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California Department of Education
Official Letter
California Department of Education
Official Letter
August 1, 2018

Dear County and District Superintendents, County and District Chief Business Officials, and Charter School Administrators:

The Every Student Succeeds Act Per-Pupil Expenditure
Reporting Requirement

The Elementary and Secondary Education Act of 1965 (ESEA), as reauthorized by the Every Student Succeeds Act (ESSA), requires state educational agencies (SEAs) and their local educational agencies (LEAs) to prepare and publish annual report cards that contain specified data elements, including LEA and school-level per-pupil expenditures (PPE). Although California LEAs already collect and report on most of the required report card data elements, including LEA-level expenditures, they are not currently collecting or reporting school-level expenditures to the state.

The purpose of this letter is to provide information and guidance that will assist California LEAs with meeting the ESSA PPE reporting requirement. Although there is currently nothing in federal law or federal regulations that requires SEAs to develop a standard methodology for calculating PPE, the California Department of Education (CDE) recognizes the need to provide support to LEAs on implementing this new reporting requirement.

The CDE engaged school district and county office of education (COE) stakeholders in a work group setting over several months to seek input on how districts currently allocate and track school-level expenditures and the impact of these reporting practices on the ESSA PPE reporting requirement, in order to inform guidance to LEAs on the structure for and reporting of school-level PPE. Additionally, the CDE hosted a stakeholder engagement session attended by education association representatives, education advocate organizations, and other interested stakeholder groups to provide information and gather feedback related to the ESSA PPE reporting requirement.

Note that the guidance provided below works within the current standardized account code structure (SACS) and the current CDE financial data collection process. ESSA does not require that states or LEAs develop new accounting structures or data collection systems to implement this reporting requirement.

The Requirement

Specifically, ESSA sections 1111(h)(1)(C)(x) and 1111(h)(2)(C) require an SEA and all of its LEAs, which in California include school districts, COEs and charter schools, to report “the per-pupil expenditures of Federal, State, and local funds, including actual personnel expenditures and actual nonpersonnel expenditures of Federal, State, and local funds, disaggregated by source of funds, for each local educational agency and each school in the State for the preceding fiscal year.”

The law is silent regarding the methodology to be used to calculate per-pupil expenditures, e.g., what categories of expenditures should be included or excluded, what pupil counts to use, etc., and no formal federal guidance has been issued.

Effective Date

According to the “Dear Colleague” letter issued by the US Department of Education (ED) on June 28, 2017, available on the ED website at, an SEA and its LEAs are allowed to delay, until the 2018–19 school year, reporting PPE on annual report cards. California, along with the majority of other states, are electing this option in order to allow thoughtful transition to collecting, calculating and reporting the required data, as many states’ financial systems and reporting processes, including California’s, do not currently support school-level expenditure reporting.

Note that 2017–18 SEA and LEA report cards, which must include all other data elements required by ESEA Section 1111(h)(1) and (2), must include a brief description of the steps taken by an SEA and its LEAs to ensure PPE information is included in 2018–19 report cards. The CDE recommends the following or a similar statement be included in all 2017–18 report cards:

The California Department of Education issued guidance to LEAs on August 1, 2018 regarding how to calculate school-level per-pupil expenditures that will be reported on 2018–19 report cards.

Calculating Local Educational Agency and School-Level Per-Pupil Expenditures

LEAs will calculate LEA-level and school-level PPE using the financial data available in their local accounting systems. It is important to note that the law requires actual expenditures, not budgeted or estimated expenditures, be used in the PPE calculation.

Following are guidelines and other information to assist LEAs with their PPE calculations. In order to align with other federal financial data collections, the CDE followed parameters that exist for calculating current expenditures and expenditures per pupil in the National Public Education Financial Survey (NPEFS) and the Annual Survey of School System Finances (F-33).

Included Expenditures

Generally, all LEA expenditures that represent the ongoing, day-to-day operations of schools and LEAs for public elementary and secondary education, i.e., current expenditures, should be included in the calculation. These include, but are not limited to, instruction, instructional support, student support services, pupil transportation services, plant maintenance and operations, and general administration, but not including excluded expenditures discussed below.

Excluded Expenditures

Several types of expenditures are not appropriately included in current expenditures. These expenditures are either not associated with prekindergarten through grade twelve students, such as adult education; or are one-time, significant outlays that may distort the data, such as facilities acquisition. Therefore, the CDE recommends the following categories be excluded from total expenditures used in the PPE calculation:

  • Adult Education (Fund 11; Goal 4XXX)
  • Capital Outlay (Function 8500; Object 6XXX)
  • Community Services (Goal 8100, Function 5000)
  • Debt Service (Function 9100, Object 74XX)
  • Nonagency (Goals 7110 and 7150)
  • Tuition (Function 9200, Object 71XX)
  • Transfers (Functions 9200 and 9300; Object 72XX, 76XX)
  • County Services to Districts (Goal 8600)

LEAs may determine that other expenditures cause PPE to be misleading and elect to exclude them from the calculation. However, over-exclusion of expenditures should be avoided.

