NORTH CAROLINA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS NCASBO

NORTH CAROLINA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS “NCASBO” Today’s session is provided by NCASBO 1 Budget 101 -Chart of Accounts and What’s in the Bucket?

Purpose of today’s Class: l l l 2 Linking the budget codes to the budget process A basic overview of some of the complexities of a NC School System budget-A big puzzle Definitions of some terms

The Big Bad Budget Code X-XXX-XXX-XXX-XX 3

The Big Bad Budget Code Chart of Accounts – Basic Structure X-XXX-XXX-XXX-XX Each piece of the code tells a story! l – – – 4 – One-digit Fund code Four-digit Purpose/function code Three-digit Program Report code Three-digit Object code Three-digit Location code Some districts use 2 -5 additional digits

The Big Bad Budget Code l Fund Codes: X-XXX-XXX-XXX-XX – – – 5 1 = State Public School Fund 2 = Local Current Expense Fund 3 = Federal Grants Fund School system budgets are three separate budgets pulled together into one big budget! Due dates are backwards. School system budgets rely on all three but is due before any of the others!

Sources of School System Funding By % per DPI 2017 -18 Summary Statistics 6

Amount of 2017 -18 Fund Sources per DPI (in billions) 7

The real numbers! (from 2017 -18) $'s 8 State $8, 675, 419, 789 Federal $1, 406, 756, 020 Local $4, 719, 980, 683 Total $14, 802, 156, 492

So how do we get these Funds and how do we budget for them? 9

The Buckets or PRC’s l 10 Program Report Codes (PRC): X-XXX-XXX-XXX-XX – These three digits identify the specific state federal or local allotment/funding source. – For this class, we will focus on the state funded portion of a budget.

What areas does the state fund School Systems for? 11

The buckets are called Allotments! l 12 The School Allotment Section (part of DPI) develops and administers a system which calculates and distributes projected and actual State and Federal funding to the LEA’s. Each bucket is determined by a formula or by specific application as legislated by the NC General Assembly.

Allotment Formulas-moving targets l l 13 Many of the formulas are based on Allotted ADM (Average Daily Membership). One is based County wealth ranking (Low Wealth Supplemental Funding). One is based on County Population (Small County Supplemental Funding). Some are based on efficiency (transportation funding).

ADM Allotment-Teachers (PRC 001) are allotted based on one per the following number of students (ADM) and rounded to the nearest one-half position: K – 18 7 -8 -- 23 1 – 16 9 -- 26. 5 2 -3 – 17 10 -12 -- 29 4 -6 -- 24 14

ADM Allotment-School Building Administration Principals (PRC 005) are funded for each school with 100 or more pupils in final ADM and/or seven or more full-time equivalent state allotted/paid teachers and instructional support personnel (based on the prior year 6 th pay period) 15

ADM Allotment-Classroom Materials/Inst. Supplies/Equipment l 16 Funds for Instructional Materials, Supplies, and Equipment are distributed based on allotted ADM. Funds for each student to take the Preliminary Scholastic Aptitude Test (PSAT) are allotted based on ADM in grades 8 and 9.

ADM – Average Daily Membership Does a school system control what its ADM is? 17

ADM – Average Daily Membership 18 Ultimately, School Systems do not control their ADM, but they can influence it! Students and families are attracted and retained by: *Good results - testing, graduation rates, college acceptances, placement in trades… *Welcoming schools with highly respected teachers, administrators, support staff… *Desirable options of curriculum, sports, extra curricular activities…

ADM – Average Daily Membership School systems benefit when ADM is rising! School systems suffer when ADM falls! How do they suffer? Reduced Funding. 19

ADM – Average Daily Membership Reduced state funding results in: l Reduction of staff from core teachers, program enhancement teachers, principals, AP’s, support staff… l Reduction of services such as special education, driver education training, CTE… 20

ADM – Average Daily Membership ADM is used in the different allotments in different ways. Some formulas start with minimum or base amounts and then increase based on ADM. Some are flat ADM formulas. The formulas are published by DPI in the Allotment Policy Manual. 21

Another Twist to Allotments! Allotments are computed based on things such as ADM, Low Wealth, Small County or efficiency. That is how you come to the amount of the allotment. In NC, there is another twist and that is how allotments are given to schools systems. 22

Allotments School systems receive allotments in the following formats: l Dollar allotments l Position allotments l Months of employment allotments 23

Dollar Allotments This is the simple one, DPI calculates the amount and puts it in a bucket for school systems to spend as dictated by the PRC. 24

Position Allotments There a couple of allotments that are given by positions. The main two are classroom teachers (PRC 001) and Instructional Support (PRC 007). Instead of DPI giving the school system a bucket of X $’s, They get X number of positions. 25

Position Allotments 26 DPI’s definition of position allotments: The state allots positions to a local school system for a specific purpose. The local school system pays whatever is required to hire certified teachers and other educators based on the State Salary Schedule, without being limited to a specific dollar amount. Each local school system will have a different average salary based on the certified personnel's experience and education.

Months of employment allotment 27 DPI’s definition of Months of Employment: A unit of employment corresponding to a calendar month. The state allots a certain number of months of employment which can be assigned to a position, or a portion of a position, at the discretion of the LEA. Months of employment pertain to all position allotments which include Career Technical Education and School Building Administration (Assistant Principals)

In Summary l l l 28 School System’s budgets are basically three entwined budgets, state, local and federal with the state piece being the largest. In all three funding sources, the money comes in buckets/allotments with specific restrictions to what the funds can be spent on. The level of restrictions vary by funding source.

In Summary l 29 NC allotments are sort of unique in that they come in three forms: Dollar Allotments Position Allotments Months of Employment Allotments

In Summary l 30 NC School System budgets are complex to create because they are based on moving targets and backwards calendar due dates.