ADE Director's Communication Memo Form

Memo Number : COM-08-156

Date Created : 06/06/2008


Co-op Directors
other: General Business Managers

Type of Memo: Informational
Response Required: No
Section:   APSCN - Bill Goff, Director
Athletic Expenditures and Allocations

Regulatory Authority:
A,C.A. §6-20-2002 & 6-20-2003 (amended by Act 255 of 2007)A.C.A. §6-20-2203(amended by Act 1006 of 2007)

Contact Person:
Kathleen Crain

Phone Number:


Act 255 of 2007 requires the Division of Legislative Audit to conduct an annual review of the athletic expenditures reported to the Arkansas Department of Education (ADE) on a rotating basis so that each public school district is evaluated at least once every five (5) years. During the 2007-2008 school year, Legislative Audit reviewed the 2006-2007 athletic expenditures of 50 school districts and presented its findings to the Legislative Joint Auditing Committee on February 8, 2008. A copy of that report can be found on Legislative Audit’s web site at Look under “Special Reports” and do a search on “Athletic Expenditures”.

One of Legislative Audit’s recommendations was that ADE require a uniform method for districts to employ allocating and reporting all athletic expenditures. Some district expenditures relate to multiple programs and/or functions and the amount pertaining to each program and/or function must be estimated by the use of an allocation method. The following allocation methods pertaining to athletic expenditures are recommended for the 2007-2008 school year and are required beginning with the 2008-2009 school year:

Transportation - Multiply bus miles pertaining to athletics by the statewide average cost per mile. The rate for the 2007-2008 school year is based on 2006-2007 expenditures and route miles and equals $3.56 per mile. Act 255 of 2007 defines athletic transportation as “Travel, including bus-related operation and maintenance, to and from any Interschool Athletic Program event for students, faculty, spirit groups, band, or patrons of the school district.” Of the $3.56, $1.42 relates to salaries and benefits of bus drivers. In some cases, a bus for an athletic event may be driven by a volunteer or by a coach who receives a coaching stipend that includes driving buses for athletic events. If the bus driver is not compensated for the athletic trip, or if the compensation is included in a stipend already charged to athletics, the rate of $2.14 (3.56-1.42) per mile should be applied.

Property Insurance, Utilities, and Maintenance Expenditures -
After the last payroll for the year, total all expenditures charged to athletic certified salaries (Fund 1, Program Code 115) and divide by all certified salaries (Fund 1 total expenditures). Multiply this factor, carried to five decimal places, times total Property Insurance expenditures to determine the portion of Property Insurance to allocate to athletics. Multiply this factor times total Utilities expenditures to determine the portion of Utilities to allocate to athletics. Multiply this factor times all other Maintenance expenditures (Functions 2600-2699, Other than Property Insurance and Utilities) to determine the portion of all other maintenance expenditures to allocate to athletics.

Facilities Construction/Renovation (multi-purpose facility) - Estimate the total number of hours the facility will be used during a complete school year. Estimate the total number of hours the facility will be used for athletics during the school year. Divide athletic hours by total hours to determine the percentage of time pertaining to athletics. Multiply this percentage times the total cost of the multipurpose facility to determine the portion that should be allocated to athletics. If the multipurpose facility is included in a project that contains other facilities, the project architect, general contractor or construction manager should be able to provide documentation relating to the cost of the multipurpose facility.

Salaries and benefits of coaches – 100% of any stipend or contract days paid exclusively for athletic duties should be charged to athletics. The base contract amount (per teacher salary schedule) must be allocated between athletics and non-athletics if, during the school day, the coach is assigned to classes that are especially for students participating in an Interschool Athletic Program. For purposes of allocating the salaries and benefits of coaches, preparation periods in excess of one must be allocated to athletics.

If any other allocation method is used for the 2007-2008 school year, the school district, when audited, will have to provide documentation and justification for the method being used. Only the above allocation methods are allowed for the 2008-2009 school year and thereafter.

All expenditures relating to athletics, regardless of fund, source of fund, function, location, subject area or object code, must have program code 115 included in the budget unit being charged. The most appropriate fund, function, location, subject area, and object codes should be used in addition to program code 115. Function code 1150 is only for "direct instruction," and therefore, should not be used for expenditures relating to transportation or maintenance. Failure to include program code 115, or use of incorrect function codes, will result in an erroneous athletic expenditure report and likely audit findings. If a material misstatement occurs for two consecutive years, the school district shall receive a probationary violation in the district’s Standards for Accreditation report issued by the Arkansas Department of Education. A material misstatement is one in which the submitted data has more than a five percent variance from the correct data.

Please refer to Commissioner’s Memo COM-07-096, dated March 28, 2007, for more detailed directions regarding the Financial Coding and Reporting of Athletic Expenditures.


Back to the Customer List

Copyright © 1997 Arkansas Department of Education. All rights reserved.
Department of Education Home Page