Voluntary and Temporary Transfer of Funds

Guidance Regarding Voluntary and Temporary Transfer Requests

• California Education Code (EC) Section 8256 allows for the California Department of Education (CDE) to arrange interagency adjustments between different contractors with the same type of contract when both agencies mutually agree to a temporary transfer of funds for the balance of the fiscal year. This transfer is known as a Voluntary and Temporary Transfer (VTT) of funds between over-earning contractors and under-earning contractors.
• Local Planning Council (LPC) designees or an LPC subcommittee group may facilitate the transfer of funds between contractors within their county and submit requests to the CDE.
• Contractors will self-identify as an over- or under-earner and submit a transfer request that includes an amount of contract funding they expect to be able to temporarily release or accept.

Requirements

• Participating contractors must be in good standing, and in full compliance with Contract Terms and Conditions, fiscal reporting requirements, regulatory requirements, and statutory requirements.
• Contractors requesting additional funding on a temporary basis must have projected contract earnings in excess of their current contract Maximum Reimbursable Amount (MRA).
• Funds accepted by the over-earning contractor cannot be transferred into the Preschool Reserve Account.

Application Process

• VTT requests must be submitted to the CDE between November 1 and November 15 or between May 1 and May 15, of the same contract year. Note: To meet CDE’s deadlines, the LPC designee or LPC subcommittee may require requests to be submitted prior to the CDE due date.
• Once participating contractors have self-identified, the LPC designee or LPC subcommittee group will collect signed letters of request (Attachment B or Attachment C) from the authorized contract representatives indicating their willingness to temporarily release and transfer contract funds (Attachment B) or accept transferred contract funds (Attachment C).
• The LPC designee or LPC subcommittee group will attach a cover letter (Attachment A) that requests a review of the submitted documents and will forward the completed package which includes all three attachments to the Early Education and Nutrition Fiscal Services (EENFS) fiscal analyst for the county, for consideration. The CDE Fiscal Analyst Directory is located on the CDE website.
• All VTT requests received by the LPC designee or LPC subcommittee group should be forwarded to CDE, regardless of if there is a match in county or not.

• Additional information regarding the VTT process including all Attachments is located on the Local Planning Council Forms web page.

Approval Process

• EENFS will review all VTT requests and determine whether the amount of the transfer corresponds with the contracts’ projected fiscal year contract earnings for all contractors involved in the transfer. 
• EENFS may request additional justification for requests.
• The decision to approve or deny voluntary and temporary transfers of contract funds will be made exclusively by CDE; all parties will be notified of the outcome.
• All approved VTT requests will be processed via an Allocation Letter, which does not need to be signed and returned to the CDE.