California Department of Education / County Office of Education
External Services Subcommittee (ESSCO)
May 4, 2015 FINALNotes
California Department of Education May 4, 2015
1430 N Street Room 110110:00 a.m.
Co-Chair:Priscilla Quinn, Region VIII – Kern COE
Co-Chair: Peggy O’Guin, California Department of Education
Vice Chair:Jamie Perry, Region VII – Fresno COE
Meg Kailikole / I / Mendocino / Karen Deller Hennessy / V / MontereyLynette Kerr / I / Humboldt / Diane Baumhover / VI / Tuolumne
Judy Thomson / I / Sonoma / Shirley Buell / VI / Stanislaus
Adrian Barron / II / Butte / Cecilia Belmontes / VII / Madera
Jessica Tegerstrand / II / Shasta / Jamie Perry / VII / Fresno
Lori Carroll / III / Yuba / Ann Walsh / VII / Merced
Sandra Fowles / III / Yolo / Priscilla Quinn / VIII / Kern
Diane Lacombe / III / El Dorado / Elizabeth Goff / IX / Imperial
Rhonda Marquette / III / Yuba / Chris Lombardo / IX / Orange
Deborah Messervey / III / Nevada / Brent Watson / IX / San Diego
Jennifer Stahlheber / III / Sutter / Cynna Hinkle / X / San Bernardino
Debbie Wilkins / III / Sacramento / Nancy Sheets / X / Riverside
Priscilla Aquino-Dichoso / IV / San Mateo / Charles Faulkner / XI / Los Angeles
Sherry Beatty / IV / Solano / Blanche Katayama / CDE
Sarah Blackstone / IV / Napa / Rebecca Lee / CDE
Jenny Goodspeed / IV / Contra Costa / Arlene Matsuura / CDE
Kate Lane / IV / Marin / Peggy O'Guin / CDE
Christine Rea / IV / Contra Costa / Myra Okasaki / CDE
1.Announcements:
BASC Update
There was a discussion about COE oversight responsibility for verifying the accuracy of information districts report in the Annual Update. The conclusion is that COEs should check for reasonableness and follow-up with requests for clarification as needed, but in the end, this is a local accountability model. If a district over- or under-estimates expenditures to a material degree or fails to implement its LCAP without a reasonable explanation, there could be credibility concerns among stakeholders. The district may also find it difficult to meet the Minimum Proportionality Percentage at “target,” when the LCFF is fully implemented and the current flexibility during the phase-in goes away, if Supplemental and Concentration dollars have not been used to serve the “unduplicated pupils” who generated the funding.
SACS2015 Budget Software was released May 1.
Additional SACS Basics and SACS Advanced Concepts workshops will be held on June 4th and 5th in Sacramento (
The California Society of CPAs (CalCPA) School Districts Conference will be held May 8 in Sacramento ( and includes a session titled “Are You Prepared forthe OMB Omni-Circular?” on the new Uniform Guidance.
2.Proposition 39 – California Clean Energy Jobs Act?
Elizabeth Shirakh and Armand Angulo from the California Energy Commission (CEC) presented information about the California Clean Energy Jobs Act (Proposition 39, The purposes for meeting with us included:
Provide an overview and update regarding the program, while providing the opportunity for questions and answers. (See attached handout entitled, “Prop 39 – CDE Meeting 5-4-15.ppt” for detailed information.)
Reach-out to learn how the CEC can help increase participation in the program, particularly among small LEAs.
Highlights of the CEC overview included:
Updated program guidelines were adopted in December 2014.
A new online application system was released in February 2015, including an updated Handbook, revisions to the calculators, etc.
An amendment process was released May 4, 2015. The amendment process may be used by LEAs who have approved plans but want to change them.
LEAs may apply for zero-interest Energy Conservation Assistance Act (ECAA-Ed) loans. Although this funding is currently exhausted, LEAs should still apply to show a need and to get on a waiting list in case funds become available. Information regarding this program is found at
The program is intended to be flexible to meet the needs of all LEAs. For example, there is not a specific due date for applications. Some districts may need to front-fund and get reimbursed. Others may pair Proposition 39 funds with an ECAA-Ed loan. Others may wait and do the project when all Proposition 39 funds have been received.
If an LEA has not completed an Energy Expenditure Plan, the allocation rolls over until the next year. The funding is not lost.
There is a listserv on the Proposition 39 site that sends out program updates, including a spreadsheet every Monday that provides a list of approved Energy Expenditure Plans, with funding information. CDE pays out as much as they can up front.
