The calculation of excess cost is a joint effort among the business office, special education office, and PEIMS.
- Which financial reports should be used for the Excess Cost Calculation? Allocated or Unallocated? Audited or Unaudited?
- How should LEAs estimate/prorate between elementary and secondary if the financial report does not do this?
- How will PIC 99 and Organization 999 be handled?
- Which method would be recommended to sort out only campus-based costs?
- Where did the campus-only costs guidance come from? That is new to us.
- Is there one report LEAs can run to get all information needed: elementary/secondary split, PIC 99 and Organization 999 allocated back to special education?
- If LEAs use the prior year audited data in the report (PRF1D007-Allocated), it redistributes the PIC 99 cost to special education based on the FTE formula, but it does not include Organization 999 costs attributed to special education, and it does not separate by campus (elementary vs. secondary). Please advise.
- If LEAs use the prior year audited data in the report (PRF1D008-Unallocated), it does not distribute PIC 99 to special education and does not include organization code 999, which includes special education costs too. Please advise.
- There seems to be an advantage to using the Unallocated report since that report can be run by campus and divided by elementary and secondary. Can we do that?
- What is TEA's response to the following suggestion? Run the PDF1D008-Unallocated, which can divide accurately the costs between elementary and secondary, and if that meets the threshold at elementary and secondary, you could stop there in your analysis because using the allocated funds just adds more special education expenditures. If your expenditures are close to or below the threshold, run report PRF1D007-Allocated to see how much PIC 99 adds to the special education expenditure.
- Should Fund code 240 be used in the calculation?
- Should ARRA funds be used in the calculation?
1. Which financial reports should be used for the Excess Cost Calculation? Allocated or Unallocated? Audited or Unaudited?
The excess cost calculation should be performed at the end of the fiscal year prior to the start/conclusion of the annual audit to determine if the LEA is compliant. Because of the timing of this assessment, the LEA should use financial information available from its unaudited general ledger. Final determination of the LEA’s compliance may be determined by using the Actual Financial Data (ACTUAL) table available through PEIMS Edit+ under View Reports, Table Downloads. This data may be imported into a database or spreadsheet application to calculate the numbers needed to determine LEA compliance.
2. How should LEAs estimate/prorate between elementary and secondary if the financial report does not do this?
The annual financial and compliance report and the PEIMS Edit+ reports are not appropriate for this analysis since the reports do not include sufficient detail. The more appropriate sources of data are cited above.
3. How will PIC 99 and Organization 999 be handled?
Generally, expenditures classified under PIC 99 and Org code 999 do not have a material impact to this analysis.
4. Which method would be recommended to sort out only campus-based costs?
The use of trial balance data such as that represented in the Actual Financial Data (ACTUAL) table may be used to identify costs pertaining to elementary and secondary campuses.
5. Where did the campus-only costs guidance come from? That is new to us.
Appendix A to Section 300 of Title 34 of the Code of Federal Regulations stipulates that LEAs demonstrate compliance with the excess cost requirement based on an analysis of elementary and secondary expenditures.
6. Is there one report LEAs can run to get all information needed: elementary/secondary split, PIC 99 and Organization 999 allocated back to special education?
There is not one report that can be used. Instead, the LEA should use financial data in a trial balance format from its financial accounting records (i.e., detailed general ledger) and the Actual Financial Data (ACTUAL) table available through PEIMS Edit+.
7. If LEAs use the prior year audited data in the report (PRF1D007-Allocated), it redistributes the PIC 99 cost to special education based on the FTE formula, but it does not include Organization 999 costs attributed to special education, and it does not separate by campus (elementary vs. secondary). Please advise.
Expenditures classified under Org Code 999 should not be included in the analysis. By definition, these expenditures are undistributed and, consequently, do not pertain to any one campus.
8. If LEAs use the prior year audited data in the report (PRF1D008-Unallocated), it does not distribute PIC 99 to special education and does not include organization code 999, which includes special education costs too. Please advise.
Correct. Instead, the LEA should use financial data in a trial balance format from its financial accounting records (i.e., detailed financial ledger) and the Actual Financial Data (ACTUAL) table available through PEIMS Edit+.
9. There seems to be an advantage to using the Unallocated report since that report can be run by campus and divided by elementary and secondary. Can we do that?
The agency will base final determinations of compliance on the data contained in the Actual Financial Data (ACTUAL) table available through PEIMS Edit+.
10. What is TEA’s response to the following suggestion? Run the PDF1D008-Unallocated, which can divide accurately the costs between elementary and secondary, and if that meets the threshold at elementary and secondary, you could stop there in your analysis because using the allocated funds just adds more special education expenditures. If your expenditures are close to or below the threshold, run report PRF1D007-Allocated to see how much PIC 99 adds to the special education expenditure.
The agency will base final determinations of compliance on the data contained in the Actual Financial Data (ACTUAL) table available through PEIMS Edit+.
11. Should Fund code 240 be used in the calculation?
Yes. Commodities (Fund 240 National School Breakfast and Lunch Program) should be used in the calculation.
12. Should ARRA funds be used in the calculation?
No. Do not include American Recovery and Reinvestment Act (ARRA) expenditures in the calculation.
If you have questions related to the calculation of excess costs, please contact:
Division of Federal Fiscal Compliance and Reporting
1701 N. Congress Avenue
Austin, Texas 78701
Phone: 512-463-9127
E-mail: compliance@tea.state.tx.us