1. education
2. school

JANUARY 2008
Arizona School Finance
Summary Manual
A tool developed to assist your understanding
of the school budget — where the
money comes from and where it goes
Permission is granted to reproduce any
portion and all portions of the 2008 School
Finance Manual provided that credit is given
to the Arizona Association of School Business
Official for the production of this manual.
The Arizona Association of School Business Officials
lead to an Associates of Arts Degree (2 year degree
(AASBO) is pleased to provide this document so that
program) from the Community College System of
you may better understand the ever changing world of
Arizona. Two certificate credentials, School Business
school finance. This document will assist you in assem-
Specialist and School Business Official, are currently
bling and deciphering the various elements of a school
being offered to AASBO members. For further infor-
district budget as well as being a resource for other
mation on these programs, contact the Director of
related budgetary issues.
Education Programs or an AASBO staff member.
This manual is only one resource available to you in
Above all else, remember that AASBO is an organiza-
your quest to understand school finance. This docu-
tion developed and run by individuals committed to
ment, as well as other related informa-
member service. A special thank you
tion, is available to you via the AASBO
to Wendy Qualls – Business Manager
web site. The AASBO web site (www.
aasbo.org) contains numerous links
to other related organizations that
contain helpful information in the area
of school finance.
“If you should have
any questions, ideas,
or suggestions, please
feel free to contact the
AASBO staff at
602-253-5576.”
Litchfield Elementary School District,
Lou Wiegand - Director of Business
Glendale Union High School District,
George Zeigler, CPA – Chief Financial
Officer Mesa Unified School District,
Lynn Pogreba – InfiniteVisions, Lyle
For those who desire a learning expe-
Friesen - Director of School Finance
rience typically associated with a
Operations, Arizona Department of
classroom environment, including qualified instruc-
Education and Chuck Essigs - Director of Government
tors and interaction with peers, consider enrolling in
Relations AASBO, for their assistance in updating the
one of the AASBO Educational Programs. Subject
information contained in this manual.
areas include:
accounting, budgeting, purchasing,
food service, transportation, facility management,
If you should have any questions, ideas, or sugges-
human resources and school law. Advanced classes
tions, please feel free to contact the AASBO staff at 602-
are offered in the areas of purchasing, budget and
253-5576. They will be more than willing to assist you.
finance, and maintenance and operations. An internship program offering opportunities to work with
mentors is available to students who have completed
classes in each discipline. In cooperation with Central
Arizona College, participation in these classes can
Tom Elliott
Tom Elliott
2007-08 AASBO Board of Directors
Arizona School Finance Summary Manual
This document is divided into four (4) sections to aid in
your understanding of school finance. These sections
are as follows:
I.
II.
III.
IV.
Overview
Budget Formula Construction
Where Formula Dollars Come From
How Budgets Are Categorized
Although the information in this document is representative of many public school districts in the State of
Arizona, it will not portray all.
Additional information may be obtained from the
following locations.
Arizona Department of Education
1535 West Jefferson Avenue
Phoenix, AZ 85007
(602) 542-5393
1 (800) 352-4558
www.ade.az.gov
Arizona School Facilities Board
1700 West Washington, Suite 230
Phoenix, AZ 85007
(602) 542-6501
www.sfb.state.az.us
Arizona Auditor General
2910 N. 44th Street, Ste. 410
Phoenix, AZ 85018
(602) 553-0333
www.azauditor.gov
Arizona Association of School Business Officials
2100 N. Central Ave., #202
Phoenix, AZ 85004
(602) 253-5576
www.aasbo.org
Arizona School Boards Association
2100 North Central Avenue, Ste 200
Phoenix, AZ 85004-1441
(602) 254-1100
www.azsba.org
Arizona School Administrators
1910 W. Washington
Phoenix, AZ 85009
(602) 252-0361
www.azsa.org
Arizona Department of Revenue
1600 W. Monroe
Phoenix, AZ 85007-2650
(602) 716-6090
www.revenue.state.az.us
Association of School Business Officials
International
11401 North Shore Dr
Reston, VA 20190
866-682-2729
www.asbointl.org
Table of Contents
Overview: “A Global Perspective”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Budget Formula Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maintenance and Operations Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Base Support Level (BSL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pupil Transportation Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Revenue Control Limit and District Support Level (DSL) . . . . . . . . . . . . . . . . . . . . . 12
Capital Outlay Revenue Limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Additions to the Maintenance and Operations and
Unrestricted Capital Outlay Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Soft Capital Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Where Formula Dollars Come From . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
State and County Equalization Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
School District Property Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
How Budgets are Categorized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance and Operations (M&O) Fund 001. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Classroom Site Fund 010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Instructional Improvement Fund 020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
County, City and Town Grants Fund 050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensatory Instruction Fund 072. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Projects Funds 100-499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
School Plant Funds 500-506. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Funds 510-595 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Related Funds 600-700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Miscellaneous Funds 510-595. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
21
22
23
23
23
24
24
24
26
28
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Acronyms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Arizona Association of School Business (AASBO) Officials. . . . . . . . . . . . . . . . . 33
Arizona Association of School Business Officials | School Finance Summary Manual
OVERVIEW: “A Global Perspective”
The public elementary and secondary schools of
Arizona are governed by the Arizona Constitution and
Title 15 of the Arizona Revised Statutes (A.R.S.).
finance system ended July 9, 1998 when the legislature passed and approved Students FIRST (Fair and
Immediate Resources for Students Today) legislation.
Students FIRST created a completely
new capital financing system aimed
“The focus of this
at creating minimal adequacy standards for capital related issues in
manual is to provide
public schools. This system more
tightly controls the capital funding
an understanding of
as compared with the past when it
the way public school
was typically financed by the sale
of general obligation bonds. The
districts in the State of
Students FIRST program is governed
Arizona are funded ”
by the state School Facilities Board.
The legislature has required that the
Arizona Department of Education and
the state’s Auditor General interpret
Title 15 and design the state’s Uniform
System of Financial Records (USFR)
which is used in maintaining local
school district financial records and
preparing reports. Two USFR manuals
exist, one for school districts and
one for charter schools. The USFR
prescribes the accounting system
and includes a detailed description of the legally established funds. The USFR and
Memorandums are available to download from the
Auditor General’s site (www.azauditor.gov). The USFR
includes a calendar, chart of accounts and other valuable information. A listing of the commonly used funds
is included in the section of this document entitled:
How Budgets are Categorized.
In 1980-81 the Arizona Legislature refined the school
finance system to provide equal dollars per weighted
pupil for school district operations through a balancing
of the local qualifying property tax rate and State
and County equalization assistance. This concept,
commonly referred to as the “equalization formula”
allowed school districts throughout the State of Arizona
to experience similar “effort” in raising educational
dollars for their students irrespective of the property
valuations within their boundaries. With the exception
of the suspension of County Equalization, this equalization formula is still utilized today in funding a district’s
Revenue Control Limit (RCL), Capital Outlay Revenue
Limit (CORL), and its Soft Capital Allocation. Further
details of these formulas are included in the section of
this document entitled: Budget Formula Construction.
In 1995 the Legislature authorized
charter schools — a new educational option. In the first
years, charter school funding was based on the RCL,
CORL and Capital Levy Revenue Limit (CLRL), which
was calculated in the same manner as the districts.
Over the years, the funding has evolved to include Additional Assistance, which replaced the CORL, CLRL and
Transportation funding, plus additional monies in lieu of
capital funding from the School Facilities Board (SFB).
The focus of this manual is to provide an understanding
of the way public school districts in the State of Arizona
are funded and does not include charter school funding.
The sections that follow will help to better understand
some of the detailed components that make up the
financing formulas.
In 1994, the Arizona Supreme Court ruled that the
state’s statutory formula for funding school facilities and equipment violated the Arizona Constitution. A four-year struggle to create a new capital
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction
A school district budget covers a one year period from
July 1st to June 30th. Each school district must propose,
adopt and revise an expenditure budget according to
the following chart. The following is a schedule of the
dates, publishing and meeting notice requirements for
Expenditure Budgets per Arizona Revised Statutes:
Type of Budget Revision
Publishing
Requirements
Public Hearing
and Board
Meeting
Post Notice
of Public
Hearing*
Proposed budget and adoption
of proposed budget (A.R.S. §
15-905.C)
Publish proposed budget or summary
and notice no later than 10 days prior
to public hearing or post on the Arizona
Department of Education website
Not later than
July 15
Yes
September 15 budget revision
(A.R.S. §15-905.Q)
No
Prior to October
15
Yes
December 15 budget revision
(A.R.S. § 15-905.E)
Publish notice no later than 10 days
prior to public hearing
On or before
December 15
Yes
Final budget revision (Growth
A.R.S. §15-948(D); excess utilities A.R.S. §15-910(D); tuition
revenues A.R.S. §15-905(I); Type
03 HS tuition A.R.S. §15-905(J);
Impact Aid A.R.S. §15-905(K) )
No
Prior to May 15
Yes
(May 15 budget revisions and
other budget revisions not
indicated above.)
No
Prior to May 15
Yes
*Only regular public hearing notice requirements for posting must be met.
The Expenditure Budget contains categories from which school districts can expend monies. These categories
(funds) fall into these major classifications:
•
•
•
•
•
Maintenance & Operation
Unrestricted Capital Outlay
Soft Capital Allocation
Classroom Site Fund
Instructional Improvement Fund
•
•
•
•
•
Bond Building and Capital Funds
Special Projects (Federal/State)
Building Renewal
New Schools Facilities
Other Funds
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
Maintenance and Operations Budget
The Maintenance & Operations (M&O) Fund budget
is where most of the day to day expenditures take
place. Typical budgeted expenditures include: salaries,
employee benefits, supplies, utilities, maintenance
and repair, and miscellaneous expenditures not of a
capital nature.
Although the format and formula computation of the
M&O Fund is very structured, the process of determining how the monies will be spent varies among
school districts. Typically the budgeting process starts
months before the budget year begins.
The M&O Budget limit is based on a number of formulas
heavily dependent upon the Average Daily Membership (ADM) of the first 100 days in session (A.R.S.
§15-901A.2). School districts are funded on prior year
ADM and charter schools on current year ADM. ADM
means the total enrollment of fractional students and
full-time students, minus withdrawals, of each school
day through the first one hundred days in session for
the current year (A.R.S. §15-901) (A.R.S. §15-902.02
provides an option to offer and be funded on the 1st
200 days of instruction.)
This basic Maintenance and Operation Expenditure
Budget includes the following formulas:
• Base Support Level (BSL) (A.R.S. §15-943)
• Transportation Revenue Control Limit
(TRCL) (A.R.S. §15-946)
• Capital Outlay Revenue Limit (CORL)
(A.R.S. §15-961)
“The M&O Budget limit
is based on a number
of formulas heavily
dependent upon the
Average Daily Membership (ADM) of the first
100 days in session ”
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
Base Support Level (BSL)
Weighted Student Count
Base
Support
Level
=
{
Weighted Student Count
X
Base Level Amount
X
Teacher Experience Index
The Weighted Student Count takes into consideration
the relative associated cost of educating certain classifications of students. The weighted student count
takes into account the size of the district, whether the
students are in elementary or high school, the isolation
of small rural school districts in the state, and special
needs children. Weighted Student Count is specified
per A.R.S. §15-943.
Group A Students
Group A students are defined in A.R.S. §15-901 which
includes funding for the following groups of students.
For school districts with 600 or more students, the
following weights by grade level are utilized:
Grade Level
Support Level Weight
Pre-School with Disabilities (PSD)
1.450
K - 8 grades
1.158
9 - 12 grades
1.268
School districts with fewer than 600 students in elementary and/pr high school grades have weights that vary
by grade range. Weight factors for the small isolated
school districts are greater than those for the small
school districts. School districts must be designated
by the Superintendent of Public Instruction in order to
use small isolated district weights. As defined in A.R.S.
§15-901 (B) (26), a small isolated school district to be
so designated must contain no school which is fewer
than thirty miles, or fifteen miles if road conditions and
terrain cause driving to be slow or hazardous, from
another school operated by an in-state school district
and which teaches one or more of the same grades
as the school to be designated as within an isolated
small school district. Following are the special weightings applicable to these school districts as identified in
A.R.S. §15-943.1. (See chart below)
Support Level Weights for Small School Districts Not Designated as Isolated
Student Count
K-8 Grades
9-12 Grades
< 100
1.399
1.559
> =100 & < 500
1.278 + [.0003 x (500 – student count)]
1.398 + [.0004 x (500 – student count)]
> = 500 & < 600
1.158 + [.0012 x (600 – student count)]
1.268 + [.0013 x (600 – student count)]
Support Level Weights for Small Isolated School Districts
Student Count
K-8 Grades
9-12 Grades
< 100
1.559
1.669
> =100 & < 500
1.358+ [.0005 x (500 – student count)]
1.468 + [.0005 x (500 – student count)]
> = 500 & < 600
1.158 + [.002 x (600 – student count)]
1.268 + [.002 x (600 – student count)]
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
Base Support Level (BSL)
Group B Students
Additional support level weights are provided for
special needs and other students that were served the
previous year. Funding for Extended School Year (ESY)
is included within the funding generated by these additional weights. These weights are specified in A.R.S.
§15-943.2. They are as follows:
K
1.352
Hearing Impairment
4.771
K-3
0.060
ELL (English Language Learners)
0.115
MD - R, A-R and SMR - R
6.024
MD - SC, A-SC and SMR - SC
5.833
Multiple Disabilities Severe Sensory
Impairment
7.947
Orthopedic Impairment (Resource)
3.158
Orthopedic Impairment (Self Contained)
6.773
Preschool-Severe Delayed 3.595
ED, MIMR, SLD, SLI, and OHI
0.003
Emotionally Disabled (Private)
4.822
Moderate Mental Retardation
4.421
Visual Impairment
4.806
Teacher Compensation
A district can increase its Base Level amount by an
additional 1.25% if its teacher performance evaluation system receives approval from the State Board of
Education, in accordance with A.R.S. §15-952. Funds
received by this increased budget capacity may be
expended only for additional teacher compensation.
For budget year 2007-08, the Base Level is $3,267.22
with teacher compensation.
Career Ladder and Optional Performance Incentive
Programs
A limited number of districts approved by the State may
also increase the Base Level amount by up to an additional 5.5%, if it participates in a teacher compensation program entitled “Career Ladder” (A.R.S. §15-918
et al) or an Optional Performance Incentive Program
(A.R.S. §15-919 et all). The elementary and high school
districts must increase their Qualifying Tax Rate (QTR)
by 2¢ for each percent increase in their Base Level
amount. Unified school districts must increase the QTR
by .04 cents for each percent increase in their Base
Level amount.
