Fiscal RegulationsFiscal RegulationsDecember 2004-June 2005December 2004-June 2005

N.J.A.C. 6A:10A-7 & 8N.J.A.C. 6A:10A-7 & 8

7.1 Discretionary Education 7.1 Discretionary Education Opportunity Aid Governance Opportunity Aid Governance

& Mid-year Awards& Mid-year Awards

Fiscal and Program Standards Fiscal and Program Standards for DEOA Disbursements for DEOA Disbursements

Mid-year Award Application Mid-year Award Application ProceduresProcedures

No Significant Changes

6A:10A-7.2 Cost Efficiency 6A:10A-7.2 Cost Efficiency in 2005-2006 Budgetsin 2005-2006 Budgets

Department Efficiency Study Department Efficiency Study (DES) (DES)

Review of Administrative Cost Review of Administrative Cost Limits Limits

Presumptive Budget CalculationPresumptive Budget Calculation Incremental Cost of Opening a Incremental Cost of Opening a

New School Facility New School Facility Education Opportunity Aid Education Opportunity Aid

(EOA) in 2005-2006(EOA) in 2005-2006

Department Efficiency StudyDepartment Efficiency Study

Compares Median per Pupil Compares Median per Pupil Spending in 9 Cost Areas with Spending in 9 Cost Areas with Other School Districts Other School Districts

Compares Median per Pupil Compares Median per Pupil Spending in 6 GroupsSpending in 6 Groups

DES – Cost Reductions DES – Cost Reductions Applied in Priority OrderApplied in Priority Order

1.1. Spending for more effective Spending for more effective instructioninstruction

2.2. Spending for greater efficiencySpending for greater efficiency

3.3. Funding for inflationFunding for inflation

4.4. Reductions in the school Reductions in the school district’s request for DEOA. district’s request for DEOA.

Administrative Cost LimitsAdministrative Cost Limits

Administrative costs may not Administrative costs may not increase by more than 2.5 % or increase by more than 2.5 % or the cost of living, whichever is the cost of living, whichever is

greater.greater.

Presumptive Budget Calculation Presumptive Budget Calculation

The Department will calculate the The Department will calculate the presumptive budget as the presumptive budget as the

2004-2005 base budget 2004-2005 base budget (including DEOA) increased by (including DEOA) increased by

2.5% or CPI, whichever is 2.5% or CPI, whichever is greater, plus the incremental greater, plus the incremental

new school facility costs new school facility costs approved by the Department. approved by the Department.

Incremental Cost of Opening a Incremental Cost of Opening a New School FacilityNew School Facility

Requests were due to the Requests were due to the Department by November 30, Department by November 30, 2004.2004.

Requests will be reviewed by Requests will be reviewed by the Department and a the Department and a determination will be made on determination will be made on the amount necessary to meet the amount necessary to meet the incremental new facility cost. the incremental new facility cost.

Education Opportunity Aid Education Opportunity Aid (EOA) in 2005-2006 (EOA) in 2005-2006

EOA will be calculated as the EOA will be calculated as the greater of:greater of:

EOA formula fundingEOA formula funding (parity) (parity)

OROR EOA using the presumptive EOA using the presumptive

budget formula budget formula pursuant to pursuant to N.J.A.C. 6A:10A-7.2(g).N.J.A.C. 6A:10A-7.2(g).

6A:10A-7.3 Application for 6A:10A-7.3 Application for DEOA in 2005-2006DEOA in 2005-2006

Abbott School Districts May Apply for Abbott School Districts May Apply for DEOA in 2005-2006 through the DEOA in 2005-2006 through the

process outlined in the code process outlined in the code (N.J.A.C. 6A:10A-7) and (N.J.A.C. 6A:10A-7) and

summarized here.summarized here.

DEOA Eligibility CriteriaDEOA Eligibility Criteria

School district must have met all the School district must have met all the conditions for disbursement of DEOA conditions for disbursement of DEOA in FY 05 and must continue to in FY 05 and must continue to maintain minimal, customary and maintain minimal, customary and statutory standards for efficient statutory standards for efficient financial management and business financial management and business operations and continue to follow operations and continue to follow customary, basic and required customary, basic and required instructional standards, policies and instructional standards, policies and practices as set forth inpractices as set forth in

N.J.A.C. 6A:10A-7.1. N.J.A.C. 6A:10A-7.1.

DEOA Eligibility CriteriaDEOA Eligibility Criteria

Foundational education programFoundational education program Aligned preschool -12 curriculum Aligned preschool -12 curriculum Documented use of a student-level Documented use of a student-level

database to evaluate student performance database to evaluate student performance and to adjust instructionand to adjust instruction

A system of evaluation and assistance that A system of evaluation and assistance that is tied to the instructional priorities and is tied to the instructional priorities and curriculum and are reflected in the curriculum and are reflected in the professional improvement plansprofessional improvement plans

Provide a safe and clean school Provide a safe and clean school environment and ensure timely service and environment and ensure timely service and delivery to schools of instructional supplies delivery to schools of instructional supplies and materials and other goods and and materials and other goods and services required to operate an efficient services required to operate an efficient school system. school system.

