Archived Information

School Finance: Circuit Breaker

FY'04 Final Circuit Breaker

We have recently concluded calculating amounts for the final FY'04 Circuit Breaker reimbursements . As you know, in it's first year of implementation, Circuit Breaker reimbursed high cost special needs students in the same year that costs occurred. As a result, reserves were set aside in anticipation of claims of new students throughout the year. It was anticipated that if the new claims did not exceed the total amount of the reserves, the remaining funds would be redistributed to districts at the end of the fiscal year, increasing the reimbursement rate. Combined with the reserves, the final reimbursement rate for Circuit Breaker in FY'04 is 40.2%.

Accounting for final payments

As stated in the law, amounts reimbursed to districts under this program are available to the School Committee without further appropriation. We have had discussions with the Division of Local Services in the Department of Revenue and concluded that these amounts should remain in the Special Education Reimbursement Fund and be available in FY'05. It should be emphasized that these funds can only be used for Special Education expenses.

Reporting revenue and expenses for FY'04

Districts should report all revenue and expenses on their FY'04 End of Year Pupil & Financial Report. This includes amounts paid directly by the Commonwealth to Private Special Education schools on behalf of districts. Revenue should be reported in Schedule 1 on Line 180. Expenses should be reported on the appropriate lines (lines 2801-3080 Column 5) on Schedule 1 and on the appropriate lines on Schedule 4.

FY'05 State Budget

In FY05 there have been changes to the program enacted with the State budget. The program has been changed to a true reimbursement program. In essence, districts will be reimbursed in FY'05 for eligible students reported on FY'04 final claims. Since this is a true reimbursement program, it is no longer necessary to submit residential invoices to us for payment. Districts will now pay 100% of all out of district tuition invoices, including residential placements, and will be reimbursed accordingly.

The FY'05 Circuit Breaker line item was increased by $80m. The reimbursement rate for eligible students (those whose costs are in excess of four times the FY'04 statewide per pupil foundation ($29,320)) will be 72% and 100% for those students identified as Abandoned, Homeless and/or State Wards. Reimbursements will be made in four quarterly payments of 25% each quarter. The initial FY'05 district listing is also on our website.

In addition, FY'05 budget language includes a $3m set aside to assist districts experiencing extraordinary cost increases greater than 25% of FY'04 costs. The process for which you can file a claim for extraordinary increases will be available later in the fall.

The FY'05 budget language also states that the Department shall conduct audits of FY'04 circuit breaker claims. If your district is selected for an audit, you will be notified in writing. We would appreciate it if you and your staff will give us your full cooperation and provide any documents requested in a timely manner.

Finally, we are currently in the process of creating FY'05 circuit breaker update files to be maintained on the local level. This will allow districts to update student changes as they occur and eliminate the burden of entering all student changes at once. We will let you know as soon as the update files are available.

To assist you in reconciling detail claims, payment files detailing student reimbursement for both FY'04 and FY'05 are now available on the Secure Portal. In order to work with these files, please download them to your hard drive.