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Ltr8-07: K-3 CSR

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

January 14, 2009

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

NOTICE OF THE FOURTH 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 $1,546,307, 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 January 2009 principal apportionment payment.

In November and December 2008, a total of $26,971,637 was recovered in the second and third recovery of 2007-08 K-3 CSR overpayments. In the accompanying letters dated November 14, 2008 and December 8, 2008, we noted that an additional recovery was scheduled for January 2009.

County superintendents of schools are requested to immediately inform each affected school district and charter school of the offset. 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 enacted 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 estimated program participation reported in their November 2007 Operations Applications, actually 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 released in two payments. The first payment of $27,777,210, approximately 96.84percent of the deficited final payment of $28,683,829, was distributed in December 2008. The second payment of $906,619 will be distributed in March 2009 after additional funds are recovered with this notice. 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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