DEOA – Consider All Available DEOA – Consider All Available Resources, Reallocations & Resources, Reallocations & Potential EfficienciesPotential Efficiencies Consider the following before submitting a request Consider the following before submitting a request

for DEOA (only changes are highlighted here) for DEOA (only changes are highlighted here)

Costs in excess of the efficiency Costs in excess of the efficiency measures established by the DESmeasures established by the DES

All expenditures not evaluated by the DES All expenditures not evaluated by the DES shall be reviewed for efficiencyshall be reviewed for efficiency

Salary appropriations for vacant positions Salary appropriations for vacant positions in excess of step in excess of step oneone of the school of the school district’s salary scale for position/title district’s salary scale for position/title except for positions that are difficult to fillexcept for positions that are difficult to fill

Requests for DEOA shall include: Requests for DEOA shall include:

Evidence of student instructional needsEvidence of student instructional needs Evidence that proposed intervention to Evidence that proposed intervention to

address documented needs can be address documented needs can be expected to be effective in improving expected to be effective in improving instructioninstruction

Documentation that the findings of the Documentation that the findings of the DES have been appliedDES have been applied

Demonstration that costs that exceed Demonstration that costs that exceed the midpoint average median in the the midpoint average median in the DES are necessary and justifiableDES are necessary and justifiable

Requests for DEOA shall include:Requests for DEOA shall include: Evidence that current programs, services, Evidence that current programs, services,

practices, materials or positions in the area practices, materials or positions in the area funds for new programs, services, funds for new programs, services, practices, materials or positions are practices, materials or positions are requested are essential to student requested are essential to student achievement or that they will be eliminated achievement or that they will be eliminated and the funds generated from their and the funds generated from their elimination will be available to support the elimination will be available to support the new or expanded programs, services or new or expanded programs, services or positions positions

Evidence that continued implementation of Evidence that continued implementation of current programs or services can be current programs or services can be justified as efficient and effectivejustified as efficient and effective

Requests for DEOA shall include:Requests for DEOA shall include: A detailed listing of all new or expanded A detailed listing of all new or expanded

programs, services, contracts and positions programs, services, contracts and positions that are included in the 2005-2006 budget that are included in the 2005-2006 budget that were not part of the approved budget that were not part of the approved budget for 2004-2005, and the program or service for 2004-2005, and the program or service it is designed to replaceit is designed to replace

A listing by program and associated cost of A listing by program and associated cost of all ineffective or inefficient programs, all ineffective or inefficient programs, services and contracts and positions that services and contracts and positions that were included in the 2004-2005 budget that were included in the 2004-2005 budget that are not part of the proposed budget for are not part of the proposed budget for 2005-2006 to demonstrate the elimination 2005-2006 to demonstrate the elimination of all ineffective and inefficient programsof all ineffective and inefficient programs

Requests for DEOA shall include:Requests for DEOA shall include:

The school district’s certified The school district’s certified payroll records submitted payroll records submitted electronicallyelectronically

Detailed analysis of salary Detailed analysis of salary information including information including substitutes, overtime and substitutes, overtime and stipends stipends

All 2005-2006 school-based All 2005-2006 school-based budgetsbudgets

6A:10A-8.2 District and school-6A:10A-8.2 District and school-level transfers during the level transfers during the budget yearbudget year

The Abbott regulations mirror the The Abbott regulations mirror the Finance regulations for district-Finance regulations for district-

level transfers except the level transfers except the requests for approval of Abbott requests for approval of Abbott district-level transfers shall be district-level transfers shall be submitted to and approved by submitted to and approved by

the Assistant Commissioner for the Assistant Commissioner for Abbott Implementation.Abbott Implementation.

Line-Item TransfersLine-Item Transfers

Line-item transfers Line-item transfers fromfrom any general any general fund appropriation account >10%, on a fund appropriation account >10%, on a cumulative basis, require approval of the cumulative basis, require approval of the Assistant Commissioner of Abbott Assistant Commissioner of Abbott ImplementationImplementation

Appropriation of surplus or other Appropriation of surplus or other unbudgeted or underbudgeted revenue unbudgeted or underbudgeted revenue is restricted to April 1 thru June 30 and is restricted to April 1 thru June 30 and requires Commissioner approvalrequires Commissioner approval

All require 2/3rds vote of authorized All require 2/3rds vote of authorized membership of the board membership of the board

Line-Item Transfers – General Line-Item Transfers – General Fund Appropriation AccountFund Appropriation AccountGeneral fund appropriation account means the General fund appropriation account means the

required advertised appropriation accounts* required advertised appropriation accounts* pursuant to N.J.S.A. 18A:22, except where pursuant to N.J.S.A. 18A:22, except where consolidated as follows: consolidated as follows:

1. Basic skills, bilingual and special education 1. Basic skills, bilingual and special education instruction, including other related and instruction, including other related and extraordinary services;extraordinary services;

2. Student activities, student athletics and other 2. Student activities, student athletics and other student instructional services;student instructional services;

3. Student support services, including, attendance, 3. Student support services, including, attendance, health, guidance, child study team, and media;health, guidance, child study team, and media;

4. Improvement of instruction and staff training; and4. Improvement of instruction and staff training; and5. Special programs (fund 13).5. Special programs (fund 13).