The handout includes Prop 39 “Hotline” contact information for support.
The group suggested that CEC meet with the CCSESA Facility Subcommittee of County Offices (FSCO), as FSCO members may be more directly involved with helping LEAs with the Proposition 39 projects. The group also noted that small LEAs may be especially challenged with participating because they may never have done this type of project before. Some COEs are assisting with RFPs, consortiums, etc. The “Hotline” will be particularly helpful.
3. Update on the 2014-15 Audit Guide and proposals for the 2015-16 Audit Guide.
2014-15 Audit Guide:
K-3 Grade Span Adjustment: Auditors will verify the district’s average class enrollment calculation and progress toward the 24 pupils/class for sampled school sites. If the district and bargaining unit have agreed to an alternate class size, per EC 42238.02(d)(3)(B) or (C) for the audit year, no further procedures will be done.
LCAPs: Auditors will not be tying expenditures to specific General Ledger accounts. Instead, auditors will review the approved LCAP for actions or services the LEA described in Sections 3A and 3B of the plan and that the LEA identified as having actual expenditures. The auditors will then sample some of those expenditures and examine supporting documentation to see if the expenditures were made consistent to the action or services.
Maintenance of Effort – Transportation, Adult Education, ROC/P: MOE is the lesser of the expenditures or the funding received for each specified program in 2012-13. The corrective action for a noncompliance finding related to Transportation might be to say that the district should meet the MOE in the future. Since the MOE requirements for Adult Education and ROC/P go away in 2015-16, there is not really any corrective action that could be taken for a noncompliance finding.
The MOE is calculated before any Basic Aid fair share reductions and does not include expenditures supported by fees.
Middle/Early College High Schools: If a pupil is enrolled in an early or middle college high school and is concurrently enrolled in college courses, a day of attendance is 180 minutes, per EC 46146.5. If a student is not concurrently enrolled in college courses, a day of attendance is 240 minutes.
Common Core Implementation Funds: All LEAs who had enrollment in 2012-13 received Common Core funds. A condition of apportionment is that a plan needed to be developed and explained in a public meeting of the governing board prior to adoption at a subsequent meeting. On or before July 1, 2015, an expenditure report must be submitted to CDE. LEAs that do not submit the expenditure reports will be invoiced for the Common Core funds. The expenditure report information is located here:
LEAs can report expenditures above the apportioned amount, which will help show continued need for funds.
Independent Study (IS):
IS contracts may be for one year, instead of the previous one semester limit.
LEA signature/date on work samples is no longer required when assessing time value or work for apportionment purposes. Work samples must still be retained.
For 2014-15, IS pupil/teacher ratios may be calculated by grade span or LEA-wide. For 2015-16, LEAs will be required to calculate the ratio by grade span. However, there are proposed statutory amendments that if adopted will eliminate this requirement, reverting back to the LEA-wide ratio. For more information, see
Proposals for 2015-16 Audit Guide:
Deleted procedures: Common Core, Adult Education, and ROC/P.
Added procedures:
Course-based IS. This is a new concept wherein a Board certifies that an IS course is equivalent to a classroom-based course in instructional minutes, instead of assigning time value to student work products. If a student is enrolled and making satisfactory progress in one of these courses, the LEA can claim ADA. There are many conditions of apportionment, such as (but not limited to): 1) teachers must meet NCLB requirements for highly qualified teachers and be an employee of the LEA offering the program; 2) students must meet with teachers every 2 weeks, either in person or via virtual live feed. Course-based IS ADA must be calculated separately from other LEA ADA and must meet the requirements of EC 51745.6. If more than 10% of the LEA’s total ADA is claimed for course-based IS, the 10% can receive 100% ADA funding, but the remaining 90% will be reduced by the statewide ADA absence rate, as noted in EC Section 51749.5(b)(5):
If more than 10 percent of the total average daily attendance of a school district, charter school, or county office of education is claimed pursuant to this section, then the amount of average daily attendance for all pupils enrolled by that school district, charter school, or county office of education in courses authorized pursuant to this section that is in excess of 10 percent of the total average daily attendance for the school district, charter school, or county office of education shall be reduced by either (A) the statewide average rate of absence for elementary school districts for kindergarten and grades 1 to 8, inclusive, or (B) the statewide average rate of absence for high school districts for grades 9 to 12, inclusive, as applicable, as calculated by the department for the prior fiscal year, with the resultant figures and ranges rounded to the nearest 10th.. If you do partial CR and part IS, you have to use IS ADA. If you’re doing 100% it is OK, but partial, more ADA than FTE. You can’t claim more than 10% can be IS, or reduced…First 10% can be claimed – then reduced by statewide absence rate. For a district, it probably won’t hit 10%, but charter school could be affected. Caution districts if using this. 90% subject to statewide ADA rate.EC 51749.5 and 6
Immunization: The California Department of Public Health asked for immunization procedures to be included in the 2015-16Audit Guide. The focus will be on schools (including charters) that did not report immunization status to the CDPH, as well as schools that had a high conditional kindergarten admission rate. Additional information will be available here, including a list of non-reporters:
The ability to reduce instructional time by 5 days is eliminated in 2015-16. District’s will be required to have 180 days; charters 175.
