Frequently Asked QuestionsFrequently asked questions regarding the Education Protection Account.
Education Protection Account
What is the Education Protection Account (EPA)? (Updated 26-Jan-2018)
The Education Protection Account (EPA) was created in November 2012 by Proposition 30, The Schools and Local Public Safety Protection Act of 2012, and it was implemented in 2013. The EPA is governed by Section 36 of Article XIII of the California Constitution, which was amended by Proposition 55 in November 2016.
The revenues generated from Section 36 of Article XIII of the California Constitution are deposited into a state account called the Education Protection Account. Of the funds in the account, 89 percent is provided to K-12 education and 11 percent to community colleges.
More information on Propositions 30 and 55 .
Source: Article XIII, Section 36, Subdivision (e), Paragraph (3) of the California Constitution .
Are EPA funds appropriated through the annual Budget Act?
No, the funds are continuously appropriated and are not contingent on the passage of the State budget by the constitutional deadline.
Source: Article XIII, Section 36, Subdivision (e), Paragraph (3) and Paragraph (4) of the California Constitution .
What entities will receive a share of the K–12 EPA funds?
Local educational agencies (LEAs), including school districts, county offices of education (COE) and charter schools will receive funds from the EPA.
Source: Article XIII, Section 36, Subdivision (e), Paragraph (3), Subparagraph (B) of the California Constitution .
How much money has been allocated to EPA? (New 06-Jun-2017)
Education Protection Account Revenue Allocation
Fiscal Year EPA Revenue EPA Proportionate Share 2012–13 $6,509,460,000 21.38904% 2013–14 $6,284,237,490 21.03167% 2014–15 $7,753,846,430 26.66369% 2015–16 $7,201,896,910 25.71750% 2016–17 $6,708,585,040 24.75705%
This chart will be updated each fiscal year after the Second Principal (P-2) Apportionment certification. For current fiscal year EPA information, see the CDE Funding Rates and Information Web page.
Does an LEA need to submit an application to the state to receive EPA funds?
No, EPA funds provide general purpose funding to LEAs and will flow automatically from the state.
Will the EPA proportionate share percentage for a fiscal year change over the course of the year? (Updated 06-Jun-2017)Yes, for each fiscal year cycle the EPA proportionate share percentage will be recalculated four times.
Before the start of each fiscal year (June 30), the California Department of Finance (DOF) will provide an EPA revenue estimate. In the fourth quarter of each fiscal year, the DOF will provide an updated EPA revenue amount based on statewide receipts for the current fiscal year. These EPA revenue estimates as well as the statewide revenue limit and charter school general purpose funding totals used for the LCFF Floor as of the Advance, First Principal (P-1) Apportionment, P-2 Apportionment, and Annual certification periods will be used to determine an LEA’s EPA proportionate share entitlement, relevant to each certification period.
The chart below illustrates the data elements and timing of each calculation of the EPA proportionate share percentage.
Education Protection Account Proportionate Share Percentage Calculations
DOF's EPA Revenue Amount Calculation Statewide Revenue Limit and Charter School General Purpose Entitlement Total (LCFF Floor) as of... Calculation EPA Proportionate Share Percentage for... Pre-Fiscal Year Estimate (June 30) Divided by Advance Equals 1st Quarter (September) and 2nd Quarter (December)
Pre-Fiscal Year Estimate
Divided by P-1 Equals 3rd Quarter (March) Final Amount
Divided by P-2 Equals 4th Quarter (June) Final Amount
Divided by Annual Equals Prior Year Adjustment
The EPA proportionate share ratios can be found on the CDE's Funding Rates and Information Web page.
When will EPA entitlements be allocated? (Updated 06-Jun-2017)
EPA funds are allocated on a quarterly basis in September, December, March and June of each year.
The EPA amount received is a reduction to LCFF state aid. When will the state apply these reductions?
Except for "excess tax" LEAs, every dollar an LEA receives in EPA funding is a reduction to their LCFF state aid funding allocated through the Principal Apportionment. The reductions will be applied at each Principal Apportionment certification.
