Education Protection Account
- Have unique account codes been established for the Proposition 30 Education Protection Account (EPA) entitlement?
- When will the EPA code combinations be available in the SACS tables of valid code combinations?
- How should the adjustment of the EPA entitlement from P-2 to Annual be recorded?
- How should LEAs record EPA expenditures? Since the EPA entitlement merely replaces state aid funds that have always been reported in Resource 0000, is it appropriate to accumulate the costs in Resource 0000 and then make a direct cost transfer from Resource 0000 to Resource 1400?
- Must expenditures of EPA funds be charged directly to the EPA resource at the time of expenditure, or may periodic or annual adjusting entries be made between another resource and Resource 1400?
- Can EPA funds be transferred to other resources?
- Can contributions from other resources (funding sources) be made to Resource 1400?
- Can EPA funds be carried over into the following year?
- Must the EPA entitlement be allocated proportionately to the programs whose ADA generates the LEA’s revenue limit funding?
- Proposition 30 specifies that LEAs may not use EPA funds for salaries or benefits of administrators or any other administrative costs. What is the definition of administrative costs?
- Specifically, for what types of activities may EPA funds be used?
- May EPA funds be used for indirect costs?
- Will the CDE provide a template that LEAs can use for reporting EPA revenues and expenditures?
- Proposition 30 requires that the use of EPA funds be determined by the governing board at an open public meeting. Does this meeting need to be a separate meeting only for the discussion of EPA funding?
- When should the open public meeting for discussing the use of 2012–13 EPA Funding be held?
- Will the CDE provide guidance or sample language for a governing board’s approval of the use of EPA funds at an open public meeting?
- What are some example journal entries?
- Can the charter school 1% supervisorial oversight fee be charged on EPA funds?
- Has the CDE provided any additional EPA information?
- Have unique account codes been established for the Proposition 30 Education Protection Account (EPA) entitlement?
Yes, standardized account code structure (SACS) Resource 1400, Education Protection Account, and revenue Object 8012, Education Protection Account Entitlement, have been established. These codes are required to be used by all local educational agencies, including charter schools, receiving EPA funds.
Charter schools reporting financial data via the Alternative Form, which does not contain resource codes, should use Object 8012 to record the EPA entitlement.
- When will the EPA code combinations be available in the SACS tables of valid code combinations?
The EPA code combinations will be available the beginning of April 2013, which is after the second interim reporting due date. This is because in the SACS software for fiscal year 2012–13, there is no line in the interim reporting fund forms into which the amount reported in Object 8012 could extract.
As a workaround, LEAs that wish to report EPA revenue for second interim can include EPA revenue temporarily in Object 8011, Revenue Limit State Aid – Current Year, and then reclassify the EPA revenue to Resource 1400, Object 8012 during year-end closing.
- How should the adjustment of the EPA entitlement from P-2 to Annual be recorded?
Any amount received in the current year that was not accrued in the prior year should be recorded to Resource 1400 using Object 8019, Revenue Limit State Aid – Prior Years.
Charter schools reporting financial data via the Alternative Form should use Object 8019.
- How should LEAs record EPA expenditures? Since the EPA entitlement merely replaces state aid funds that have always been reported in Resource 0000, is it appropriate to accumulate the costs in Resource 0000 and then make a direct cost transfer from Resource 0000 to Resource 1400?
EPA expenditures should be reported in Resource 1400 using the actual expenditure account lines where feasible, and not lump-sum transferred using Object 5710, Transfers of Direct Costs. The intention of the EPA reporting requirement is transparency. Reporting actual expenditure items achieves this better than a lump-sum transfer. The use of a unique resource code facilitates this transparency in the LEA’s accounting records.
-
Must expenditures of EPA funds be charged directly to the EPA resource at the time of expenditure, or may periodic or annual adjusting entries be made between another resource and Resource 1400?
It is appropriate to record periodic adjusting entries between another resource and Resource 1400. However, as mentioned previously, the entries should be made using the actual expenditure account lines and not as a lump-sum direct cost transfer.
- Can EPA funds be transferred to other resources?
Allowable expenditures should be recorded directly to EPA Resource 1400 to the extent possible. The CDE expects that school districts and charter schools incur sufficient unrestricted educational expenditures that should allow for easily identifying amounts to be reported in Resource 1400.
However, due to the unique characteristics of county offices of education (COEs) in that their principal instructional programs are typically reported as restricted and they may operate many other programs on a fee for service model, it may be necessary for COEs to transfer EPA funds to other resources in order to keep program accounting intact.
