5400 - Short Term Debt Service/Interest (RANS): Actual interest paid in borrowing for Revenue Anticipation Notes (RANS) to support current year school district operations which shall be computed by multiplying (1) the total interest paid by the municipality by (2) the total school committee appropriation divided by the total amount to be raised as determined by the Department of Revenue on the tax rate recapitulation sheet. 5450 - Short Term Debt Service/Interest(BANS): Actual interest paid in borrowing for Bond Anticipation Notes (BANS) on bonds and loans used to finance the purchase of textbooks, equipment or technology and school building maintenance or construction. 5500 - Other Fixed Charges: Other items of a recurrent nature for school purposes, such as the direct costs of bank charges for school department accounts, the salaries of crossing guards, the costs of public safety inspections. 6800 - Health Services for Non-Public Schools: The salaries of health personnel who provide direct services which state law requires be provided to non-public students or non-public school employees and who make regularly scheduled visits to non-public schools for this purpose; related costs for supplies, materials and other direct expenditures in support of these services and other services provided in accordance with G.L.c.71, § 57. 6900 - Transportation Services for Non-Public Schools: The cost incurred in transporting students once daily to and from non-public schools in accordance with G.L. c. 76, §. 1. 7000 - Acquisition, Improvement and Replacement of Fixed Assets: Such costs shall be limited to specific appropriated items, including school building planning costs and lease/purchases of buildings or non-instructional equipment, that are intended to acquire a new asset, for major reconstruction projects as defined by 603 CMR 38.00, for maintenance projects costing over fifty thousand dollars ($50,000) or capital leases. The actual cost of transportation vehicles and the allowed amortization consistent with 603 CMR 10.08. (See Amortization Schedule - Attachment B) 8100 - Long Term Debt Retirement/School Construction: The annual principal of loans used to finance the purchase or construction of schools. 8200 - Long Term Debt Service/School Construction: The annual interest payment on bonds and loans used to finance the purchase or construction of schools. 8400 - Long Term Debt Service/Educational Expenditures: The annual interest on bonds and loans used to finance the purchase of books, instructional equipment and extraordinary maintenance projects. 8600 - Long Term Debt Service/Other: The interest on bonds and loans used to finance the purchase of non instructional equipment, and to pay for capital maintenance projects in excess of fifty thousand dollars ($50,000) 9000 - Programs with Other Schools, including:
- 9100 - Programs with Other Districts in Massachusetts
- 9110 - Tuition Under School Choice
- 9120 - Tuition to Charter Schools
- 9200 - Programs with Districts in Other States
- 9300 - Programs with Non-Public Schools
- 9400 - Payments to Collaboratives
9500 - Assessments to Regional School Districts: The payments appropriated and due according to regional school agreements and G.L. c. 70 shall be reported in total. Documentation Requirements
Each municipality shall comply with the documentation requirements cited in 603 CMR 10.05 and Section IX of these guidelines. Allocation Methods
Each school district shall choose one allocation method where alternatives are offered, shall use this method consistently from year to year, and may change methods only with the approval of the Commissioner of Education. If school and municipal officials wish to use an allocation method of their own devise, they shall request and receive the approval of the Commissioner of Education before they put this method into use, and they shall use this method consistently from year to year and may change methods only upon the approval of the Commissioner. Resolution of Disputes
When school and municipal officials cannot agree on the correct reporting, allocation and documentation of expenditures by municipal agencies for educational purposes, either party may appeal to the Commissioner of Education, who shall appoint a designee to conduct an informal hearing to encourage the parties to reach an agreement and to make a final determination if no agreement can be reached. The Commissioner of Education shall seek the advice and consultation of the Commissioner of Revenue (or designee) in this hearing. Non Operating Towns
Non operating towns are responsible for reporting all tuitioned out students and the associated costs on Schedules 1, 11 and 19 of the End of Year Pupil and Financial Report. If the municipality provides transportation to these students, Schedule 7 of the End of Year Report must be completed. The town must also report the total amount of assessment paid to a member Regional School District.
VII. ANNUAL SCHOOL SPENDING REQUIREMENTS
The Commissioner of Education shall determine each school district's actual net school spending in the prior fiscal year and the estimated net school spending in the current year from information contained in the End-of-Year Pupil and Financial Report.
Eligible Net School Spending Categories
The sum of the following expenditures for public education from local revenues and M.G.L. c. 70 school aid, reported in accordance with 603 CMR 10.06 and these Guidelines shall be considered a school district's annual net school spending for purposes of determining compliance with the requirements of M.G.L., c70.