Teacher Experience Index (TEI)
This factor is derived from the formula specified in
A.R.S. §15-941. Its purpose is to allow extra budget
capacity for school districts whose average years of
experience for teachers exceed the State of Arizona
average. Districts that qualify are allowed to increase
the support level by 2.25% for each year of experience
above the State of Arizona average. The average and
each district’s TEI factor is calculated from the School
District Employer Report (SDER) that is due annually
by October 15; this report is commonly compiled by a
district’s Human Resources or Payroll department.
Base Level Amount
The Base Level is the amount of money determined annually by the Legislature per 1.0 weighted
student count. For budget year 2007-08 the Base
Level is $3,226.88 without teacher compensation.
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
Pupil Transportation Funding
A.R.S. §15-945 and §15-946 provide increased budget
limits for districts that transport or contract for the
transportation of students to-and-from school. There
is additional funding for academic, vocational and
athletic trips. The subsections below provide details on
the computation of the transportation limits.
Transportation Support Level (TSL)
The Transportation Support Level (TSL) is based
on the average daily route miles per eligible student
transported. Districts are required to use the prior
year Approved Daily Route Mileage in calculating this
amount for the budget year. Eligible students are those
in elementary school (grades PSD-8) whose place of
residence is greater than one mile from their school
of attendance, and those in high school (grades 9-12)
whose place of residence is greater than one and a half
miles from their school of attendance. The formula is
based on 180 school days.
The first step in calculating the TSL is to divide the
district’s total daily route miles by the total number of
eligible students transported. The quotient obtained
from this calculation is used in this chart to determine
the district’s funding per route mile.
Daily Route Mileage
Per Eligible Student
State Support Level
per Route Mile for
2007-08
0.5 or less
$2.23
More than 0.5 through 1.0
$1.81
More than 1.0
$2.23
10
The second section of the support level is for
academic, vocational and athletic trips. This add-on
amount varies by type of district and is determined by
the following chart:
Daily Route Mileage
Per Eligible Student
Transported
District
Type
02 or 03
District
Type
04
District
Type
05
1.0 or less
0.15
0.10
0.25
0.18
0.12
0.30
More than 1.0
Type 02 = unified district, type 03 = elementary district
not in a high school district, type 04 = elementary
district in a high school district and type 05 = high
school district.
The factor determined above is multiplied by the toand-from support level (excluding bus tokens and
passes) to calculate this add-on.
The third part of the calculation is the support level for
the extended year programs which is determined by
multiplying the total extended school year route miles
for students with disabilities attending the extended
school year program by the per mile factor used in the
basic to-and-from support level.
The sum of the above
three items, the toand-from, academic/
vocation/athletic, and
extended school year
constitutes the TSL.
The factor chosen from the chart is multiplied by the total
route mileage and then actual expenditures for bus passes
and tokens for eligible students is added to that product
to determine the to-and-from school support level.
Arizona Association of School Business Officials | School Finance Summary Manual
“The Transportation
Support Level (TSL) is
based on the average
daily route miles
per eligible student
transported.”
Budget Formula Construction cont.
Pupil Transportation Funding cont.
Transportation Revenue Control Limit
(TRCL)
The Preliminary Transportation Revenue Control Limit
(TRCL) is determined by adding the increase in the
budget year TSL from the prior year TSL to the prior
year TRCL.
In accordance with A.R.S. §15-946, the budget year
TRCL cannot increase from the prior year TRCL amount
if the budget year TRCL would exceed 120% of the
budget year TSL.
If the budget year Preliminary TRCL is greater than
120% of budget year TSL, then the budget year TRCL
is the same as the prior year TRCL.
In 2007, the Arizona legislature amended A.R.S. §15946 to set the TRCL to equal the TSL, when the TSL is
greater than the TRCL (Laws 2007, 1st Regular Session,
Chapter 234, Section 1).
“The Preliminary
Transportation Revenue
Control Limit (TRCL) is
determined by adding
the increase in the
budget year TSL from
the prior year TSL to
the prior year TRCL”
Arizona Association of School Business Officials | School Finance Summary Manual
11
Budget Formula Construction cont.
Revenue Control Limit (RCL) and
District Support Level (DSL)
The RCL is a spending limit and is calculated by adding
the BSL to the TRCL. The Revenue Control Limit may
be allocated, in amounts determined by the district,
between the M&O fund budget and the unrestricted
capital fund budget.
The District Support Level (DSL) is that portion of the
RCL that is eligible for equalization assistance. It is
calculated by adding the BSL to the TSL.
Common school districts not within a high school
district (Type 03) are funded for high school students
based on high school tuition paid to other districts.
The Base Support Level formula for those districts
12
uses the elementary student count only. The tuition
amount paid for high school students from these
districts is included in the DSL and the RCL for
purposes of determining the General Budget
Limit, but excluded when calculating the amount
of budget overrides.
“The Revenue Control
Limit may be allocated,
in amounts determined
by the district, between
the M&O fund budget
and the unrestricted
capital fund budget.”
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
13
Capital Outlay Revenue Limit
Student Count of Less Than 600
Just as there is a formula that determines the Revenue
Control Limit, there is also a formula for Capital Outlay
in A.R.S. §15-961. The Capital Outlay Revenue Limit
(CORL) is a spending limit and, like the RCL, may be
allocated, in whole or in part, to either the M&O or unrestricted capital fund.
There are no special provisions for Rapid Decline
districts, so the actual 100th Day adjusted ADM must
be used as the student count. For small and isolated
districts, the basic formula per student dollar amounts
for K-8 and 9-12 are multiplied by the corresponding
weights determined from the chart indicated in Section
II.A.1.b of this report and prescribed by A.R.S. §15-943
(for small school districts).
The CORL calculation is a multiplication of the
unweighted actual student count (100th Day adjusted
ADM) by the appropriate support levels.
The 2007-08 formula for districts of 600 or more
students is as follows:
Grade Level
Support Level
PSD
$225.76
K-8
$225.76
9-12
$267.94
The sum of the above products is the Capital Outlay
Base. If a district’s student count is greater than 5%
over the prior year student count, the Capital Outlay
Base is increased by the actual percentage increase in
the school district’s student count.
The final factor in the CORL formula is an increase for
textbooks for high school students. Prior to 1984, high
school students had to pay a rental fee for textbooks.
In 1984, the Legislature adopted a compulsory education statute which requires students to be 16 or to have
completed the 10th grade prior to leaving school. In
conjunction with the compulsory school requirement,
the Legislature commenced the process of furnishing
textbooks free to high school students. In 2007-08, the
allowable amount for high school textbooks is $69.68
per high school student count. It should be noted that
these provisions apply only to required textbooks and
related printed materials. School districts may continue
to charge a reasonable rental fee for other supplementary materials.
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
14
and grades 1-8 can be requested under the provisions
of A.R.S. §15-482. However, when this provision is used
in combination with the use of proceeds from the sale
or long-term lease of school property (A.R.S. §15-1102)
or with an override in accordance with A.R.S. §15-481,
After allocating the RCL and the CORL between the
the total increase cannot exceed 15% of the Revenue
Maintenance & Operation Budget and the UnrestrictControl Limit. This special K-3 override can be for the
ed Capital Budget there are certain adjustments to be
same period as the 10% override. Budget balance
made in arriving at the total budget for these funds.
carryover for K-3 override is limited to 50% of unexThere are numerous reasons for an increase, but most
pended budget balance. This override
districts will typically only have some of
may be allocated to the M&O or Unrethe adjustments noted below. Unless
“Overrides may
stricted Capital Outlay Fund.
otherwise noted the adjustment may be
made to both the M&O and Unrestricted
not be increased
A.R.S §15-481 allows for a special overCapital Outlay budgets.
for growth in
ride election for capital outlay. For overrides approved by a vote of the qualified
student counts.”
Growth Funding
electors of the school district at an elecThe district’s Revenue Control Limit for the
tion held from and after October 31, 1998,
budget year is computed utilizing the prior year’s 100th
the period of the additional increase prescribed in this
day Resident ADM calculation. If the 100th day ADM
subsection shall not exceed seven years for any capital
for Group A and/or Group B is greater than the prior
override election. This override may be allocated to the
year 100th day ADM, a district’s budget may be revised
Unrestricted Capital Outlay Fund only.
to include an increase to the RCL. (A.R.S. §15-948)
Overrides may not be increased for growth in student
counts. Equalization Assistance is not provided for
Budget Overrides
override amounts.
A.R.S. §15-481 allows a district to increase its budget
up to 10% of its Revenue Control Limit if the voters of
the district approve by election. The voter authorization
Tuition Revenue
is given for up to seven years. If the additional increase
Districts are allowed to budget an additional amount
is for five years or more, the percentage increase
for tuition and/or certificates of educational converemains constant (up to 10%), except during the next
nience (CEC) revenues. If this revenue was underesto last year when the percentage decreases to twotimated, the district may increase the budget prior to
thirds of the initial percentage and during the last year
May 15. If this revenue was overestimated, the district
when it decreases to one-third of the initial percentage.
must reduce expenditures and the general budget limit
A district can renew its authorized percentage (up to
based on actual revenues.
10%) in the last two years of an existing override by
passing another election. This override may only be
Excess Utility Costs
allocated to the M&O Fund.
A district may budget for utility costs that are exempt
from the Revenue Control Limit, as provided in A.R.S.
A special override election for academic achievement
§15-910. Excess utilities are direct operational costs of
in grades K-3 may be held by an elementary or unified
heating, cooling, water, electricity, telephone communidistrict. Five percent of the Revenue Control Limit
cations and sanitation fees that exceed a base amount.
attributable to the weighted count in PSD, kindergarten
The base amount is calculated by increasing or
Additions to the Maintenance &
Operations and Unrestricted Capital
Outlay Budget
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
15
decreasing the utilities cost for the base year of 198485 by the percentage change in the combined Revenue
Control Limit and Capital Outlay Revenue Limit from
the base year to the budget year.
A district may expend from the
excess utility budget category
only after it has expended the full
amount budgeted in the base utility
lines of the budget. The amount
budgeted for excess utilities may
be revised, after notice is given and
a public meeting is held, any time
before May 15.
The ability to budget for excess utilities ends after FY 2008-2009. This
increase is made only to the M&O Fund.
Instruction. Equalization assistance is not provided by
the state or county for these costs. Current law has
capped the desegregation budget for 2007-2008 at
the 2006-2007 budget level plus a
percentage increase based upon the
“A district may expend
ADM increase of the school district
and a 2% inflation increase (Laws
from the excess utility
2007, 1st Regular Session, Chapter
264, Section 15). Unspent desegbudget category only
regation budget may not be carried
after it has expended the
forward.
full amount budgeted
in the base utility lines
of the budget. ”
Budget Balance Carryforward
A district may carry forward any unused M&O budget
balance, limited to 4% of the prior year RCL. None of
this carry forward can be attributable to required reductions such as excess utilities, tuition revenue budgeted
and not received or expenditures for the debt service
portion of the cost of tuition. Authorization for this addition is found in A.R.S. §15-943.01.
A district may also carryforward any unused Unrestricted Capital Fund budget plus interest earned for
the prior fiscal year. Interest earnings from the prior
year may not be used to increase the M&O budget.
Desegregation Costs
Additional budget capacity for a district to comply
with or continue to implement activities relating to a
court-ordered desegregation or administrative agreement with the United States Department of Education
Office for Civil Rights is allowed under A.R.S. §15-910.
A district qualifying and choosing to budget for these
expenses may budget both maintenance and operation
and capital outlay funds outside of the RCL and CORL.
A separate desegregation budget must be prepared
on forms prescribed by the Superintendent of Public
Small School District
Exemption
School districts that have a student
count of 125 or less students in
grades K-8 or 100 or less students
in grades 9-12 may adopt a budget in excess of their
normal calculated budget limit. Districts that utilize this
provision are allowed to add any needed dollars at the
time the budget is proposed (A.R.S. §15-949).
Registered Warrants
Districts may budget for interest expenses for registering warrants or net interest expense for tax anticipation notes (TANS) incurred in the fiscal year two years
prior to the budget year, if the county treasurer pooled
all district monies for investment and the district applied
for early payments of their state aid apportionment or
the district was not eligible for state aid.
Title 8 PL 103-382
Districts may budget for P.L. 81-874 assistance received
for the education of children with disabilities, children
with specific learning disabilites and children residing
on Indian lands. A.R.S §15-905 K., O. and P.
Accommodation Schools
If an accommodation school has a positive total cash
balance at year end, the county school superintendent may authorize an addition to the accommodation
school’s revenue control limit for the following fiscal
year. A.R.S. §15-974 C. This increase is made only to
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
16
the M&O Fund. This increase is limited to the lesser of
the ending cash balance minus the amount budgeted
as budget balance carry forward (A.R.S. §15-943.014)
or 10% of the RCL.
Tuition Out Debt Service
Districts may budget the bond issues portion of the
cost of tuition charged to the district as provided in
A.R.S. §15-824 for pupils attending school in another
school district. A.R.S §15-910 L. This increase is made
only to the M&O Fund.
The money to support the Revenue Control Limit,
Capital Outlay Revenue Limit, and Soft Capital Allocation, as set forth in the preceding sections, are obtained
from two main sources - state equalization assistance
and property taxes.
“Districts may budget the
bond issues portion of the
cost of tuition charged to
the district as provided in
A.R.S. §15-824 for pupils
attending school in
another school district.
A.R.S §15-910 L.”
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
Dropout Prevention Programs
School districts which participated in the dropout
prevention program as originally established pursuant to
Laws 1987, Chapter 333 and continued by Laws 1990,
chapter 399, may continue to budget for the dropout
prevention program in an amount not to exceed the
amount budgeted in fiscal year 1990-1991 (Laws 1992,
Chapter 305, Section 32). Expenditures for programs
serving grades 4 through 12 are allowed.
