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Welcome to the California Department of Education (CDE) presentation for charter schools on filing a nonclassroom-based (NCB) funding determination request for the fiscal year 2013–14.
My name is Bill Fong, Fiscal Consultant with the CDE Charter Schools Division. I want to thank you for your attendance today and I do apologize for the short notice. For those unable to attend, we will post this webinar presentation on our web site. For this webinar, questions will only be taken from the question box located on your screen. We will try to answer all of the questions. If we do not get to a question, we will post online select questions and answers in a FAQ follow-up.
The funding determination presentation entails 15 slides as detailed in the Table of Contents.
The objectives of this presentation is to provide guidance about whether or not a funding determination is required, the funding levels available for NCB charters, the criteria for each funding level, requesting mitigating circumstances (if needed), how to fill out the funding determination form, and when and where to file the forms.
Slide 3: Background
The law requires that Nonclassroom-based (NCB) charter schools obtain a funding determination prior to being funded for its NCB average daily attendance (ADA).
Senate Bill (SB) 740 (Chapter892, Statutes of 2001), required the State Board of Education (SBE) to establish the criteria for determining the appropriate funding level for NCB charter schools. SB 740 stated that the Advisory Commission on Charter Schools (ACCS) is to assist with this process. The ACCS developed regulations that define classroom-based and NCB instruction. The regulations prohibit a charter school from receiving funding for NCB instruction unless the SBE determines its eligibility for funding. The web site location for the pertinent laws and regulations are on slide 16.
The funding determination process begins with the filing of a funding determination form (FDF) with the CDE. The FDF is reviewed by the CDE and the ACCS. Recommendations are then forwarded for consideration and approval by the SBE.
Slide 4: Classroom or Nonclassroom-Based?
A charter school that offers an instructional setting that does not meet the definition of a classroom based setting is classified as a NCB charter school. The law defines the following four conditions that must be met to be classified as a classroom based setting:
The charter school's pupils are engaged in educational activities required of those pupils, and the pupils are under the immediate supervision and control of an employee of the charter school who is authorized to provide instruction to the pupils within the meaning of EC Section 47605(I).
At least 80 percent of the instructional time offered at the charter school is at the school site.
The charter school’s school site is a facility that is used principally for classroom instruction.
The charter school requires its pupils to be in attendance at the school site at least 80 percent of the minimum instructional time required pursuant to EC Section 47612.5(a)(1).
Furthermore, regulations 5 CCR Section 11963(b) require that the school site where the pupils receive instruction meet one of the following conditions:
The facility is owned, rented, or leased by the charter school principally for classroom instruction.
The facility is provided to the charter school by a school district pursuant to EC Section 47614 principally for classroom instruction.
The facility is provided to the charter school free-of-charge principally for classroom instruction pursuant to a written agreement.
NCB instruction may include, but is not limited to, independent study, home study, work study, and distance and computer-based education.
Slide 5: Requesting a Funding Determination
If you are a NCB charter school, then in order to be funded for your NCB ADA, you must obtain a funding determination that is approved by the SBE. A request for a funding determination is the first step, the FDF must be filed with the CDE. For new charter schools that opened in the fall of 2013, the FDF is due to the CDE by December 1, 2013. For continuing charter schools whose funding determinations expires on June 30, 2014, the FDF is due by February 1, 2014.
An FDF is reviewed by CDE for accuracy and completeness. Please note that incomplete FDFs or late submissions will not be processed by the CDE or forwarded to the ACCS/SBE for consideration. The ACCS and/or CDE may ask the charter school to provide additional information in order to make possible a more detailed review or to develop a reasonable basis for a recommendation. After completion of our review, the CDE will present its recommendation to the ACCS. Both the CDE’s and ACCSs recommendations will be presented to the SBE for final approval or denial.
Slide 6: Funding Determinations
There are four possible funding determination outcomes: Full funding at 100%, partial funding at 85% or 70%, OR denial of the funding determination request. Denial of a funding determination request by the SBE shall result in no funding for charter school’s NCB ADA.
Slide 7: Full Funding Determination (100%) Criteria
To be eligible for a full funding determination (100%), the NCB charter school must meet three conditions:
Spend at least 40% of its total public revenues on salaries and benefits for all employees who possess a valid teaching certificate,
Spend at least 80% of its total revenues on instruction and related services, and
The ratio of ADA for independent study pupils to full-time certificated employees does not exceed a pupil-teacher ratio of 25:1 (or the ratio of the largest unified school district in the county in which the charter school resides, whichever is higher).
Regulations specify what information must be included on the FDF to include, but is not limited to, the charter school’s resources (revenue sources) and expenditures.
Let’s take a look at the chart on slide 8 for the various percentage thresholds. If a NCB charter school does not meet all of the criteria for full funding then it will be recommended for the lesser partial funding.
Slide 8: Funding Determination Criteria
The other two lower funding determinations are at 85% and 70%:
For 85%, a charter school must spend at least 40 percent of its total public revenues on salaries and benefits for all employees who possess a valid teaching certificate and (2) at least 70 percent but less than 80 percent of its total revenues on instruction and related services
For 70%, a charter school must spend at least 35 percent but less than 40 percent of its total public revenues on salaries and benefits for all employees who possess a valid teaching certificate and (2) at least 60 percent but less than 70 percent of its total revenues on instruction and related services.