School-Level Versus Local Education Agency-Level Expenditures

For school-level PPE reporting, the per-pupil expenditure calculation will include expenditures charged directly to a school plus the school’s share of expenditures that are charged centrally at the LEA level but that benefit the schools, i.e., central expenditures.

It is important to note that LEAs are afforded flexibility to determine which expenditures are charged directly to the school level versus those expenditures that remain at the central level and are ultimately allocated to individual schools based on a reasonable, consistent allocation methodology. LEAs are ultimately responsible for the spending decisions made on behalf of their schools and are in the best position, based on LEA characteristics and governance, to identify costs that benefit individual schools versus those that benefit all of the LEA’s schools. Once a methodology for identifying school-level and central costs has been determined, school districts and COEs should consistently apply that methodology to all of their own schools.

That said, LEAs should ensure that, to the extent possible, school-level expenditures reflect costs that were actually incurred at the school site, with remaining costs those that are not directly identifiable to a school. This is especially true for teachers and other personnel that are assigned to a specific school site. LEAs should not simply use an averaging methodology to distribute all expenditures among all of their schools.

Student Counts

The other component of the PPE calculation is the student count. While LEAs have the option of using enrollment or average daily attendance (ADA) in the PPE calculation, the CDE recommends that LEAs use enrollment. This is consistent with the student count that is used in the federal current expenditures per pupil calculation, and that most school districts use to develop site budgets.

However, the CDE recognizes that for some LEAs enrollment may be distorting and ADA may provide a better representation of student count. Ultimately, LEAs should use the count that best provides an accurate representation of PPE, and use that count consistently for all of its schools.

Calculating Per-Pupil Amounts

Once total expenditures and student counts have been determined, the formulas for calculating LEA and school-level per-pupil amounts are:

  • LEA-level PPE – total LEA expenditures divided by the LEA’s student count.
  • School-level PPE – for each of the LEA’s schools, school-level expenditures, plus the school’s share of the LEA’s central expenditures, divided by the school’s student count. 

Reporting and Presenting Per-Pupil Expenditure Data

CDE will ultimately collect the PPE data from LEAs for inclusion in the SEA report card. The CDE is working on determining the required level of per-pupil expenditure information that must be reported in SEA and LEA report cards pursuant to ESSA and how it will be presented within the report cards.  At minimum, there will be reporting criteria for actual school-level expenditures and LEA-level expenditures allocated to school sites, broken out by federal funds and by state and local funds.

As noted earlier, PPE is one of many elements that must be included in the SEA and LEA report cards, and the other elements must be included in the report cards for the 2017–18 school year. The PPE information, which must be reported for the 2018–19 school year, will fit within the format and processes established for the SEA and LEA report cards released for the 2017–18 school year later this fall. Additional information about the reporting criteria, collection, and presentation will be forthcoming.

LEAs may consider providing additional student, teacher and school information in conjunction with PPE that will provide context for the amounts reported. 

Considerations for 2018–19 Financial Reporting

As LEAs begin recording 2018–19 financial transactions, consideration should be given to this new reporting requirement and how the local financial system will capture the information needed for school-level reporting. Most LEAs are already tracking some level of expenditures directly to the school level, using the SACS school field or another locally defined field in the LEA’s accounting system, but opportunities for further refinement may exist. For example, LEAs may want to identify additional expenditures to be tracked at the school level in the financial system that can be easily identified to a specific school or schools.

Other areas for consideration:

  • Use prior year financial data, e.g., 2017–18, to prepare test PPE data in order to make preliminary assessments of the outcomes and whether those outcomes meet expectations.
  • Test and evaluate approaches to allocate central expenditures to the schools, analyzing how various approaches affect school-level per-pupil expenditure amounts.
  • Anticipate questions that may be asked by the governing board, parents, and other stakeholders, and be prepared to answer them.

Every Student Succeeds Act Per-Pupil Expenditure Resources

The resources listed below provide additional information and tools related to the ESSA per-pupil expenditure reporting requirement:

Future Efforts

The CDE anticipates that throughout 2018–19 additional information and support for implementing the PPE reporting requirement will be provided to LEAs, such as additional correspondence, frequently asked questions, webinars, and workshop sessions. In particular, CDE will provide information regarding the process and timeline by which the CDE will collect the PPE data from LEAs, in order for that data to be incorporated into the SEA report card as required by ESSA. 

If you have any questions regarding the ESSA PPE reporting requirement please contact the CDE School Fiscal Services Division, Office of Financial Accountability and Information Services by phone at 916-322-1770 or by email at



Caryn Moore, Director
School Fiscal Services Division

Last Reviewed: Monday, March 25, 2024

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