Notes from IDEA SPED Finance Regional Training
October 4, 2018
Changes in federal regulations require local districts to adjust accounting practices. The goal is to provide greater transparency for how revenues are spent. DESE is working with local districts to provide training.
Monitoring:
All districts have their special education finances monitored. Every district is placed in a cohort and is monitored according to a schedule. Risk assessments are also conducted by DESE annually. Further monitoring may take place if budgets or FER’s are submitted late, a change in personnel has occurred, or if expenditures are incorrectly coded. For districts receiving on site monitoring a list of 15 (page 12 of monitoring guide) items must be submitted prior to the visit.
Revenue sources:
All funding sources for special education must be tracked at the local level. While IDEA is a federal mandate, federal funding was never intended to cover all expenses. Districts must source code all expenditures. DESE recommends funding sped with local, state, and federal revenue. Decisions on how much of each source is spent on IDEA are made at the local level. For state and local funds, districts do not have to identify specific funding sources. For federal monies districts must document which specific revenue code is used.
General Ledger Basics:
General ledgers are used to build ASBR’s and DESE uses the ASBR to build FER’s. If incorrect coding is used in the ledger a chain reaction of complications will follow. All codes must have:
-fund code (tells which major fund to which the expense belongs): 1, general; 2, teacher; 3, debt service; 4, capital project
-function code (tells the basic purpose of the expense): there are many function codes. Previous guidance told districts to use 1221 primarily. New guidance allows much more flexibility. Examples of function codes include: 1221, sped teacher; 2162, occupational therapy.
-object codes (identifies services or commodities and directs which object the expense is collapsed into): Examples: certificated salary, 6110; supplies, 6400.
-location code (tells which of the district’s building the expense belongs to)
-source code (tells the source of the funds): this is the major shift in coding. All funds must be coded local, 1; county, 2; state, 3; federal, 4.
-project code (identifies the specific source of the revenue- must be used for federal or specific state awards): Example, IDEA Entitlement funds, 44100. This is new and is a major shift.
Example
Fund, function, object, location, source, and project code for the portion of a high school teacher’s salary paid with IDEA part B funds.
2-1221-6110-1-4-44100
Cash Management
All districts must have a written cash management procedure. If adopted MCE or MSBA policies are current, districts are covered. Federal funds can only be drawn on a reimbursement basis. If federal funds are drawn before they are expended, financial penalties may occur.
Allowable Expenditures
Anything that is required to implement an IEP is an allowable expense for IDEA part B funds; however, the least complicated expenditure is for teacher’s salaries. Using IDEA monies for administrator salaries requires documentation for time and effort. Using IDEA monies for equipment/technology requires additional inventory documentation. All expenditures must be included in the budget submitted through e pegs. If federal funds are used for construction, the construction must be used only for special education. Changing the use of the building would require purchasing it from the federal government. Employees who are on the roster for medicaid roster can not have all of their salary coded as IDEA; however, employees who only have a portion of their salary coded to IDEA can also be included on the SDAC medicaid roster.
Time and Effort
A signed semi-annual certification form must be kept on file for any employee who has any portion of their salary coded to IDEA funds.
Maintenance of Effort
Districts are required to spend state and local dollars in addition to their federal dollars. To receive federal funds districts must spend the same amount of money or more than they spent the year before. There are two avenues for meeting maintenance of effort. The first is local funds only and the second is local and state combined. Districts must be aware of how new expenses are coded because increasing spending creates a new threshold that may be difficult to continue.
The only exceptions are
-voluntary departure of sped staff
-decrease in enrollment of children with disabilities
-termination of a costly obligation for a specific child
-termination of a costly long-term purchase
-assumption of cost by the high need fund
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