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Ltr6-07: K-3 CSR

Letter Head: Jack O'Connell, State Superintendent of Public Instruction, California Department of Education

December 8, 2008

IDear Select County Superintendents of Schools, Auditors, and Treasurers:

NOTICE OF THE THIRD RECOVERY OF OVERPAYMENTS FOR THE
KINDERGARTEN AND GRADES ONE THROUGH THREE CLASS SIZE
REDUCTION PROGRAM FROM THE PRINCIPAL APPORTIONMENT
FISCAL YEAR 2007-08

This recovery of overpayment, in the amount of $84,149, is made pursuant to California Education Code (EC) Section 52124(d). The recovery is for amounts overpaid for the 2007-08 Kindergarten and Grades One through Three Class Size Reduction (K-3 CSR) Program, and will be made through an offset to each affected school district’s and charter school’s December principal apportionment payment.

In November 2008, $26,887,488 was recovered in the Second Recovery of Overpayments for 2007-08 K-3 CSR overpayments. At that time, we noted that additional recoveries were scheduled for December2008 and January 2009. This is the first of the two additional recoveries. The Fourth Recovery of Overpayments for approximately $1.55million in satisfaction of the full overpayment is scheduled for January 2009.

County superintendents of schools are requested to immediately inform each affected school district or charter school of the adjustments. To view the schedule of recoveries showing affected school districts and charter schools and amounts being recovered, please visit the California Department of Education (CDE) K-3 CSR Program Web page at http://www.cde.ca.gov/fg/aa/ca/k3csr.asp.

This recovery is composed of two parts. First, funding for the K-3 CSR Program was reduced by $32.0 million through legislation in February 2008, and sufficient funding is not available to fully fund the program at the original rates of $1,071 and $535 per pupil for Options 1 and 2, respectively. In order to fund the program within existing resources, per pupil rates are reduced to 99.85 percent of the original rates (a 0.15percent decrease) to $1,069 and $534 per pupil for Options 1 and 2, respectively, for all school districts and charter schools participating in the program.

Second, in February 2008, a provisional apportionment for the 2007-08 K-3 CSR Program was certified in accordance with ECSection 52126(g)(2). However, some school districts and charter schools that received the provisional funding based on their program participation estimated in November 2007 on their Operations Application have participated in 2007-08 at a lower level. In accordance with EC Section 52124(d), which states that a school district shall not retain any funds it receives for any class that does not actually meet all the requirements of the Class Size Reduction Program, the CDE is required to recover the amount overpaid. Both parts of the recovery reflect the overpayment of funds calculated at the deficited per pupil rates.

Due to the lack of sufficient cash in the K-3 CSR appropriation, payments of amounts owed to school districts and charter schools for the 2007-08 program based on deficited final entitlements will be delayed until recoveries are made, and will be released in two payments. The first payment of $27,777,210, approximately 96.84percent of the deficited final payment of $28,683,829, will be distributed in December 2008. The second payment of $906,619 will be distributed in March 2009 after additional funds are recovered in December 2008 and January 2009. The two final payments reflect the deficited final entitlements calculated at deficited per pupil rates.

The CDE has submitted to the state Department of Finance a request for additional K-3 CSR funding in order to fully fund the program.

If you have any questions regarding this recovery, please contact Rebecca Lee, Fiscal Consultant, Categorical Allocations and Management Assistance Office, at 916‑324‑4533 or by e-mail at relee@cde.ca.gov.

Sincerely,

 

Scott Hannan, Director
School Fiscal Services Division

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