However, if a charter school spends less than 35 percent of its total public revenues on salaries and benefits for all employees who possess a valid teaching certificate and spends less than 60 percent of its total revenues on instruction and related services, the CDE/ACCS recommendation shall be a denial of the charter school’s request, unless there is a reasonable basis to recommend otherwise. A denial of a funding determination request by the SBE will result in no funding for the charter’s NCB ADA.
Slide 9: Funding Determination Form (FDF)
The FDF is a spreadsheet file for use by the charter schools for this funding determination process. The FDF is currently posted on CDE’s web site. The FDF is composed of three worksheet tabs: 1) Instructions, 2) Data Input, and a 3) Summary and Recommendation worksheet. Note- the Data Input worksheet is the only tab that requires data input from the charter school. Let’s take a look at the form and we will go over each section within each tab.
FDF Instruction Tab
The instruction worksheet basically contains general instructions about the form; and, when and where to mail and email the FDF and conflict of interest policy files. There is no input required on this worksheet.
FDF Data Input Tab
The data input tab has up to five sections that may need to be completed:
Charter Information – Complete all fields a. thru v.
Certification – Appropriate person must sign FDF after reviewing 4 statements.
Financial Information – Complete sections IIIA, IIIB, and IIIE. Guidance and definitions for what revenues/ expenditures are to be included is provided for in the California School Accounting Manual (CSAM) 
For new charters, use reasonable estimates of current year annualized revenues and expenditures.
For continuing charters, use the prior year’s revenues and expenditures, ie. unaudited actuals or if available, the audited statements.
Supplemental Information – Complete sections IV, 1 thru 7
Virtual or On-Line NCB Charters – Must complete Sections I to V
If you are not a virtual or on-line charter school, complete sections I through IV. Virtual or On-Line charter schools must complete sections I through V.
FDF Summary and Recommendation Tab
This is a summary sheet and NO input is required on this worksheet. Information is extracted from the Data Input worksheet. The percent calculations for the Certificated Salary and Benefits and the Instruction and Related Services are posted here for comparison to the funding determination criteria.
Slide 10: Duration of Funding Determination
Charter schools that are in its first year of operation will receive a two-year funding determination. For continuing charters, a minimum of two years and a maximum of five years can be granted. A charter school that has achieved a rank of six or greater on the Academic Performance Index (API) for the two years immediately prior to receiving a determination of funding must be granted a five-year funding determination.
Slide 11: New Charter Schools
For a new charter school, regulations require additional follow-up reporting. Within 90 days after the end of the first fiscal year, the new charter school must file its unaudited actual report, which reflects financial activities for its first year of operation. In addition, a FDF for the second fiscal year, using 2014–15 budget estimates must also be filed within the same 90 days. If after review of these documents, the charter school does not support a full funding determination, the ACCS must recommend that the SBE revise the charter’s previous funding determination.
If the calculated percentages on FDF fail to comply with the requested funding determination criteria, regulations do allow the charter school to request of the ACCS to find a “reasonable basis” (also referred to as mitigating circumstances) by which to make a recommendation other than one that results from the criteria specified in the regulations. Mitigating circumstances may include:
One-time or Unique or Exceptional Circumstances
Size of the charter school
Number of years the charter school has been operational
Slide 13: Requesting Mitigating Circumstances
A NCB charter school may request the ACCS to consider mitigating circumstances (MC) if it fails to meet the criteria for the funding determination level requested. If the requested funding determination does not meet the threshold established for certificated salaries and benefits or instruction-related expenses, as listed in Section C of the Summary and Recommendation worksheet, the charter school may request consideration of mitigating circumstances.
MC requests must include the documented data regarding the individual and specific circumstances. Each MC request must also clearly identify the factors that are unique to that individual charter school (e.g., one-time or unique or exceptional expenses for facilities, acquisition of a school bus, acquisition and installation of computer hardware not related to the instructional program, special education charges levied on the charter school by an LEA, restricted state, federal, or private grants of funds awarded to the charter school that cannot be expended for teacher salaries, or contracted instructional services for special education). In addition, a charter school’s MC request must explain why the charter school failed to meet the title 5 regulations for funding, including specific actions taken by the charter school to meet the expenditure requirements.
The ACCS and SBE may approve the mitigating circumstances request and provide a higher funding level than the charter school otherwise would receive. A charter school that wants to request consideration of MC must file a MC request form. The MC form is due on the same date as the FDF.
Slide 14: Due Dates
For new charter schools, the FDF/MCF are due by December 1, 2013
For continuing charter schools, the FDF/MCF are due by February 1, 2014
Slide 15: Where to File?
Email electronic files (FDF, conflict of interest policy, MCF, if needed and other supporting documents) to the address noted on slide 15.
Mail signed hard copies (FDF, conflict of interest policy, MCF, if needed and other supporting documents) to the address noted on slide 15.
Slide 16: Pertinent Laws and Regulations and Questions?
Pertinent laws and regulations on funding determinations can be access on the web sites listed on slide 16.
This ends our presentation on funding determination.
If you have questions, please send them to us at charter-SB740@cde.ca.gov. We will post pertinent general questions and answers in a FAQ follow-up on our web site.
You can also email or call me anytime during this process:
Background information and updates on issues of interest to the State Board Members.
Periodically, the State Board Members may receive information memoranda from State Board staff and the California Department of Education. The information memoranda may include background information, updates on issues of interest to the State Board Members, and reports on a variety of educational topics.