Joint Career and Technical Education and
Vocational Education Center
Districts that have entered into an intergovernmental
agreement to establish a jointly owned and operated joint career and technical education and vocational education center as provided in A.R.S. §15-789
may budget for vocational maintenance and operation
expenses which are specifically exempt, in whole or in
part, from the revenue control limit for a period of not
to exceed three years beginning the first year that the
career and technical education and vocational education center is operating. (A.R.S. §15-910.01)
Career Ladder Budget Balance Carryforward
A district that has implemented a career ladder program
may budget any budget balance in the maintenance and
operation section of the budget that is directly attributable to a career ladder program from the current fiscal
year for use in career ladder programs in the budget
year. The amount budgeted shall not be included in
the allowable budget balance carry forward calculated
pursuant to A.R.S. §15-943.01. A.R.S. §15-918.04 C.
This increase is made only to the M&O Fund.
17
not be included in the allowable budget balance carry
forward calculated pursuant to A.R.S. §15-943.01.
A.R.S. §15-919.04 (D). This increase is made only to
the M&O Fund.
Performance Pay Budget Balance
Carryforward
A district that has a performance pay component in its
salary schedule may budget any budget balance in the
maintenance and operation section of the budget that
is directly attributable to the performance pay component in the salary schedule from the current fiscal year
for use in the performance pay component of the
salary schedule in the budget year. Budget balance for
this item means the difference between the actual and
budgeted performance pay component of a district’s
salary schedule. The amount budgeted shall not be
included in the allowable budget balance carry forward
calculated pursuant to A.R.S. §15-943.01. A.R.S. §15920. This increase is made only to the M&O Fund.
Other Adjustments
Districts shall adjust the budget for adjustments
required by the department of education or adjustments required by the State Board of Education (eg.,
budget reduction for prior year for overexpenditure
pursuant to A.R.S. §15-905 L.) A.R.S. §15-905 M.
Optional Performance Incentive Program
Budget Balance Carryforward
A district that has implemented an optional performance incentive program may budget any budget
balance in the maintenance and operation section of
the budget that is directly attributable to the optional
performance incentive program from the current fiscal
year for use in the optional performance incentive
program in the budget year. The amount budgeted shall
Arizona Association of School Business Officials | School Finance Summary Manual
Budget Formula Construction cont.
18
Soft Capital Allocation
Student Count of Less Than 600
Districts can spend Soft Capital Allocation budget only
for short-term capital items that are required to meet
academic adequacy standards such as technology,
textbooks, library resources, instructional aids, pupil
transportation vehicles, and furniture and equipment.
All of the soft capital monies must be spent in the Soft
Capital Allocation Fund and cannot be spent for maintenance and operation expenses. Districts may use
soft capital monies to meet administrative soft capital
purposes after complying with adequacy standards.
Districts with a K–12 student count of less than 600
students are allowed a special transportation soft
capital adjustment. A district must make application and obtain approval through the State Board of
Education for this special adjustment, and it must meet
several requirements set forth in A.R.S. §15-963.
Student Count of 600 or More
•Unused Soft Capital Allocation budget may be
carried forward to the subsequent budget year.
•The soft capital allocation may be increased by
interest earned in the prior year.
•Districts shall adjust the budget for adjustments
required by the department of education or adjustments required by the State Board of Education
(eg., budget reduction for prior year for overexpenditure pursuant to A.R.S. §15-905 L.) A.R.S.
§15-905 M.
Grade Level
Support Level
PSD
$225.00
K-8
$225.00
9 - 12
$225.00
As is with the M&O and Unrestricted Capital Outlay
funds, there are adjustments to the soft capital allocation limit that are made to arrive at the Soft Capital Allocation Budget Limit. The adjustments are as follows:
Arizona Association of School Business Officials | School Finance Summary Manual
Where Formula Dollars Come From
19
The money to support the Revenue Control Limit,
Capital Outlay Revenue Limit, and Soft Capital Allocation, as set forth in the preceding sections, are obtained
from two main sources - state equalization assistance
and property taxes.
State Equalization Assistance
The school finance formula attempts to ensure that
each district has equitable budget capacity compared
to others in the state. Equalization assistance helps to
ensure that the revenues available for district budgets are
shared equitably as described in A.R.S. §15-971. Equalization assistance is the amount of money that the state
provides to school districts over and above the uniform
Qualifying Tax Rate (QTR). If the local tax rate necessary to fund the RCL/DSL, CORL and Soft Capital allocation formulas is equal to or lower than the Qualifying
Tax Rate, no state equalization assistance is given. If the
tax rate necessary to fund the formulas is greater than
the Qualifying Tax Rate, state equalization assistance
is provided in order to keep this portion of local property taxes uniform throughout Arizona. The amount of
equalization assistance provided varies inversely with a
district’s per weighted student assessed property valuation. As the district assessed valuation per student goes
up, the equalization assistance goes down. The state
equalization aid formula can be described as follows:
1.Equalization base
is the sum of the
lesser of the RCL
or DSL, the CORL,
and the Soft
Capital
allocation.
“Equalization
assistance helps to
ensure that the
revenues available for
district budgets are
shared equitably.”
2.Qualifying Tax
Rate (QTR) - The
qualifying tax rate
for 2007-2008 is
$1.602 for elementary level students and $1.602
for high school students. Unified and Type 03
elementary districts must separately determine
equalization based on PSD-8 student count and
9-12 student count and the qualifying tax rate for
each is $1.602. The QTR for Career Ladder and
Optional Performance Incentive Program districts
for 2007-08 is $1.712 for both elementary and
high school students.
3.District Primary Assessed Valuation (A.V.) including valuation of in-lieu contributions.
4.Equalization Base formula: (QTR x A.V./100) =
Total Equalization Assistance
The State Board of Education is charged with distributing state aid (equalization assistance) from the state
aid entitlement for school districts. A.R.S. §15-973
provides the following schedule for state aid distributions to school districts:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
July 15
September 15
October 15
December 15
January 15
February 15
March 15
April 15
May 15
June 15
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/12 of the total amount is distributed
1/6 of the total amount is distributed
1/6 of the total amount is distributed
1/12 of the total amount is distributed
If a school district has cash flow problems, it can apply
to the Superintendent of Public Instruction for early
payments on the schedule shown above. Advance
payments will be made if state funds are available and
if approved by the State Treasurer, the Director of the
Department of Administration and the Superintendent
of Public Instruction. In no event is a school district
allowed to receive more than three-fourths of its total
apportionment before April 15 of the fiscal year.
School District Property Taxes
A significant portion of school district financing in
Arizona comes from local property taxes on real and
Arizona Association of School Business Officials | School Finance Summary Manual
Where Formula Dollars Come From cont.
personal property. As outlined in the previous section
on equalization assistance, the funding for the Revenue
Control Limit, Capital Outlay Revenue Limit, and Soft
Capital Allocation for each district is based upon what
a tax rate raises in each district. This system results
in districts with high taxable property values per pupil
paying a higher percentage of the total cost with local
taxes. In contrast, school districts with lower taxable
property values per pupil pay a lower
percentage of the total cost. Items outside
the RCL and CORL that don’t have a dedicated funding source are from the local
property tax levies of each district.
In August the County School Superintendents’ offices transmit tax levy requirements for each district to the county
finance departments who, in turn, inform
the county Board of Supervisors of the
necessary levy by fund for each district.
The levy, placed on property in August,
applies to the assessed valuation determined for real property in the district through the
previous January. For the unsecured personal property in each district, the new tax rate for each year is
not applied until the following January. This variation
in assessing practices for real and unsecured personal
property can result in a revenue lag if district tax rates
increase substantially over a previous year.
Property tax levies are determined by applying tax
rates against the primary assessed valuation and the
secondary assessed valuation. Primary and secondary
valuations are applied to the same properties. However,
the primary category limits the increase in property
values to 10% from the previous year, while there is no
limit to the increase in property values for secondary
valuation. Override and debt service tax rates are applied
to secondary assessed valuation and all other tax rates
are applied to the primary assessed valuation.
Property taxes are collected and distributed in
November and April of each year. Generally in Arizona,
the delinquency rate on taxes has been on the average
about 5%, which can account for cash flow problems
20
in some school districts. A portion of the taxes due is
paid by the state in the form of additional state aid as
provided by the homeowners tax reduction provisions
pursuant to A.R.S. §15-992. Salt River Project funds
are in lieu of property taxes.
Regardless of the collection of taxes or the timeliness
of being received in a district, the district can spend
up to the budget capacity authorized by
the previously described limitations. The
district must register warrants if the cash is
not available at the time of expenditure.
Registering warrants is the system established in A.R.S. that allows the county treasurer to provide short-term financing to
school districts for cash flow problems in
its primary levy funds (M&O, Soft Capital,
Adjacent Ways and Unrestricted Capital)
and the Classroom Site Fund (CSF).
Checking the Calculations
The budget limit and equalization assistance calculations
can be checked by obtaining the APOR 55-1 report on
the ADE’s web site. This report is updated each month
of the fiscal year, except August and November.
The ADE web site also provides the BUDG25 and
BUDG 75 reports. The BUDG25 report compares the
budget submitted by the district to a calculation of the
district’s budget that is performed by ADE and notes the
differences. The BUDG75 report compares the actual
expenditures in the Annual Financial Report (AFR)
submitted by the district to the ADE calculated budget
limits and calculates the budget balance carryforward for the next year. With student counts continuing
to be adjusted after the budgets are revised in May,
it is important for districts to reconcile their budgets
and AFR’s to the BUDG75 to ensure they are using the
correct budget limits, carry forwards, etc.
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized
Maintenance and Operations (M&O)
Fund 001
This fund is divided into programs. The three main
programs are: Regular Education, Special Education,
and Pupil Transportation. For reporting and accounting
purposes, each of the programs is further subdivided
by function (instruction, support services, and operation of non-instructional services) .
The total budget for the M & O Fund cannot exceed
the budget limits previously specified except for items
outside the limit, and the expenditures cannot exceed
the budget. If a district does not have sufficient cash
balance in the M & O and other levy funds, it may still
spend up to the budget limit by registering warrants.
The budget limit determines spending authority rather
than cash availability.
Regular Education — Program 100
This program is used to account for expenditures relating
to activities that provide students in prekindergarten
through grade 12 with learning experiences. Expenditures not specifically assigned to other
programs should be classified here.
Special Education Programs
— Program 200
This program is used to account for
expenditures relating to activities for
students receiving services outside the
realm of “regular programs” in accordance with the disability classifications as defined in A.R.S. §15-761, and
programs for gifted, remedial, English
immersion, vocational and technological, and career education.
21
Pupil Transportation — Program 400
This program is used to account for operating expenditures relating to transporting pupils to-and-from school
or school activities.
Desegregation Expenditures —
Programs 510-515
This program is established to account for the expenditures related to a desegregation plan either court
ordered or by administrative agreement with the United
States Department of Education Office for Civil Rights
for the purpose of remediating alleged or proven racial
discrimination. A separate budget must be maintained
for these expenditures. Expenditures must be solely
for the purpose of satisfying the compliance with an
approved desegregation plan.
Special K-3 Program Override Expenditures
—Program 520
This program is used to account for expenditures
relating to the funds obtained through a K–3 override, as prescribed in A.R.S. §15-482. Budget balance
carryover for K–3 override is limited to
50% of unexpended budget balance.
“This (M&O) fund
is divided into
programs. The three
main programs are:
Regular Education,
Special Education,
and Pupil
Transportation.”
Special Education, Disability
— Program 300
This program is used for Title 8 P.L. 103-382 add-on
monies (Impact Aid).
Arizona Association of School Business Officials | School Finance Summary Manual
Dropout Prevention Program —
Program 530
Eligible districts participated during FY
91 in the dropout prevention program as
provided under the Laws 1992, Chapter
305 Eligible districts are allowed to
budget using local tax monies above
their Revenue Control Limit equal to
the FY91 budget. The monies must be
spent on dropout prevention as outlined
in the legislation.
How Budgets are Categorized cont.
Joint Career and Technical Education and
Vocational Education Center —Program 540
A school district may enter into an intergovernmental
agreement (up to three years) with other school districts
or community college districts to establish a jointly
owned and operated vocational and technical center.
The expenses, which are exempt in whole or in part
from the revenue control limit as prescribed by A.R.S.
§15-910.01, are accounted for in this program.
Other Instructional Programs —
Program 610-630
These programs are used to account for activities that
add to a student’ educational experience. These activities typically include events and activities that take place
outside the traditional classroom. Some examples of
such activities are athletics, band, choir, and debate.
22
CSF detailed special revenue funds (011, 012, and
013) separately.
The CSF is a budget-controlled fund, therefore districts
may make expenditures in the Fund that are within the
CSFBL, prior to receiving cash in which case warrants
would be registered for the fund.
The monies in the three funds must be used to supplement, rather than supplant, existing monies and must
not be used for administrative purposes.
011 Classroom Site Fund —Base Salary
This fund includes 20% of the current CSF allocation
and any prior year’s unexpended budget balance and
interest earnings. Monies in this fund can only be used
for teacher base salary increases, teacher employmentrelated expenses, and registered warrant expenses for
this fund.
Classroom Site Fund 010
012 Classroom Site Fund —Performance Pay
The Classroom Site Fund (CSF), as prescribed by
A.R.S. §15-977, was established in fiscal year 2002
to account for the portion of state sales tax collections and State Trust Land income provided to school
districts as an additional source of funding for teacher
salary increases and other specified maintenance and
operation purposes. The amount that school districts
receive from the State to use at school sites is based
on actual tax collections, not to exceed the Joint Legislative Budget Committee (JLBC) annual estimate.
This fund includes 40% of the current CSF allocation and any prior year’s unexpended budget balance
and interest earnings. Monies in this fund can only be
used for performance-based teacher compensation
increases, teacher employment-related expenses, and
registered warrant expenses for this fund.
A.R.S. §15-978 establishes the Classroom Site Fund
Budget Limit (CSFBL) as the JLBC’s current estimate, plus any prior year’s unexpended budget balance and interest
earnings in the CSF. Budget control
is applied at the total CSF level (i.e.,
Fund 010 expenditures cannot exceed
the CSFBL). The restrictions placed
on the original allocation of revenues
apply in all future years. Therefore, the
unexpended budget balance must be
carried forward in each of the three
Each district must submit a Classroom Site Fund Pay
for Performance Compensation Plan to the Arizona
Department of Education on or before December 31st
of each year.
013 Classroom Site Fund — Other
Arizona Association of School Business Officials | School Finance Summary Manual
This fund includes 40% of the current
CSF allocation and any prior year’s unexpended budget balance and interest
earnings. Monies in this fund can only be
used for the following maintenance and
operation purposes: class size reduction;
teacher compensation increases; AIMS
intervention programs; teacher development; dropout prevention programs;
teacher liability insurance premiums; and
How Budgets are Categorized cont.
registered warrant expenses for this fund. Expenditures
for class size reduction, AIMS intervention, and dropout
prevention programs must be appropriate expenditures
under function 1000-Instruction, excluding athletics.