* Includes rollover of prior year encumbrances.* Includes rollover of prior year encumbrances.

Line-Item Transfers (From)Line-Item Transfers (From)

10 Department working day 10 Department working day approval deadline or automatically approval deadline or automatically approvedapproved

Districts need to keep Districts need to keep documentation of Department documentation of Department receipt of transfer request if receipt of transfer request if approved under “automatic” approved under “automatic” provisionprovision

Line-Item Transfers (To)Line-Item Transfers (To)

Transfers “TO” Administration Transfers “TO” Administration over 10% require approvalover 10% require approval

Transfers “TO” Capital Outlay Transfers “TO” Capital Outlay are restricted pursuant to are restricted pursuant to EFCFAEFCFA

Appropriation of Unbudgeted/ Appropriation of Unbudgeted/ Underbudgeted RevenueUnderbudgeted Revenue

Regulations identify revenue sources that do Regulations identify revenue sources that do notnot require Commissioner approval to increase require Commissioner approval to increase spending above approved budget. (N.J.A.C. spending above approved budget. (N.J.A.C. 6A:10A-8.2(c))6A:10A-8.2(c))

1. Additional state aid when approval is granted in 1. Additional state aid when approval is granted in the award letter (extraordinary aid, DEOA, EOA the award letter (extraordinary aid, DEOA, EOA adjustments);adjustments);

2. Tuition revenue generated from a district-specific 2. Tuition revenue generated from a district-specific program, which is not part of a formal sending-program, which is not part of a formal sending-receiving relationship pursuant to N.J.S.A. 18A:38-receiving relationship pursuant to N.J.S.A. 18A:38-19 and 18A:46-21;19 and 18A:46-21;

3. Unrestricted federal revenue (Impact aid, SEMI); 3. Unrestricted federal revenue (Impact aid, SEMI); and and

4. Surplus generated from revenue allowed to be 4. Surplus generated from revenue allowed to be excluded from the excess surplus calculation in the excluded from the excess surplus calculation in the pre-budget year (extraordinary aid).pre-budget year (extraordinary aid).

Appropriation of Appropriation of Unbudgeted/Underbudgeted Unbudgeted/Underbudgeted Revenue – April 1 – June 30Revenue – April 1 – June 30

Requests allowed between April 1 and June 30 and Requests allowed between April 1 and June 30 and approval authority delegated to the Assistant approval authority delegated to the Assistant Commissioner for Abbott Implementation (8.2(a))Commissioner for Abbott Implementation (8.2(a)) Documentation of approval of 2/3s affirmative vote of Documentation of approval of 2/3s affirmative vote of

the authorized membership of the boardthe authorized membership of the board Transfers to be approved for items necessary to Transfers to be approved for items necessary to

achieve the efficiency and effectiveness standards for achieve the efficiency and effectiveness standards for the current yearthe current year

All districts must first transfer from available balances All districts must first transfer from available balances priorprior to requesting an increase in spending above to requesting an increase in spending above approved budget.approved budget.

Requests submitted to the Assistant Commissioner Requests submitted to the Assistant Commissioner for Abbott Implementation must include the latest for Abbott Implementation must include the latest board secretary report as documentation that board secretary report as documentation that appropriation balances are or will be appropriation balances are or will be expended/appropriated.expended/appropriated.

Appropriation of Appropriation of Unbudgeted/Underbudgeted Unbudgeted/Underbudgeted Revenue – Prior to April 1Revenue – Prior to April 1

Districts may petition the Commissioner Districts may petition the Commissioner prior to April 1 for an increase in spending prior to April 1 for an increase in spending for an “emergent circumstance” and for an “emergent circumstance” and include in such submission(8.2(b))include in such submission(8.2(b))

Board certification necessary for “emergent Board certification necessary for “emergent circumstance”circumstance”

Document additional revenue is necessary Document additional revenue is necessary or circumstance will “render peril to health or circumstance will “render peril to health and safety to students and staff” or force and safety to students and staff” or force the district into an “operating deficit as a the district into an “operating deficit as a result of the required implementation of the result of the required implementation of the CCCS and the Abbott rulesCCCS and the Abbott rules

Latest board secretary report as Latest board secretary report as documentation no other line item balances documentation no other line item balances are or will be availableare or will be available

6A:10A-8.2 District and school-6A:10A-8.2 District and school-level transfers during the level transfers during the

budget yearbudget year Transfer the full amount on “Local Transfer the full amount on “Local

Contribution – Transfer to Special Contribution – Transfer to Special Revenue” in the 2004-2005 approved Revenue” in the 2004-2005 approved budget to the special revenue fund budget to the special revenue fund

Any amount included in the approved Any amount included in the approved 2004-2005 budget on that line that is 2004-2005 budget on that line that is not transferred to the special revenue not transferred to the special revenue fund as of December 31, 2004 will fund as of December 31, 2004 will result in a direct reduction of the result in a direct reduction of the 2004-2005 DEOA2004-2005 DEOA

Questions ??????Questions ??????