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Letter Head: Jack O'Connell, State Superintendent of Public Instruction, Phone number 916-319-0800

December 28, 2007

Dear County Offices of Education Chief Business Officials:

2007-08 FIRST QUARTER LOTTERY APPORTIONMENT

The State Controller’s Office (SCO) will distribute the 2007-08 first quarter lottery apportionment on December 28, 2007. The total apportioned to county offices of education, school districts, and charter schools is $241,549,255.62 or $36.44 ($36.436517838) per unit of average daily attendance (ADA) for the unrestricted lottery apportionment. The first quarter payment also includes prior-year adjustments due to the recalculation of 2005-06 and 2006-07 lottery apportionments based on final lottery revenue totals and actual ADA reports.

Enclosed for your information are the Remittance Advice and a copy of the “Lottery Educational Apportionment System Master Register” (Master Register). The Master Register is also located on the SCO’s Web site at http://www.sco.ca.gov/ard/payments/lottery/ [Note, the preceding Web address is no longer valid and has been replaced by http://www.sco.ca.gov/ard_payments_lottery.html] (Outside Source). The Master Register lists the following information:

  • Average Daily Attendance: The ADA is the actual annual ADA reported for the 2006-07 fiscal year times the statewide average excused absence factor of 1.04446. This ADA is the basis for the 2007-08 first quarter apportionment. The Master Register lists charter school ADA separately from the chartering agency.
  • Apportioned Amount: The amount apportioned for the first quarter of 2007-08 consists of unrestricted (non-Proposition 20) lottery funding only. The SCO will distribute 2007-08 Proposition 20 funding when the total statewide lottery revenue for education has exceeded a specified level (typically not until the third or fourth quarter apportionment).
  • Revenue Adjustment Amount: This amount reflects additional 2006-07 lottery revenue that is available for distribution. Each year, the California State Lottery withholds a portion of its revenues until after the audit of its year-end financial statements. The additional revenue released for 2006-07 totaled $18,060,771.90. Of this amount, $1.08 per ADA ($1.075160624) is unrestricted lottery funding and $1.15 per ADA ($1.154258798) is restricted Proposition 20 lottery funding.
  • ADA Adjustment Amount: The SCO allocates lottery funding based upon prior year annual ADA until the actual annual ADA is available for the current year. Every December, the SCO recalculates lottery funding for the prior two fiscal years according to actual annual ADA (adjusted by the factor of 1.04446) and funding rates per ADA, which change along with statewide ADA totals.

To compute a local educational agency’s (LEA’s) 2006-07 ADA adjustment amount:

  1. Multiply the LEA’s 2005-06 annual ADA (adjusted by 1.04446, and listed on the 2006-07 fourth quarter master register) by the old 2006-07 rates of $121.876524262 for the unrestricted lottery apportionment and $22.749539118 for the Proposition 20 apportionment. This total is the amount apportioned during the 2006-07 fiscal year.
  2. Multiply the LEA’s 2006-07 annual ADA (adjusted by 1.04446) by the new 2006-07 rates of $120.550672208 for the unrestricted lottery apportionment and $22.560716242 for the Proposition 20 apportionment. This total is the amount that the LEA should have received for the 2006-07 fiscal year (prior to any lottery revenue adjustments).
  3. The difference between the two calculations is the ADA adjustment amount for the 2006-07 fiscal year.

To compute a LEA’s 2005-06 ADA adjustment amount:

  1. Multiply the LEA’s 2005-06 annual ADA (adjusted by 1.04446 and listed on the 2006-07 fourth quarter master register) by the old 2005-06 rates of $127.239435058 for the unrestricted lottery apportionment and $29.363102433 for the Proposition 20 apportionment. This total is the amount apportioned for the 2005-06 fiscal year.
  2. Multiply the LEA’s revised (if no revision, use the same ADA as above) 2005-06 annual ADA (adjusted by 1.04446) by the new 2005-06 rates of $127.198347094 for the unrestricted lottery apportionment and $29.352950051 for the Proposition 20 apportionment. This total is the amount that the LEA should have received for the 2005-06 fiscal year.
  3. The difference between the two calculations is the ADA adjustment amount for the 2005-06 fiscal year.
  • Accounts Receivable Balance: This amount represents the balance of any accounts receivable due to the State from a LEA.
  • Paid Amount: This total reflects the actual amount paid by the SCO, including the first quarter apportionment and any prior year adjustments.
  • Non-Proposition 20: The use of non-Proposition 20 lottery funds is unrestricted. However, pursuant to Government Code Section 8880.5, LEAs must use this lottery funding exclusively for the education of pupils and may not use this revenue for the acquisition of real property, construction of facilities, financing of research, or other non-instructional purposes.
  • Proposition 20: Proposition 20 lottery funding is restricted for the purchase of instructional materials. Education Code Section 60010 defines instructional materials.

The Department requests that county superintendents of schools inform LEAs immediately of this apportionment. If you have any questions regarding the lottery apportionment, please contact Erin Lillibridge, Fiscal Consultant, at 916-327-0378 or by e-mail at elillibridge@cde.ca.gov [Note, the preceding contact information is no longer valid and has been replaced by Stel Cordano, Fiscal Consultant, at 916-327-0378 or by e-mail at scordano@cde.ca.gov.]

Sincerely,

 

Scott Hannan, Director
School Fiscal Services Division

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