Instructional Improvement Fund 020
The Instructional Improvement Fund was established
in FY 2003-2004 and consists of monies received from
Indian Gaming and interest earned. Districts may utilize
up to 50% of these monies for teacher compensation
increases and class size reduction. The expenditures
for class size reduction, if any,
must be appropriate expenditures
under function 1000-Instruction,
excluding athletics. Monies not
used for teacher compensation
and class size reduction shall be
utilized for the following maintenance and operation purposes:
1. Dropout prevention programs.
2.Instructional improvement
programs including programs
to develop minimum reading skills for students by
the end of 3rd grade.
The monies in this fund may not be used to supplant
existing state and local monies. This fund is cash
controlled and the monies received in this fund are nonreverting. Therefore, expenditures cannot be incurred
prior to the receipt of monies and unspent monies at
fiscal year-end may be used in subsequent years.
County, City and Town Grants Fund 050
Fund for the accounting of revenues and expenditures
of grants received from counties, cities and towns.
23
Structured English Immersion Fund 071
This fund is used to account for monies received to
provide for the incremental cost of instruction to English
language learners (ELLs) and must be used to supplement existing programs. In accordance with A.R.S.
§15-756.03, monies must not be used to supplant
federal, state, or local monies, including desegregation
monies, previously used for ELLs, or used to pay for
the normal costs of conducting programs for English
proficient students. As defined in A.R.S. §15-756.01,
incremental costs are the costs that are associated
with a structured English immersion program pursuant
to A.R.S. §15-752 or a program
pursuant to A.R.S. §15-753 and
that are in addition to the normal
costs of conducting programs for
English proficient students. Incremental costs do not include costs
that replace the same types of
services provided to English proficient students or compensatory
instruction. A.R.S. §15-756.04 as
added by Laws 2006, Chapter 4.
Compensatory Instructions
Fund 072
This fund is used to account for monies received for
compensatory instruction. Per A.R.S. §15-756.11.,
“compensatory instruction” means programs in addition to normal classroom instruction that may include
individual or small group instruction, extended day
classes, summer school or intersession school and
that are limited to improving the English proficiency of
current English language learners and pupils who were
English language learners and who have been reclassified as English proficient within the previous two years.
Monies shall not be used to supplant any federal, state
or local monies, including desegregation monies levied
pursuant to A.R.S. §15-910, used for compensatory
instruction that were budgeted for English language
learners as of February 23, 2006.
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized cont.
24
used. Limitations related to the maximum amount that
can be used from this fund in any fiscal year are detailed
Another category of funds used for operating and
in A.R.S. §15-1102. Common or high school districts
capital expenses is called Special Projects. These are
that are bonded in excess of 7% of their secondary
federal and state grants which are used for supplemental
assessed valuation or unified districts that are bonded
educational programs. Guidelines for
in excess of 14% of their secondary
accounting and reporting of these
assessed valuation cannot use these
“Prior to sale of school
funds are set forth by the appropriate
proceeds for anything other than
department of the Arizona Departpayment of bonded indebtedness.
sites and facilities, a
ment of Education. Federal grants
are recorded in funds 100-399; state
school district must
grants are recorded in funds 400-499.
Special Projects Funds 100-499
Medicaid Reimbursement
- Fund 290
have a successful
election of their voters.”
This fund is used to account for
monies received from Medicaid. Since the original
expenditures that result in the Medicaid reimbursement
are accounted for in the M&O Fund and the reimbursement in the Medicaid Reimbursement Fund, this fund
can be spent for any allowable M&O purpose.
School Plant Fund (Sale) Fund 506
This fund was established in fiscal
year 1998-99 and is used to account
for monies received from the sale
of school property on or after July 1, 1998. These
proceeds cannot be used for maintenance and operation purposes.
Other Funds 510-595
School Plant Funds 500-506
Food Services - Fund 510
School Plant Fund (Sale or Lease for Over
One Year) - Fund 500
This fund is used to record the financial operations of
school activities which have as their purpose the preparation and serving of regular and incidental meals,
lunches, breakfasts and snacks in connection with
school functions - primarily school cafeteria operations.
This fund is used to account for the monies derived
from the sale of school property before July 1, 1998
or lease of school property for over one year. Limitations related to the maximum amount that can be used
from this fund in any fiscal year are detailed in A.R.S.
§15-1102. Prior to sale of school sites and facilities,
a school district must have a successful election of
its voters. Common or high school districts that are
bonded in excess of 7% of their secondary assessed
are subject to specific restrictions as set for in A.R.S.
§15-1102.C.
School Plant Fund (Sale or Lease for One
Year of Less) - Fund 505
This fund is used to account for monies received from
the lease of school property for one year or less. There
is no specific time limit in which the monies must be
Civic Center - Fund 515
The governing board of a district may permit the use
of school property, under its direction, for civic activities, as defined in A.R.S. §15-1105. Monies received
for use of school facilities and the related expenditures are accounted for in this fund. A reasonable
fee shall be charged for lease of property, unless the
board permits uncompensated use for activities that
promote the educational functions of the district.
In accordance with A.R.S. §15-342(29), if program
needs are met, excess monies may be expended for
maintenance and operation or unrestricted capital
outlay purposes.
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized cont.
25
Community School - Fund 520
School Opening - Fund 545
This fund is used to account for revenues and expenditures for the purposes of academic and skill development for all citizens in accordance with A.R.S. §15-1141,
42 and 43. This fund can be used to account for such
areas as summer school on a tuition basis, GED testing,
and audit adult basic education programs. In accordance with A.R.S. §15-342(29), if program needs are
met, excess monies may be expended for maintenance
and operation or unrestricted capital outlay purposes.
This fund is used to account for monies transferred in
from the Maintenance and Operation Fund ending cash
balance to be expended for maintenance and operation
purposes incurred in the first year of operation of a new
school within the district. Monies in this fund are not
subject to reversion, except that at the end of 5 years
without any activity in the fund, any remaining monies
must be reverted to the Maintenance and Operation
Fund. A.R.S. §15-943.01
Auxiliary Operations - Fund 525
Insurance Proceeds - Fund 550
This fund is used to account for revenues and expendiThis fund is used to account for the monies received
tures related to the bookstores and athletic activities in
from insurance claims and the related expenditures
accordance with A.R.S. §15-1125. It can also be used
(A.R.S. §15-1103.A.) These funds are primarily for the
for class fees and miscellaneous
replacement of capital facilities and
classroom collections, such as field
equipment.
“The governing board of
trips and book clubs. Examples can
be found in the USFR.
Textbooks - Fund 555
a district may permit the
Extracurricular Activities
Fees Tax Credit - Fund 526
use of school property,
under its direction, for
civic activities”
This fund is used to account for revenues and expenditures of monies
collected in support of extracurricular and character education activities. Contributions to this fund may be taken as a tax
credit by the taxpayer in accordance with A.R.S. §431089.01. Amounts in this fund should be spent on
the activities for which they are collected. In accordance with USFR Memorandum No. 214, districts may
choose to account for these transactions in Auxiliary
Operations – Fund 525, rather than the 526 fund.
Gifts and Donations - Fund 530
This fund is used to account for the revenues and noncapital expenditures of gifts, donations, bequests and
private grants made to the district (A.R.S. §15-341.15).
Fund 650 can be established for gifts and donations for
capital items.
This fund is used to account for monies
received from students to replace or
repair lost or damaged textbooks and
library books, supplementary books
or instructional computer software.
(A.R.S. §15-729).
Indirect Costs - Fund 570
This fund is used to account for monies transferred from
federal projects, including the Food Service Fund, for
administrative costs. A district may use this fund only
when it has obtained an indirect cost rate approved by
the Arizona Department of Education.
Unemployment Insurance - Fund 575
This fund is used by districts using the reimbursement
(self-insured) method of accounting for unemployment
insurance contributions. Deposits are made into this
fund based on an appropriate percentage of salaries
in various funds. s former employees draw upon their
benefits, expenditures are made from this fund to reimburse the Department of Economic Security.
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized cont.
Joint Technological and Education Districts
- Fund 596
This fund is used to account for revenues received by
member districts from Joint Technological and Education Districts for use in vocational education programs.
Capital Related Funds 600-700
Unrestricted Capital Outlay - Fund 610
The Unrestricted Capital Outlay section of the budget
accounts for budgeted expenditures for acquisitions
by purchase, lease-purchase, lease or long-term lease
of capital items are defined in the Uniform System of
Financial Records, which include the following areas:
1.Land, buildings, and improvements to land and
buildings, including labor and related benefits
costs and materials if the work is performed by
school district employees.
2.Furniture, furnishings, athletic equipment and
other equipment, including software.
3.Pupil and non-pupil transportation vehicles and
equipment, including all capital expenditures
within a contract, if the district contracts for pupil
transportation.
4.Instructional aids, including instructional software.
5. Library books.
Adjacent Ways - Fund 620
This fund is used to account for special property tax
assessments used for constructing, maintaining or
otherwise improving any public way adjacent to any
parcel of land owned by the school district or leased for
school purposes by the school district,
or an intersection of any public way
adjoining a quarter block in which the
parcel of land is situated, and for the
construction of sidewalks, sewers,
utility lines, roadways and other related
improvements in or along such streets
and intersections. The monies generated from this assessment shall not
be used for any construction, main-
26
tenance or other improvements to the school district’s
property except improvements necessary to assure the
safe ingress and egress for buses and fire equipment
in accordance with A.R.S. §15.995. Unexpended funds
can be carried over from year to year and interest earned
should be credited to the fund.
Soft Capital Allocation - Fund 625
This fund is used to record Soft Capital Allocation
monies in accordance with A.R.S. §15-962, and shall
only be used for short-term capital items that are
required to meet academic adequacy standards such
as technology, textbooks, library resources, instructional aids, pupil transportation vehicles, furniture and
equipment. School districts shall not use any portion
of Soft Capital Allocation monies for maintenance and
operation expenses. School districts may use Soft
Capital Allocation monies to meet administrative soft
capital purposes after complying with the adequacy
standards prescribed in A.R.S. §15-2011.
Bond Building - Fund 630
This fund is used to account for proceeds from the sale
of bonds following a successful election. The money is
used to acquire land, purchase pupil transportation vehicles or pay contractors, consultants, and equipment
vendors providing materials and services for facility projects and equipment as designated on an appropriate
election ballot. Bond proceeds shall not be expended for
items whose useful life is less than the average life of
the bonds issued or whose useful life is less than five
years. The money not being used to satisfy payments
may be invested. Income from investments must be
used to reduce the debt service levy rather than add to
the funds available for land acquisition, construction or equipment,
unless a school district had asked a
second question on the bond election ballot which provided authorization from the voters to use the
interest earnings for additional
bond purchases. (Arbitrage rules
may apply if interest earned on
investments exceeds interest paid
on the bonds issued).
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized cont.
Districts are limited as to the maximum value of bonds
they can have outstanding at any time. Under A.R.S.
§15-1021, common and high school districts can bond
up to 15% of its secondary assessed valuation, and
unified districts can bond up to 30% of its secondary
assessed valuation.
Class A Bonds may not be issued after December 31,
2000. After December 31, 1998, districts may issue
class B Bonds. A common or high school district
may issue class B bonds to an amount in the aggregate, including the existing class B indebtedness,
not exceeding 5% of the taxable property used for
secondary property tax purposes. A unified school
district may issue class B bonds to an amount in the
aggregate, including the existing class B indebtedness,
not exceeding 10% of the taxable property used for
secondary tax purposes.
27
cies. If a school district has an emergency, the school
district shall apply to the school facilities board for
funding for the emergency. The school district’s application shall disclose any insurance or building renewal
monies available to the school district to pay for the
emergency. “Emergency” means a serious need for
materials, services or construction or expenses in
excess of the district’s adopted budget for the current
fiscal year and that seriously threaten the functioning of
the school district, the preservation or protection of
property or public health, welfare or safety.
Building Renewal - Fund 690
Students FIRST law established this fund for the
purpose of maintaining the adequacy of existing school
facilities. These monies can be used for major renovations and repairs of a building, for upgrades to building
systems (e.g. heating, cooling, plumbing, etc.) that will
maintain or extend the useful life of a building and for
Impact Aid Revenue Bond Building infrastructure costs. Monies from this fund may not be
used for new construction, remodeling interior space for
Fund 639
aesthetic purposes, exterior beautification, demolition,
Bond building funded by Impact Aid Revenues, rather
soft capital items or routine maintenance. The School
than property tax levies. See Bond Building Fund 630.
Facilities Board distributes building
renewal monies to school district in
Deficiencies Correction “Districts are limited two equal installments in November
Fund 685
and May of each year. A school district
as to the maximum
While this phase of the program has
may use 8% of the calculated building
since been completed, the Students
value of bonds they
renewal amount for routine preventative
FIRST law established a deficienIn order to receive this
can have outstanding maintenance.
cies correction fund for the purpose
funding districts must obtain approval
of correcting deficiencies in existing
of a three-year building renewal plan
at any time. ”
school facilities. The School Facilifrom the SFB.
ties Board was charged with adopting
rules establishing minimum school facility guidelines,
New School Facilities - Fund 695
assessing school buildings against these guidelines,
This fund is administered by the SFB and has been
and providing monies to bring the buildings up to the
established for the purpose of constructing new
guidelines.
schools to meet the minimum adequacy guidelines.
The criteria to determine district eligibility for monies
Emergency Deficiencies Correction from the new school facilities fund are based on annual
Fund 686
evaluation and approval of district enrollment projecThis fund accounts for monies received from the
tions and the additional square footage that will be
School Facilities Board to correct emergency deficienneeded to maintain adequacy standards in a district.
Arizona Association of School Business Officials | School Finance Summary Manual
How Budgets are Categorized cont.
The School Facilities Board distributes new school facilities monies to school districts based on the following
formula: (number of students) x (square footage) x (cost
per square foot) = allocation. Land costs are funded in
addition to formula funding for new construction.
Debt Service - Fund 700
Accounts for the accumulation of property tax revenues
used for, and the payment of, long-term debt principal,
interest and related costs.
