The purpose of this Commissioner’s Memo is to provide the attached spreadsheet showing the preliminary 2007-2008 calculation of student growth funding along with information regarding the student growth funding calculation and disbursement schedule. To assist in a review of the spreadsheet, the documents listed below may prove helpful.
• Commissioner’s Memo FIN-08-001 – Schedule of 2007-2008 State Aid Disbursements
• Commissioner’s Memo FIN-08-004 - State Aid Notice 2007-2008
• Arkansas Department of Education (ADE) Rules Governing the Funding of Public School Districts approved by the Arkansas State Board of Education (ASBE) at the September 10, 2007, meeting;
• Ark. Code Ann. §§ 6-20-2303 and 6-20-2305 regarding student growth funding and declining enrollment funding; and
• Ark. Code Ann. §§ 6-20-601 through 6-20-604 regarding isolated and isolated special needs funding.
Pursuant to Act 272 of 2007, student growth funding is comprised of four calculations. One quarter (1/4) of the per student foundation funding ($5,719 * ¼ for fiscal year 2007-2008) is multiplied by any increase in the school district’s:
1. first quarter current year Average Daily Membership (ADM) over the 3-quarter ADM of the previous school year;
2. second quarter current year ADM over the 3-quarter ADM of the previous school year;
3. third quarter current year ADM over the 3-quarter ADM of the previous school year; and
4. fourth quarter current year ADM over the 3-quarter ADM of the previous school year.
The current year ADM data used for each of the calculations is submitted to Arkansas Public School Computer Network (APSCN) by the school district as shown below. APSCN provides the ADM data to Local Fiscal Services within the following month, in most cases.
• First quarter ADM in Cycle 3 due November 15;
• Second quarter ADM in Cycle 5 due February 15;
• Third quarter ADM in Cycle 6 due April 15;
• Fourth quarter ADM in Cycle 7 due June 15.
The calculation of the amount to disburse according to the Schedule of State Aid Disbursements for fiscal year 2007-2008 published July 5, 2007, as CM FIN-08-001 (two payments of 50% each in January and June of 2008) must be estimated using the data available at the time of disbursement. In January only quarter one ADM is available and in June quarters one, two, and three will be available. The student growth disbursement schedule for 2007-2008 is as follows:
• Approximately 50% in January 2008 – result of calculation one above, plus result of calculation two above using first quarter data in lieu of the unavailable second quarter data;
• Approximately 50% in June 2008 - result of calculation three above, plus result of calculation four above using third quarter data in lieu of the unavailable fourth quarter data;
• In June 2008, the estimated calculation two disbursed in January 2008 is calculated using actual second quarter data submitted in February 2008 and the adjustment is included with the June 2008 disbursement.
• In January 2009, the estimated calculation four disbursed in June 2008 is calculated using actual fourth quarter data submitted in June 2008 and the adjustment is included with the January 2009 disbursement.
Disbursements in subsequent years will follow the schedule detailed in Section 6 of the Arkansas Department of Education Rules Governing the Funding of Public School Districts approved by the Arkansas State Board of Education at the September 10, 2007, meeting.
The timing of the receipt of ADM data for student growth funding poses additional funding challenges, due to the relationship between student growth funding and declining enrollment funding and due to the relationship between declining enrollment funding and isolated funding.
• Pursuant to Ark. Code Ann. § 6-20-2305, a district cannot receive both declining enrollment funding and student growth funding. These two funding categories are calculated using ADM data from different time periods. Therefore, it is possible for a school district to have a decline in ADM for the time period covered by the declining enrollment calculation and growth in ADM for the time period covered by the student growth calculation. Prior to disbursement, the funding amounts are reviewed to determine the category expected to yield the most money. At this juncture, with only quarter one ADM available to calculate student growth funding, the task of identifying the category that yields the most money is difficult, at best. The final determination will be made following the receipt of the fourth quarter ADM and the calculation of the final quarter of student growth funding in the 2008-2009 fiscal year. The fourth quarter adjustment could result in additional student growth funds to the district, district repayment of student growth funds to the ADE, or a change in the category funded (to ensure that the district receives the category yielding the most money).
• Pursuant to Ark. Code Ann. § 6-20-2305, a district cannot receive both declining enrollment funding and isolated special needs funding. Regular isolated funding, for the districts with a partial school closing, is calculated on current year ADM. Therefore, for school districts with a partial school closing, regular isolated funding cannot be calculated with certainty until May or June 2008. Additionally, isolated special needs funding is based on funds remaining after regular isolated funding is calculated. There is no statutory prohibition against a school district receiving both student growth funding and special needs isolated funding. So, in determining the category that yields the most funding between special needs isolated funding and declining enrollment funding, expected student growth funding should be given consideration.
Direct any questions concerning the calculations to Cindy Hedrick or Vivian Roberts at 501-682-4258.