Entitlement Calculations and Payments
What data (revenue limit, local revenue, and ADA) is used to calculate EPA funding under LCFF? (Updated 26-Jan-2018)When available, see the 2017-18 Principal Apportionment Reference Guides for information on the EPA calculations beginning as of the 2017-18 Fiscal Year. The following chart provides the source location for each LEA type used to determine an LEA's total EPA entitlement prior to 2017-18, including ADA for minimum calculation:
Data to Determine EPA Entitlements
Total ADA is the sum of:
- Total District ADA (Line H-5) from the School District ADA exhibit
- Total ADA (Line G-5) from the School District Basic Aid Court-Ordered Voluntary Pupil Transfer Calculation exhibit (credited to the district of attendance)
- Total ADA (Line G-5) from the School District Basic Aid Choice Calculation exhibit (credited to the district of attendance)
- Total ADA (Line G-5) from the School District Basic Aid Open Enrollment Calculation exhibit (credited to the district of attendance)
Revenue Limit Funding is the sum of Adjusted Total Deficited Base Revenue Limit (Line B-3) + Adjusted Total Other Revenue Limit (Line B-6) + Adjusted Necessary Small Schools Allowance (Deficited) (Line B-7) from the School District LCFF Transition exhibit.Local Revenue (Line F-2) from the School District LCFF Transition exhibit.
County Office of Education
Total County Funded Non-Juvenile Court Schools ADA, Line B-5 + Total Juvenile Court Schools ADA, Line B-8 from the County LCFF Transition exhibit.
Total Adjusted Revenue Limit Funding (Line B-12) from the County LCFF Transition exhibit.Total Local Revenue (Line D-4) from the County LCFF Transition exhibit.
Total ADA is the sum of Attendance Charter School – Funded ADA, Total Funded ADA (Line E-5) + Attendance Charter Funded County Programs – Funded ADA (Line J-5) from the Charter School ADA exhibit.
Adjusted General Purpose Funding (Line B-5) from the Charter School LCFF Transition exhibit.Total In-lieu of Property Taxes (Line F-7) from the Charter School LCFF Transition exhibit.
How is EPA funding calculated? (Updated 26-Jan-2018)Despite implementation of the Local Control Funding Formula (LCFF) in fiscal year 2013–14, EPA entitlements continue to be calculated based on adjusted revenue limits, including the allowance for necessary small schools, and charter school block grant funding in accordance with Section 36 of Article XIII of the California Constitution. The funding amounts continue as components of the LCFF as part of an LEA's Floor calculation. The CDE will allocate EPA revenues on a quarterly basis through the 2030–31 fiscal year. Charter schools newly operational in the 2013–14 fiscal year and after receive the EPA minimum funding level of $200 per unit of ADA.
The CDE calculates EPA entitlements based on the statewide total of revenue limits and charter school block grant funding. Each LEA's EPA entitlement is then reduced so that funding from local revenue and the EPA combined do not exceed the LEA's adjusted revenue limit or charter school general purpose funding, provided that each LEA receives the minimum EPA funding of $200 per unit of ADA. For most LEA's, EPA funding offsets LCFF state aid allocated through the Principal Apportionment.
Below are three examples of the EPA entitlement calculation. Example 1 shows an LEA whose EPA entitlement is the proportionate share amount. Example 2 shows an LEA whose EPA entitlement is reduced so that the in-lieu funding plus EPA entitlement does not exceed its revenue limit. Example 3 illustrates a scenario where an LEA would receive the $200 per ADA minimum.
Education Protection Account Calculation Example
Step EPA Entitlement Calculation Example 1 Example 2 Example 3 A-1 Current ADA 20,000 20,000 20,000 A-2 Per ADA Minimum $200 $200 $200 A-3 Minimum per ADA (A-1 x A-2) $4,000,000 $4,000,000 $4,000,000 B-1 Adjusted Revenue Limit/General Purpose Block Grant $100,000,000` $100,000,000 $100,000,000 B-2 Local Revenue/In-Lieu $65,000,000 $85,000,000 $97,000,000 B-3 EPA Entitlement Cap (B-1 - B-2) $35,000,000 $15,000,000 $3,000,000 C-1 Adjusted Revenue Limit/General Purpose Block Grant (B-1) $100,000,000 $100,000,000 $100,000,000 C-2 Proportionate Share Ratio 25.00% 25.00% 25.00% C-3 EPA Proportionate Share (C-1 x C-2) $25,000,000 $25,000,000 $25,000,000 D-1 EPA Entitlement (Lesser of B-3 or C-3, but not less than A-3) $25,000,000 $15,000,000 $4,000,000
Revenue limit or charter school general purpose funding determined as part of an LEA's LCFF Floor changes at each Principal Apportionment certification as a result of ADA, local revenue, and other adjustments. Does this mean the EPA entitlement will change also? (Updated 06-Jun-2017)
Yes. An LEA’s EPA entitlement will be determined at the Advance, P-1, P-2, and Annual Apportionment certification periods. An LEA’s EPA entitlement will not change after the Annual certification even if the LEA’s LCFF Floor or local revenue amount changes at the Annual R1, R2, or R3 certifications. CDE will compare the final EPA entitlement at Annual to the EPA entitlement calculated as of P-2 and any adjustment (positive or negative) will be applied against an LEA’s current year EPA apportionment.