Impact Aid Revenue Bond Building Debt
Service - Fund 720
Accounts for the accumulation of impact aid monies for
the payment of long-term debt, principal, interest and
related costs. See Impact Aid Revenue Bond Building
– Fund 639
Other Miscellaneous Funds
Student Activities - Fund 850
Pursuant to A.R.S. §15-1121 to 1124, a school district
is the custodian for monies raised by the efforts of
students in connection with activities of student organizations and clubs.
28
Intergovernmental Agreements - Fund 955
This fund is used by a fiscal agent to account for monies
of an intergovernmental agreement (IGA). Revenues
include amounts received from participants.
The USFR Identifies Other Funds that can be established by school districts (Not an inclusive list; refer to
USFR for others)
1.Career and Technical Education and Vocational
Education Projects - Fund 535
2. Fingerprinting-Fund 540
3. Litigation Recovery Fund-Fund 565
4. Teacherage-Fund 580
5. Insurance Refund-Fund 585
6. School Bus Advertisement-Fund 595
7. Joint Technological Education-Fund 596
8. School Plant Fund Special Construction-Fund 640
9.Gifts and Donations (for capital purposes) -Fund
650
10. Condemnation-Fund 660
11. Capital Equity – Fund 670
12. Trust Funds-Funds 801-849
13. Enterprise Funds-Funds 901-949
Internal Services - Funds 950-989
These funds are used to account for revenues and expenditures relating to providing services to other school
functions, other school districts, or governmental units.
The revenues from the operation of a district services
program shall be transmitted to the county treasurer for
deposit in the district Internal Services Fund. Districts
may employ personnel, purchase supplies and equipment and incur other necessary expenses related to
the operation of a district services program. Monies in
these funds are not subject to reversion at the end of
the fiscal year.
Arizona Association of School Business Officials | School Finance Summary Manual
Appendix A
29
Key Procedures for Bonds and Capital Outlay Overrides
Component
Class A Bonds
Class B Bonds
Capital Outlay overrides
Election date
Last election date was
November 3, 1998
Only allowed on the first
Tuesday after the first
Monday in November; first
opportunity is November 2,
1999
Only allowed on the first
Tuesday after the first Monday
in November
Limitations on
type of capital
expenditure
For elections held before
July 9, 1998, no change.
For elections after July 9,
1998, may no longer be
used for “furniture and
apparatus” but may still be
used for pupil transportation vehicles.
May not be used for “soft
capital” items – including
equipment and pupil transportation vehicles
No new restrictions on type of
capital expenditure
New voter information (additions to previous
requirements)
No additional requirements a) Executive summary of district’s capital plan
b)A list of projects to be funded with the cost of each
(administrative projects listed separately)
c)The tax rate associated with each project and cost to
$80,000 (cap override) or $100,000 (bond) homeowner
Restrictions tied to Not applicable
voter information
Proceeds may only be expended as described in the
pamphlet, except that 10% of the total may be used for
general capital expenses and cost overruns
Additional ballot
language
No additional requirements Ballot must state that the proposed capital improvements
are to exceed the state standards and are in addition to
monies provided by the state, and that the district is entitled
to state monies for building renewal, net construction, and
renovation of buildings
Ballot language
review
None required
Ballot language to be submitted to Legislative Council for
review 85 days before the election
Length of override
Not applicable
Not applicable
Seven years
Limits on issuance
May not be issued after
Dec. 31, 1999
Cannot be issued until all
Class A proceeds have
been obligated in contract
Not applicable
Public meeting
Requirement for annual public meeting on the status of capital improvements (to be held
between September 1st and October 31st)
Effect on state
funding
The School Facilities Board may not award
monies to fund new facilities financed with
Class A bonds (no co-mingling). Buildings
built with Class A bonds will be included in
the district’s total square footage.
Arizona Association of School Business Officials | School Finance Summary Manual
No effect if proceeds are used to “exceed
square footage funded by the school facilities board”
Glossary
Annual Financial Report (AFR) - An annual comprehensive financial reporting due to ADE by October 15.
The AFR includes budget and actual summary information for revenues, expenditures and fund balances
for all district funds.
Approved Daily Route Miles - the mileage to transport eligible students to-and-from school for the first
100 days of school, plus an estimate for 80 additional
school days, divided by 180.
Arizona Association of School Business Officials
(AASBO) - A professional organization made up of
school employees that work in the business support
areas, in the State of Arizona. AASBO is an affiliate of
the Association of School Business Officials – International (ASBO – International)
30
Base Level - an amount determined annually by the
Arizona Legislature per 1.0 weighted ADM. This amount
is part of the RCL calculation.
Budg25 - an ADE generated report that assists districts
in analyzing their expenditure budgets. The district’s
submitted budget is compared to ADE calculations.
Differences indicate a need for the district to provide
additional information to ADE or revise the budget.
Budg75 - an ADE generated report that assists
districts in analyzing their prior year budget balance.
The district’s submitted Annual Financial Report data is
compared to ADE calculations. Differences indicate a
need for the district to provide additional information or
make adjustments in order to accurately reflect budget
balance carry forward or over expenditure.
Arizona Department of Education (ADE) - This
agency operating under the direction of the Superintendent of Public Instruction provides direct services
to school districts. The agency executes the policies
of the State Board of Education and the State Board
of Vocational and Technological Education - implementing state academic standards; administering
statewide assessments; disseminating information;
administering and allocating federal and state funds;
and providing program improvement assistance to
schools and districts.
Concurrency - a concurrency occurs when a student
is enrolled in two or more district or charters at the same
time. If a valid concurrency exists between a charter
and a non-charter and both have validated the concurrency as true, SAIIS will allocate the ADM between the
two based on the actual enrollment in both the district
and charter.
Average Daily Attendance (ADA) - The actual
average daily attendance through the first one hundred
days in session.
Equalization Assistance - the amount of money that
the state and county provide to school districts over
and above the Qualifying Tax Levy (QTL) to ensure that
the revenues available for district budgets are shared
equitably.
Average Daily Membership (ADM) - Average Daily
Membership – a method of counting the number of
enrolled students based upon the first 100 school days
in session. As examples: a student who enrolls 5 days
after the start of the school year = 95/100 = .95 ADM, a
kindergarten student who only attends school for onehalf (1/2) of the day = .50 ADM, a high school student
who attends only 3 of the required 4 class periods =
¾ = .75 ADM. ADM is a key component in the school
finance funding formulas.
District Support Level (DSL) - The Base Support
Level (BSL) plus the Transportation Support Level
(TSL).
Fiscal Year - for Arizona schools, is July 1 through
June 30 of each year.
GDP Price Deflator - The average of the four Implicit
Price Deflators for the Gross Domestic Product
(GDP) reported by the United States Department of
Commerce for the four quarters of the calendar year.
Arizona Association of School Business Officials | School Finance Summary Manual
Glossary cont.
Grants Management - ADE department that ensures
the proper allocation, distribution, and expenditure of
all federal and state funds administered by ADE. They
process grant budget applications, revisions, cash
management reports and completion reports.
Group A - Educational programs for career exploration, a specific learning disability, an emotional
disability, mild mental retardation, remedial education,
a speech/language impairment, homebound, bilingual,
preschool moderate delay, preschool speech/language
delay, other health impairments and gifted pupils.
Group B - Educational improvements for pupils in
kindergarten programs and grades one through three,
educational programs for autism, a hearing impairment, moderate mental retardation, multiple disabilities, multiple disabilities with severe sensory impairment, orthopedic impairments, preschool severe delay,
severe mental retardation and emotional disabilities for
school age pupils enrolled in private special education programs or in school district programs for children with severe disabilities or visual impairment and
English learners enrolled in a program to promote
English language proficiency.
M&O - a common acronym for the Maintenance and
Operation fund, fund 001. Calculation of this budget
is formula driven. This budget is used for most of the
day to day expenditures of a school district.
Qualifying Tax Rate – QTR - A hypothetical tax rate
that is multiplied times the Primary Assessed Valuation
and Assessed Valuation for SRP properties to determine the local tax levy effort required before a district
is eligible for equalization assistance. The QTR is
adjusted annually, based on an inverse relationship to
the assessed valuation for the entire state.
31
Student Accountability Information System
(SAIS) - The administrative application that collects
student detail information using the Internet. School
districts send this information to ADE’s SAIS database.
The district’s ADM and other attendance data is generated from this system.
Student Count - ADM for the fiscal year prior to the
current year, except for the purpose of budget preparation student count means ADM for the current year.
Students FIRST - Students Fair and Immediate
Resources for Students Today – 1998 legislation that
created a new capital financing system aimed at
creating minimal adequacy standards for capital related
issues in public schools. Administered by the School
Facilities Board.
Title 15 - a compilation of selected education laws
passed by the Arizona State Legislature.
Uniform System of Financial Records – USFR – a
publication that is a joint responsibility of the Arizona
Auditor General and ADE. This document interprets
Arizona Title 15 and contains the guidelines and
directions by which Arizona schools must financially
comply.
USFR Memorandum - Issued by the Auditor General
to update the USFR manual between major revisions.
These are available on the Auditor General’s website or
via e-mail.
Weights – a multiplier that is applied to an ADM
number to allow for variable educational costs based
on certain classifications of students.
School Facilities Board – SFB - an Arizona government entity created in 1998 to oversee building new
schools (fund 695), building and capital deficiencies
(fund 685) and building renewal (fund 690).
Arizona Association of School Business Officials | School Finance Summary Manual
Acronyms
A: Autistic
AASBO: Arizona Association of School Business
Officials
ADA: Average Daily Attendance
ADE: Arizona Department of Education
ADM: Average Daily Membership
AFR: Annual Financial Report
AG:
Attorney General or Auditor General
APOR: Apportionment Report
ARS or A.R.S.: Arizona Revised Statute
32
K–8: Kindergarten through Eighth Grade
K–12: Kindergarten through Twelfth Grade
M&O: Maintenance and Operation
MIMR: Mild Mental Retardation
MD: Multiple Disabilities
OHI: Other Health Impairments
OI: Orthopedic Impairment
PFP: Pay for Performance
PSD: Pre-School with Disabilities
QTL: Qualifying Tax Levy
ASBA: Arizona School Boards Association
QTR: Qualifying Tax Rate
A.V.: Assessed Value
R: Resource
BBCF: Budget Balance Carry forward
RCL: Revenue Control Limit
BSL: Base Support Level
SAIS: Student Accountability Information System
CAFR: Comprehensive Annual Financial Report
SC: Self-Contained
CEC: Certificates of Educational Convenience
SDER: School District Employer Report
CORL: Capital Outlay Revenue Limit
SFB: School Facilities Board
CPI: Consumer Price Index
SLD: Specific Learning Disability
CLRL: Capital Levy Revenue Limit
SLI: Speech/Language Impairment
CSF: Classroom Site Fund
SMR: Severe Mental Retardation
DSL: District Support Level
ED: Emotionally Disabled
Students Fair and Immediate Resources for
FIRST:
Students Today
ELL: English Language Learners
TAPBI: Technology Assisted Project-based
Instruction
ESY: Extended School Year
TANS: Tax Anticipation Notes
FDK: Full Day Kindergarten
TEI: Teacher Experience Index
GDP: Gross Domestic Product
TRCL: Transportation Revenue Control Limit
JTED: Joint Technological Education District
TSL: Transportation Support Level
K–3: Kindergarten through Third Grade
USFR: Uniform System of Financial Records
Arizona Association of School Business Officials | School Finance Summary Manual
AASBO Board of Directors — 2007-08
Ernie Meza, President
Pendergast Elementary School District
3845 N. 91st Avenue Phoenix, AZ 85037
623/772-2280
[email protected]
Michael Fisher, Director of Maintenance and Transportation
Phoenix Elementary School District
1817 N. 7th Street Phoenix, AZ 85006
[email protected]
602/257-3934
James Brown, President-elect
Round Valley Unified School District
P.O. Box 610 Springerville, AZ 85938
928/333-6580
[email protected]
Kathy Glindmeier, Director of Educational Programs
Paradise Valley Unified School District
20621 N. 32nd Street Phoenix, AZ 85050
602/493-6330
[email protected]
David Peterson, Vice President
Scottsdale Unified School District
3811 N. 44th Street Phoenix, AZ 85018
480/484-6183
[email protected]
Geoff Habgood, Director for Food & Nutrition
Deer Valley Unified School District
21421 N. 21st Ave., Bldg. #2 Phoenix, AZ 85027
623/445-5160
[email protected]
Bobette Tomerlin, Treasurer
Payson Unified School District
P.O. Box 919 Payson, AZ 85547
928/474-2070
[email protected]
Howard Kropp, Director of Purchasing
Washington Elementary School District
4650 W. Sweetwater Glendale, AZ 85304
602/374-2610
[email protected]
Jim Migliorino, Immediate Past President
Deer Valley Unified School District
20402 N. 15th Ave. Phoenix, AZ 85027
623/445-4959
[email protected]
Bill Munch, Director of Membership Services
Mesa Unified School District
549 N. Stapley Drive Mesa, AZ 85203-7297
480/472-0150
[email protected]
Tom Clark, Director of Information Technology
Madison Elementary School District
5601 N. 16th Street Phoenix, AZ 85016
602/664-7904
[email protected]
Rosa Saenz, Vendor Representative
The Professional Group Public Consulting
212 W. Superstition, #103 Apache Junction, AZ 85220
602/702-3491
[email protected]
Tom Elliott, Director of Business Administration
Paradise Valley Unified School District
15002 N. 32nd Street Phoenix, AZ 85032
602/867-5135
[email protected]
AASBO Staff
John Fung, Executive Director
2100 N. Central Ave., Suite 202 Phoenix, AZ 85004
602/253-5576 x121
[email protected]
Chuck Essigs, Director of Governmental Relations
2100 N. Central Ave., Suite 202 Phoenix, AZ 85004
602/253-5576 x122
[email protected]
Darlene Kracht, Membership Services Coordinator
2100 N. Central Ave., Suite 202 Phoenix, AZ 85004
602/253-5576 x120
[email protected]
Ana Sanchez, Administrative Assistant
2100 N. Central Ave., Suite 202 Phoenix, AZ 85004
602/253-5576
[email protected]
Jeff Gadd, Director of Professional Development & Training
2100 N. Central Ave., Suite 202 Phoenix, AZ 85004
602/350-5209
[email protected]
Arizona Association of School Business Officials | School Finance Summary Manual
School Finance
Procedures Manual
FY 2009
Version 09.01.95
ARIZONA DEPARTMENT OF EDUCATION
Introduction ..................................................................................................................................... 4
Defining an Instructional Program Schedule .................................................................................. 5
Minimum Annual Instructional Hour Requirements .................................................................. 5
Instructional Time, Courses, and Subjects .................................................................................. 5
Calendar Requirements ............................................................................................................... 5
The School Year ..................................................................................................................... 5
Holidays .................................................................................................................................. 6
Minimum Annual School Days Requirement ......................................................................... 6
Scheduling Limitations ........................................................................................................... 6
School Calendar Make Up Day Options................................................................................. 6
Defining Eligibility for School Membership .................................................................................. 7
Residency and Legal Custody..................................................................................................... 7
Admission of Resident Students ................................................................................................. 8
School Districts ....................................................................................................................... 8
Charter Schools ....................................................................................................................... 8
Admission of Non Resident Students ......................................................................................... 9
Certificate of Educational Convenience (CEC) ...................................................................... 9
Open Enrollment ................................................................................................................... 10
Children of non-resident college faculty............................................................................... 10
Children of parents working at Certain State Institutions..................................................... 10
Children living with resident relatives .................................................................................. 10
Children of nonresidents paying tuition................................................................................ 10
Foreign exchange students .................................................................................................... 10
Homeless Children ................................................................................................................ 10
Age Requirements and Validations for Funding Purposes ....................................................... 11
Exceptions to when a child must be enrolled in a school ......................................................... 11
Compilation and Maintenance of Student Records ...................................................................... 12
Technology Assisted Based Instructional Programs (TAPBI) ..................................................... 13
Instructional Program Schedule ................................................................................................ 13
Enrollment................................................................................................................................. 13
Determining Full Time Equivalency .................................................................................... 13
Attendance ................................................................................................................................ 13
Joint Technological Education Districts (JTED) .......................................................................... 14
Enrollment................................................................................................................................. 14
Attendance ................................................................................................................................ 15
Reporting Student Membership .................................................................................................... 16
Enrollment Date (Membership Start Date) ............................................................................... 16
Presentation of Withdrawal Form ............................................................................................. 16
Withdrawal Date (Membership End Date) ............................................................................... 16
Readmission .............................................................................................................................. 16
Determining Student Full Time Equivalency ........................................................................... 17
Defining Homebound Membership Periods ............................................................................. 18
Concurrent Memberships .......................................................................................................... 18
Subsequent Memberships ......................................................................................................... 18
Resolving Membership Disputes .............................................................................................. 19
Tracking Student Attendance........................................................................................................ 20
Reporting Attendance: Daily Absences .................................................................................... 20
Daily Attendance Tracking ................................................................................................... 20
2
ARIZONA DEPARTMENT OF EDUCATION
Absence Reasons .................................................................................................................. 23
Excused Absences ................................................................................................................. 24
Reporting Attendance: Minutes and Daily Absences ............................................................... 25
Reporting Attendance: Instructional Minutes ........................................................................... 25
Moving Dollars… Making Sense
3
ARIZONA DEPARTMENT OF EDUCATION
Introduction
The purpose of this manual is to provide guidance to all district and charters throughout the State of
Arizona on the rules and regulations they must follow in reporting information to the School Finance Unit
of the Arizona Department of Education (ADE). The scope is to cover information and processes relevant
to reporting data to the School Finance Unit that impact state funding. References to statutes are provided
frequently but all who submit information should endeavor to become knowledgeable of the laws that
districts and charters are bound to observe. As legislative or system changes occur, this document will be
updated accordingly. For fiscal years prior to 2009, these procedures were previously published in the
Instructions for Required Reports.