One example is a COE whose only instructional program is a community school that is reported using Resource 2400, Juvenile Court/County Community Schools. In order to avoid splitting community school expenditures between two resource codes, especially when the program revenue has historically been a revenue limit transfer from Resource 0000 and where now reporting the related EPA revenues and expenditures separately would be inconsistent with past practice, this COE might transfer EPA funds to this revenue limit funded program using Object 8091, Revenue Limit Transfers – Current Year.
Another example is an excess tax COE that historically has operated a program on behalf of school districts on a fee for service basis. This COE may decide to use its new minimum $200 per ADA EPA entitlement towards the cost of running the program, thus enabling them to charge less to participating school districts. Although the program is partially funded with unrestricted revenues, the COE may want to keep expenditures together in order to determine the charges for services.
- Can contributions from other resources (funding sources) be made to Resource 1400?
No. Because LEAs have a legal requirement to report the receipt and use of EPA funds, contributions to Resource 1400 from other resources would distort EPA expenditures and not result in the intended reporting transparency. Also note that the EPA is not a “program,” in the sense that it is not “a group of related activities that operate together to accomplish specific purposes or objectives.” The normal reason for recording a contribution to a program is to keep program expenditures together, which does not apply in this context. Therefore, contributions from other funding sources should not be made to Resource 1400.
- Can EPA funds be carried over into the following year?
Proposition 30 does not restrict the amount of EPA funds that may be carried over. As a practical matter, though, most EPA funds probably will be expended each year.
- Must the EPA entitlement be allocated proportionately to the programs whose ADA generates the LEA’s revenue limit funding?
No. LEAs may allocate the EPA entitlement entirely to one program for expenditure. For example, a school district may allocate it entirely to the regular education program, and county offices of education may allocate it entirely to the Juvenile Court School program.
Proposition 30 specifies that LEAs may not use EPA funds for salaries or benefits of administrators or any other administrative costs. What is the definition of administrative costs?
The CDE has interpreted that administrative costs, as used in Proposition 30, means anything defined as administration in the California School Accounting Manual. Administrative costs include general administration, school administration, and instructional administration:- General administration refers to agency-wide administrative activities including governing board, superintendent, and district-level fiscal, personnel, and central support services.
- School administration refers to activities concerned with directing and managing the operation of a particular school.
- Instructional administration refers to activities for assisting instructional staff in planning, developing, and evaluating the process of providing learning experiences for students.
The CDE has determined that expenditures by county offices of education for certain administrative activities they are required to perform on behalf of the school districts within the county are not administrative costs for purposes of Proposition 30. These expenditures are separately identifiable within the county office's financial reports.
The CDE believes that defining administration at the functional level, rather than by specific items of expenditure, will make it easier for LEAs to identify costs that may be charged to EPA. Furthermore, the CDE is confident that LEAs incur a sufficient level of non-administrative costs, e.g., instruction and pupil services, to easily meet the intent of Proposition 30 to not use EPA funding for administrative costs.
- Specifically, for what types of activities may EPA funds be used?
Except as provided below for COEs, the following tables of SACS functions show the activities for which EPA funds may and may not be used:
1000–1999 INSTRUCTION
SACS Function
Chargeable to EPA?
1000 Instruction Yes1110 Special Education: Separate Classes Yes1120 Special Education: Resource Specialist Instruction Yes1130 Special Education: Supplemental Aids and Services in Regular Classrooms Yes1180 Special Education: Nonpublic Agencies/Schools Yes1190 Special Education: Other Specialized Instructional Services Yes
2000–2999 INSTRUCTION-RELATED SERVICES
SACS Function
Chargeable to EPA?
2100 Instructional Supervision and Administration
No
2110 Instructional Supervision (optional)
No
2120 Instructional Research (optional)
No
2130 Curriculum Development (optional)
No
2140 In-house Instructional Staff Development (optional)
No
2150 Instructional Administration of Special Projects (optional)
No
2200 Administrative Unit (AU) of a Multidistrict SELPA
No
2420 Instructional Library, Media, and Technology
Yes
2490 Other Instructional Resources
Yes
2495 Parent Participation (optional)
Yes
2700 School Administration
No
3000–3999 PUPIL SERVICES
SACS Function
Chargeable to EPA?
3110 Guidance and Counseling Services
Yes
3120 Psychological Services
Yes
3130 Attendance and Social Work Services
Yes
3140 Health Services
Yes
3150 Speech Pathology and Audiology Services
Yes
3160 Pupil Testing Services
Yes
3600 Pupil Transportation
Yes
3700 Food Services
Yes
3900 Other Pupil Services
Yes
4000–4999 ANCILLARY SERVICES
SACS Function
Chargeable to EPA?
