Friday, September 11, 2009

Arizona Schools Getting Screwed on Tuesday

Arizona districts and charters operate on an equalization payment that arrives monthly on or around the 15th from the Arizona Department of Education. There has been a lot of fear recently that the state legislature would be irresponsible and do one of two things since those who call the shots are anti-government conservatives: 1) education budgets would be gutted or 2) refuse to protect current funding levels by kicking shortfalls down the road.

Well, the GOP leaders picked the "all of the above option" and as a result, the following memo was issued to schools YESTERDAY at 5:55pm
September 10, 2009

State Fiscal Stabilization Fund FY 2010 Distribution

The recently passed state budget (3rd Special Session Chapter 11 section 14) requires the Arizona Department of Education to reduce basic state aid payments by $472.1 million and replace those funds with federal State Fiscal Stabilization funds (SFSF) as provided in the American Recovery and Reinvestment Act of 2009 (ARRA) “as soon as possible.” This procedure is consistent with Title XIV of ARRA and follows guidance provided by the U.S. Department of Education regarding the distribution and use of the funds. This distribution will also provide the added benefit of improving the State’s cash flow requirements.


Impact on September 15 Basic State Aid payment

Based on the above law, the Arizona Department of Education will not be distributing any funds on September 15, 2009. In lieu of this payment, each LEA will be awarded SFSF funds in the same amount that they would have received in the apportionment payment.


Application Process

Federal law requires each LEA to complete an application to receive federal funds. The application can be accessed through the Department of Education’s Grants Management System. If you have questions about accessing this system, please contact Richard Valdivia at Richard.Valdivia@azed.gov. Applications will be available as soon as school finance can calculate the September basic state aid payment, which we anticipate will be no later than Monday, September 14 2009.

The application is basically identical to the application LEAs submitted last summer. LEAs will have to identify how they intend to use the funds by object code with a brief description. To complete the application, LEAs will have to make certain federally required assurances that the funds will be expended as required by ARRA and the required accounting and reporting requirements will be met. Applications are due by September 16, 2009.

FAILURE TO APPLY FOR ARRA FUNDS MEANS YOUR DISTRICT WILL NOT RECEIVE FUNDING IN THE AMOUNT OF YOUR SEPTEMBER BASIC STATE AID PAYMENT.

When completing the application, please make sure that the application amount matches the award amount. Also, please ensure that all requested projects have a completion date within the current fiscal year.


Cash Distributions

Cash will be distributed through the Department of Education’s Grants Management System. As with all other federal grants, cash will be distributed on the first of each month. Therefore, the earliest LEAs can receive funds is October 1, 2009. LEAs that submit applications after September 16 will receive funds on November 1, 2009.

Available Uses

Funds can be used for any activity authorized by the following:
  • ESEA (includes Impact Aid)
  • IDEA
  • AEFLA
  • Perkins Act
Funds cannot be used for
  • Facility maintenance costs
  • Capital costs for stadiums
  • Vehicles
  • Capital costs for district office space
  • Cannot fund aquariums, zoos, golf courses, swimming pools.
While funds can be used for capital improvement projects on schools, any capital project involving an outside vendor is subject to Davis Bacon wage requirements. Further, federal rules require any transactions involving outside vendors to be reported.


Cash Management

Federal cash management laws apply to these funds. Each LEA is responsible for meeting these laws. LEAs may want to use the funds to reimburse prior expenditures if that will help simplify cash management requirements.


Accounting for the Funds

The Auditor General’s Office will be providing guidance outlining how these funds will be accounted for.


For Profit Charter Schools

For profit charter schools are not eligible to receive SFSF dollars and were exempted from the basic state aid reduction. Therefore, for profit charter schools will receive their September 15 basic state aid payment as normal.

Questions

For general questions, please contact John Arnold at jarnold@azsfb.gov.

For questions regarding the application process or the Grants Management System, contact Richard Valdivia at Richard.valdivia@azed.gov.

For questions regarding accounting contact Laura Miller at lmiller@azauditor.gov .
So what does this mean?

Bottom line is schools will not be receiving their monthly payment from the Arizona Department of Education on Tuesday, September 15th.

Finance personnel will have to go through a federal grant application process to request funds through the ARRA (Stimulus). The earliest they can expect funds is October 1st and there are restrictions as to how it can be used.

Since the GOP state legislators in charge waited until the last goddamned minute to decide whether or not education was worth funding (to them, it's not), schools got a whopping two work-day heads up on this debacle.

September 15th will be a dark day in Arizona. GOP lawmakers who voted to gut Arizona's education system must pay a heavy political price for it.

[IMPORTANT UPDATE] They flinched. Dept of Ed is now assuring schools that they will receive their payments on the 15th. Goes to show you how arbitrary this all is to them, rather than making the funding of education a bedrock principle.

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