With the approval of Proposition 301 in November 2000, effective July 1, 2001, ADE developed the
Student Accountability Information System (SAIS). It replaced a data submission process in which school
districts and charter holders submitted data to ADE in summary form. With SAIS, we receive and
maintain detailed student data. The information collected by SAIS brings greater accountability and
efficiency to school funding and reporting in Arizona.
The focus of SAIS is to collect, as events occur, student-level data: individual student records reflecting
specific events in the students' relationship with the school (e.g., enrollment, absence, and withdrawal).
Certain events, which affect a student's status, require the related school entity to submit transactions to
SAIS. The district and charters submit such data via secure Internet at www.ade.az.gov/commonlogon.
ADE aggregates the data from the districts and charters and stores it in a system of databases. The Student
Counts process further combines the data into applicable groupings to determine appropriate expenditure
capacity and/or funding for the districts and charters.
Other units within the ADE require that district and charters submit information. SAIS and various online applications collect data that is required by the federal government; however, because the information
does not affect state funding, information on those processes is not addressed in this manual. Those units
include, but are not limited to the following: Academic Achievement, Exceptional Student Services, and
Research and Evaluation. Reports may include Graduation Rate Study, Year End Enrollment, ESS
Census Verification, the Annual Special Education Data Collection, and Title III ELL Data Collection.
The following conventions will be used when referencing statute from this document.
Referencing statute
Code ●§● Title-Section (Subsection).
Example… as provided in A.R.S. § 15-972(B)(1)(b)(vi)
Referencing multiple sections
Code ●§§●Title-Section1, ●Section2, ●and●Section3 .
Referencing multiple subsections
Code ●§●Title-Section (Subsection1), ● (Subsection2), ●and ● (Subsection3)
4
ARIZONA DEPARTMENT OF EDUCATION
Defining an Instructional Program Schedule
Minimum Annual Instructional Hour Requirements
The following table is a summary of the minimum hour requirements for a full time instructional
program (A.R.S. § 15-901(A)(2)(b)(i)).
Note: Federal preschool programs (i.e. Head Start) may have additional requirements.
Grade Range
Preschool
KG (Half Day)
KG (Full Time),1-3
4-6
7-8
9-12
Instructional Hours Required for the Year
216*
356
712
890
1068
720
*Derived from 360 minutes ÷ 5 Days * 180 Days
Instructional Time, Courses, and Subjects
Instructional time, courses, and subjects are defined in the ADE External Guidelines under GE18.
The amount of passing time that may be included in the calculations of total instructional hours
for all grades is also limited as defined in the ADE External Guidelines under GE-19.
Calendar Requirements
Each district or charter is required to establish all calendars by August 31 of the school year. The
calendar must be approved and active before any student detail information can be submitted to
ADE. The approval process and instructions for submitting calendars are published in the SAIS
LEA Calendar Application User Manual which can be found at
http://www.ade.az.gov/schoolfinance/SAISSupport/PEA_LEACalendar/Manual.pdf.
The School Year
The fiscal year shall begin July 1 and end June 30 and a school month is twenty school days or
four weeks of five days each (A.R.S. § 15-801(A)). Throughout this document a school calendar
year may be referenced by the calendar years that are covered. For example, the following terms
may be used to refer to the same period of July 1st 2008 – June 30th 2009:
Fiscal Year 2009
School Year 2008-2009
Moving Dollars… Making Sense
5
ARIZONA DEPARTMENT OF EDUCATION
Holidays
The calendar must observe the four defined holidays (A.R.S. § 15-801(B)):
• Thanksgiving Day
• July 4th
th
• December 25
• Veterans’ Day
Schools may not be in session on any of those days or count any instruction provided on those days
towards meeting the annual hours requirement in A.R.S. §15-901.
Minimum Annual School Days Requirement
A full time instructional program requires at least 720 hours over 180 days (A.R.S. §§ 15901(A)(2)(c)(vi) and 341.01). The exception is that 180 days of instruction may mean 180 days or an
equivalent number of minutes of instruction per school year based on a different number of days of
instruction as long as it is approved by the school district governing board.
A.R.S. § 15-902.02 allows for school districts to elect to provide 200 days of instruction and receive a
calculation of average daily membership based on that basis. A copy of the summary of minutes from the
election for the 200 day calendar of instruction shall be sent to School Finance to authorize the
calculation.
The governing board may also decide to offer an educational program on the basis of a four day school
week with 144 days of instruction or for preschool or an alternative kindergarten program on the basis of
a three day school week with 108 days of instruction (A.R.S. § 15-341(A)(2)).
Calendar Days Required Based on the Number of Days Per Week
Head Start
Preschool Disabled-KG
1-12
N/A
108 Days
N/A
3 Day Week
128 Days (Fed)
144 Days
144 Days
4 Day Week
160 Days (Fed)
180 Days
180 Days
5 Day Week
Scheduling Limitations
The determination of the type of calendar is based on the number of days of the week used to
offer instruction throughout the entire year. The weekdays set for each week do not need to be
consistent throughout the year. However, the number of session days that may occur in a week
is limited to 5 days. Unless otherwise authorized by the superintendent of public instruction 6 or
7 day calendars will not be approved
(A.R.S. § 15-801(A)).
SAIS will exclude 3 day calendars when determining the aggregation target date. When setting
up a calendar, LEAs should keep in mind that changing the type of calendar from a 4 day
calendar to a 3 day calendar could extend the aggregation target date for the entire district or
charter holder. This may affect the availability and completeness of student count reports until
the aggregation target date is actually reached.
School Calendar Make Up Day Options
The number of days per week may not exceed the type of calendar selected. The recommended
practice is to schedule in a few extra instructional days in anticipation of schedule changes due to
weather or unforeseen occurrences. Any calendar changes that need to occur after the first 100
Session Days are limited by the implementation of the calendar application. If a school desires
6
ARIZONA DEPARTMENT OF EDUCATION
to make changes that cannot be reflected in the calendar electronically submitted to ADE, the
Audit Resolution Unit would need to be consulted to determine compliance.
Defining Eligibility for School Membership
Residency and Legal Custody
The residence of the person having legal custody (parent, legal guardian) of a student is considered the
residence of the student, except for certain homeless children (A.R.S. § 15-824(B) and (C)) and some
students with Certificates of Educational Convenience (A.R.S. § 15-825(B)). A.R.S. § 15-824 (G)(2)
defines legal custody as follows:
•
•
Custody exercised by the natural or adoptive parents with whom a student resides.
Custody granted by order of a court of competent jurisdiction to a person or persons with whom a
student resides.
An individual who has reached the age of 18 is considered an adult for purposes of determining residency.
The statutes do not require that residency be established for a specified length of time for purposes of
attending school (Attorney General Opinion 73-10(C)). If a student is between the ages of 18 and 22,
resides in the district, and is identified as a child with a disability (A.R.S. § 15-761(2)) and has not
completed the highest grade taught in the district, the student may attend school in the district without
payment of tuition. If the student is receiving special education services at the time the student reaches
22 years of age, special education services shall continue to be provided through the end of that school
year(A.R.S.15-764(A)(1)).
Notwithstanding any other law, a child who resides with a family member other than the child's parent
and is residing with the family member while awaiting the outcome of a legal guardianship or custody
proceeding is deemed to reside in the school district where that family member resides if the family
member provides written documentary proof of one of the following:
•
The family member is attempting to obtain legal guardianship of the child in an unresolved and
uncontested guardianship proceeding commenced in Superior Court. The family member shall
provide documentation to the school district within thirty days of enrollment that the family member
is attempting to obtain legal guardianship of the child. Upon obtaining legal guardianship, the family
member shall provide documentation to the school district.
• The family member is attempting to obtain custody of the child in an unresolved and uncontested
child custody proceeding commenced in Superior Court. The family member shall provide
documentation to the school district within thirty days of enrollment that the family member is
attempting to obtain custody of the child. Upon obtaining custody, the family member shall provide
documentation to the school district.
(A.R.S. § 15-821(D))
Moving Dollars… Making Sense
7
ARIZONA DEPARTMENT OF EDUCATION
Admission of Resident Students
School Districts
All schools shall admit children between the ages of six and twenty-one years who reside in the school
district and who meet the requirements for enrollment in one of the grades or programs offered in the
school (A.R.S. § 15-821(A)).
A school district shall not deny a pupil who is between the ages of sixteen and twenty-one year’s
admission to a high school because the pupil does not hold an eighth grade certificate. Governing boards
shall establish procedures for determining the admissibility of pupils who are under sixteen years of age
and who do not hold eighth grade certificates (A.R.S. § 15-701(H)).
School districts may refuse to admit pupils who have been expelled from another educational institution
or who are in the process of being expelled from another educational institution. A school district may
annually or upon the request of any pupil or the parent or guardian review the reasons for expulsion and
consider re-admission (A.R.S. § 15-841(C) and (D)).
Charter Schools
A charter school shall enroll all eligible pupils who submit a timely application, unless the number of
applications exceeds the capacity of a program, class, grade level or building.
Preference may be given to
• Returning pupils
• Siblings of enrolled pupils
• Pupils who reside within the boundaries of the school district where the charter school is
physically located.
A charter school shall not limit admission based on ethnicity, national origin, gender, income level,
disabling condition, or proficiency in the English language or athletic ability.
A charter school may limit admission to pupils within a given age group or grade level.
A charter school may refuse to admit any pupil who has been expelled from another educational
institution or who is in the process of being expelled from another educational institution
(A.R.S. § 15-184(A) thru (E)).
8
ARIZONA DEPARTMENT OF EDUCATION
Admission of Non Resident Students
Certificate of Educational Convenience (CEC)
The governing board of a school district shall admit pupils from another school district or area
upon presentation of a certificate of educational convenience issued by the county school
superintendent pursuant to A.R.S. § 15-825.
CEC-A Student: A student precluded by distance or lack of adequate transportation facilities
from attending school in the school district or county of the student's residence or who resides in
unorganized territory may apply to the County School Superintendent for a CEC. The County
School Superintendent may issue a certificate authorizing the student to attend school in an
adjoining school district or county, whether within or outside of this State. If a CEC is issued, the
school enrollment is as follows:
•
•
The enrollment of a student precluded by distance or lack of adequate transportation from
attending school in the district or county of residence is deemed for the purpose of
determining student count to be in the school of the county or district of the student's
residence. The student's district of residence may be charged tuition by the district of
attendance or the districts may agree to exchange students and not charge each other tuition
(A.R.S. § 15-825(01)(A)(1)).
The school enrollment of a student from an unorganized territory is deemed for the purpose
of determining student count to be in the district of actual attendance (A.R.S. § 15825.(A)(2)).
Note: The governing board of a school district shall admit up to 350 pupils from another school
district or area pursuant to A.R.S. § 15-824(A)(2), to a high school without presentation of a
CEC, if the pupil is a resident of a common school district within the state which is not within a
high school district and which does not offer instruction in the pupil’s grade. The limitation does
not apply to small isolated common school districts, as defined in A.R.S. § 15-901. The common
school district shall be reported as the district of residence for the purposes of determining
average daily membership used in calculating state aid (A.R.S. § 15-824(A)(2)). Tuition shall be
charged by the high school of attendance to the common school district (A.R.S. § 15-824(A and
E)).