Is the $200 per ADA EPA minimum funding in addition to $120 ADA constitutional guarantee?
Yes, each are separate constitutional guarantees.
Are funds received from EPA used in the determination of an LEA's "basic aid" or excess tax" status? (Updated 06-Jun-2017)
No, the determination of whether a school district is "basic aid" or "excess tax" is made prior to the consideration of EPA revenue pursuant to EC Section 42238.02(m) .
Why can an LEA receive only $200 per-ADA minimum when it is not considered "basic aid" or "excess tax" under LCFF? (New 06-Jun-2017)
An LEA's "basic aid" status under LCFF is not a component of the EPA entitlement calculation, because the law governing EPA uses an LEA's revenue limit or charter school general purpose funding determined under the LCFF Floor. An LEA will receive the $200 per-ADA minimum if:
- The LEA is a charter school newly operational as of 2013–14 or later,
- The local revenue/in-lieu exceeds the adjusted revenue limit/charter school general purpose funding, or
- The difference between the LEA's revenue limit/charter school general purpose funding and its local revenue/in-lieu is less than the per-ADA minimum funding threshold.
- The LEA is a charter school newly operational as of 2013–14 or later,
Where can I find information on EPA entitlements and apportionments?
EPA Entitlement and Apportionment information is available on CDE's Web site.
Is there a schedule of the specific dates when EPA payments for the fiscal year will be made? (Updated 06-Jun-2017)The State Controller's Office publishes annually a report of its estimated payment schedule, which includes EPA, on its State and Local Apportionments Web page .
Use of Funds and Reporting Requirements
Must the EPA entitlement be allocated proportionately to the programs whose ADA generates the LEA's revenue limit funding? (Updated 06-Jun-2017)
There are no statutory requirements on how EPA funds should be allocated and each LEA decides locally how to best allocate funds.
Are there reporting requirements? (Updated 06-Jun-2017)
Article XIII, Section 36, Subdivision (e), Paragraph (6) of the California Constitution requires all districts, counties and charter schools to report on their Web sites an accounting of how much money was received from the EPA and how that money was spent.
Will the CDE provide a template that LEAs can use for reporting EPA revenues and expenditures? (Updated 06-Jun-2017)
The law does not prescribe a format for LEAs to report their receipt and expenditure of EPA funds, nor did it require the CDE to develop a format. Therefore, the CDE will not be providing a template. It will be at each LEA’s discretion to determine the format for reporting its EPA revenue and expenditures on its Web site.
The law requires that the use of EPA funds be determined by the governing board at an open public meeting. Does this meeting need to be a separate meeting only for the discussion of EPA funding? (Updated 06-Jun-2017)
The law does not specify that the open public meeting has to be a separately held meeting. Therefore, this requirement may be satisfied at a regularly scheduled meeting, which the CDE believes could be the annual budget adoption meeting.
When should the open public meeting for discussing the use of EPA funding be held? (Updated 06-Jun-2017)
The law does not specify that the open public meeting has to be a separately held meeting. Therefore, this requirement may be satisfied at a regularly scheduled meeting, which the CDE believes could be the annual budget adoption meeting, although it could be at any open public meeting before expenditures are recorded for each applicable fiscal year.
Are there any restrictions on the use of EPA funds?
Yes, specific information on the use of funds is available on CDE’s Web site.
Has the CDE issued accounting guidance on how to account for EPA funds?
Yes, accounting guidance is available on CDE’s Web site.