4000 Ancillary Services
Yes
4100 School-Sponsored Co-curricular (optional)
Yes
4200 School-Sponsored Athletics (optional)
Yes
4900 Other Ancillary Services (optional)
Yes
5000–5999 COMMUNITY SERVICES
SACS Function
Chargeable to EPA?
5000 Community Services
Yes
5100 Community Recreation (optional)
Yes
5400 Civic Services (optional)
Yes
5900 Other Community Services (optional)
Yes
6000–6999 ENTERPRISE
SACS Function
Chargeable to EPA?
6000 Enterprise
No
7000–7999 GENERAL ADMINISTRATION
SACS Function
Chargeable to EPA?
7100 Board and Superintendent
No
7110 Board
No
7120 Staff Relations and Negotiations (optional)
No
7150 Superintendent (optional)
No
7180 Public Information (optional)
No
7190 External Financial Audit—Single Audit
No
7191 External Financial Audit—Other
No
7200 Other General Administration
No
7210 Indirect Cost Transfers
No
7300 Fiscal Services (optional)
No
7310 Budgeting (optional)
No
7320 Accounts Receivable (optional)
No
7330 Accounts Payable (optional)
No
7340 Payroll (optional)
No
7350 Financial Accounting (optional)
No
7360 Project-Specific Accounting (optional)
No
7370 Internal Auditing (optional)
No
7380 Property Accounting (optional)
No
7390 Other Fiscal Services (optional)
No
7400 Personnel/Human Resources Services (optional)
No
7410 Staff Development (optional)
No
7430 Credentials (optional)
No
7490 Other Personnel/Human Resources Services (optional)
No
7500 Central Support (optional)
No
7510 Planning, Research, Development, and Evaluation (optional)
No
7530 Purchasing (optional)
No
7540 Warehousing and Distribution (optional)
No
7550 Printing, Publishing, and Duplicating (optional)
No
7600 All Other General Administration (optional)
No
7700 Centralized Data Processing
No
8000–8999 PLANT SERVICES
SACS Function
Chargeable to EPA?
8100 Plant Maintenance and Operations
Yes
8110 Maintenance (optional)
Yes
8200 Operations (optional)
Yes
8300 Security (optional)
Yes
8400 Other Plant Maintenance and Operations (optional)
Yes
8500 Facilities Acquisition and Construction
Yes
8700 Facilities Rents and Leases
Yes
9000–9999 OTHER OUTGO
SACS Function
Chargeable to EPA?
9100 Debt Service
Yes
9200 Transfers Between Agencies
Yes
County Office of Education only
SACS Goal Chargeable to EPA? 8600 County Services to Districts (without regard to function) Yes
- May EPA funds be used for indirect costs?
Indirect costs are not an allowable use of EPA funds because they are primarily administrative costs.
- Will the CDE provide a template that LEAs can use for reporting EPA revenues and expenditures?
Proposition 30 did not prescribe a format for LEAs to report their receipt and expenditure of EPA funds, nor did it require the CDE to develop a format. Therefore, the CDE will not be providing a template. It will be at an LEA’s discretion to determine the format for reporting its EPA revenue and expenditures on its Web site.
- Proposition 30 requires that the use of EPA funds be determined by the governing board at an open public meeting. Does this meeting need to be a separate meeting only for the discussion of EPA funding?
Proposition 30 language does not specify that the open public meeting has to be a separately held meeting. Therefore, this requirement may be satisfied at a regularly scheduled meeting, which the CDE believes could be the annual budget adoption meeting.
- When should the open public meeting for discussing the use of 2012–13 EPA Funding be held?
Most likely this will be the meeting at which the second interim report is presented, although it could be at any open public meeting before expenditures are recorded for 2012–13.
-
Will the CDE provide guidance or sample language for a governing board’s approval of the use of EPA funds at an open public meeting?
No. Proposition 30 did not prescribe the format that the governing board’s approval of the use of EPA funding must take, and did not require the CDE to develop a format. Therefore, it will be at an LEA’s discretion to determine the appropriate approval format, based on local governing board policies.
- What are some example journal entries?
a. The local educational agency (LEA) records receipt of its 2012-13 EPA entitlement in June 2013.
Debit (Dr)/ Credit (Cr)
Fund Resource
Project Year
Goal
Function
Object
Amount
Cr
01
1400
0
0000
0000
8012
$10,000
b. For 2012-13, the school district reclassifies $10,000 of instructional expenditures (teacher salaries and benefits) originally accumulated in Resource 0000 to Resource 1400, according to the spending determination made by the governing board.