CEC-B Student: The County School Superintendent of any county in which a student is placed
in one of the following listed facilities will issue a CEC for the student to attend school in the
school district or adjoining school district(A.R.S. § 15-825(B))
.
• A State rehabilitation or corrective institution
• A foster home, child care agency, or institution which is licensed and supervised by the
Department of Economic Security or Department of Health Services
• A residential facility operated or supported by the Department of Economic Security or the
Department of Health Services
• A residence under the supervision of the Juvenile Corrections
Note: The County School Superintendent of any county may not issue a CEC for a student placed
in one of the above listed facilities if the student is placed in the same district of the student's
parents' or legal guardians' residence or if the student is placed without a court order and the
student's parents or legal guardians are not residents of this state. (A.R.S. § 15-825(C)).
Moving Dollars… Making Sense
9
ARIZONA DEPARTMENT OF EDUCATION
Open Enrollment
A school district may offer an open enrollment option without charging tuition. The status of
open enrollment is in reference to students that are nonresident to the district. Tuition may be
charged to nonresident pupils only when the tuition is authorized under A.R.S. §§ 15-764(E), 15797(C), 15-823(A), 15-824(A) or 15-825. These policies shall include admission criteria,
application procedures and transportation provisions. A copy of the district policies for open
enrollment shall be filed with the Department of Education. [A.R.S. § 15-816(01)]
Children of non-resident college faculty
The governing board shall admit children of nonresident teaching and research faculty of
community college districts and state universities and children of nonresident graduate or
undergraduate students of community college districts and state universities whose parent's
presence at the district or university is of international, national, state or local benefit without
payment of tuition. [A.R.S. § 15-823(B)]
Children of parents working at Certain State Institutions
The superintendent of public instruction shall assist school districts in education children whose
parents or legal guardians are employed by and domiciled at the following state institutions and
stations:
•
•
•
•
•
The State Hospital
The Arizona State Schools for the Deaf and the Blind
Mental retardation centers
Port of entry inspection stations
Institutions and facilities maintained by the State Department of Corrections
The assistance shall be by payment of tuition [A.R.S. §15-976 (A)(1)(2)(B)(C)].
Children living with resident relatives
The governing board shall admit children who are residents of the United States but are nonresidents of
this state without payment of tuition if evidence indicates that the child's physical, mental, moral or
emotional health is best served by placement with a grandparent, brother, sister, stepbrother, stepsister,
aunt or uncle who is a resident within the school district, unless the governing board determines that the
placement is solely for the purpose of obtaining an education in this state without payment of tuition.
[A.R.S. § 15-823(C)], (Attorney General Opinion I87-005). These students are eligible for state aid.
[A.R.S. § 15-824(D)]
Children of nonresidents paying tuition
The governing board may admit children of nonresidents of the State, upon payment of a reasonable
tuition fixed by the governing board (A.R.S. § 15-823(A)).
Foreign exchange students
The governing board may admit nonresident foreign students who are in exchange programs without
payment of tuition. [A.R.S. § 15-823(D)] These students are not eligible for state aid. [A.R.S. § 15824(D)]
Homeless Children
The governing board may admit homeless or abandoned children [A.R.S. § 15-823(E)]
10
ARIZONA DEPARTMENT OF EDUCATION
Age Requirements and Validations for Funding Purposes
Grade Range
Preschool
Lower Limit
3 years old or
*Must have one or
Within 90 days of the student’s third
more of the following birthday with board approval
SPED Services
(A.R.S. § 15-771 (G))
HI,VI,PSD,PSL,PMD
Kindergarten
1st – 12th Grade
Upper Limit
5 years old after Sept 1st
5 years old before Sept 1st or
5 years old by Jan 1st with board approval
6 years old before Sept 1st or
6 years old by Jan 1st with board approval
Until the 22nd birthday
or until the end of the
fiscal year of the 22nd
birthday if receiving
SPED services
Exceptions to when a child must be enrolled in a school
Pursuant to A.R.S. § 15-802(D), a person is excused from school attendance if any of the following are
shown to the satisfaction of the school principal or the school principal's designee:
1. The child is in such physical or mental condition that instruction is inexpedient or impracticable.
2. The child has completed the high school course of study necessary for completion of grade ten as
prescribed by the State Board of Education.
3. The child has presented reasons for nonattendance at a public school, which is satisfactory to the
school principal or the school principal's designee.
4. The child is over fourteen years of age and is, with the consent of the person who has custody of him,
employed at some lawful wage earning occupation.
5. The child is enrolled in a work training, career education, career and technical education, vocational
education or manual training program, which meets the educational standards, established and
approved by the Department of Education.
6. The child was suspended and not directed to participate in an alternative education program..
7. The child is enrolled in an education program provided by a state educational or other institution.
See also (A.R.S. § 15-841(C) and (D)).
Moving Dollars… Making Sense
11
ARIZONA DEPARTMENT OF EDUCATION
Compilation and Maintenance of Student Records
School District Governing Boards and Charter Operator Governing Bodies are responsible for compiling
and maintaining attendance records. Attendance records can be compiled by either a paper system or a
paperless system.
A. Pursuant to A.R.S. §15-521(2) each teacher shall “keep a school register, which the
governing board shall carefully preserve as one of the records of the school.” This can be
either a paper attendance system or paperless attendance system.
B. Attendance shall be taken for each student, and maintained at all levels, in order for the
Arizona Department of Education to be able to examine the school’s average daily
attendance, ADA, as defined in A.R.S. §15-901.
C. Each teacher shall take attendance and indicate whether the student is either absent or
present, as prescribed by the definition of “daily attendance.” See A.R.S. §15-901 (6).
D. School Districts and Charter Operators must maintain a sufficient audit trail of attendance
documentation to be able to validate the accuracy of the attendance information reported
to the Arizona Department of Education. This information should include the following:
the original teacher attendance documents and other documents required to record any
changes to the original teacher entry. Audit trail documents can utilize either a paper or
electronic format.
E. The schools shall record the attendance information into their School Management
System (SMS) and then into the Arizona Department of Education’s Student
Accountability Information System (“SAIS”).
F. All original attendance records, whether paper or paperless, must be maintained for four
(4) years pursuant A.R.S. §41-1351and according to the school district or charter
operator’s record retention schedule for audit purposes. Link for Records Management
for School Districts and Charter Schools;
http://www.lib.az.us/records/school.cfm
G. If a school district or charter operator fails to maintain original attendance records of its
students, they may be subject to an ADM adjustment in accordance with A.R.S. § 15915.
H. TECHNOLOGY ASSISTED PROJECT-BASED (TAPBI) schools: shall maintain a
daily log used by each pupil who participates in the program. “The daily log shall be
used by the school district or charter school to qualify the pupils who participate in the
program in the school’s average daily attendance calculations pursuant to A.R.S. §15901”. A.R.S. §15-808 (E)
(EX-34)
12
ARIZONA DEPARTMENT OF EDUCATION
Technology Assisted Based Instructional Programs (TAPBI)
A.R.S. §15-808 (B)
Instructional Program Schedule
TAPBI programs are required to submit calendars that define the 100 session days of a school
year. Contrary to the aggregation rules in previous fiscal years, hours of student instruction
reported as attendance after the 100th session day will not be used to determine absences as
applicable to the calculation of Average Daily Attendance.
Enrollment
Schools shall maintain sufficient records to document compliance with the following enrollment
requirements:
•
Each academic school year, at least 80% of the pupils who are participating must have
been previously enrolled in and attended a public school in the previous school year.
•
Kindergarten pupils may participate if a sibling is currently enrolled in and attending a
program.
Determining Full Time Equivalency
Refer to the section in this document for Determining Student Full Time Equivalency for all
schools.
Attendance
Each school selected for the technology assisted project-based instruction program shall ensure
that a daily log is maintained for each pupil who participates in the program. The daily log shall
describe the amount of time spent by each pupil participating in the program pursuant to this
section on academic tasks.
TAPBI programs may record attendance according to procedures defined in this document under
Reporting Attendance: Minutes and Daily Absences.
Moving Dollars… Making Sense
13
ARIZONA DEPARTMENT OF EDUCATION
Joint Technological Education Districts (JTED)
Enrollment
A course that is identified as having additional requirements beyond the scope of a standard
educational course may be approved by Career and Technical Education (CTE) as a JTED
course. Therefore a member district may not claim ADM for membership in a JTED course. All
students taking a course that is approved as a JTED course must be reported as having
enrollment in the JTED program for each JTED course. All students who no longer participate
in any JTED approved courses must be withdrawn from the appropriate JTED programs. (A.R.S.
§§ 15-391(3)(c)) , 15-393(D)(5)(d)).
The ADM per pupil allowed for the centralized campus owned and operated by the JTED is 0.75
per course of at least 150 minutes. (A.R.S. 15-393 (O))
Member Districts sending students to Central JTED Campuses or to a satellite program will
report separately “actual” ADM enrollment for the students enrolled in member district courses.
(A.R.S. 15-901 (A) (1))
Only JTED satellite memberships of students that are resident of that member district may
generate the additional .25 ADM above the limit of 1.0. Unless there is a contract for tuition
established with a non-member school, JTED Satellite memberships for students that are not
residing in that member district must be reported with a tuition payer code of 5 for fundable
membership exclusion.
Scenario 1 - Student resides in the member district is enrolled fulltime in 4 Non-JTED courses at
a district or charter and 1 JTED satellite. All courses are 60 minutes long.
• The district or charter must report the enrollment of the student with the district or charter
as both the District of Residence and the District of Attendance.
• The JTED must report the enrollment of the student with the JTED as both the District of
Residence and the District of Attendance.
Scenario 2 – Student who does not reside in the member district is enrolled fulltime in 4 NonJTED courses at a charter school and 1 JTED satellite. All courses are 60 minutes long.
• The charter must report the enrollment of the student with the charter as both the District
of Residence and the District of Attendance with a Tuition Payer Code = 5.
• The JTED must report the enrollment of the student with the JTED as both the District of
Residence and the District of Attendance.
14
ARIZONA DEPARTMENT OF EDUCATION
Attendance
When determining the daily absence of a student, a member district may not count instructional
time in a JTED course as instructional time spent in a non-JTED course.
Scenario 1 - Student is enrolled fulltime in 4 Non-JTED courses and 1 JTED satellite. All
courses are 60 minutes long. The actual attendance and reported attendance for that student is as
follows:
Actual
Reported Daily Reported Daily
Attendance Attendance
Absence
JTED1
Present
0.25
0.00
Course1
Present
0.25
0.00
Course2
Present
0.25
0.00
Course3
Present
0.25
0.00
Course4
Absent
0.25
0.00
The Member District does not have any absences to report.
The JTED Satellite does not have any absences to report.
The Daily Attendance for the student would be 1.25 for that day.
Scenario 2 - Student is enrolled fulltime in 4 Non-JTED courses and 1 JTED satellite. All
courses are 60 minutes long. The actual attendance and reported attendance for that student is as
follows:
Actual
Reported Daily Reported Daily
Attendance Attendance
Absence
JTED1
Present
0.25
0.00
Course1
Present
0.25
0.00
Course2
Present
0.25
0.00
Course3
Present
0.25
0.00
Course4
Absent
0.00
0.25
The Member District must report an absence of .25 for the student on that day.
The JTED Satellite does not have any absences to report.
The Daily Attendance for the student would be 1.0 for that day.
Moving Dollars… Making Sense
15
ARIZONA DEPARTMENT OF EDUCATION
Reporting Student Membership
Enrollment Date (Membership Start Date)
For the purposes of determining Average Daily Membership (ADM) for a given school year at a given
public school pursuant to A.R.S. § 15-901(A)(2), the first day of membership for continuing or preenrolled students, may be defined as the first day that classroom instruction is offered, provided that such
students physically attend school within the first ten school days. For all other students, the first day of
membership shall be defined as the first day a student physically attends school. The definition of the first
member day shall be applied consistently throughout the district or charter holder. (GE-17 First Day
Absence)
Note: Continuing students who do not attend school during the first ten days school is in session are
subject to summer withdrawal.
Presentation of Withdrawal Form
As documentation helps to ensure uniform and comparable data across schools, districts and charters are
to use the form: Official Notice of Pupil Withdrawal when a student withdraws during the school year.
Furthermore, Arizona state law requires that a properly executed withdrawal form be presented to a
school if the student previously attended another school within the state of Arizona. (A.R.S. § 15-827)
Please refer to the Official Notice of Pupil Withdrawal Form and Instructions available at
www.ade.az.gov/schoolfinance/Forms/WithdrawalForm1.doc.
Withdrawal Date (Membership End Date)
The effective date of withdrawal is the last day of actual attendance of the student. (A.R.S. § 15–
901(A)(2)) Withdrawals should be reported for students formally withdrawn from school and students
who have been absent for ten consecutive school days without excuse. Students who are in membership
on the last scheduled day of school are not subject to withdrawal.
Some of the computerized attendance systems require the date of withdrawal to be entered on the day
following the last day of attendance in order to be paid for the last day of attendance. The date of
withdrawal should be adjusted programmatically to the actual last day when the data is submitted to
SAIS. In any case, the last day of actual attendance is to be counted as a membership day.
Readmission
Readmission occurs when a student has been withdrawn from a school and reenters the same
school during the same school year. The date of readmission shall be defined as the first day the
student physically attends school following the date of withdrawal.