4.Adult education reporting survey for 2012-13 expenditures. CDE is developing an application to collect 2012-13 Adult Education data with a very short turnaround time. The data may be used to assist with the 2015-16 proposed Adult Education appropriation.
For 2015-16, the Governor has proposed $500 million for the Adult Education Block Grant to fund programs inelementary and secondary basic skills; citizenship, ESL, and workforce preparation; education for adults with disabilities; CTE programs; and apprenticeships.This will be distributed COEs and districts based on what they spent or received, whichever is less, on Adult Education in 2012-13. CDE will be trying to collect data from LEAS regarding how much they spent in the 5 areas. Emails will go to affected districts and to CDEFisc.
5.CalPERS invoice for GASB 68 Reports & Schedules. Are LEA’s approving and paying this cost?
A few COEs asked for LEA approval; most COEs just transferred the funds.
The coding for the transfers should be: Object 5800, Function 7200.
6. Public hearing requirements for reserves (SB 858)
When should reserve above the minimum be reviewed and discussed? On public hearing date or budget adoption date?Answer: On the public hearing date. 42127(a)(2)(B).
If there is a change to the LEA’s budget as a result of the public hearing, do they have to do another public hearing? Answer: No.The purpose of the public hearing to hear comments and make changes accordingly, if appropriate.
Should it be a separate agenda item?Answer: The statute is silent, but as a practical matter, it should be.
Is it only about assigned and unassigned amounts in Fund 01 and Fund 17?Answer: Statute is not clear and CDE has not taken a stance on which funds are intended. This is a local decision, but Funds 01 and 17 seemed reasonable to most ESSCO attendees.
What are acceptable reasons to substantiate the need for reserves above the recommended minimum?Answer: This is also a local decision. COEs must verify that the substantiation was provided, but are not required to assess the validity of the rationale. Districts should consider increasing the reserve requirements per Board Policy, if appropriate.
CDE’s January 7, 2011 letter includes some sample language and will be attached to the minutes.
Question from group: Do Committed Funds have to be real specific? Answer:Per GAAP, a “stabilization arrangement” (reserve) is not usually reported as committed, because the triggering event to spend committed funds has to be very specific and not routine. The“Reserve for Economic Uncertainties” is by definition not specific.
What is the proof or documentation needed - minutes of meeting?Answer: The statute is silent, but the budget certification page, agenda, or minutes seem reasonable.
Consequence of not doing public hearing on reserves?Answer: Based on current understanding, COEs may have to conditionally approve or disapprove the budget.
7.Beta Testing in relation to Districts and Charter Schools ADA being brought together in the Criteria and Standards
Criterion 2 and 3 pull in charter ADA and enrollment, but it is not combined in Criteria 4, 9, and 10. Can there be an override?Answer: The reason it is combined is because when a charter’s financials are included with the district’s financial statements, ADA projections for the charter could have a material impact on the district’s fiscal position. However, CDE is open to continuing the discussion.
8.FCMAT Manual
Kate Lane has agreed to take the lead in coordinating the FCMAT COE Procedure Manual updates, starting in August.
9.Software. GASB 68 pension reporting.
GAAP has long required employers to book the state’s on-behalf contribution to STRS for an LEA’s teachers, but longstanding practice is that most LEAs don’t. Aside from the departure from GAAP, this hasn’t had serious implications before now, butconversion entries relating to the new pension reporting requirements of GASB 68 rely on the LEA having booked the on-behalf contribution. If LEAs don’t book the contribution in their funds, then auditors would probably have to handle it with an adjustment to the funds in order for the subsequent conversion entries to work properly. The group suggested that it would be helpful for CDE to assist LEAs with calculating the on-behalf entry, perhaps within the SACS software. CDE will look into that option.
Our Next Meeting is June 1, 2015
2015 ESSCO agendas, handouts and meeting notes are at:
ESSCO Notes May 4, 2015Page 1 of 5