Dr/Cr Fund Resource Project Year Goal Function Object Amount Dr01140001110
1000
1100
$7,000
Dr
01
1400
0
1110
1000
3101
$1,000
Dr
01
1400
0
1110
1000
3401
$ 700
Dr
01
1400
0
1110
1000
3501
$ 600
Dr
01
1400
0
1110
1000
3601
$ 400
Dr
01
1400
0
1110
1000
3801
$ 300
Cr
01
0000
0
1110
1000
1100
$7,000
Cr
01
0000
0
1110
1000
3101
$1,000
Cr
01
0000
0
1110
1000
3401
$ 700
Cr
01
0000
0
1110
1000
3501
$ 600
Cr
01
0000
0
1110
1000
3601
$ 400
Cr
01
0000
0
1110
1000
3801
$ 300
c. The LEA records receipt of its 2013-14 EPA entitlement.
Dr/Cr
Fund
Resource
Project Year
Goal
Function
Object
Amount
Cr
01
1400
0
0000
0000
8012
$9,000
d. The LEA records receipt of its 2012-13 EPA entitlement adjustment, based on 2012-13 Annual apportionment (assumes the amount was not accrued in 2012-13).
Dr/Cr
Fund
Resource
Project Year
Goal
Function
Object
Amount
Cr
01
1400
0
0000
0000
8019
$2,000
e. For 2013-14, the school district reclassifies $11,000 of instructional expenditures (teacher salaries and benefits) originally accumulated in Resource 0000 to Resource 1400, according to the spending determination made by the governing board. (Note that an LEA could instead charge expenditures directly to EPA from the beginning.)
Dr/Cr
Fund
Resource
Project Year
Goal
Function
Object
Amount
Dr
01
1400
0
1110
1000
1100
$7,000
Dr
01
1400
0
1110
1000
3101
$1,000
Dr
01
1400
0
1110
1000
3401
$ 700
Dr
01
1400
0
1110
1000
3501
$ 600
Dr
01
1400
0
1110
1000
3601
$ 400
Dr
01
1400
0
1110
1000
3801
$ 300
Cr
01
0000
0
1110
1000
1100
$7,000
Cr
01
0000
0
1110
1000
3101
$1,000
Cr
01
0000
0
1110
1000
3401
$ 700
Cr
01
0000
0
1110
1000
3501
$ 600
Cr
01
0000
0
1110
1000
3601
$ 400
Cr
01
0000
0
1110
1000
3801
$ 300
Examples specific to county offices of education (COEs)
f. The COE determines that it will use its EPA entitlement for the instructional expenditures of its community schools program. EPA funds are transferred to the Juvenile Court/County Community Schools resource.
Dr/Cr
Fund
Resource
Project Year
Goal
Function
Object
Amount
Dr
01
1400
0
0000
0000
8091
$15,000
Cr
01
2400
0
0000
0000
8091
$15,000
g. An excess tax COE determines that it will use its EPA entitlement to fund some of the costs of a program that it operates on a fee-for-service basis on behalf of school districts. The program incurs costs that are allowed to be charged to EPA. In this case, the program is funded with unrestricted revenues. Therefore, EPA funds are transferred to the unrestricted resource.
Dr/Cr
Fund
Resource
Project Year
Goal
Function
Object
Amount
Dr
01
1400
0
0000
0000
8091
$15,000
Cr
01
0000
0
0000
0000
8091
$15,000
NOTE: If EPA funds are transferred out of Resource 1400 then the LEA should keep local accounting records to document that the EPA funds have been spent for non-administrative costs for purposes of the reporting requirement and the annual audit.
- Can the charter school 1% supervisorial oversight fee be charged on EPA funds?
Yes. Pursuant to Education Code (EC) sections 47613 and 47632, the amount that can be charged for the charter supervisorial oversight fee is based on revenues which, for purposes of calculating the oversight fee, is defined as general-purpose entitlement and categorical block grant funding. Proposition 30 did not change the definition of those revenues or the calculation for the general purpose entitlement; rather, it changed where the funds for general purpose entitlement will come from. Specifically, part will come from the EPA and part will come from state aid (EC Section 47633). For information on whether EPA funds may be used to pay the supervisorial oversight fee, see question 10.
- Has the CDE provided any additional EPA information?
Yes, additional EPA information [http://www.cde.ca.gov/fg/aa/pa/epa.asp] is available on the CDE Web site.