16
ARIZONA DEPARTMENT OF EDUCATION
Determining Student Full Time Equivalency
The requirements for a student enrollment to qualify for a full time equivalency and the
requirements for fractional enrollments are as follows:
GUIDELINE
a. Preschool
i. A preschool child is one who is enrolled in a program for preschool
children with disabilities of at least 360 minutes each week. This program
must meet at least 3 days per week for each child.
ii. Fractional enrollments are not applicable for preschool children
b. Kindergarten through Eighth Grade
Grade Range
Kindergarten
1-3
4-6
7-8
Fractional Enrollment for Kindergarten through Eighth Grade
Hours enrolled as applied to a full year schedule
0
0.25
0.5
0.75
<356
N/A
≥356 and <712
N/A
<178
≥178 and <356
≥356 and <534
≥534 and <712
<223
≥223 and <445
≥445 and <668
≥668 and <890
<267
≥267 and <534
≥534 and <801
≥801 and <1068
1
≥712
≥712
≥890
≥1068
c. Ninth through Twelfth Grade
Requirement A
Full Time
Program
Minimum of
720 hours
AND
Three
Quarters
Program
Minimum of
540 hours
AND
Half Time
Program
Minimum of
360 hours
AND
Quarter
Time
Program
Minimum of
180 hours
AND
Requirement B
4 Subjects @ 123 hours each delivered over any number of days
OR
Any number of subjects totaling at least 20 hours per week
3 Subjects @ 123 hours each delivered over any number of days
OR
Any number of subjects totaling at least 15 hours per week
2 Subjects @ 123 hours each delivered over any number of days
OR
Any number of subjects totaling at least 10 hours per week
1 Subjects @ 123 hours each delivered over any number of days
OR
Any number of subjects totaling at least 5 hours per week
Moving Dollars… Making Sense
17
ARIZONA DEPARTMENT OF EDUCATION
Defining Homebound Membership Periods
A homebound or hospitalized student is one who is capable of profiting from academic instruction but is
unable to attend school due to illness, disease, accident, or other health conditions, who has been
examined by a competent medical doctor and is certified by that doctor as being unable to attend regular
classes for a period of not less than three school months or a pupil who is capable of profiting from
academic instruction but is unable to attend school regularly due to chronic or acute health problems, who
has been examined by a competent medical doctor and who is certified by that doctor as being unable to
attend regular classes for intermittent periods of time totaling three school months during a school year.
The medical certification shall state the general medical condition, such as illness, disease or chronic
health condition that is the reason that the pupil is unable to attend school. Homebound or hospitalized
includes a student who is unable to attend school for a period of less than three months due to a pregnancy
if a competent medical doctor, after an examination, certifies that the student is unable to attend regular
classes due to risk to the pregnancy or to the student's health.
Homebound or hospitalized categories can include students who are unable to attend school for a period
of less than three months due to a pregnancy if a competent medical doctor, after an examination, certifies
that the student is unable to attend regular classes due to risk to the pregnancy or to the student's health.
(A.R.S. § 15-901 (B)(13))
To maintain homebound status the following requirements must be met:
• The student must be enrolled in the school the student would otherwise attend
• The student must be receiving at least 240 minutes of instruction per week
• A certified teacher must be providing the instruction
Concurrent Memberships
A student may be enrolled in more than one school over the same period of time. The dates,
over which the student shares membership, defines a concurrent membership period. The state
funding for this student is apportioned between the concurrent memberships according to statute.
Subsequent Memberships
State funding for a student may also be affected by the student’s previous or subsequent
enrollment in another school. Any other membership that a student may have during the fiscal
year has the potential to reduce the amount of funding received by a school. The amount of
fundable membership a student generates in the state across all enrollments in a fiscal year may
be limited.
18
ARIZONA DEPARTMENT OF EDUCATION
Resolving Membership Disputes
Memberships that have the potential of limiting the fundable membership count for your students
may be reported to the state from other schools. The following section will present the set of
procedures that School Finance has established to help resolve these issues.
School A reports
membership for
Student
Student Enrolls
in School B
School B makes
a records request
to School A
School B submits
membership for
Student
Records Request
Transcript
Pupil
Withdrawal
Form
SDADMS71-1
Did
School A provide
records?
Compare to SBE
Curriculum Req
R7-2-302
School A is
noncompliant
Email
[email protected]
Was
student reported
correctly by
School A?
School B sends certified
letter to School A
requesting a
Change of Records
Does School A
Respond?
Proof of
nonresponse
Email [email protected]
SF Contacts School A and gives
warning of enrollment invalidation
Does School A
Respond?
SF invalidates School
A Membership
School A Corrects the Data
(15-915 if Prior Year Correction)
Moving Dollars… Making Sense
19
ARIZONA DEPARTMENT OF EDUCATION
Tracking Student Attendance
Reporting Methods
All Other
Schools
Daily Absences
Only
Alternative Schools,
Charter Schools w/ approved alt. cal.,
TAPBI Schools
Minutes of Attendance
AND
Daily Absences
Disabled Preschool
&
Homebound
Minutes of Attendance
Only
Reporting Attendance: Daily Absences
Except as otherwise provided by any other law, beginning July 1, 2008, absences shall be
forwarded electronically by the school district on a school by school basis with other records
pursuant to A.R.S. 15-902 (J).
This reporting method is required for the following instructional programs:
• Elementary schools grades kindergarten through sixth grade.
• Middle schools grades seven and eight
• High school grades nine through twelve
• Joint Technological Education Districts (JTED) (A.R.S. 15-393).
Daily Attendance Tracking
For students in elementary grades (KG-8)
Attendance shall be taken at least twice a day and sufficient documentation shall be maintained
to support the fractional student absence reported.
For students in high school grades (9-12)
Attendance shall be taken for each period
20
ARIZONA DEPARTMENT OF EDUCATION
For kindergarten students (excluding homebound)
For students enrolled in kindergarten, a full day of attendance is a day in which a student attends
more than three-quarters of the instructional time for the day. If the total instruction time
scheduled for the year is at least 346 but less than 692 hours, attendance for at least three
quarters of the day should be counted as one-half day of attendance. If the instructional time
scheduled for the year is at least 692 hours, a full day of attendance may be counted as one-half
of the instructional time scheduled for the day. A.R.S. § 15-901(A)(6)(a)(i)
•
Kindergarten students are considered either to be present or absent for a full day.
Incremental absences in proportions that are less than a kindergarten student’s full time
equivalency are not allowed.
•
Record a kindergarten student who is enrolled in a program with total instruction time
between 346 and 692 hours for the year as absent if he/she is in attendance for less than
three–quarters of the instructional time scheduled for the day.
•
If the total instructional time for the year is 692 hours or more, a student is counted as
absent if he/she attends less than half the instructional time scheduled for the day.
Example 1
•
Student A is enrolled in a kindergarten program that is scheduled to include 360
instructional hours over the course of the school year. (A half day program.)
•
Two hours of instruction are scheduled for a particular day.
•
If Student A attends for at least one hour and 30 minutes of the two hours of instruction
scheduled for the day, he is considered to be in attendance for the full day and no
absences are reported.
•
If Student A attends for less than one hour and 30 minutes of the two hours of instruction
scheduled for the day, he is considered to be absent for the full day and an absence in the
amount of 0.50 must be reported.
Note: The reported amount of a daily absence may not exceed a student’s full time
equivalency. In this case, Student A is enrolled in a half day kindergarten program and
has an FTE of 0.50.
Example 2
•
Student B is enrolled in a kindergarten program with total instruction time of 720
instructional hours over the course of the school year. (A full day program.)
•
Four hours of instruction are scheduled for a particular day.
•
If Student B attends for at least two hours of the four hours of instruction scheduled for
the day, she is considered to be in attendance for the full day and no absences are
reported.
•
If Student B attends for less than two hours of the four hours of instruction scheduled for
the day, she is considered to be absent for the full day and an absence in the amount of
1.00 must be reported.
Moving Dollars… Making Sense
21
ARIZONA DEPARTMENT OF EDUCATION
For students in grades 1–8 (excluding homebound)
For students enrolled in first through eighth grade or an ungraded program, daily attendance is a
day in which a student attends more than three-quarters of the instructional time scheduled for
the day. The attendance of a pupil at three-quarters or less of the instructional time scheduled for
the day shall be counted as follows:
A. If attendance for all pupils in the school is based on quarter days, the attendance of a
pupil shall be counted as one-fourth of a day's attendance for each one-fourth of
full–time instructional time attended.
•
Attendance for at least 76% of the instructional time scheduled for the day is
counted as a full day of attendance and no absence is reported.
•
Attendance for 75% of the instructional time scheduled for the day is counted
as three–fourths of a day’s attendance and a quarter day (0.25) absence is
reported.
•
Attendance between 51% and 74% of the instructional time scheduled for the
day is counted as a half day of attendance and a half day (0.50) of absence is
reported.
•
Attendance between 25% and 50% of the instructional time scheduled for the
day is counted as a quarter day of attendance and three–quarters of a day (0.75)
of absence is reported.
•
Record a full day (1.00) of absence for a student that is in attendance for less
than 25% of the instructional time scheduled for the day.
Attendance
Absence
Amount
>75% of the instructional time scheduled for the day
0.00
75% of the instructional time scheduled for the day
0.25
≥50% but <75% of the instructional time scheduled for the
day
0.50
≥25% but <50% of the instructional time scheduled for the
day
0.75
<25% of the instructional time scheduled for the day
1.00
B. If attendance for all pupils in the school is based on half days, the attendance of at
least three-quarters of the instructional time scheduled for the day shall be counted as
a full day's attendance and attendance at a minimum of one-half but less than threequarters of the instructional time scheduled for the day equals one-half day of
attendance.
•
22
Attendance for at least three–quarters of the instructional time scheduled for
the day is counted as a full day of attendance and no absence is reported.
ARIZONA DEPARTMENT OF EDUCATION
•
Attendance for at least one–half, but less than three–quarters of the
instructional time scheduled for the day is counted as a half day of attendance
and a half day (0.50) of absence is reported.
•
Record a full day of absence for a student that is in attendance for less than half
the instructional time scheduled for the day.
Attendance
Absence
Amount
>75% of the instructional time scheduled for the day
0.00
≥50% but <75% of the instructional time scheduled for the
day
0.50
<50% of the instructional time scheduled for the day
1.00
Note: The reported amount of a daily absence may not exceed a student’s full time equivalency.
For students in grades 9 – 12 (excluding homebound)
For high schools or ungraded schools in which the pupil is at least fourteen years of age by
September 1, the attendance of a pupil may be counted as one-fourth of that day's attendance for
each sixty minutes of instructional time in a subject that counts toward graduation, except that
attendance for a pupil shall not exceed the pupil's full or fractional membership. A.R.S. § 15–901
(A)(6)(e)
Absence Reasons
Schools will need to record absences as excused or unexcused for the purposes of determining
compliance with the withdrawal of students for 10 consecutive unexcused absences. The
guideline for excused absences is published on the ADE website as EX-1.
Since ADM may be adjusted due to an excessive absence rate at the district or charter holder
level, the following reasons for absences need to be kept on file to apply to ADE for an
exception of these absences from the calculation of the absence rate.
• Illness for any period of three consecutive days or more.
• Adverse weather conditions for any period of three consecutive days or more.
• Concerted refusal by students to attend classes for three consecutive days or more.
• Threats of violence against school property, school personnel or students.
• Chronic health problems as defined in section 15-346 if the school district is providing
services to the pupils during their absence from school.
A.R.S. 15-902 (B) and (C)
Moving Dollars… Making Sense
23
ARIZONA DEPARTMENT OF EDUCATION
Excused Absences
•
•
•
•
•
•
•
24
Pursuant to A.R.S. §15-901(A)(2), “…excused absences shall be identified by the
Department of Education...”. The Department of Education defines an excused absence
as being an absence due to illness, doctor appointment, bereavement, family emergencies
and out-of-school suspensions. The out-of-school suspension must not to exceed 10% of
the instructional days scheduled for the school year. The Department of Education
delegates the decision of family vacations as an excused absence to individual school
districts and charter holders.
Pursuant to A.R.S. §15-806, “the governing board of each school district shall adopt a
policy governing the excuse of students for religious purposes. The policy may permit a
student to be excused from school attendance for religious purposes, including
participation in religious exercises or religious instruction. If the policy permits a student
to be excused for religious purposes, the policy shall stipulate the conditions under which
the excuse will be granted.” Pursuant to A.R.S. §15-806(1) and (2)these conditions will
include at least a written consent from the person who has legal custody of the student
and the religious instruction or exercises must take place at a suitable place away from
school property. Pursuant to Op.Atty.Gen. No. R76-292, the total number of days of
excused absences for religious purposes shall be reasonable and not abused.
Pursuant to A.R.S. §15-902(C), a district or charter may apply to the Arizona Department
of Education for an adjustment when excessive absences occur that are a result of a
widespread illness, adverse weather conditions, or a concentrated refusal by students to
attend classes which extends to three or more consecutive instructional days.
Pursuant to A.R.S. §15-902(E), a district or charter may also apply to the Arizona
Department of Education for absence approval for students with chronic health problems
if the district or charter is providing services to the students during their absences.
Pursuant to A.R.S. §15-803(A)(2), in order for any of the above absences to be excused, a
child who is under 16 years of age must be accompanied by a parent, guardian, or
authorized person.
In order for absences relating to illness, doctor appointment, bereavement, family
emergencies, or district approved family vacation to be counted as excused absences, the
school must be notified of the absence prior to the absence or when the absence occurs by
the parent or legal guardian who has custody of the student. Upon returning to school
from an excused absence, the student shall submit to the school signed written consent
and specific reason for the absence signed by the parent or guardian. The school shall
then retain written consent of absence in the students file for a period of four (4) years. If
there are ten (10) or more consecutive absences due to illness, the school shall require the
student to furnish a doctors note allocating the student’s illness, which shall remain in the
student’s file for four (4) years.
If an absence occurs relating to any other term or condition that is not specifically
designated herein, the absence shall be counted as unexcused.
ARIZONA DEPARTMENT OF EDUCATION
Reporting Attendance: Minutes and Daily Absences
For an approved group of schools, minutes of attendance may also be forwarded electronically
for the purposes of determining daily membership. In these cases, daily absences should also be
submitted. The school is still required to document daily absences and keep such records on file
for determining compliance.
This reporting method is allowed for the following alternative educational programs:
• Alternative schools operating in a school district: This approval applies only to
district schools that appear on the list of alternative schools as identified by the Arizona
State Board.
• Charter schools operating on approved alternative calendars: This approval applies
only to charter schools that have been approved by the Arizona State Charter Board as
operating alternative calendars.
• Technology Assisted Project-Based Instruction Program
(TAPBI) (A.R.S. 15-808)
Determining Daily Absences
These programs may count pupils as having attended full time in any week for which the pupil
was enrolled in and physically attended at least twenty hours of instruction during that week
(A.R.S. §§ 15-796 through 797). For the purposes of determining an excessive absence
adjustment, SAIS will calculate an absence based on attendance less than 20 hours a week.
When reporting absences schools shall follow the procedures outlined in this document under
Reporting Attendance: Daily Absences.
Reporting Attendance: Instructional Minutes
This reporting method is required for the reporting of attendance for homebound students and
disabled preschool students.
Moving Dollars… Making Sense
25