July 21, 2010
Dear County Superintendents of Schools, Auditors, and Treasurers:
This apportionment, in the amount of $54,677,435, is made to local educational agencies (LEAs) from federal funds provided to the state under the American Recovery and Reinvestment Act (ARRA) of 2009 (Public Law 111-05). These State Fiscal Stabilization Funds (SFSF) are one-time, with an intended use to avert layoffs of teachers and other personnel and further education reform in the key areas of teacher quality, standards and assessments, using longitudinal data to improve instruction, and supporting struggling schools. The amount of SFSF funds available to support kindergarten through grade twelve in fiscal year 2008-09 is $2.565 billion, and in fiscal year 2009-10, $354 million, for a total of $2.919 billion.
LEAs that applied for SFSF funding and completed the ARRA Section 1512 fourth quarter report, for the period ended June 30, 2010, are included in this apportionment. The amount paid reflects 25 percent of each LEA’s total SFSF entitlement out of the $2.919 billion funding less any unexpended funds as of June 30, 2010, based on the Section 1512 fourth quarter report. Cash management procedures were implemented in order to reduce the time elapsing between the LEAs’ receipt and disbursement of federal funds, pursuant to the cash management requirements under federal statute and regulations.
Beginning in fiscal year 2010-11, letters of apportionment from the California Department of Education’s (CDE) School Fiscal Services Division will no longer be mailed to the county superintendents of schools. Instead, county superintendents will be notified of each apportionment by e-mail. Accordingly, the CDE has sent an e-mail to each county superintendent, addressed to the county’s CDEfisc e-mail address, to inform him or her of this apportionment. The e-mail contained a link to the CDE Categorical Programs Web page at http://www.cde.ca.gov/fg/aa/ca/ where, under the program name, the letter and schedule for this apportionment are posted. The CDE requested that the e-mail be forwarded to all school districts in the county.
Warrants will be mailed to each county treasurer within approximately two weeks from the date of this Notice. For standardized account code structure coding, use Resource Code 3200, ARRA – State Fiscal Stabilization Fund, and Revenue Object Code 8290, All Other Federal Revenue. The California sub-allocation (pass-through) number is Program Cost Account (PCA) 25008. County superintendents of schools are requested to immediately inform LEAs, including direct funded charter schools, of this apportionment.
The basis to distribute the $2.565 billion is: (1) determine each LEA’s share of the categorical program reductions per Section 34 of Senate Bill 4 (Chapter 12, Statutes of 2009-10, Third Extraordinary Session, SBX3 4), and (2) determine an amount by LEA based on the deficit factor applied to general purpose funds (i.e., revenue limits) for the remaining funds. Note, reductions in state allocations are simply the basis of determining the distribution; SFSF funds are federal funds, and the federal requirements described below govern their use.
Categorical Program Reductions
Entitlements were calculated by determining the total reduction in each LEA’s funding under the various categorical programs for which 2008-09 appropriations were reduced by Section 34 of SBX3 4.
Revenue Limit Reductions
Entitlements for school districts and county offices of education were calculated by determining the difference between the 2008-09 P-2 State Aid for Revenue Limit using the statutory deficit factor of 0.92156 and what the Revenue Limit would have been with a deficit factor of 0.9674. Charter School Block Grant rates were calculated by applying this same deficit factor; rates are $5,727 for K-3, $5,814 for 4-6, $5,983 for 7-8, and $6,942 for 9-12. Charter school entitlements are the difference between the General Purpose Entitlements using these rates and the 2008-09 P-2 General Purpose Entitlement amount. Locally funded charter schools applied through their authorizing agency, and funding associated with the charter school is included in the district or county amount.
Please note that the entitlement amounts in this apportionment may differ from those posted for the first, second and third apportionments; the earlier amounts were preliminary entitlements used before complete and actual data were available. Detailed spreadsheets showing the funding reduction in each of the categorical and general purpose programs are available at http://www.cde.ca.gov/fg/aa/ca/arra.asp.
Use of Funds
SFSF funds may be used by LEAs for any activity authorized under the following: (1) The Elementary and Secondary Education Act of 1965, including Impact Aid, (2) The Individuals with Disabilities Education Act, (3) The Adult Education and Family Literacy Act, or (4) The Carl D. Perkins Career and Technical Education Act of 2006. All LEAs should review the ARRA Web site at http://www.cde.ca.gov/ar/, U.S. Department of Education SFSF Guidance at http://www.ed.gov/programs/statestabilization/applicant.html, and Using ARRA Funds to Drive School Reform and Improvement http://www.ed.gov/policy/gen/leg/recovery/guidance/uses.doc.
Pursuant to SFSF Guidance, all SFSF funds are available for obligation until September 30, 2011.
LEAs are required to comply with assurances that were included in the SFSF application. This includes assisting the state in the areas of education reform and meeting annual reporting requirements (ARRA Section 1408).
LEAs must submit quarterly reports that cover cumulative activities from the beginning of the grant period. It is anticipated that the next report will cover the quarter ending September 30, 2010. At a minimum, LEAs should anticipate reporting: (1) the total amounts of ARRA funds received; (2) amounts of ARRA grant funds expended on or obligated to projects or activities; (3) the name, description, and evaluation of the project or activity’s completion status; (4) an estimate of the number of jobs that were saved or created with the ARRA funds; and (5) for infrastructure investments, the purpose, total cost, and rationale for funding the investment and the name and contact information of the person to contact regarding the project. We recommend LEAs review reporting guidelines recently issued by the Office of Management and Budget and the U.S. Department of Education (ED). (Section 1512(c) and (f) of the ARRA)
The ED award number for this apportionment is S394A090005. The Catalog of Federal Domestic Assistance subprogram number is 84.394A (State Fiscal Stabilization Fund – Education Grants, Recovery Act).
Title 34 of the Code of Federal Regulations, Section 80.21(i), requires that any interest earned by LEAs on federal dollars be returned to the ED if the amount is in excess of $100. LEAs should forward interest payments for remittance to the ED to:
California Department of Education
P.O. Box 515006
Sacramento, CA 95851
To ensure proper posting of payments, please include the program’s PCA number (PCA 25008) and identify the payment as “Federal Interest Returned.”
Each recipient and subrecipient awarded funds made available under the ARRA must promptly refer to the ED’s Office of Inspector General any credible evidence that a principal officer, employee, agent, contractor, subrecipient, subcontractor, or other person has submitted a false claim under the False Claims Act or has committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity, or similar misconduct involving those funds. Information about the Office of Inspector General Hotline is available at http://www.ed.gov/about/offices/list/oig/hotline.html.
If you have general questions regarding ARRA please contact the Government Affairs Branch by phone at 916-319-0821 or by e-mail at email@example.com. For questions related to this apportionment, or fiscal questions related to the reduction in categorical programs, please contact Thi Huynh, Fiscal Consultant, Office of Charter Apportionments and District Reorganization, at 916-324-4555 or at firstname.lastname@example.org. For SFSF fiscal questions related to the reduction in revenue limits, please contact Elizabeth Dearstyne, Fiscal Consultant, Office of Principal Apportionment and Special Education, at 916-327-0398 or at email@example.com. For questions on the calculation of individual amounts shown in the State Fiscal Stabilization Fund Entitlements, please contact the person identified on the each entitlement schedule.
Susan Lange, Deputy Superintendent
Finance, Technology, and Administration Branch