1000 - All Administrative Services
2000 - All Instructional Services
3100 - Attendance Services
3200 - Health Services
3400 - Food Services not including the cost of food
3510 - Athletic Services
3520 - Other Student Activities
4000 - All Operation and Maintenance of Plant
5100 - Employee Retirement
5200 - Insurance Programs
5260 - Non employee insurance
5300 - Rental-Lease of Land, Buildings and Equipment
5400 - Short Term Debt Service/Interest - RANS
9100 - Programs with Other Districts in Massachusetts
9110 - School Choice Tuition
9120 - Tuition to Charter Schools
9200 - Programs with School Districts in Other States
9300 - Programs with Schools Other than Public Schools
9400 - Payments to Collaboratives
Non Eligible Net School Spending Categories
Net school spending shall not include any of the above items expended for evening programs, adult programs and vacation programs, as defined in 603 CMR 10.02. Net School Spending shall not include capital leases after the third reporting year. Net School Spending shall not include insurance costs for retirees if these costs were not reported in 1993 and consistently thereafter. Spending for the items specified in 603 CMR 10.06 shall be reduced by the school district's general fund receipts for tuition received for state wards or other students attending the district's schools, earnings on investments by regional school districts, rental fees for the use of school buildings, insurance reimbursements for services provided to students in the district's schools, reimbursements for school choice and charter school students attending schools outside the district and other general fund revenues generated by the school district available to support current year operating expenses, with the exception of Medicade reimbursement.
Compliance
The Department shall compare each school district's net school spending in the prior fiscal year with the net school spending required by G.L. c.70, s.6. For the purposes of this calculation, actual expenditures in the prior year by municipal departments other than the school department for school district purposes shall be used for the following expenditure categories:
School district insurance programs and employee retirement programs, interest on short term borrowing in anticipation of revenue to fund current year operating expenses (RANS), tuition payments on behalf of resident students, assessments for charter school and school choice students.
Estimated expenditures by municipal departments other than the school department shall be deemed to be the actual expenditures in all of the other categories in which municipalities are permitted to report expenditures pursuant to 603 CMR 10.06 If the actual net school spending in the prior fiscal year meets or exceeds the required net school spending as determined by G.L. c. 70, § 6, the school district shall be deemed to have met its obligations under the terms of the statute. If the actual net school spending in the prior fiscal year is less than the required net school spending as determined by G.L. c. 70, s. 6 but is greater than or equal to 95 percent of the required amount, the difference between the actual and the required amount shall be added to the required net school spending in the current fiscal year and shall be spent by the school committee or other municipal agency for any of the categories included in the definition of net school spending.
Example
A school district spends 97% of the required net school spending in FY98. Three percent of the required amount for FY98 is added to the required net school spending for FY99. If the actual net school spending in the prior fiscal year is less than 95 percent of the required net school spending as determined by G.L. c. 70, s. 6, five percent of the required amount shall be added to the required net school spending in the current fiscal year and shall be spent by the school committee or other municipal agency for any of the categories included in the definition of net school spending. The difference between the actual net school spending and 95 percent of the required net school spending shall be deducted from the Chapter 70 distribution of the district in the current year but shall not affect the required amount of net school spending, including any prior year deficiencies, in the current year. The Commissioner of Revenue and the Treasurer shall make this deduction at the request of the Commissioner of Education at a time determined by the Commissioner of Revenue.
Example
A school district spends 93% of the required net school spending in FY98. Five percent of the required amount for FY98 is added to the required net school spending for FY99, and two percent of the required amount for FY98 is deducted from the state school aid distribution for FY99. If, in any year when a district has been ordered to increase its required net school spending because of prior year deficiencies, the district's must spend the required carryover amount and at least 95% of the new required net school spending. The difference between the district spending and the total spending requirement must be added to the next year's required net school spending.
Example
In FY97, with its required net school spending set at $1,000,000, a school district spends $960,000 (96%). In FY98, the required net school spending is set at $1.1 million plus the $40,000 carryover from the prior year, totaling $1,140,000. In FY98 the district must spend the $40,000 carryover from FY97 and 95% of the FY98 requirement of $1,100,000. The district must spend a total of $1,085,000 ($40,000 + $1,045,000) to meet its FY98 requirement. The balance up to $55,000 must be carried over and added to the required amount for FY99. The Commissioner of Education shall notify school superintendents and municipal officials of any prior year spending deficiency and resulting expenditure obligation carried forward into the current fiscal year pursuant to M.G.L., c.70 s.11 within thirty days after the submission of the End-of-Year Pupil and Financial Report. In such instances, any funds remaining in the school district's account at the close of the fiscal year shall be reserved by the municipal account or regional school treasurer and shall be made available to the school district without further appropriation. If the amount of the prior year's net school spending deficiency is greater than the amount of the school district's unspent funds available to be carried forward, an amount sufficient to meet the carried forward spending obligation must be appropriated by the municipality or municipalities responsible for the financial support of the school district.
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